nep-exp New Economics Papers
on Experimental Economics
Issue of 2017‒01‒01
thirty papers chosen by

  1. Whose voice matters? An experimental examination of women empowerment in microfinance By Klaus Abbink; Asadul Islam; Chau Nguyen
  2. Cooperation under risk and ambiguity By Björk, Lisa; Kocher, Martin; Martinsson, Peter; Nam Khanh, Pham
  3. Behavioral Insights from Field Experiments in Environmental Economics By Daniel A. Brent; Lana Friesen; Lata Gangadharan; Andreas Leibbrandt
  4. Divided Majority and Information Aggregation: Theory and Experiment By Micael Castanheira De Moura; Laurent Bouton; A. Llorente-Saguer
  5. Self-confidence and unraveling in matching markets By Dargnies, Marie-Pierre; Hakimov, Rustamdjan; Kübler, Dorothea
  6. "Many a slip between the cup and the lip": The effect of default-based nudges on prosocial behavior and attitudes By Gaudeul, Alexia; Kaczmarek, Magdalena Claudia
  7. How fully do people exploit their bargaining position? The effects of bargaining institution and the 50–50 norm By Nejat Anbarci; Nick Feltovich
  8. Iterative versus standard deferred acceptance: Experimental evidence By Bó, Inácio; Hakimov, Rustamdjan
  9. Labels as nudges? An experimental study of car eco-labels By Cristiano Codagnone; Giuseppe Alessandro Veltri; Francesco Bogliacino; Francisco Lupiáñez-Villanueva; George Gaskell; Andriy Ivchenko; Pietro Ortoleva; Francesco Mureddu
  10. Beliefs about Gender By Pedro Bordalo; Katherine B. Coffman; Nicola Gennaioli; Andrei Shleifer
  11. The Effects of Computers on Children’s Social Development and School Participation: Evidence from a Randomized Control Experiment By Robert W. Fairlie; Ariel Kalil
  12. Welfare stigma in the lab: Evidence of social signaling By Friedrichsen, Jana; König, Tobias; Schmacker, Renke
  13. Discrete Adjustment to a Changing Environment: Experimental Evidence By Mel Win Khaw; Luminita Stevens; Michael Woodford
  14. Conflict of Interest, Disclosure, and Vertical Relationships: An Experimental Analysis By Paul Chen; Martin Richardson
  15. Assessing small-scale raspberry producers' risk and ambiguity preferences: Evidence from field-experiment data in rural Chile By Cárcamo, Jorge; Cramon-Taubadel, Stephan von
  16. Does Information Change Attitudes Towards Immigrants? Representative Evidence from Survey Experiments By Alexis Grigorieff; Christopher Roth; Diego Ubfal
  17. Long-run expectations in a Learning-to-Forecast Experiment By Annarita Colasante; Simone Alfarano; Eva Camacho-Cuena; Mauro Gallegati
  18. Preferences for Intrinsically Risky Attributes By Zack Dorner; Daniel A. Brent; Anke Leroux
  19. How Does Dishonesty Affect Winning and the Willingness to Compete? Evidence from a Stiff Competition Environment By Posadzy, Kinga; Josephson, Camilla; Martinsson, Peter
  20. Multicandidate Elections: Aggregate Uncertainty in the Laboratory By Micael Castanheira De Moura; Laurent Bouton; A. Llorente-Saguer
  21. Guilt in voting and public good games By Rothenhäusler, Dominik; Schweizer, Nikolaus; Szech, Nora
  22. Does Competition Aggravate Moral Hazard? A Multi-Principal-Agent Experiment By Olga A. Rud; Jean Paul Rabanal; John Horowitz
  23. Value for Money? Vote-Buying and Politician Accountability in the Laboratory By Jessica Leight; Rohini Pande; Laura Ralston
  24. Putting Your Money Where Your Mouth Is By Daniel A. Brent; Lata Gangadharan; Anke Leroux; Paul A. Raschky
  25. It Pays to Be a Man: Rewards for Leaders in a Coordination Game By Philip J. Grossman; Catherine Eckel; Mana Komai; Wei Zhan
  26. Integer programming approaches to find row-column arrangements of two-level orthogonal experimental designs By VO-THANH, Nha; GOOS, Peter; SCHOEN, Eric D.
  27. No sense of ownership in weak participation: a forest conservation experiment in Tanzania By Handberg, Øyvind Nystad
  28. Information matters, but it is not enough: a field experiment on the causal effect of information barriers for participation in Higher Education By Giovanni Abbiati; Gianluca Argentin; Carlo Barone; Antonio Schizzerotto
  29. Early childhood environment, breastfeeding and the formation of preferences By Armin Falk; Fabian Kosse
  30. Misperceptions of income distributions: Cross-country evidence from a randomized survey experiment By Bublitz, Elisabeth

  1. By: Klaus Abbink; Asadul Islam; Chau Nguyen
    Abstract: Offering microfinance loans to women to empower them may be ineffective if borrowers hand over control of loans to their husbands. We conduct a lab-in-the-field experiment to examine potential gender bias in intra-household decision making in rural Bangladesh. The experiment mimics a real-life scenario in which a microfinance loan is offered to either the wife or the husband and the borrower can decide whether or not to transfer the decision to his/her spouse. We find that women are more likely to let their spouses make decisions than men. Different treatments in the experiment test the underlying causes. Our findings suggest that women’s decision to transfer decision making is driven both by their lower decision-making power and their belief in their spouses’ higher financial capabilities. We also examine subjects’ control over the use of earnings and find that offering credit to women has no effect on their control over household expenditures.
    Keywords: Microfinance, women empowerment, gender bias, intra-household bargaining, field experiment.
    JEL: C91 C93 D13 O12
    Date: 2016–11
  2. By: Björk, Lisa (Department of Economics, School of Business, Economics and Law, Göteborg University); Kocher, Martin (Department of Economics, LMU Munich); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University); Nam Khanh, Pham (School of Economics, Ho Chi Minh City University of Economics)
    Abstract: The return from investments in public goods is almost always uncertain, in contrast to the most common setup in the existing empirical literature. We study the impact of natural uncertainty on cooperation in a social dilemma by conducting a public goods experiment in the laboratory in which the marginal return to contributions is either deterministic, risky (known probabilities) or ambiguous (unknown probabilities). Our design allows us to make inferences on dierences in cooperative attitudes, beliefs, and one-shot as well as repeated contributions to the public good under the three regimes. Interestingly, we do not find that natural uncertainty has a significant impact on the inclination to cooperate, neither on the beliefs of others nor on actual contribution decisions. Our results support the generalizability of previous experimental results based on deterministic settings. From a behavioural point of view, it appears that strategic uncertainty overshadows natural uncertainty in social dilemmas.
    Keywords: Public good; conditional cooperation; experiment; uncertainty; risk; ambiguity
    JEL: C91 D64 D81 H41
    Date: 2016–12
  3. By: Daniel A. Brent; Lana Friesen; Lata Gangadharan; Andreas Leibbrandt
    Abstract: Many environmental decisions are based on intrinsic motivations in addition to traditional economic incentives. Field experiments allow researchers to isolate a specific causal mechanism which can help advance our understanding of consumer and firm behavior in environmental markets. This article summarizes the literature on the use of field experiments in environmental economics, focusing on framed and artefactual field experiments as well as natural experiments targeting municipal energy and water demand. We set out a theoretical framework to improve the interpretation of results from field experiments in environmental economics. In addition to providing an overview of experimental methods and findings we also lay out a set of challenges for researchers interested in running a field experiment in environmental economics.
    Keywords: field experiments; environmental economics, intrinsic incentives, extrinsic incentives, behavioral economics
    JEL: C93 Q50
    Date: 2016–11
  4. By: Micael Castanheira De Moura; Laurent Bouton; A. Llorente-Saguer
    Abstract: We propose a theory-based experimental approach to compare the properties of approval voting (AV) with thoseof plurality. This comparison is motivated by the theoretical prediction that, in our aggregate uncertainty setup,AV should produce close to first-best outcomes,while pluralitywill not. The experiment shows, first, thatwelfaregains are substantial. Second, both aggregate and individual responses are in line with theoretical predictions,and thus with strategic voting. Finally, subjects' behavior under AV highlights the need to study equilibria inasymmetric strategies.
    Date: 2016
  5. By: Dargnies, Marie-Pierre; Hakimov, Rustamdjan; Kübler, Dorothea
    Abstract: We document experimentally how biased self-assessments affect the outcome of matching markets. In the experiments, we exogenously manipulate the self-confidence of participants regarding their relative performance by employing hard and easy real-effort tasks. We give participants the option to accept early offers when information about their performance has not been revealed, or to wait for the assortative matching based on their actual relative performance. Early offers are accepted more often when the task is hard than when it is easy. We show that the treatment effect works through a shift in beliefs, i.e., underconfident agents are more likely to accept early offers than overconfident agents. The experiment identifies a behavioral determinant of unraveling, namely biased self-assessments, which can lead to penalties for underconfident individuals as well as efficiency losses.
    Keywords: market unraveling,experiment,self-confidence,matching markets
    JEL: C92 D47 D83
    Date: 2016
  6. By: Gaudeul, Alexia; Kaczmarek, Magdalena Claudia
    Abstract: Recent evidence suggests that default based nudges i.e. alterations in the decisional context, can have large effects on decision making and can be used as policy interventions to improve individual and public welfare. This paper presents the results of a controlled experiment (N = 988), designed to evaluate not only the effectiveness of a default manipulation on decision making, but also to explore how yielding or opposing a nudge intervention later affects attitudes (towards the nudge and the nudger) and behavior in a charity giving context. The results show that while the default nudge was effective at the time of application, it was not enough to change attitudes towards the nudged behavior as would be needed for long-term success. Indeed, we rather find that those who adopted an action that went against the nudge were more motivated to follow on through with this action later on than those who went with the nudge. We furthermore show that giving people more leeway in how to respond to a nudge improves acceptance of the nudge. We finally discuss the practical implications of our findings in terms of the applicability of default-based nudges as a tool for policy interventions.
    Keywords: nudging,defaults,decision making,prosocial behavior,charity giving,behavioral economics
    JEL: C9 D04 D12 D64 H41
    Date: 2016
  7. By: Nejat Anbarci; Nick Feltovich
    Abstract: A recurring puzzle in bargaining experiments is that individuals under–respond to changes in their bargaining position, compared to the predictions of standard bargaining theories. This result has been observed in a variety of settings, but there has been little systematic study of the factors associated with higher or lower responsiveness.We conduct a complete–information bargaining experiment using two institutions – the Nash demand game (NDG) and a related unstructured bargaining game (UBG) – and with bargaining power varied via the disagreement outcome. Importantly, in about one–fourth of bargaining pairs, one player’s disagreement payoff is more than half the cake size; in these cases, 50–50 splits are not individually rational. We find that subjects are least responsive to changes in bargaining position in the NDG with both disagreement payments below half the cake size. Responsiveness is higher in the UBG, and in the NDG when one disagreement payment is more than half the cake, but in both cases it is still less than predicted. It is only in the UBG with a disagreement payment more than half the cake that responsiveness reaches the predicted level. Our results imply that the extent to which actual bargaining corresponds to theoretical predictions will depend on (1) the institutions within which bargaining takes place, and (2) the distribution of bargaining power, in particular, whether the 50–50 norm yields a plausible focal point. We construct and analyse a simple model that characterises our main results.
    Keywords: Nash demand game; unstructured bargaining; real effort; equal split; experiment
    JEL: C78 C72 D81
    Date: 2016–11
  8. By: Bó, Inácio; Hakimov, Rustamdjan
    Abstract: We run laboratory experiments where subjects are matched to colleges, and colleges are not strategic agents. We test the Gale-Shapley Deferred Acceptance (DA) mechanism versus the Iterative Deferred Acceptance Mechanism (IDAM), a matching mechanism based on a new family of procedures being used in the field, in which information about tentative allocations is provided while students make choices. We consider two variations of IDAM: one in which they are only informed about whether they are tentatively accepted or not (IDAM-NC) and one in which students are additionally informed at each step of the tentative cutoff values for acceptance at each school (IDAM). A significantly higher proportion of stable outcomes is reached both under IDAM and IDAM-NC than under DA. The difference can be explained by a higher proportion of subjects following an equilibrium strategy akin to truthful behavior under IDAM and IDAM-NC than truthful behavior itself under DA. Moreover, the provision of intermediate cutoff values in IDAM leads to higher rates of equilibrium behavior than in IDAM-NC and a higher robustness of stability between the rounds of experiments. Our findings provide substantial support for the rising practice of using iterative mechanisms in centralized college admissions in practice.
    Keywords: Market Design,Matching,Iterative Mechanisms,College Admissions,Experiments
    JEL: C78 C92 D63 D78 D82
    Date: 2016
  9. By: Cristiano Codagnone; Giuseppe Alessandro Veltri; Francesco Bogliacino; Francisco Lupiáñez-Villanueva; George Gaskell; Andriy Ivchenko; Pietro Ortoleva; Francesco Mureddu
    Abstract: This article presents the results of a laboratory experiment and an online multi-country experiment testing the effect of motor vehicle eco-labels on consumers. The laboratory study featured a discrete choice task and questions on comprehension, while the ten countries online experiment included measures of willingness to pay and comprehension. Labels focusing on fuel economy or running costs are better understood, and influence choice about money-related eco-friendly behaviour. We suggest that this effect comes through mental accounting of fuel economy. In the absence of a cost saving frame, we do not find a similar effect of information on CO2 emissions and eco-friendliness. Labels do not perform as well as promotional materials. By virtue of being embedded into a setting designed to capture the attention, the latter are more effective. We found also that large and expensive cars tend to be undervalued once fuel economy is highlighted.
    Keywords: Eco-label; Nudge; Willingness to pay; Fuel economy; Experiments; CO2 emission
    JEL: C9 D3 Q56 Q58
    Date: 2016–12
  10. By: Pedro Bordalo; Katherine B. Coffman; Nicola Gennaioli; Andrei Shleifer
    Abstract: We conduct a laboratory experiment on the determinants of beliefs about own and others’ ability across different domains. A preliminary look at the data points to two distinct forces: miscalibration in estimating performance depending on the difficulty of tasks and gender stereotypes. We develop a theoretical model that separates these forces and apply it to analyze a large laboratory dataset in which participants estimate their own and a partner’s performance on questions across six subjects: arts and literature, emotion recognition, business, verbal reasoning, mathematics, and sports. We find that participants greatly overestimate not only their own ability but also that of others, suggesting that miscalibration is a substantial, first order factor in stated beliefs. Women are better calibrated than men, providing more accurate estimates of ability both for themselves and for others. Gender stereotypes also have strong predictive power for beliefs, particularly for men’s beliefs about themselves and others’ beliefs about the ability of men. Our findings help interpret evidence on gender gaps in self-confidence.
    JEL: C91 D01 J16
    Date: 2016–12
  11. By: Robert W. Fairlie; Ariel Kalil
    Abstract: Concerns over the perceived negative impacts of computers on social development among children are prevalent but largely uninformed by plausibly causal evidence. We provide the first test of this hypothesis using a large-scale randomized control experiment in which more than one thousand children attending grades 6-10 across 15 different schools and 5 school districts in California were randomly given computers to use at home. Children in the treatment group are more likely to report having a social networking site, but also report spending more time communicating with their friends and interacting with their friends in person. There is no evidence that computer ownership displaces participation in after-school activities such as sports teams or clubs or reduces school participation and engagement.
    JEL: I20
    Date: 2016–12
  12. By: Friedrichsen, Jana; König, Tobias; Schmacker, Renke
    Abstract: A puzzle of the modern welfare state is that a large fraction of social benefits is not taken up. Using a laboratory experiment, we present evidence that stigmatization through public exposure causally reduces the take-up of a redistributive transfer by 30 percentage points. We build a theoretical model that interprets welfare stigma as unfavorable inferences about the claimant's type. Our design exogenously varies the informativeness of the takeup decision by varying whether transfer eligibility is based on ability or luck. We find that subjects avoid the inference both of being low-skilled and of being willing to live off others. Contrary to conventional wisdom, stigma may thus also contribute to low take-up if eligibility is not linked to economic performance.
    Keywords: stigma,signaling,redistribution,non take-up,welfare program
    JEL: D03 H31 I38 C91
    Date: 2016
  13. By: Mel Win Khaw; Luminita Stevens; Michael Woodford
    Abstract: We conduct a laboratory experiment to shed light on the cognitive limitations that may affect the way decision makers respond to changes in their economic environment. The subjects solve a tracking problem: they estimate the probability of a binary event, which changes stochastically. The subjects observe draws and indicate their draw-by-draw estimate. Our subjects depart from the optimal Bayesian benchmark in systematic ways, but these deviations are not simply the result of some boundedly rational, but deterministic rule. Rather, there is a random element in the subjects' response to any given history of evidence. Moreover, subjects adjust their forecast in discrete jumps rather than after each new ring draw, even though there are no explicit adjustment costs. They adjust by both large and small amounts, contrary to the predictions of a simple Ss model of optimal adjustment subject to a fixed cost. Finally, subjects prefer to report "round number" probabilities, even though that requires exerting additional effort. Each of these regularities resembles the behavior of firms setting prices for their products. We develop a model of inattentive adjustment and compare its quantitative fit with alternative models of stochastic discrete adjustment.
    JEL: D84 E03
    Date: 2016–12
  14. By: Paul Chen; Martin Richardson
    Abstract: Vertical integration between providers of financial advice and producers of financial products is not uncommon. We consider the impact of disclosure where full disclosure of the incentives of an advisor to recommend the product of an upstream affiliate rather than from some other producer is not possible. We report the results of an experiment in which an informed advisor recommends to a less informed client one of two potential assets to purchase and also a price to offer. In one setting the incentives of the two players are fully aligned but in another the advisor receives an additional payment for selling one of the assets. We consider two treatments – with and without disclosure to the client of the advisor’s interests. With disclosure, the client is only informed of the presence but not the size of an additional payment the advisor receives for selling one of the assets. We find that an advisor’s conflict of interest influences their asset recommendation away from the asset that best serves the client’s interests. The partial disclosure of the advisor’s conflict of interest as common knowledge seems to influence neither the advisor’s recommended asset nor, more surprisingly, the client’s likelihood of rejecting the advisor’s recommendation. However, we do find that disclosure results in a larger financial payoff for the client in our experimental setup.
    Keywords: Experiment; financial advice; disclosure, conflict of interest
    JEL: G02 D04
    Date: 2016–12
  15. By: Cárcamo, Jorge; Cramon-Taubadel, Stephan von
    Abstract: Most researchers who analyze producers' preferences under uncertainty report that producers are averse towards risk and ambiguity scenarios. This aversion has an influence on producers' decision-making processes; hence the relevance of determining and analyzing these preferences as a key factor to design agricultural policies that help producers to cope with production uncertainty. In this study we elicit small-scale raspberry producers' preferences through field experiments in rural Maule (Chile). In addition, we identify producers' socioeconomic and farm characteristics that influence these preferences. Finally, we compare the two standard methods in the current literature to estimate producers' risk preferences from field experiments, and analyze if the estimation method influences these preferences. Our results show an asymmetry in producers' risk preferences; producers are twice as sensitive to losses as to gains. Additionally, we find that producers get smaller lottery utilities in scenarios where ambiguity is present, which implies ambiguity aversion. We also show that the method used to estimate risk preferences can influence the results, with obvious implications for policy design.
    Keywords: Risk Preferences,Ambiguity Preferences,Small-scale Producers,Raspberry Producers,Producers' Preferences Elicitation
    Date: 2016
  16. By: Alexis Grigorieff; Christopher Roth; Diego Ubfal
    Abstract: We study whether providing information about immigrants affects people’s attitude towards them. First, we use a large representative cross-country experiment to show that, when people are told the share of immigrants in their country, they become less likely to state that there are too many of them. Then, we conduct two online experiments in the U.S., where we provide half of the participants with five statistics about immigration, before evaluating their attitude towards immigrants with self-reported and behavioral measures. This more comprehensive intervention improves people’s attitude towards existing immigrants, although it does not change people’s policy preferences regarding immigration. Republicans become more willing to increase legal immigration after receiving the information treatment. Finally, we also measure the same self-reported policy preferences, attitudes, and beliefs in a four-week follow-up, and we show that the treatment effects persist. Keywords: Biased Beliefs, Survey Experiment, Immigration, Policy Preferences, Persistence. JEL classification: C90, J15, Z1, Z13
    Date: 2016
  17. By: Annarita Colasante (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Simone Alfarano (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Eva Camacho-Cuena (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Mauro Gallegati (Department of Economics, Università Politecnica delle Marche, Ancona, Italy)
    Abstract: We conduct a Learning to Forecast Experiment (LtFE) using a novel setting in which we elicit subjects' short and long-run expectations on the future price of an asset. We find that: (i) the rational expectations equilibrium (REE) is not a meaningful description for subjects' expectations, (ii) which are, instead, better described by an adaptive learning scheme. (iii) Subjects exhibit a higher degree of inertia when revising long-run expectations vis-à-vis short-run expectations.
    Keywords: Experiment, Expectations, Coordination
    JEL: D84 E37 G12
    Date: 2016
  18. By: Zack Dorner; Daniel A. Brent; Anke Leroux
    Abstract: Riskiness is an important attribute of goods, whereby the utility derived from that attribute is determined by one’s attitude to risk. We develop a novel approach to leverage data on risk attitudes from a fully incentivized risk elicitation task to model intrinsic riskiness of alternatives in a choice experiment. In a door-to-door survey, 981 respondents participated in a discrete choice experiment to elicit preferences over alternative sources of municipal water, conditional on water price and quality. Additional source attributes, such as the risk associated with vulnerability to drought or technological risks are treated as intrinsic since they cannot be plausibly disassociated from the water supply source. A risk task estimates participants’ coefficient of constant relative risk aversion (CRRA), which is incorporated into the preference estimation to test the hypotheses that supply risk and new technology risk are important intrinsic attributes for new water sources. Participants are not given information about supply or technological risks of the sources to avoid framing effects driving the results. Controlling for water quality and cost, we find that supply risk – and not technology risk – is an important determinant of participants’ choices.
    Date: 2016–11
  19. By: Posadzy, Kinga (Division of Economics, Department of Management and Engineering, Linköping University); Josephson, Camilla (Division of Economics, Department of Management and Engineering, Linköping University); Martinsson, Peter (Division of Economics, Department of Management and Engineering, Linköping University)
    Abstract: We experimentally investigate how the possibility of behaving dishonestly affects the willingness to compete and who the winner is when there is stiff competition. Our results show that although only some subjects are dishonest when competing, dishonest behaviour creates significant inefficiencies due to best performing subjects not winning. Willingness to compete, on the other hand, was unaffected.
    Keywords: Competition; dishonesty; experiment
    JEL: C91 D03 D04
    Date: 2017–01–01
  20. By: Micael Castanheira De Moura; Laurent Bouton; A. Llorente-Saguer
    Date: 2016
  21. By: Rothenhäusler, Dominik; Schweizer, Nikolaus; Szech, Nora
    Abstract: This paper analyzes how moral costs affect individual support of morally difficult group decisions. We study a threshold public good game with moral costs. Motivated by recent empirical findings, we assume that these costs are heterogeneous and consist of three parts. The first one is a standard cost term. The second, shared guilt, decreases in the number of supporters. The third hinges on the notion of being pivotal. We analyze equilibrium predictions, isolate the causal effects of guilt sharing, and compare results to standard utilitarian and non-consequentialist approaches. As interventions, we study information release, feedback, and fostering individual moral standards.
    Keywords: Moral Decision Making,Committee Decisions,Diffusion of Responsibility,Shared Guilt,Being Pivotal,Division of Labor,Institutions and Morals
    JEL: D02 D03 D23 D63 D82
    Date: 2016
  22. By: Olga A. Rud (Bates College); Jean Paul Rabanal (Bates College); John Horowitz (Ball State University)
    Abstract: We conduct a Multi-Principal-Agent experiment to determine whether market structure affects intermediary behavior. The intermediaries (Agents) are perfectly informed regarding project types and can recommend that Principals either proceed or discontinue with a project. Agents earn revenues only when they recommend to continue. We find that monopolist Agents protect the interests of Principals better than when Agents compete. Our findings are robust to a significant fee increase. The results of our study apply to a number of economic and financial environments (money-managers, rating agencies, etc.) and provide additional evidence on the impact of market structure on individual incentives and equilibrium outcomes.
    Keywords: Delegated portfolio management, conflict of interests, rating services, market design, deception, laboratory experiment
    JEL: D03 D40 D82 G02 G23 G24 C90
    Date: 2016–12
  23. By: Jessica Leight (Williams College); Rohini Pande (Harvard University and NBER); Laura Ralston (World Bank)
    Abstract: Though vote-buying is observed in a diverse set of polities worldwide, relatively little is known about the channels through which it affects subsequent governance outcomes. Using laboratory experiments conducted in the U.S. and Kenya, we show that vote-buying reduces voters' willingness to punish politicians and increases rent-seeking by the incumbent politician. Specifically, we collect data from 816 subjects engaged in a simple voting game in which voters can punish a politician who expropriates rents from a common treasury. Voters who receive "a payment in exchange for your vote" increase the maximum amount they will allow the politician to expropriate while still voting to reelect him. Politicians, in turn, expropriate more when vote-buying is introduced. We provide evidence that social preferences, particularly reciprocity, are an important channel for this response.
    Keywords: Corruption, vote buying, political economy
    JEL: D72
    Date: 2016–05
  24. By: Daniel A. Brent; Lata Gangadharan; Anke Leroux; Paul A. Raschky
    Abstract: We present a novel approach to address differences between stated and paid choices by incentivizing stated choices in a randomized field experiment. The treatment increases the incentives in the field by making each decision financially relevant. Our results show that the treatment increases estimates of the marginal utility of income, with the effect being economically and statistically significant in aggregate. We develop a stylized model that formalizes the extent of hypothetical bias implied by our empirical results by allowing for alternative treatment-induced channels. Under a range of plausible parameter values our results indicate hypothetical bias in approximately 95% of the parameter space with a mean hypothetical bias of 60%. Heterogeneous treatment effects indicate that low income respondents are more susceptible to hypothetical bias.
    Keywords: field experiment, quasi-public goods, non-market goods, stated preference, hypothetical bias
    JEL: Q51 C93
    Date: 2016–11
  25. By: Philip J. Grossman; Catherine Eckel; Mana Komai; Wei Zhan
    Abstract: This paper addresses followers’ assessment of leaders’ effectiveness in a controlled laboratory environment with salient incentives. We employ a simple game setting to examine how leaders are evaluated for the successes and failures of their groups. Followers participate in a five-person, coordination game repeated for two sets of 10 periods. Followers play each set with a different fixed group. After period 10, a leader provides (scripted) guidance on how to play the game to maximize group earnings. The gender of the leader is the only variable factor. At the end of the twentieth period, followers vote to reward (at a cost to themselves) their leader. We find that, even though leaders are all providing the same guidance, followers are more likely to heed the advice of the male leaders, followers are less likely to ascribe group success to female leaders, and followers reward male leaders more generously than female leaders. There is a premium to being male.
    Keywords: Leadership, Gender, Coordination Game
    JEL: C92 J71 J16
    Date: 2016–11
  26. By: VO-THANH, Nha; GOOS, Peter; SCHOEN, Eric D.
    Abstract: Nonregular fractional factorial experimental designs offer flexibility in terms of run size as well as the possibility to estimate partially aliased effects. For this reason, there is much interest in finding good nonregular designs and in orthogonal blocking arrangements of these designs. In this contribution, we address the problem of finding orthogonal blocking arrangements in scenarios with two crossed blocking factors. We call these blocking arrangements orthogonal row-column arrangements. We propose two strategies to find row-column arrangements of given two-level orthogonal treatment designs such that the treatment factors’ main effects are orthogonal to both blocking factors. The first strategy involves a sequential approach which is especially useful when one blocking factor is more important than the other. The second strategy involves a simultaneous approach for situations where both blocking factors are equally important. For the latter approach, we propose three different optimization models, so that, in total, we consider four different methods to obtain row-column arrangements. We compare the performance of the four methods by looking for good row-column arrangements of the best two-level 24-run designs in terms of the G-aberration criterion. We compare the methods in terms of computing time and in terms of solution quality. We then apply the best approaches to 64- and 72-run orthogonal designs, and end the paper with a conclusion.
    Keywords: Aliasing, Confounding, Generalized word-length pattern, Integer linear programming, Crossed blocking factors, Row-column design
    Date: 2016–08
  27. By: Handberg, Øyvind Nystad (School of Economics and Business, Norwegian University of Life Sciences)
    Abstract: Sense of ownership is often advocated as an argument for local participation within the epistemic development and nature conservation communities. Stakeholder participation in initiating, designing or implementing institutions is claimed to establish a sense of ownership among the stakeholders and subsequently improve the intended outcomes of the given institution. Theoretical and empirical justications of the hypothesis remain scarce. A better understanding of the eects of local participation can motivate more extensive and stronger participation of local stakeholders and improve institutional performance. This paper applies theories from psychology and behavioral economics to better understand sense of ownership. The empirical investigation is a framed eld experiment, in the context of tropical forest conservation and payments for environmental services in Tanzania. The results lend little support to the hypothesis in this context. The participation treatment in the experiment is weak, and a possible explanation is that sense of ownership is sensitive to the form of participation.
    Keywords: articipation; sense of ownership; forestry; Tanzania; framed eld experiment
    JEL: C93 Q23
    Date: 2016–12–13
  28. By: Giovanni Abbiati; Gianluca Argentin; Carlo Barone; Antonio Schizzerotto
    Abstract: Our contribution assesses the role of information barriers for patterns of participation in Higher Education (HE) and the related social inequalities. For this purpose, we developed a large-scale clustered randomised experiment involving over 9,000 high school seniors from 62 Italian schools. We designed a counseling intervention to correct student misperceptions of the profitability of HE, that is, the costs, economic returns and chances of success of investments in different tertiary programs. We employed a longitudinal survey to test whether treated students’ educational trajectories evolved differently relative to a control group. We find that, overall, treated students enrolled less often in less remunerative fields of study in favour of postsecondary vocational programmes. Most importantly, this effect varied substantially by parental social class and level of education. The shift towards vocational programmes was mainly due to the offspring of low-educated parents; in contrast, children of tertiary graduates increased their participation in more rewarding university fields. Similarly, the redistribution from weak fields to vocational programmes mainly involved the children of the petty bourgeoisie and the working class, while upper class students invested in more rewarding university fields. We argue that the status-maintenance model proposed by Breen and Goldthorpe can explain these socially differentiated treatment effects. Overall, our results challenge the claim that student misperceptions contribute to horizontal inequalities in access to HE.
    Keywords: randomised experiment, Higher Education, field of study, educational inequality
    Date: 2016–12
  29. By: Armin Falk (University of Bonn); Fabian Kosse (University of Bonn)
    Abstract: This study provides insights on the role of early childhood family environment within the process of preference formation. We start by presenting evidence showing that breastfeeding duration is a valid measure of the quality of early childhood environment. In the main analysis, we then investigate how early childhood environment affects the formation of fundamental economic preferences such as time, risk, and social preferences. In a sample of preschool children we find that longer breastfeeding duration is associated with higher levels of patience and altruism as well as a lower willingness to take risk. Repeating the analysis on a sample of young adults indicates that the observed pattern is replicable and persists into adulthood. Importantly, in both data sets our findings are robust when controlling for cognitive ability and parental socio-economic status. We can further rule out that the results are purely driven by nutritional effects of breastfeeding. Altogether, our findings strongly suggest that early childhood environment as measured by breastfeeding duration systematically and persistently affects preference formation.
    Keywords: time preference, risk preferences, altruism, experiments with children, origins of preferences, childhood environment, breastfeeding
    JEL: C91 D64 D90 D81 J13
    Date: 2016–12
  30. By: Bublitz, Elisabeth
    Abstract: This paper investigates whether the individual misperception of income distributions helps explain why, opposite to Meltzer and Richard (1981), higher initial inequality levels do not correlate positively with redistribution. I conduct a representative survey experiment in Brazil, France, Germany, Russia, Spain, and the United States, providing a personalized information treatment on the income distribution to a randomly chosen subsample. Most respondents misperceive their own position in the income distribution. These biases differ by country and the true income position. Misperceptions of the median income relate negatively to misperceived income positions, showing evidence for biased reference points. Correcting misperceptions slightly shifts the demand towards less redistribution in Germany and Russia which appears to be driven by respondents with a negative position bias. Apart from Spain and the US, treatment reactions lead to a convergence of the demand for redistribution across countries. The treatment also alters trust levels in government and beliefs about the importance of luck but not equally across bias types.
    Keywords: income distribution,biased perceptions,inequality,survey experiment
    JEL: D31 D63 H20
    Date: 2016

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.