|
on Experimental Economics |
| By: | Ben Jann; Elisabeth Coutts |
| Abstract: | In a seminal experiment, Doob and Gross (1968) examined the influence of social status on peer-punishment of norm violations in traffic. They observed an inverse relationship between the economic status indicated by a car that was blocking an intersection and the punishment meted out to the driver of that car, with "punishment" taking the form of a honk of the car horn. In a more recent experiment, Diekmann et al. (1996) noted the status and reactions of the cars blocked by a single mid-status car. Blocked drivers at the wheel of a higher-status car were found to punish more aggressively than drivers of a lower-status car. Our study employs a combined design to separate the effects of driver and blocker status. In two field experiments, we varied the status of the norm-violating car and recorded the status of the blocked driver's (i.e. the experimental subject's) car. Our results provide evidence that social distance facilitates peer-punishment. Punishment was expressed less readily when the blocked and blocking cars indicated a similar social status. |
| Keywords: | social status, peer-punishment, horn honking, field experiment, road traffic |
| JEL: | C93 |
| Date: | 2017–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:bss:wpaper:27&r=exp |
| By: | Tomas Miklanek |
| Abstract: | This paper examines endogenous decisions to acquire useful information. My experimental design tries to test predictions of ego-utility theories and other relevant theories about the decision-making process of agents in the environment with costless signals. Only slightly more than half of the subjects acquired an optimal number of the signals for payoff maximization. The results suggest that for the subjects making sub-optimal decisions, aversion to cognitive dissonance is the prevalent channel. Contrary to this, I find much less support for the ego-utility theory and theory of information ignorance in my setting. The availability of information alone does not automatically lead to an improvement in decisions. |
| Keywords: | information acquisition; experiment; overconfidence; |
| JEL: | C91 D03 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp582&r=exp |
| By: | Klempt, Charlotte; Pull, Kerstin; Stadler, Manfred |
| Abstract: | Bilateral bargaining situations are often characterized by informational asymmetries concerning the size of what is at stake: in some cases, the proposer is better informed, in others, it is the responder. We analyze the effects of both types of asymmetric information on proposer behavior in two different situations which allow for a variation of responder veto power: the ultimatum and the dictator game. We find that the extent to which proposers demand less in the ultimatum as compared to the dictator game is (marginally) smaller when the proposer is in the superior information position. Further we find informed proposers to exploit their informational advantage by offering an amount that does not reveal the true size of the pie, with proposers in the ultimatum game exhibiting this behavioral pattern to a larger extent than those in the dictator game. Uninformed proposers risk imposed rejection when they ask for more than potentially is at stake, and ask for a risk premium in dictator games. We concentrate on proposers, but also explore responder behavior: We find uninformed responders to enable proposers' hiding behavior, and we find proposer intentionality not to play an important role for informed responders when they decide whether to accept or reject an offer by an (uninformed) proposer. |
| Keywords: | Bargaining,Information,Experimental Games |
| JEL: | C72 C91 D03 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:97&r=exp |
| By: | Roman M. Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University); Timothy W. Shields (Argyros School of Business and Economics, Chapman University and Economic Science Institute, Chapman University) |
| Abstract: | We investigate the behavior of information providers (underwriters) and users (investors) in a controlled laboratory experiment where underwriters have incentives to deceive and investors have incentives to avoid deception. Participants play simultaneously as underwriters and investors in one-shot information transmission games. The results of our experiment show a significant proportion of both deceptive and non-deceptive underwriters. Despite the presence of deceptive underwriters, investors are receptive to underwriters’ reports, gleaning information content, albeit overly optimistic. Within our sample, deception by underwriters and reception by investors are the most profitable strategies. Moreover, participants who send deceptive reports to investors, but at the same time are receptive to reports of underwriters, earn the highest payoffs. These results call into question the characterization of duped investors being irrational. |
| Keywords: | experiment, strategic communication, risk, deception, investment advice |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:17-04&r=exp |
| By: | Sheremeta, Roman; Shields, Timothy |
| Abstract: | We investigate the behavior of information providers (underwriters) and users (investors) in a controlled laboratory experiment where underwriters have incentives to deceive and investors have incentives to avoid deception. Participants play simultaneously as underwriters and investors in one-shot information transmission games. The results of our experiment show a significant proportion of both deceptive and non-deceptive underwriters. Despite the presence of deceptive underwriters, investors are receptive to underwriters’ reports, gleaning information content, albeit overly optimistic. Within our sample, deception by underwriters and reception by investors are the most profitable strategies. Moreover, participants who send deceptive reports to investors, but at the same time are receptive to reports of underwriters, earn the highest payoffs. These results call into question the characterization of duped investors being irrational. |
| Keywords: | experiment, strategic communication, risk, deception, investment advice |
| JEL: | C72 C91 |
| Date: | 2017–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:77733&r=exp |
| By: | Toke R. Fosgaard (Department of Food and Resource Economics, University of Copenhagen); Lars G. Hansen (Department of Food and Resource Economics, University of Copenhagen); Erik Wengström (Department of Economics, Lund University; Department of Economics, University of Copenhagen) |
| Abstract: | This paper shows that political attitudes are linked to cooperative behavior in an incentivized experiment with a large sample randomly drawn from the Danish population. However, this relationship depends on the way the experiment is framed. In the standard game in which subjects give to a public good, contributions are the same regardless of political attitudes. In an economically equivalent version, in which subjects take from a public good, left-wingers cooperate significantly more than subjects in the middle or to the right of the political spectrum. Through simulation techniques we find that this difference in the framing effect across political point of views is to some extent explained by differences in beliefs and basic cooperation preferences. |
| Keywords: | Cooperation, Social Dilemma, Political Ideology, Experiment, Simulation |
| JEL: | H41 C90 D03 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:foi:wpaper:2017_02&r=exp |
| By: | Vollmer, Elisabeth; Hermann, Daniel; Mußhoff, Oliver |
| Abstract: | The identification of the optimal selling time of stored goods is among the most essential eco-nomic decisions on a farm. Beyond monetary aspects, behavioral factors may influence farmers' selling behavior. In financial economics, the disposition effect is a commonly observed phenomenon. It indicates that investors hold losing stocks too long, while they sell stocks that have increased in value too early. In the context of agriculture, this behavioral bias has not been analyzed thoroughly yet. To close this research gap, we conducted an incentivized online experiment with 112 farmers in Germany. The experimental design was based on well-proven experiments from financial economics and adapted to an agricultural decision context where stored goods must be sold. Farmers were provided information on the uncertain price developments. In addition, lotteries were conducted to elicit farmers' risk attitude, probability weighting, and loss aversion. Results indicate that there is a robust disposition effect in farmers' selling behavior. Furthermore, more loss-averse farmers exhibited a higher disposition effect. |
| Keywords: | disposition effect,experiments,farmers |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:daredp:1701&r=exp |
| By: | Antonio Cabrales (Department of Economics, University College London); Antonio M. Espín (Department of Economics, Middlesex University Business School); Praveen Kujal (Department of Economics, Middlesex University and Economic Science Institute, Chapman University); Stephen Rassenti (Economic Science Institute, Chapman University) |
| Abstract: | Recent experiments suggest that social behavior may be shaped by the time available for decision making. It is known that fast decision making relies more on intuition whereas slow decision making is affected by reflective processes. Little is known, however, about whether people correctly anticipate the effect of intuition vs. reflection on others’ decision making. This is important in everyday situations where anticipating others’ behavior is often essential. A good example of this is the extensively studied Trust Game where the trustor, by sending an amount of money to the trustee, runs the risk of being exploited by the trustee’s subsequent action. We use this game to study how trustors’ choices are affected by whether trustees are externally forced to respond quickly or slowly. We also examine whether trustors’ own tendency to stop and reflect on their intuitions (as measured by the Cognitive Reflection Test) moderates how they anticipate the effect of reflection on the behavior of trustees. We find that the least reflective trustors send less money when trustees are forced to respond “reflectively” rather than “intuitively”, but we also argue that this is a wrong choice. In general, no group, including the ones with the largest number of reflective individuals, is good at anticipating the (positive) effect of forced delay on others’ trustworthiness |
| Keywords: | trust, trustworthiness, beliefs, reflection, dual-process, intuition |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:17-05&r=exp |
| By: | Thomas Markussen (epartment of Economics, University of Copenhagen); Jean-Robert Tyran (Department of Economics, University of Copenhagen) |
| Abstract: | In this experiment, voters select a leader who can either act in the public interest, i.e. make efficient and equitable policy choices, or act in a corrupt way, i.e. use public funds for private gain. Voters can observe candidates’ pro-social behavior and their score in a cognitive ability test prior to the election, and this fact is known to candidates. Therefore, self-interested candidates have incentives to act in a pro-social manner, i.e. to pretend to be public-spirited leaders. We find that both truly pro-social and egoistic leaders co-exist, but that political selection is ineffective in choosing public-spirited leaders. The main reason is that egoistic candidates strategically pretend to be pro-social to increase their chances of winning the election. |
| Keywords: | political selection, pro-social behavior, social dilemma, corruption, voting |
| JEL: | C92 C91 D03 D72 H41 |
| Date: | 2017–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1704&r=exp |
| By: | Tomas Miklanek |
| Abstract: | This study introduces a theoretical model of inequality aversion which can also be used in an environment with information asymmetries. The model is based on the non-paternalistic approach where, the own utility function incorporates the utility of other people as perceived by a decision maker. Moreover it allows extensions for other motives which may result in pro-social behavior. I extend the model by adding shame aversion as an additional driver for apparently altruistic behavior. Threat of shame is induced by different levels of exposure of either own actions or identity to the third party observers. I also experimentally test predictions of the model using a very simple environment of a dictator’s game. The experimental design aims to remove additional confounding behavioral effects present in the previous literature. The results suggest that even a very small exposure results in significantly higher amounts sent to recipients. The analysis also shows that the agents, who believe that they can conceal their own actions in front of the less informed counterpart, exploit this information asymmetry for their monetary benefit. |
| Keywords: | shame; dictator game; anonymity; experiment; |
| JEL: | C91 D03 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp581&r=exp |
| By: | Mechtenberg, Lydia; Muehlheusser, Gerd; Roider, Andreas |
| Abstract: | Whistle-blowing by employees plays a major role in uncovering corporate fraud. Various recent laws aim at improving protection of whistle-blowers and enhancing their willingness to report. Evidence on the effectiveness of such legislation is, however, scarce. Moreover, critics have raised worries about fraudulent claims by low-productivity employees. We study these issues in a theory-guided lab experiment. Easily attainable ("belief-based") protection indeed leads to more reports, both truthful and fraudulent. Fraudulent claims dilute prosecutors' incentives to investigate, and thereby hamper deterrence. These effects are ameliorated under more stringent ("fact-based") protection. |
| Keywords: | Business Ethics; Cheap-Talk Games; Corporate Fraud; Corruption; Lab Experiment; Whistle-Blowing |
| JEL: | C91 D73 D83 K42 M59 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11898&r=exp |
| By: | Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Stéphane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille 2 - Université Paul Cézanne - Aix-Marseille 3 - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Jason Shogren (Departement of Economics and Finance, University of Wyoming - UW - University of Wyoming); Adam Zylbersztejn (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We focus on the design of an institutional device aimed to foster coordination through communication. We explore whether the social psychology theory of commitment, implemented via a truth-telling oath, can reduce coordination failure. Using a classic coordination game, we ask all players to sign voluntarily a truth-telling oath before playing the game with cheap talk communication. Three results emerge with commitment under oath: (1) coordination increased by nearly 50 percent; (2) senders' messages were significantly more truthful and actions more efficient, and (3) receivers' trust of messages increased. |
| Keywords: | Coordination game,Cheap talk communication,Oath |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01480525&r=exp |
| By: | David Kershaw |
| Abstract: | Would payments to those who earned less than a certain amount reduce their incentive to work? Initial results of an unusual test indicate no such effect. |
| Keywords: | Negative Income Tax, National basic income, Graduated work incentive, Graduated tax |
| JEL: | J I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:75baa942aabd4275a8cc2e8b86419cd7&r=exp |
| By: | Mathematica Policy Research |
| Abstract: | The study describes a carefully controlled field test of the effects on recipient families of eight different negative income tax or benefit formulas. |
| Keywords: | Negative Income Tax, National basic income, Graduated work incentive, Graduated tax |
| JEL: | J I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:6fe5073b203a4908a8d1e796914587b7&r=exp |
| By: | Béatrice Boulu-Reshef (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Samuel Brott (Berkeley Research Group); Adam Zylbersztejn (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Etienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We study a finitely repeated public goods game (based on the voluntary contribution mechanism) played under complete uncertainty about the marginal benefit of the public good relative to the private consumption (commonly known as the marginal per capita return): neither one's marginal per capita return nor other players' marginal per capita returns are known at the time of decision-making. We show that contributions are equivalent when the rate of return is predetermined and when it is uncertain, and display a similar decay over time. Combined with the previous experimental findings, our results suggest that the cooperation in public goods games is sensitive to the source of uncertainty about marginal per capita return. |
| Abstract: | Nous étudions un jeu de bien public répété avec un horizon fini et connu (sous la forme du mécanisme de contribution volontaire) avec une incertitude complète sur le rendement marginal du bien public : ni le rendement marginal personnel, ni les rendements marginaux des autres joueurs ne sont connus au moment de la prise de décision sur la contribution individuelle au bien public. Nous montrons que les contributions sont similaires lorsque le rendement marginal du bien public est prédéterminé et parfaitement connu, et lorsqu'il est incertain. Dans les deux cas, les contributions ont tendance à décroitre avec la répétition. En tenant compte des résultats expérimentaux précédents, nos résultats suggèrent que la coopération dans les jeux de biens publics est sensible à la source d'incertitude sur le rendement marginal du bien public. |
| Keywords: | Cooperation,uncertainty,voluntary contribution mechanism,public good,expected return,incertitude,mécanisme de contribution volontaire,bien public,rendement attendu |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01441053&r=exp |
| By: | Sylvain Chareyron; David Gray; Yannick L'Horty |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:tep:teppwp:wp17-01&r=exp |
| By: | Marie Boltz; Karine Marazyan; Paola Villar |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:uds:wpaper:20170004&r=exp |
| By: | Michela Faccioli (The James Hutton Institute, Social, Economic and Geographical Sciences Group); Laure Kuhfuss (School of Geography and Sustainable Development, University of St. Andrews); Mikolaj Czajkowski (University of Warsaw, Department of Economics) |
| Abstract: | The outcome of a conservation policy is often subject to uncertainty. In stated preference valuation, there is increasing recognition that uncertainty affects preferences for environmental policies. However, there is also poor understanding regarding people’s perception of uncertainty per se and risk attitude. To shed more light on this , we designed a discrete choice experiment and compared preferences for environmental outcomes under climate change across two split samples, each confronted with a scenario where environmental outcomes are presented as either certain or uncertain (i.e. probabilistically) but displaying the same expected results. We fi nd that, for an equal expected outcome, preferences vary between the certain and the uncertain treatment. These results indicate that risk attitudes impact stated preferences for conservation policies under uncertainty and reinforce the idea that uncertainty should be included in stated preference studies to provide more accurate and policy relevant results . Interestingly, we additionally find that risk attitudes appear to be both context- and individual-specific– the effect of uncertainty depends on the magnitude and direction of change of the environmental good and on individual’s socio-demographic characteristics. |
| Keywords: | Stated preference valuation, uncertainty, risk attitude, climate change, conservation |
| JEL: | D6 D81 Q20 Q51 Q54 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:sss:wpaper:2017-06&r=exp |
| By: | Ekström, Mathias (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | Christmas is when people are expected to act selflessly for the well-being of others, but are people actually more altruistic at this time of the year? Responding to this question poses a challenge because of the confounding factors of charitable tax breaks, reciprocity motives, direct social pressure and persuasive campaigns for giving that are more prevalent in December. In this paper, I use a unique solicitation situation where these factors are eliminated. Using nine years of data and more than 50 million individual giving decisions, I provide three main results. First, the month of December is associated with an 18 percent increase in the proportion of donors, thereby providing strong support to the notion of seasonal social preferences. Second, exploiting a reform that changed the price of giving, I find that this December effect is equivalent to a 42 percent discount on charitable giving. Finally, half of the December increase in generosity persists into January before returning to the baseline in February. |
| Keywords: | Altruism; Charitable giving; Christmas; Social preferences |
| JEL: | C33 D03 D64 H41 Z10 |
| Date: | 2017–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2017_004&r=exp |
| By: | Stevens, Katrien; Whelan, Stephen |
| Abstract: | There is some evidence that gender differences exist in the propensity to negotiate and outcomes from negotiation. Evidence from the psychology and management literatures suggest that relative to males, females are less likely to initiate negotiation and in the event of negotiation, ask for and receive less. This paper examines the propensity of males and females to negotiate over pay, the wage outcomes resulting from negotiation and its impact on the gender wage gap in a non-experimental setting. Using a unique Australian dataset we find evidence that females are less likely than males to have the opportunity to negotiate over pay in their jobs. However, conditional on the opportunity to negotiate, they are no less likely to actually negotiate their pay. Further, while negotiation is associated with higher wage outcomes, females do not fare worse than males in the event of negotiation. |
| Keywords: | negotiation; gender; wage differentials; labor market |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2016-19&r=exp |
| By: | Dmitry Levando (National Research University Higher School of Economics [Moscow], CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The paper defines a family of nested non-cooperative simultaneous finite games to study coalition structure formation with intra and inter-coalition externalities. Every game has two outcomes - an allocation of players over coalitions and a payoff profile for every player. Every game in the family has an equilibrium in mixed strategies. The equilibrium can generate more than one coalition with a presence of intra and inter group externalities. These properties make it different from the Shapley value, strong Nash, coalition-proof equilibrium, core, kernel, nucleolus. The paper demonstrates some applications: non-cooperative cooperation, Bayesian game, stochastic games and construction of a non-cooperative criterion of coalition structure stability for studying focal points. An example demonstrates that a payoff profile in the Prisoners' Dilemma is non-informative to deduce a cooperation of players. |
| Keywords: | Noncooperative games |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01491935&r=exp |
| By: | Robert Moffitt; Kenneth Kehrer |
| Abstract: | Reviews the basic findings of the negative income tax experiments and discusses the modeling differences encountered in estimating the labor supply response to tax rates. |
| Keywords: | Negative Income Tax, National basic income, Graduated work incentive, Graduated tax. |
| JEL: | J I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:f65e3ccc692540638c09bdf4f0f2cc6c&r=exp |
| By: | Heather Rose |
| Abstract: | Describes the plan for a pilot project to test negative income tax ideas. Experimental variables include the amount of income families are guaranteed if they have no other income, and the rate this amount is reduced as other income rises. |
| Keywords: | Negative Income Tax, National basic income, Graduated work incentive, Graduated tax |
| JEL: | J I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:8111d48ea03f4274a18b96fa20bb4780&r=exp |
| By: | Elias Carroni; Luca Ferrari (Dipartimento di Scienze per l'Economia e l'Impresa); Simone Righi |
| Abstract: | We shed new lights on the desirability of privacy invasion by web–masters in online markets. We consider website’s users uncertain about their need for a prod- uct and advertisers being offered banner spaces to show their commercials. The latter are designed as bayesian experiments. We show the emergence of different types of advertisement, ranging from fully informative to cheap talk. However, fully–informative banners are never showed if users can privately and costly acquire information about their state of necessity. As a result, when users’ privacy is vio- lated, they buy products they do not need and that they would not have bought if privacy were protected. |
| Keywords: | Privacy, Bayesian Persuasion, Advertisement, Targeting. |
| JEL: | D21 D80 L10 L51 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2017_09.rdf&r=exp |
| By: | Feld, Jan; Sauermann, Jan; de Grip, Andries (Research Centre for Educ and Labour Mark) |
| Abstract: | The Dunning–Kruger effect states that low performers vastly overestimate their performance while high performers more accurately assess their performance. Researchers usually interpret this empirical pattern as evidence that the low skilled are vastly overconfident while the high skilled are more accurate in assessing their skill. However, measurement error alone can lead to a negative relationship between performance and overestimation, even if skill and overconfidence are unrelated. To clarify the role of measurement error, we restate the Dunning–Kruger effect in terms of skill and overconfidence. We show that we can correct for bias caused by measurement error with an instrumental variable approach that uses a second performance as instrument. We then estimate the Dunning–Kruger effect in the context of the exam grade predictions of economics students, using their grade point average as an instrument for their exam grade. Our results show that the unskilled are more overconfident than the skilled. However, as we predict in our methodological discussion, this relationship is significantly weaker than ordinary least squares estimates suggest. |
| Keywords: | Dunning-Kruger effect, overconfidence, judgment error, measurement error, instrumental variable |
| JEL: | D03 I23 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umaror:2017003&r=exp |
| By: | Flagmeier, Vanessa; Müller, Jens; Sureth-Sloane, Caren |
| Abstract: | We examine the disclosure of GAAP effective tax rate (ETR) information in firms' financial statements. Applying the theoretical underpinnings of Wagenhofer (1990) to a tax setting, we argue that firms face a tradeoff in their GAAP ETR disclosure decision. On the one hand, firms have incentives to increase GAAP ETR disclosure if the ratio has a condition that is favorable from an investor's perspective, expecting positive capital market reactions. On the other hand, the disclosure might draw tax auditors' and public attention to the GAAP ETR and result in proprietary costs in terms of additional tax payments or reputational damages. We empirically test the disclosure behavior by examining the relation between disclosure intensity and five different measures of favorable GAAP ETR conditions. First, we provide evidence that the annual report section in which most of the firms disclose GAAP ETR information is the management report, indicating that firms assign considerable relevance to the ratio. Second, we find a higher disclosure intensity if the GAAP ETR has a favorable condition, i.e. is decreasing or near the average ratio of firms in the same industry or size group. We do not find a significant relation to the disclosure level for smooth GAAP ETRs. Our findings indicate that firms assess the benefits of providing the favorable GAAP ETR information to be higher than the related costs. Documenting firms' GAAP ETR reporting behavior, we contribute to the tax disclosure literature by providing insights into possible disclosure incentives. Further, our results could increase awareness among investors to have a second look at the GAAP ETR if the disclosure intensity with respect to the ratio is low. |
| Keywords: | Effective Tax Rate,Disclosure,Proprietary Costs |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:214&r=exp |
| By: | Jason M. Fletcher (Yale University); Stefanie Schurer (The University of Sydney) |
| Abstract: | We test whether adverse childhood experiences – exposure to parental maltreatment and its indirect effect on health – are associated with age 30 personality traits. We use rich longitudinal data from a large, representative cohort of young US Americans and exploit differences across siblings to control for the confounding influences of shared environmental and genetic factors. We find that maltreatment experiences are significantly and robustly associated with neuroticism, conscientiousness, and openness to experience, but not with agreeableness and extraversion. High levels of neuroticism are linked to sexual abuse and neglect; low levels of conscientiousness and openness to experience are linked to parental neglect. The estimated associations are significantly reduced in magnitude when controlling for physical or mental health, suggesting that adolescent health could be one important pathway via which maltreatment affects adulthood personality. Maltreatment experiences, in combination with their health effects, explain a significant fraction of the relationship between adulthood conscientiousness and earnings or human capital. Our findings provide a possible explanation for why personality traits are important predictors of adulthood labor market outcomes. |
| Keywords: | human capital, non-cognitive skills, Big Five personality traits, adverse childhood experiences, maltreatment, siblings-fixed effects, add health |
| JEL: | J24 J13 I00 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2017-021&r=exp |
| By: | Arjan Verschoor (University of East Anglia, Norwich, UK); Bereket Kebede (University of East Anglia, Norwich, UK); Alistair Munro (National Graduate Institute for Policy Studies, Tokyo, Japan); Marcela Tarazona (Oxford Policy Management, Oxford, UK) |
| Abstract: | We examine whether the nature of gender relations matters for the effects on household efficiency of exogenous variation in spousal control over the intra-household allocation of resources. Experiments testing for efficiency were conducted among married couples in eight sites representing a range of conjugal cultures: from an extreme form of separate spheres in northern Nigeria to (male) centralised control in North India, along with a variety of intermediate cases. Inefficiency is widespread, varies greatly and tends to be lower when wives control the allocation. The exception is a site in northern Nigeria where female control over resources is well established. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:16-31&r=exp |