nep-exp New Economics Papers
on Experimental Economics
Issue of 2017‒04‒30
thirty-six papers chosen by

  1. Cooperating Over Losses and Competing Over Gains: a Social Dilemma Experiment By Ispano, Alessandro; Schwardmann, Peter
  2. Reducing Student Absenteeism in the Early Grades by Targeting Parental Beliefs By Robinson, Carly D.; Lee, Monica G.; Dearing, Eric; Rogers, Todd
  3. Electoral fraud and voter turnout: An experimental study By Vardan Baghdasaryan; Giovanna Iannantuoni; Valeria Maggian
  4. The limits of guilt By Loukas Balafoutas; Simon Czermak; Marc Eulerich; Helena Fornwagner
  5. Employment Discrimination in Georgia: Evidence from a Field Experiment By Asali, Muhammad; Pignatti, Norberto; Skhirtladze, Sophiko
  6. Deception and Self-Deception By Schwardmann, Peter; van der Weele, Joel
  7. Matching Donations Without Crowding Out? By Adena, Maja; Huck, Steffen
  8. The Power of Sunspots: an Experimental Analysis By Fehr, Dietmar; Heinemann, Frank; Llorente-Saguer, Aniol
  9. Playing the game the others want to play : Keynes’ beauty contest revisited By Kene Boun My; Camille Cornand; Rodolphe Dos Santos Ferreira
  10. Self-Confidence and Unraveling In Matching Markets By Dargnies, Marie-Pierre; Kübler, Dorothea
  11. Efficiency versus Gender Roles and Stereotypes: An Experiment in Domestic Production Abstract Empirical studies cast doubts upon the efficiency assumption made in standard economic models of household behavior. The allocation of time among men and women between market and household work is highly differentiated by gender. In this paper we examine whether couples deviate from efficiency in household production, using an experimental design. We compare the allocation of gendered vs. neutral tasks. Our results show that women in the household overspecialize in “feminine tasks” and men in “masculine tasks” compared to what their comparative advantage would require, hence revealing the influence of gender roles and stereotypes on the couples’ behavior. By Hélène Couprie; Elisabeth Cudeville; Catherine Sofer
  12. Choice Complexity, Benchmarks and Costly Information By Job Harms; S. Rosenkranz; M.W.J.L. Sanders
  13. Competition and Incentives By Schmidt, Klaus; Fey, Lisa; Thoma, Carmen
  14. Random Lottery Incentive Mechanism in Dynamic Choice Experiments By Maria J. Ruiz Martos
  15. Making Moves Matter: Experimental Evidence on Incentivizing Bureaucrats through Performance-Based Transfers By Khan, Adnan Q.; Khwaja, Asim Ijaz; Olken, Benjamin A.
  16. The effects of financial education on financial literacy and savings behavior : Evidence from a controlled field experiment in Dutch primary schools By A.S. Kalwij; Rob Alessie; M. Dinkova; Gea Schonewille; Anna van der Schors; Minou van der Werf
  17. E-Governance, Accountability, and Leakage in Public Programs: Experimental Evidence from a Financial Management Reform in India By Banerjee, Abhijit; Duflo, Esther; Imbert, Clement; Mathew, Santosh; Pande, Rohini
  18. Testing the Theory of Multitasking: Evidence from a Natural Field Experiment in Chinese Factories By Fuhai Hong; Tanjim Hossain; John List; Migiwa Tanaka
  19. Measuring Image Concern By Emeric Henry; Jan Sonntag
  20. Why Bother? Understanding the Impact of Financial Obligations on Wage Selectivity By Gibson, John; Johnson, David
  21. Asset pricing and risk sharing in a complete market: An experimental investigation By Biais, Bruno; Mariotti, Thomas; Moinas, Sophie; Pouget, Sébastien
  22. Older people's willingness to delay social security claiming By Maurer, Raimond; Mitchell, Olivia S.
  23. Do The Effects of Social Nudges Persist? Theory and Evidence from 38 Natural Field Experiments By Alec Brandon; Paul J. Ferraro; John A. List; Robert D. Metcalfe; Michael K. Price; Florian Rundhammer
  24. Gender Differences in Tournament Choices: Risk Preferences, Overconfidence or Competitiveness? By van Veldhuizen, Roel
  25. Attrition in Randomized Control Trials: Using tracking information to correct bias By Macours, Karen; Molina Millan, Teresa
  26. Why Do Women Favor Same-Gender Competition? Evidence from a Choice Experiment By Norma Burow; Miriam Beblo; Denis Beninger; Melanie Schröder
  27. Formation of coalition structures as a non-cooperative game By Dmitry Levando
  28. Pay What You Want as a Pricing Model for Open Access Publishing? By Spann, Martin; Stich, Lucas; Schmidt, Klaus M.
  29. The spillover effects of gender quotas on dishonesty By Valeria Maggian; Natalia Montinari
  30. Aiming to choose correctly or to choose wisely ? The optimality-accuracy trade-off in decisions under uncertainty By Thomas Garcia; Sébastien Massoni
  31. Delegating Pricing Power to Customers: Pay What You Want or Name Your Own Price? By Krämer, Florentin; Schmidt, Klaus M.; Stich, Lucas
  32. Hiring Discrimination: An Overview of (Almost) All Correspondence Experiments Since 2005 By Baert, Stijn
  33. Do Price-Matching Guarantees with Markups Facilitate Tacit Collusion? Theory and Experiment By Andreas Pollak
  34. Can gender differences in distributional preferences explain gender gaps in competition? By Utteeyo Dasgupta; Subha Mani; Smriti Sharma; Saurabh Singhal
  35. Evaluating the Effects of a Targeted Home Visiting Program on Maternal and Child Health Outcomes By Malte Sandner; Thomas Cornelissen; Tanja Jungmann; Peggy Herrmann
  36. The 2016 Nobel Memorial Prize in Contract Theory By Schmidt, Klaus

  1. By: Ispano, Alessandro (THEMA - Universite de Cergy-Pontoise); Schwardmann, Peter (University of Munich)
    Abstract: Evidence from studies in international relations, the politics of reform, collective action and price competition suggests that economic agents in social dilemma situations cooperate more to avoid losses than in the pursuit of gains. To test whether the prospect of losses can induce cooperation, we let experimental subjects play the travelers dilemma in the gain and loss domain. Subjects cooperate substantially more over losses. Furthermore, our results suggest that this treatment effect is best explained by reference-dependent risk preferences and reference-dependent strategic sophistication. We discuss the implications of our results and relate our findings to other experimental games played in the loss domain.
    Keywords: Travelers dilemma; loss domain; diminishing sensitivity; strategic sophistication;
    JEL: C90 D01 D03 D81
    Date: 2017–03–23
  2. By: Robinson, Carly D. (Harvard University); Lee, Monica G. (Stanford University); Dearing, Eric (Boston College); Rogers, Todd (Harvard University)
    Abstract: Attendance in kindergarten and elementary school robustly predicts student outcomes. Despite this well-documented association, there is little experimental research on how to reduce absenteeism in the early grades. This paper presents results from a randomized field experiment in ten school districts evaluating the impact of a low-cost, parent-focused intervention on student attendance in grades K-5. The intervention targeted commonly held parental misbeliefs undervaluing the importance of regular K-5 attendance as well as the number of school days their child had missed. The intervention decreased chronic absenteeism by 15%. This study presents the first experimental evidence on how to improve student attendance in grades K-5 at scale, and has implications for increasing parental involvement in education.
    Date: 2017–03
  3. By: Vardan Baghdasaryan (American University of Armenia and Affiliate Fellow at CERGE-EI, Prague.); Giovanna Iannantuoni (University of Milano-Bicocca); Valeria Maggian (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69130 Ecully, France)
    Abstract: In this paper we experimentally investigate the consequences of electoral fraud on voter turnout. The experiment is based on a strategic binary voting model where voters decide whether to cast a costly vote in favour of their preferred candidate or to abstain. The minority candidate can illicitly influence the electoral process by applying ballot-box stuffing. In the experiment we implement two different framings: we compare voter turnout in a neutral environment and with framed instructions to explicitly replicate elections. This approach enables to both test the model's predictions and to estimate the framing effects of voting and fraud. Comparison of experimental results with theoretical predictions reveals over-voting, which is exacerbated when fraud occurs. Turnout increases as predicted with moderate level of fraud while, with higher electoral fraud, voters fail to recognize that the existence of a relatively larger number of "agents" voting with certainty considerably decreases the benefits of voting. Importantly, framing matters, as revealed by the higher turnout of those in the majority group, against which the fraud is applied.
    Keywords: Laboratory experiment, Framing, Voting, Electoral fraud, Ballot box stuffng and Voter turnout
    JEL: D72 C52 C91 C92
    Date: 2017
  4. By: Loukas Balafoutas; Simon Czermak; Marc Eulerich; Helena Fornwagner
    Abstract: This study examines experimentally how dishonest behavior in the form of misreporting others' performance depends on the nature of provided incentives. We conduct a 'lab in the field' experiment with internal auditors during two large conferences in Germany and evaluate their performance and objectivity, measured as the extent to which they truthfully report the performance of other participants a real-effort task. It has been suggested in the literature that incentive-pay compensation for auditors has the potential to lead to dishonest behavior on their part, for instance when their payoff depends on the performance of the unit that they are auditing. We vary incentives in the experiment from individual (piece rate) to competitive (tournament against another auditor) and collective (based on performance within a team). In line with our hypotheses, we find that incentive-based compensation increases dishonest behavior among internal auditors: competitive incentives lead to under-reporting of other participants' performance, while collective incentives lead to over-reporting of performance.
    Keywords: dishonesty, incentives, sabotage, internal audit, experiment
    JEL: C93 M42 M52
    Date: 2017–04
  5. By: Asali, Muhammad; Pignatti, Norberto; Skhirtladze, Sophiko
    Abstract: We provide experimental evidence about ethnic discrimination in the labor market in Georgia. We randomly assign Georgian and non-Georgian, male and female, names to similar resumes and apply for jobs as advertised in help-wanted web sites in Georgia. We find that gender has no effect on the probability of callback, but a job applicant who is ethnic Georgian is twice more likely to be called for a job interview than an equally skilled ethnic non-Georgian (Azeri or Armenian). The almost 100% gap in callbacks is statistically significant and cannot be abridged by having more experience or education. Both taste-based discrimination and statistical discrimination models are consistent with the evidence provided in this study. Labor market discrimination tends to aggravate in economic busts.
    Keywords: Field Experiment; Discrimination; Employment; Recession; Ethnicity
    JEL: C93 J15 J71 P23
    Date: 2017–04–10
  6. By: Schwardmann, Peter (University of Munich); van der Weele, Joel (University of Amsterdam)
    Abstract: Why are people so often overconfident? We conduct an experiment to test the hypothesis that people become overconfident to more effectively persuade or deceive others. After performing a cognitively challenging task, half of our subjects are informed that they can earn money by convincing others of their superior performance. The privately elicited beliefs of informed subjects are significantly more confident than the beliefs of subjects in the control condition. By generating exogenous variation in confidence with a noisy performance signal, we are also able to show that higher confidence indeed makes subjects more persuasive in the subsequent face-to-face interactions.
    Keywords: Overconfidence; self-deception; motivated cognition; persuasion; deception;
    JEL: C91 D03 D83
    Date: 2017–03–23
  7. By: Adena, Maja (WZB Berlin); Huck, Steffen (WZB Berlin and UCL)
    Abstract: Is there a way of matching donations that avoids crowding out? We introduce a novel matching method where the matched amount is allocated to a different project, present some simple theoretical considerations that predict reduced crowding out or crowding in (depending on the degree of substitutability between the two projects) and present evidence from a large-scale natural field experiment and a laboratory experiment. Similar to findings in the literature, conventional matching for the same project results in partial crowding out in the field experiment and, as predicted, crowding out is reduced under the novel matching scheme. The lab experiment provides more fine-tuned evidence for the change in crowding and yields further support for the theory: the novel matching method works best when the two projects are complements rather than substitutes.
    Keywords: charitable giving; matched fundraising; natural field experiment;
    JEL: C93 D64 D12
    Date: 2017–03–25
  8. By: Fehr, Dietmar (University of Heidelberg); Heinemann, Frank (Technical University of Berlin); Llorente-Saguer, Aniol (Queen Mary University of London and CEPR)
    Abstract: This paper presents an experiment on a coordination game with extrinsic random signals, in which we systematically vary the stochastic process generating these signals and measure how signals affect behavior. We find that sunspot equilibria emerge naturally if there are salient public signals. However, highly correlated private signals can also lead to sunspot-driven behavior, even when this is not an equilibrium. Private signals reduce the power of public signals as sunspot variables. The higher the correlation of extrinsic signals and the more easily they can be aggregated, the more powerful these signals are in distracting actions from the action that minimizes strategic uncertainty.
    Keywords: Coordination games; strategic uncertainty; sunspot equilibria; forward guidance; expectations;
    JEL: C92 D82 D83 E39 E58
    Date: 2017–03–25
  9. By: Kene Boun My (BETA - University of Strasbourg, 61 avenue de la Forˆet Noire - 67085 Strasbourg Cedex); Camille Cornand (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69130 Ecully, France); Rodolphe Dos Santos Ferreira (BETA-Strasbourg University, 61 avenue de la Forêt Noire - 67085 Strasbourg Cedex, France; Catolica Lisbon School of Business and Economics)
    Abstract: In Keynes’ beauty contest, agents make evaluations reflecting both an expected fundamental value and the conventional value expected to be set by the market. They thus respond to fundamental and coordination motives, respectively, the prevalence of either being set exogenously. Our contribution is twofold. First, we propose a valuation game in which agents strategically choose how to weight each motive. This game emphasises public information leads agents to favour the coordination motive. Second, we test the game through a laboratory experiment. Subjects tend to conform to theoretical predictions, except when fundamental uncertainty is low relative to strategic uncertainty.
    Keywords: dispersed information, public information, beauty contest, coordination, experiment
    JEL: D84 C92 E12
    Date: 2017
  10. By: Dargnies, Marie-Pierre (University of Paris Dauphine); Kübler, Dorothea (WZB and TU Berlin)
    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: 2017–03–25
  11. By: Hélène Couprie; Elisabeth Cudeville; Catherine Sofer (Université de Cergy-Pontoise, THEMA)
    Keywords: Stereotypes, gender roles, household models, gender inequalities.
    JEL: D13 J16 C92
    Date: 2017
  12. By: Job Harms; S. Rosenkranz; M.W.J.L. Sanders
    Abstract: In this study we investigate how two types of information interventions, providing a benchmark and providing costly information on option ranking, can improve decision-making in complex choices. In our experiment subjects made a series of incentivized choices between four hypothetical financial products with multiple cost components. In the benchmark treatments one product was revealed as the average for all cost components, either in relative or absolute terms. In the costly information treatment subjects were given the option to pay a flat fee in order to have two products revealed as being suboptimal. Our results indicate that benchmarks affect decision quality, but only when presented in relative terms. In addition, we find that the effect of relative benchmarks on decision-quality increases as options become more dissimilar in terms of the number of optimal and suboptimal features. This result suggests that benchmarks make these differences between products more salient. Furthermore, we find that decision-quality is improved by providing costly information, specifically for more similar options. Finally, we find that absolute – but not relative – benchmarks increase demand for costly information. In sum, these results suggest that relative benchmarks can improve decision-making in complex choice environments.
    Keywords: experimental economics, complex choices, benchmarks, advice, choice architecture
    Date: 2017–03
  13. By: Schmidt, Klaus (University of Munich); Fey, Lisa (University of Munich); Thoma, Carmen (University of Munich)
    Abstract: We report on two experiments that identify non-monetary incentive effects of competition. As the number of competitors increases, monetary incentives to engage in cost reduction tend to decrease. We test the hypothesis that there are non-monetary incentive effects of competition going in the opposite direction. In the experiments we change the number of competitors exogenously keeping the monetary incentives to spend effort constant. The first experiment shows that subjects spend significantly more effort in duopolistic and oligopolistic markets than in a monopoly. The second experiment focuses on social comparisons as one potential mechanism for this effect. It shows that competition turns the effort decisions of competing managers into strategic complements.
    Keywords: incentive effects of competition; behavioral industrial organization;
    JEL: D03 L10 O31
    Date: 2017–04–28
  14. By: Maria J. Ruiz Martos (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: Cubitt, Starmer and Sugden [TheEconomic Journal, 108, 1362-80, (1998)] pose a dynamic choice argument against the random lottery incentive (RLIS) mechanism. To wit, the RLIS relies on principles of dynamic choice. Thus, experimental research on the dynamic choice principles should be conducted ina single choice design. This study attempts to evaluate the empirical validity of their argument by quasi-replicating their single choice experiment in a RLIS design. Results suggest that one may use the RLISin dynamic choice experiments.
    Keywords: experiments, payment approaches,non-expected utility and risk, dynamic choice principles
    JEL: B49 C91 D11 D81
    Date: 2017–04–25
  15. By: Khan, Adnan Q. (London School of Economics and Political Science); Khwaja, Asim Ijaz (Harvard University); Olken, Benjamin A. (MIT)
    Abstract: Postings are often used by bureaucracies, especially in emerging economies, in an attempt to reward or punish their staff. Yet we know little about whether, and how, this type of mechanism can help incentivize performance. Using postings to induce performance is challenging, as heterogeneity in preferences over which postings are desirable non-trivially impacts the effectiveness of such schemes. We propose and examine the properties of a mechanism, which we term a performance-ranked serial dictatorship, in which individuals sequentially choose their desired location, with their rank in the sequence based on their performance. We then evaluate the effectiveness of this mechanism using a two-year field experiment with over 500 property tax inspectors in Punjab, Pakistan. We first show that the mechanism is effective: being randomized into the performance-ranked serial dictatorship leads inspectors to increase the growth rate of tax revenue by between 44 and 80 percent. We then use our model, combined with preferences collected at baseline from all tax inspectors, to characterize which inspectors face the highest marginal incentives under the scheme. We find empirically that these inspectors do in fact increase performance more under this mechanism. We estimate the cost from disruption caused by transfers to be small, but show that applying the scheme too frequently can reduce performance. On net the results suggest that bureaucracies have tremendous potential to improve performance by periodically using postings as an incentive, particularly when preferences over locations have a substantial common component.
    Date: 2016–11
  16. By: A.S. Kalwij; Rob Alessie; M. Dinkova; Gea Schonewille; Anna van der Schors; Minou van der Werf
    Abstract: In this paper, we report the results of a controlled field experiment designed to estimate the short-term effects of a 45-minute financial education program on financial literacy and savings behavior in Dutch primary schools. Among fifth and sixth graders, the program led to a pre- to posttest improvement in financial literacy on almost one out of eight questions, with about one-third of the increase in correctness attributable to the program. It also raised the savings probability for fifth graders by seven percentage point but generated no significant increase for sixth graders. Overall, the program appears to have been mainly effective for the questions explicitly addressed in its content. We also note that the significant program effects appear to be driven by the result for girls; however, we cannot reject homogeneous treatment effects with respect to gender.
    Keywords: Education, treatment effects, panel data models
    Date: 2017–02
  17. By: Banerjee, Abhijit (MIT); Duflo, Esther (MIT); Imbert, Clement (U Warwick); Mathew, Santosh (Indian Ministry of Rural Development); Pande, Rohini (Harvard University)
    Abstract: In collaboration with the Government of Bihar, India, we conducted a large-scale experiment to evaluate whether transparency in fiscal transfer systems can increase accountability and reduce corruption in the implementation of a workfare program. The reforms introduced electronic fund-flow, cut out administrative tiers, and switched the basis of transfer amounts from forecasts to documented expenditures. Treatment reduced leakages along three measures: expenditures and hours claimed dropped while an independent household survey found no impact on actual employment and wages received; a matching exercise reveals a reduction in fake households on payrolls; and local program officials' self-reported median personal assets fell.
    Date: 2016–10
  18. By: Fuhai Hong; Tanjim Hossain; John List; Migiwa Tanaka
    Abstract: Using a natural field experiment with factory workers where we introduce a quantity-based performance-pay scheme in addition to their base salary, we quantify the impact of one-dimensional monetary incentives on both incentivized (quantity) and non-incentivized (quality) dimensions of output. While the management typically observes only quantity, we also observe quality by hiring quality-inspectors unbeknownst to the workers. While some workers receive a flat-rate base salary, others receive a piece-rate base salary. We find sharp evidence that workers under a flat-rate base salary trade off quality for quantity. Interestingly, this quantity-quality trade-off is statistically insignificant for workers under a piece-rate base salary. This variation in the treatment effect is consistent with a simple theoretical model that predicts that when agents are already incented at the margin, the quantity-quality trade-off resulting from additional incentives will be less prominent.
    Date: 2017
  19. By: Emeric Henry (Département d'économie); Jan Sonntag
    Abstract: It is now well documented that individuals, on average, change their behavior when their actions are observed by others. Yet, there is no systematic way of measuring this dimension of preferences at the individual level. In this paper, we propose a novel experimental game to measure the individual sensitivity to image concerns. We show that few socio-economic characteristics can explain the level of image concern. One exception is that members of ethnic minorities seem to be more imaged concerned, in particular when observed by a member of other groups. Men (resp. women) are more image concerned when observed by women (resp. men). Finally, we show that more image concerned individuals tend to be more selfish and find evidence consistent with the fact that they try to avoid situations where their actions risk being visible.
    Keywords: Image concern; Experimental measurement; Repeated prisoner's dilemna
    JEL: D03 D64
    Date: 2015–11
  20. By: Gibson, John; Johnson, David
    Abstract: Approximately 80 percent of Americans have a significant financial obligation. A substantial fraction of these individuals rely almost solely on labor income to meet these needs. Using a two-period model we demonstrate that when agents are risk averse, increasing the level of financial obligation will have a differential effect on the likelihood a wage offer is accepted depending on the initial size of the obligation. Increasing financial obligations from low levels is found to reduce wage selectivity, while increasing it beyond a certain threshold reverses this effect. We test our theory using online experiments. We confirm our theoretical results in the form of a statistically significant "dip" in wage selectivity for risk averse subjects assigned moderate financial obligations. This non-monotonic effect suggests that heterogeneity in financial obligations may exacerbate income and wealth inequality through individuals' labor market decisions. Policy makers interested in distributional effects should consider this feedback mechanism when designing policies related to loan forgiveness or debt discharge.
    Keywords: Wage Selectivity; Debt; Unemployment; Online Experiment
    JEL: C90 C99 J22 J64
    Date: 2017–04
  21. By: Biais, Bruno; Mariotti, Thomas; Moinas, Sophie; Pouget, Sébastien
    Abstract: We design an experiment that closely emulates and tests the standard model of complete competitive markets, without imposing parametric restrictions on preferences. Consistent with theory, aggregated elicited supply and demand curves cross at the expected dividend when there is no aggregate risk, and at a lower price when there is aggregate risk. In contradiction with theory, individual participants frequently make choices that violate ?rst order stochastic dominance. We propose a random choice model which reconciles the above mentioned ?ndings and is also consistent with additional features of the data, such as, e.g., large mistakes being less frequent than smaller ones.
    Date: 2017–04
  22. By: Maurer, Raimond; Mitchell, Olivia S.
    Abstract: We designed and fielded an experimental module in the 2014 HRS which seeks to measure older persons' willingness to voluntarily defer claiming of Social Security benefits. In addition we evaluate the stated willingness of older individuals to work longer, depending on the Social Security incentives offered to delay claiming their benefits. Our project extends previous work by analyzing the results from our HRS module and comparing findings from other data sources, which included very much smaller samples of older persons. We show that half of the respondents would delay claiming if no work requirement were in place under the status quo, and only slightly fewer, 46 percent, with a work requirement. We also asked respondents how large a lump sum they would need with or without a work requirement. In the former case, the average amount needed to induce delayed claiming was about $60,400, while when part-time work was required, the average was $66,700. This implies a low utility value of leisure foregone of only $6,300, or about 10 percent of older households' income.
    Date: 2016
  23. By: Alec Brandon; Paul J. Ferraro; John A. List; Robert D. Metcalfe; Michael K. Price; Florian Rundhammer
    Abstract: This study examines the mechanisms underlying long-run reductions in energy consumption caused by a widely studied social nudge. Our investigation considers two channels: physical capital in the home and habit formation in the household. Using data from 38 natural field experiments, we isolate the role of physical capital by comparing treatment and control homes after the original household moves, which ends treatment. We find 35 to 55 percent of the reductions persist once treatment ends and show this is consonant with the physical capital channel. Methodologically, our findings have important implications for the design and assessment of behavioral interventions.
    JEL: C93 D01 D03 Q4
    Date: 2017–03
  24. By: van Veldhuizen, Roel (WZB Berlin Social Science Center)
    Abstract: A large number of recent experimental studies show that women are less likely to sort into competitive environments. While part of this effect may be explained by gender differences in risk attitudes and overconfidence, previous studies have attributed the majority of the gender gap to gender differences in a separate \\\'competitiveness\\\' trait. We re-examine this result using a novel experimental technique that allows us to separate competitiveness from alternative explanations by experimental design. In contrast to the literature, our results imply that the whole gender gap is driven by risk attitudes and overconfidence, which has important implications for future research.
    Keywords: gender; competitiveness; lab experiment; experimental design;
    JEL: C90 J16 D03
    Date: 2017–03–25
  25. By: Macours, Karen; Molina Millan, Teresa
    Abstract: This paper starts from a review of RCT studies in development economics, and documents many studies largely ignore attrition once attrition rates are found balanced between treatment arms. The paper analyzes the implications of attrition for the internal and external validity of the results of a randomized experiment with balanced attrition rates, and proposes a new method to correct for attrition bias. We rely on a 10-years longitudinal data set with a final attrition rate of 10 percent, obtained after intensive tracking of migrants, and document the sensitivity of ITT estimates for schooling gains and labour market outcomes for a social program in Nicaragua. We find that not including those found during the intensive tracking leads to an overestimate of the ITT effects for the target population by more than 35 percent, and that selection into attrition is driven by observable baseline characteristics. We propose to correct for attrition using inverse probability weighting with estimates of weights that exploit the similarities between missing individuals and those found during an intensive tracking phase. We compare these estimates with alternative strategies using regression adjustment, standard weights, bounds or proxy information.
    Keywords: attrition; long-term evaluation; randomized control trials
    JEL: C31 C81 C93 O12
    Date: 2017–04
  26. By: Norma Burow; Miriam Beblo; Denis Beninger; Melanie Schröder
    Abstract: This paper addresses the behavioral puzzle of women’s preference for competition when competitors are also women. Using a framed field experiment with 883 non-standard subjects, we show that none of the determinants of competitive behavior in general, including ability, self-confidence and risk aversion, provide a satisfying explanation for women’s substantive gender-related selection into competition. Nonetheless, women who are overconfident, i.e. over-estimate own abilities in performing a task, enter competition regardless of the gender-mix. Hence, the gender-pairing phenomenon is driven by women who correctly estimate or under-estimate own ability. We concluded that this is due to stereotypes about women’s underperformance compared to men.
    Keywords: Preferences for competition, gender, group composition, self-confidence
    JEL: C99 D83 J16
    Date: 2017
  27. By: Dmitry Levando (National Research University Higher School of Economics)
    Abstract: Traditionally social sciences are interested in structuring people in multiple groups based on their individual preferences. This paper suggests an approach to this problem in the framework of a non-cooperative game theory. Definition of a suggested game includes a family of nested simultaneous non-cooperative finite games with intra- and inter-coalition externalities. In this family, games differ by the size of maximum coalition, partitions and by coalition structure formation rules. A result of every game consists of partition of players into coalitions and a payoff profile for every player. Every game in the family has an equilibrium in mixed strategies with possibly more than one coalition. The results of the game differ from those conventionally discussed in cooperative game theory, e.g. the Shapley value, strong Nash, coalition-proof equilibrium, core, kernel, nucleolus. We discuss the following applications of the new game: cooperation as an allocation in one coalition, Bayesian game, stochastic games and construction of a non-cooperative criterion of coalition structure stability for studying focal points
    Keywords: Non-cooperative Games; Nash equilibrium; Shapley value; strong equilibrium; core
    JEL: C71 C72 C73
    Date: 2017–02
  28. By: Spann, Martin (University of Munich); Stich, Lucas (University of Munich); Schmidt, Klaus M. (University of Munich)
    Abstract: We analyze \'Pay What You Want\' as a business model for Open Access publishing by discussing motives leading authors to make voluntary contributions, potential benefits for publishers and present results from a field experiment at one publisher. Data from the field experiment indicate authors\' willingness to voluntarily contribute.
    Keywords: Gold open access; article processing charges; customer-driven pricing; voluntary contributions; field experiment;
    JEL: M31 D03 L11
    Date: 2017–03–25
  29. By: Valeria Maggian (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69130 Ecully, France); Natalia Montinari (University of Bologna, Piazza Scaravilli 2, 40126, Bologna, Italy)
    Abstract: We experimentally test for spillover effects of gender quotas on subsequent unrelated, unethical behavior. We find that introducing quotas has no systematic effect on unethical behavior for both genders. High performing, competitive females are more likely to display unethical behavior than their male counterparts.
    Keywords: Affirmative action, spillover effects, unethical behavior, competition, laboratory experiments
    JEL: D03 C91 J24
    Date: 2017
  30. By: Thomas Garcia (Univ Lyon, Université Lumière Lyon 2, GATE L-SE UMR 5824, F-69130 Ecully, France; QuBE - School of Economics and Finance, QUT, Brisbane, Australia); Sébastien Massoni (QuBE - School of Economics and Finance, QUT, Brisbane, Australia; Australian Centre for Entrepreneurship Research, QUT, Brisbane, Australia)
    Abstract: When making a decision under uncertainty, individuals aim to achieve opti- mality. In general, an accurate decision is optimal. However, in real life situations asymmetric stakes induce an unusual divergence between optimality and accuracy. We highlight this optimality-accuracy trade-off and study its origins using two experiments on perceptual decision making. We use Signal Detection Theory as a normative benchmark. The first experiment confirms the existence of an optimality-accuracy trade-off with a leading role of accuracy. The second experiment explains this trade-off by the concern of people for being right.
    Keywords: optimality, accuracy, signal detection theory, incentives, experiment
    JEL: D81 D83
    Date: 2017
  31. By: Krämer, Florentin (University of Munich); Schmidt, Klaus M. (University of Munich); Stich, Lucas (University of Munich)
    Abstract: Pay What You Want (PWYW) and Name Your Own Price (NYOP) are customer driven pricing mechanisms that give customers (some) pricing power. Both have been used in service industries with high fixed costs to price discriminate without setting a reference price. Their participatory and innovative nature gives rise to promotional benefits that do not accrue to posted-price sellers. We explore the nature and effects of these benefits and compare PWYW and NYOP using controlled lab experiments. We show that PWYW is a very aggressive strategy that achieves almost full market penetration. It can be profitable if there are promotional benefits and if marginal costs are low. In contrast, NYOP can be used profitably also if marginal costs are high and if there are no such benefits. It reduces price competition and segments the market. In a second experiment, we generate promotional benefits endogenously. We show that PWYW monopolizes the follow-up market but fails to be profitable. NYOP is less successful in penetrating the market but yields much higher profits.
    Keywords: Customer-driven pricing mechanisms; pay what you want; name your own price; competitive strategies; marketing; laboratory experiment;
    JEL: D03 D21 D22 D40 L11 M31
    Date: 2017–03–25
  32. By: Baert, Stijn
    Abstract: This chapter aims to provide an exhaustive list of all (i.e. 90) correspondence studies on hiring discrimination that were conducted between 2005 and 2016 (and could be found through a systematic search). For all these studies, the direction of the estimated treatment effects is tabulated. In addition, a discussion of the findings by discrimination ground is provided.
    Date: 2017
  33. By: Andreas Pollak
    Abstract: This paper studies how competitive prices are affected by price-matching guarantees allowing for markups on the lowest competing price. This new type of low-price guarantee was recently introduced in the German retail gasoline market. Using a sequential Hotelling model, we show that such guarantees, similar to perfect price-matching guarantees, can induce collusive prices. In particular, this occurs if the first mover provides a price guarantee with a markup which is below a threshold value. In these cases, prices are on average set at the monopoly level. A laboratory experiment supports the theoretical predictions.
    Date: 2017–03–01
  34. By: Utteeyo Dasgupta; Subha Mani; Smriti Sharma; Saurabh Singhal
    Abstract: We design an experiment to examine whether egalitarian preferences, and in particular, behindness aversion as well as preference for favourable inequality affect competitive choices differently among males and females. We find that selection into competitive environments is: (a) negatively related to egalitarian preferences, with smaller negative impacts of being egalitarian on females’ choice of the tournament wage scheme, and (b) negatively associated with behindness aversion and positively related to preference for favourable inequality, with significant gender differences in the impact of these distributional preferences. Once we allow for the impact of distributional preferences, behavioural, personality, and socioeconomic characteristics to vary by gender, the pure gender effect is explained away. We find that gender gaps in distributional preferences along with selected personality traits are the most relevant explanations for gender differences in willingness to compete. This is an important result as these characteristics are per se malleable and amenable to policy interventions.
    Date: 2017
  35. By: Malte Sandner (University College London); Thomas Cornelissen (University of York); Tanja Jungmann (Universität Rostock); Peggy Herrmann (Hannover Medical School)
    Abstract: We evaluate the effects of home visiting targeted towards disadvantaged first-time mothers on maternal and child health outcomes. Our analysis exploits a randomized controlled trial and combines rich longitudinal survey data with unique administrative health data. In a context in which the target group has comprehensive health care access, we find that home visiting has no effects on most types of health utilization, health behaviors, and physical health measures. However, the intervention has a remarkably robust and sizable positive effect on maternal mental health, reducing depressions reported in the survey data and prescriptions of psycholeptics recorded in the administrative data.
    Keywords: child health, disadvantaged families, mental health, early childhood intervention
    JEL: I14
    Date: 2017–04
  36. By: Schmidt, Klaus (University of Munich)
    Abstract: Oliver Hart and Bengt Holmström were awarded the 2016 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for their fundamental contributions to contract theory. This article offers a short summary and discussion of their path breaking work.
    Keywords: contract theory; nobel prize; optimal incentive schemes; incomplete contracts;
    JEL: B21 D23 D82 L20
    Date: 2017–03–25

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.