nep-exp New Economics Papers
on Experimental Economics
Issue of 2017‒05‒14
29 papers chosen by

  1. The Pen is Mightier than the Sword: How Third-party Advice or Sanction Impacts on Pro-environmental Behavior By Agnès Festré; Pierre Garrouste; Ankinée Kirakozian; Mira Toumi
  2. Do Higher Achievers Cheat Less? An Experiment of Self-Revealing Individual Cheating By Siniver, Erez; Tobol, Yossi; Yaniv, Gideon
  3. The Pay-What-You-Want Game: What can be learned from the experimental evidence on Dictator and Trust Games? By Matthias Greiff; Henrik Egbert
  4. Whistleblowing vs random audit: An experimental test of relative effciency By Cécile Bazart; Mickael Beaud; Dimitri Dubois
  5. Fairness views and political preferences - Evidence from a large online experiment By Daniel Müller; Sander Renes
  6. Large Stakes and Little Honesty? Experimental Evidence from a Developing Countr By Andreas Leibbrandt; Pushkar Maitra; Ananta Neelim
  7. Does the Paradox of Plenty Exist? Experimental Evidence on the Curse of Resource Abundance By Andreas Leibbrandt; John Lynham
  8. Impulsivity, Voluntary Cooperation, and Denunciation among Fishermen By Carina Cavalcanti; Andreas Leibbrandt
  9. Information, Belief Elicitation and Threshold Effects in the 5X1000 Tax Scheme: A Framed Field Experiment By Becchetti, Leonardo; Pelligra, Vittorio; Reggiani, Tommaso
  10. The Sequencing of Gift Exchange: A Field Trial By Carpenter, Jeffrey P.
  11. Disappointment Aversion and Social Comparisons in a Real-Effort Competition By Simon Gaechter; Lingbo Huang; Martin Sefton
  12. The Demand for Teacher Characteristics in the Market for Child Care: Evidence from a Field Experiment By Boyd-Swan, Casey; Herbst, Chris M.
  13. Hiding Money: Evidence from a field experiment with aspiring female entrepreneurs By Farah Said; Mahreen Mahmud; Giovanna d’Adda; Azam Chaudhry
  14. Household Matters: Revisiting the Returns to Capital among Female Micro-entrepreneurs By Bernhardt, Arielle; Field, Erica; Pande, Rohini; Rigol, Natalia
  15. Parental Involvement in Education: Evidence from Field Experiments in Developing Countries By Asadul Islam
  16. Asymmetric dominance effect with multiple decoys for low- and high-variance lotteries By Sürücü, Oktay; Brangewitz, Sonja; Mir Djawadi, Behnud
  17. Attrition in Randomized Control Trials: Using Tracking Information to Correct Bias By Molina Millán, Teresa; Macours, Karen
  18. A glance into the willingness to reduce overfishing: Field evidence from a fishnet exchange program By Carina Cavalcanti; Andreas Leibbrandt
  19. MTurk ‘Unscrubbed’: Exploring the good, the ‘Super’, and the unreliable on Amazon’s Mechanical Turk By Jeanette A.M.J. Deetlefs; Mathew Chylinski; Andreas Ortmann
  20. Double Auction Market Trading and Income Inequality: An initial investigation By Paul Brewer; Anmol Ratan
  21. Does the community-based development program contribute to the economic welfare of rural households? Evidence from a randomized experiment in Afghanistan By Sarwari, Abdul Nafi; Jinnai, Yusuke
  22. Optimal data collection for randomized control trials By Pedro Carneiro; Sokbae Lee; Daniel Wilhelm
  23. Personality and Economic Choices By Christopher Boyce; Mikołaj Czajkowski; Nick Hanley
  24. Updating ambiguous beliefs in a social learning experiment By Roberta De Filippis; Antonio Guarino; Philippe Jehiel; Toru Kitagawa
  25. It Pays to Be a Man: Rewards for Leaders in a Coordination Game By Philip J. Grossman; Catherine Eckel; Mana Komai; Wei Zhan
  27. Permutation tests for equality of distributions of functional data By Federico A. Bugni; Joel L. Horowitz
  28. Does the Allocation of Property Rights Matter in the Commons? By Andreas Leibbrandt; John Lynham
  29. Competition in Agricultural Markets: An Experimental Approach By Casaburi, Lorenzo; Reed, Tristan

  1. By: Agnès Festré (Université Côte d'Azur, France; GREDEG CNRS); Pierre Garrouste (Université Côte d'Azur, France; GREDEG CNRS); Ankinée Kirakozian (Université Côte d'Azur, France; GREDEG CNRS); Mira Toumi (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: It is recognized widely that incentives can influence the cooperation of individuals in the provision of public goods. The aim of this study is to adapt a public good game (PGG) to the environmental issue of waste management. We report an experiment where the players have to cooperate in order to reduce the cost of waste sorting treatment. We consider a traditional PGG involving groups with four players. A fifth player representing the third-party is introduced in the incentivized treatments. The third-party can provide advice about the desired individual contribution (Advice Treatment), or can punish collectively non-cooperative behaviors by increasing the tax rate (Sanction Treatment). Furthermore, participants are asked to perform an effort task to increase their given initial endowments. A social preferences measure is introduced in the form of a social value orientation (SVO) test. We find that initially, both advice and the threat of sanction significantly increase the average individual contribution level. However, once the sanction is applied, we find it has no significant effect in increasing cooperation, rather the contrary. Also, we find results in line with Becker (1974)'s altruism hypothesis that high income individuals contribute more in absolute value than low income individuals only under the threat of a sanction.
    Keywords: Waste sorting, Laboratory experiment, Advice, Sanction, Pro-social behavior
    JEL: Q53 C91 D03
    Date: 2017–05
  2. By: Siniver, Erez (College of Management, Rishon Lezion Campus); Tobol, Yossi (Jerusalem College of Technology (JTC)); Yaniv, Gideon (Ariel University)
    Abstract: The extensive body of survey-based research correlating between students' cheating and their academic grade point average (GPA) consistently finds a significant negative relationship between cheating and the GPA. The present paper reports the results of a two-round experiment designed to expose student cheating at the individual level and correlate it with three intellectual achievement measures: the GPA, the high-school matriculation average grade (MAG) and the psychometric exam score (PES). The experiment involved two classes of third-year economics students incentivized by a competitive reward to answer a multiple-choice trivia quiz without consulting their electronic devices. While this forbiddance was deliberately overlooked in the first round, providing an opportunity to cheat, it was strictly enforced in the second, conducted two months later in the same classes with the same quiz. A comparison of subjects' performance in the two rounds, self-revealed a considerable extent of cheating in the first one. Regressing the individual cheating levels on subjects' gender and their intellectual achievement measures exhibited no significant differences in cheating between males and females. However, cheating of both genders was found to significantly increase with each achievement measure, implying, in sharp contrast with the direct-question surveys, that higher achievers are bigger cheaters.
    Keywords: experimental data, cheating behavior, intellectual achievement
    JEL: A22 C91 C92 K42
    Date: 2017–04
  3. By: Matthias Greiff (Justus-Liebig-University Giessen); Henrik Egbert (Anhalt University of Applied Sciences)
    Abstract: This paper introduces the Pay-What-You-Want game which represents the interaction between a buyer and a seller in a Pay-What-You-Want (PWYW) situation. The PWYW game embeds the dictator game and the trust game as subgames. This allows us to use previous experimental studies with the dictator and the trust game to identify three factors that can influence the success of PWYW pricing in business practice: (i) social context, (ii) social information, and (iii) deservingness. Only few cases of PWYW pricing for a longer period of time have been documented. By addressing repeated games, we isolate two additional factors which are likely to contribute to successful implementations of PWYW as a long term pricing strategy. These are (iv) communication and (v) the reduction of goal conflicts. The central contribution of this study is an attempt to bridge the gap between laboratory experiments and the research on PWYW pricing, which relies largely on evidence from the field. By reviewing the relevant experiments, this study identifies factors crucial for the success of PWYW pricing and provides guidance to developing long-term applications of PWYW pricing.
    Keywords: Pay-What-You-Want, PWYW Game, pricing, dictator game, trust game
    JEL: C90 D12 D49 M21 M30
    Date: 2017–05
  4. By: Cécile Bazart; Mickael Beaud; Dimitri Dubois
    Abstract: This paper reports an experimental test of the relative effciency of a whistleblowing-based audit scheme compared to a random-based audit scheme. We design a between-subjects laboratory experiment with two treatments: a benchmark with a random-based audit scheme and an alternative treatment in which taxpayers can blow the whistle. Compared to the benchmark, the whistleblowing-based audit scheme (i) decreases the monetary amount of tax evasion, (ii) improves the targeting of evaders and (iii) raises the tax levy
    Date: 2017–05
  5. By: Daniel Müller; Sander Renes
    Abstract: We elicit distributional fairness ideals of impartial spectators using an incentivized economic experiment in a large and heterogeneous sample of the German population. Our dataset allows us to relate our experimental data on fairness ideals to a large range of socio-demographic characteristics, political preferences and revealed charitable behavior. We document several empirical facts: i) egalitarians are the predominant type, even though egalitarian allocations are Pareto-dominated by maxi-min allocations; ii) females are more egalitarian than men; iii) men are relatively more efficiency-minded; iv) maxi-max preferences are empirically irrelevant; v) left-leaning voters are more likely to be egalitarians whereas right-leaning voters are more likely to be efficiency-minded; and vi) young and highly-educated participants hold different fairness ideals than the rest of the population. Moreover, we show that the experimentally elicited fairness types predict preferences for redistribution and social spending. We also find that egalitarians are more likely to donate to charity than efficiency-minded people, even after controlling for a range of covariates. Hence, our paper also contributes to the emerging literature examining the external validity of laboratory experiments on fairness preferences.larger in-group - out-group bias.
    Keywords: Distributional fairness, impartial spectator, representative online experiment, external validity, political attitudes
    JEL: C90 D31 D63
    Date: 2017–05
  6. By: Andreas Leibbrandt; Pushkar Maitra; Ananta Neelim
    Abstract: We experimentally study the extent to which individuals are honest when lying can result in a gain of several months’ worth of income. Randomly selected individuals from villages in Bangladesh participated in a sender-receiver cheap talk game. We varied the potential benefits from providing false recommendations. While we find that individuals are more likely to provide false recommendations when stakes are very large, we still observe that almost half of the senders refrain from lying. Receivers are generally suspicious and approximately half of the times do not follow recommendations received. In addition, we observe that one-fifth of the senders do not send any message if they can remain silent and that the option to remain silent crowds out honesty but not dishonesty. These findings provide novel insights on the prevalence, robustness, and motivation of honesty over large stakes from a developing country.
    Keywords: Artefactual Field Experiment, Honesty, Deception, Stakes, Development
    JEL: C93 D64
    Date: 2017–04
  7. By: Andreas Leibbrandt; John Lynham
    Abstract: There is conflicting evidence about whether abundant resources are indeed a blessing or a curse. We make use of specially designed economic experiments to investigate how resource abundance affects cooperation in the absence or presence of regulatory institutions. We observe that in the absence of regulatory institutions, there is less cooperation in groups with access to large resource pools than in groups with access to small resource pools. However, if regulatory institutions are present, we show that there is more cooperation in groups with access to large resource pools than in groups with access to small resource pools. Our findings also reveal that resource users are more willing to regulate access to abundant than to small resource pools. These findings provide causal evidence for the “paradox of plenty” and identify the causes for the pitfalls and potentials of resource wealth.
    Keywords: lab experiment; stakes; institutions; rent seeking.
    Date: 2017–04
  8. By: Carina Cavalcanti; Andreas Leibbrandt
    Abstract: Abundant laboratory evidence shows that many people incur costs to punish free-riders. In this paper, we investigate punishment in the context of fishermen who decide whether to denounce other fishermen who catch illegally small fish. Our laboratory and survey evidence suggests that the level of impulsivity plays an important role for costly punishment. Fishermen who behave more impulsive during a laboratory inter-temporal choice task report to have a higher propensity to denounce misbehavior from other fishermen. This finding suggests that impulsivity may help to explain why many people incur costs to punish free-riders. Moreover, we find that fishermen, who contribute more in a laboratory public goods experiment, report to be more likely to denounce free-riding in the field, suggesting that voluntary cooperativeness is also important to account for denunciation in the field.
    Keywords: Altruistic Punishment, Impulsivity, Strong Reciprocity, Experiments.
    JEL: C93 O33 Q
    Date: 2017–04
  9. By: Becchetti, Leonardo (University of Rome Tor Vergata); Pelligra, Vittorio (University of Cagliari); Reggiani, Tommaso (Libera Università Maria Ss. Assunta Palermo)
    Abstract: In this paper we study by means of a framed field experiment on a representative sample of the population the effect on people's charitable giving of three, substantial and procedural, elements: information provision, belief elicitation and threshold on distribution. We frame this investigation within the 5X1000 tax scheme, a mechanism through which Italian taxpayers may choose to give a small proportion (0.5%) of their income tax to a voluntary organization to fund its activities. We find two main results: a social information effect, since information on total donations received by the organizations in the previous year significantly increases the share of donors, and a distributional effect, leading, the information provision, to a significant increase in the share of donors to the organization reporting the lowest aggregate donations.
    Keywords: charitable-giving, framed field experiment, social information effect, 5X1000
    JEL: C91 D64 H00
    Date: 2017–04
  10. By: Carpenter, Jeffrey P. (Middlebury College)
    Abstract: There is now an extensive literature on "gift exchange" showing that when principals and agents can trade "gifts" (rewards that should not emerge in a competitive equilibrium), exchange becomes more efficient. However, it is not obvious how gift exchange should be organized if the principal's goal is to increase the performance of a reciprocal agent. Specifically, who should make the first gift, the principal or the agent? Although both orderings, by themselves, have been hypothesized and examined in theory and experiments, the literature is largely silent on the comparison. I report the results of a field experiment that compares the principal-first and agent-first orderings to each other and a gift-less control. Consistent with the previous experimental literature, I find that principal-first, gifts do increase agent performance. Unlike the literature, however, I find that agent-first, gifts are also effective. Comparing the two, I see that the agent-first ordering works best, is clearly cheaper to implement and differences appear on both the extensive and intensive margins.
    Keywords: gift exchange, reciprocity, social norm, incentives, field experiment, charity, fundraising
    JEL: C93 D03 D64 H41 L30 M30
    Date: 2017–04
  11. By: Simon Gaechter (CESifo, IZA, and School of Economics, University of Nottingham); Lingbo Huang (Department of Economics, Monash University, Melbourne); Martin Sefton (School of Economics, University of Nottingham)
    Abstract: We present an experiment to investigate the source of disappointment aversion in a sequential real-effort competition. Specifically, we study the contribution of social comparison effects to the disappointment aversion previously identified in a two-person realeffort competition (Gill and Prowse, 2012). To do this we compare “social†and “asocial†versions of the Gill and Prowse experiment, where the latter treatment removes the scope for social comparisons. If disappointment aversion simply reflects an asymmetric evaluation of losses and gains we would expect it to survive in our asocial treatment, while if losing to or winning against another person affects the evaluation of losses/gains we would expect treatment differences. We find behavior in social and asocial treatments to be similar, suggesting that social comparisons have little impact in this setting. Unlike in Gill and Prowse we do not find evidence of disappointment aversion.
    Keywords: real effort competition, social comparison effects, disappointment aversion, referencedependent preferences
    Date: 2017–07
  12. By: Boyd-Swan, Casey (Kent State University); Herbst, Chris M. (Arizona State University)
    Abstract: Many preschool-age children in the U.S. attend center-based child care programs that are of low quality. This paper examines the extent to which teacher qualifications – widely considered important inputs to classroom quality – are valued by providers during the hiring process. To do so, we administered a resume audit study in which job-seeker characteristics were randomly assigned to a large number of resumes that were submitted in response to real child care job postings in 14 cities. Our results indicate that center-based providers may not hire the most qualified applicants. For example, we find that although providers have a strong preference for individuals with previous work experience in early childhood education (ECE), those with more ECE experience are less likely to receive an interview than those with less experience. We also find that individuals with bachelor's degrees in ECE are no more likely to receive an interview than their counterparts at the associate's level, even in the market for lead preschool-age teachers. Furthermore, those revealing high levels of academic performance, as measured by grade point average, are generally not preferred by child care providers. Finally, it appears that some non-quality attributes do not influence hiring decisions (e.g., signaling car ownership), while others have large effects on teacher hiring (e.g., applicant race/ethnicity). Together, our findings shed light on the complex trade-offs made by center-based providers attempting to offer high-quality programs while earning sufficient revenue to stay in business.
    Keywords: child care quality, teacher qualifications, resume audit study, field experiment
    JEL: I20 J23 J24 J71
    Date: 2017–04
  13. By: Farah Said; Mahreen Mahmud; Giovanna d’Adda; Azam Chaudhry
    Abstract: We investigate the role of social and intra-household norms in women’s decision to hide money from their male household members through artefactual field experiments with microfinance clients receiving start-up loans and training as part of a RCT in Pakistan. We find that hiding is positively correlated with women’s sense of entitlement over their own earnings and with their male household members’ lack of respect over their earned property, and negatively correlated with their agency within the household. Finally, we find that this agency can be influenced by experiences outside the household, namely agency is positively impacted by being treated within the RCT.
    Date: 2017
  14. By: Bernhardt, Arielle; Field, Erica; Pande, Rohini; Rigol, Natalia
    Abstract: Several field experiments find positive returns to grants for male and not female micro-entrepreneurs. But, these analyses largely overlook that male and female micro-entrepreneurs often belong to the same household. Using data from randomized trials in India, Sri Lanka and Ghana, we show that the gender gap in microenterprise performance is not due to a gap in aptitude. Instead, low average returns of female-run enterprises are observed because women's capital is invested into their husbands' enterprises rather than their own. When women are the sole household enterprise operator, capital shocks lead to large increases in profits. Household-level income gains are equivalent regardless of the grant or loan recipient's gender.
    Date: 2017–04
  15. By: Asadul Islam
    Abstract: Greater parental involvement in their children’s studies has been shown to be effective even in disadvantaged communities in developed countries. Based on a study of randomized field experiments involving regular, face-to-face meetings between teachers and parents in a rural Bangladesh setting, we show that this finding can be extended also to developing countries. Regular parent–teacher meetings induced parents to spend more time assisting their children and monitoring their school work. Not only did this help to improve students’ test scores but it also resulted in improvements in student attitudes and behavior. The treatment effects were robust across parental, teacher or school-level characteristics. These findings have major policy implications for developing countries where higher school enrolment levels have often not translated into improved educational outcomes: programs to stimulate parent–teacher interactions are cost-effective, easy to implement and scale up.
    Keywords: parental-teacher meeting, educational outcomes, field experiments, Bangladesh
    JEL: C93 I21 O15
    Date: 2017–04
  16. By: Sürücü, Oktay (Center for Mathematical Economics, Bielefeld University); Brangewitz, Sonja (Center for Mathematical Economics, Bielefeld University); Mir Djawadi, Behnud (Center for Mathematical Economics, Bielefeld University)
    Abstract: The asymmetric dominance effect refers to the phenomenon according to which the choice probability of an alternative increases when an inferior alternative - the decoy - is included into the choice set. The objective of this experimental study is twofold. First, we investigate the asymmetric dominance effect on two-outcome lotteries with almost equal expected values. We find that the impact of a decoy on low-variance lotteries (LVLs) is much higher than on high-variance lotteries (HVLs). Second, we examine the asymmetric dominance effect in the presence of two decoys. While the asymmetric dominance effect persists when the choice set includes two decoys, the effect is not always further enhanced compared to the setting with one decoy and again much stronger for LVLs than for HVLs. Controlling for subjects’ degrees of risk aversion, we find support for consistency between individual risk preferences and choice behavior among the lotteries. However, we observe decoy effects of equal strength irrespective of the subjects’ degree of risk aversion. Thus, our analysis indicates that to a substantial extent the presence of decoys subtly makes decision-makers choose against their risk preferences by favoring lotteries that entail risks contrary to their elicited individual risk-taking profile.
    Keywords: Asymmetric dominance effect, decoy effects, multiple decoys, risk aversion, individual decision making, experimental economics
    Date: 2017–05–02
  17. By: Molina Millán, Teresa (Universidade Nova de Lisboa); Macours, Karen (Paris School of Economics)
    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: survey non response, sample selectivity, randomized controlled trial, inverse probability weights
    JEL: O1 C93 C52
    Date: 2017–04
  18. By: Carina Cavalcanti; Andreas Leibbrandt
    Abstract: This paper investigates the actual willingness to reduce overfishing in a fishnet exchange program implemented in Brazilian fishing villages. Fishermen who use fishnets with small mesh sizes were invited to an auction where they could bid negative or positive amounts to exchange their fishnet for a fishnet with a bigger mesh size. We observe that the majority of fishermen are willing to exchange their fishnets without further compensation. In addition, we observe that environmental perceptions and experiences with fishnets help explaining the heterogeneity in bids. Fishermen who are more optimistic that local overfishing can be stopped and who have already used fishnets with larger mesh sizes place significantly higher bids. These findings may provide useful information about the limitations and possibilities of changing the behavior of individuals who strongly exploit resources.
    Keywords: auction, common pool resources, fishing, resource exploitation, willingness to change.
    Date: 2017–04
  19. By: Jeanette A.M.J. Deetlefs (School of Marketing, UNSW Business School, UNSW); Mathew Chylinski (School of Marketing, UNSW Business School, UNSW); Andreas Ortmann (School of Economics, UNSW Business School, UNSW)
    Abstract: Widely accepted as a low-cost, fast-turnaround solution with acceptable validity, Amazon’s Mechanical Turk (MTurk) is increasingly being used to source participants for academic studies (Berinsky et al. 2012; Bohannon 2011; Chandler et al. 2014; Mason and Suri 2012). Yet two commonly raised concerns remain: the presence of quasi-professional respondents, or “Super-Turkers”, and the presence of “Spammers”, those that compromise quality while optimising their pay rate. We isolate the influence on research results of experienced subjects (Super-Turkers), and of unreliable subjects (Spammers), jointly and separately. Jointly including these subjects produces very similar results to jointly excluding them, yet effect sizes decrease disproportionately to their sample representation. Furthermore, separately including experienced subjects in research results is shown to be as problematic as inclusion of unreliable subjects, although the noise introduced by these subjects is divergent and measure dependent. Hence removing only one of these types of respondents can be even more damaging to the reliability of results, than including both.
    Keywords: data collection, experimentation, field experiment, internet, Mechanical Turk
    JEL: C91 C93 D80
    Date: 2015–09
  20. By: Paul Brewer; Anmol Ratan
    Abstract: We examine robot trading in two double auction environments with identical aggregate supply and demand curves but different individual agent supply and demand curves. The Law of Supply and Demand, based on the aggregate curves, predicts the same competitive equilibrium price and quantity for the two treatments. The individual supply and demand curves relative to the competitive equilibrium price predict individual profits. The first treatment is constructed so that in competitive equilibrium the resulting incomes are equal for all agents. The second treatment is constructed to yield substantial income inequality in competitive equilibrium. The third and fourth treatments change the strategy of all but one trader on each side of the market to a “sniper” strategy that is more aggressive. While we find that the outcomes of the robot trading approximately match the theoretical predictions, we also find noisy trading produces inequality in the first treatment, and a reduction of inequality in the second treatment. In markets populated by snipers, the low realized efficiency reduces the level of profits, and profits are also more skewed than that predicted by the neoclassical theory.
    Date: 2017–04
  21. By: Sarwari, Abdul Nafi; Jinnai, Yusuke
    Abstract: This study evaluates the impacts of a community-based development program on the economic welfare of rural households in Afghanistan. Using a randomized experiment data collected by National Solidarity Program (NSP), this paper uses Ordinary Least Square Method (OLS) to eliminate the selection bias. The results show that the program decreased the economic welfare of rural households in the short-term due to the small amount of cash inflow and high expectations of the rural households. However, the program increased the economic welfare of rural households in the medium-term through the completion of infrastructure and irrigation projects. In particular, the program has increased household income, consumption, and agriculture productivity of the treatment group on average by 20, 11, and 19 percent respectively. Moreover, the study concluded that channeling resources under the community-based development program approach was an effective way to target the rural households in medium-term. Future research is required to capture the political, institutional, and project management problems that could influence the impact of the community-based program.
    Keywords: Ordinary Least Square Method,Community-Based Development,Selection Bias,Economic Welfare
    JEL: D1
    Date: 2017
  22. By: Pedro Carneiro (Institute for Fiscal Studies and University College London); Sokbae Lee (Institute for Fiscal Studies and Institute for Fiscal Studies); Daniel Wilhelm (Institute for Fiscal Studies and cemmap and UCL)
    Abstract: In a randomized control trial, the precision of an average treatment effect estimator and the power of the corresponding t-test can be improved either by collecting data on additional individuals, or by collecting additional covariates that predict the outcome variable. We propose the use of pre-experimental data such as other similar studies, a census, or a household survey, to inform the choice of both the sample size and the covariates to be collected. Our proce-dure seeks to minimize the resulting average treatment effect estimator’s mean squared error or the corresponding t-test’s power, subject to the researcher’s budget constraint. We rely on a modi?cation of an orthogonal greedy algorithm that is conceptually simple and easy to implement in the presence of a large number of potential covariates, and does not require any tuning parameters. In two empirical applications, we show that our procedure can lead to reductions of up to 58% in the costs of data collection, or improvements of the same magnitude in the precision of the treatment effect estimator.
    Keywords: randomized control trials, big data, data collection, optimal survey design, orthogonal greedy algorithm, survey costs.
    Date: 2017–03–27
  23. By: Christopher Boyce (University of Stirling, Stirling Management School); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Nick Hanley (University of St Andrews, School of Geography and Geosciences)
    Abstract: In this paper, we undertake the first examination of the effects of personality on individual economic choices over public environmental goods, using a stated preference approach. Based on three data sets from three separate choice modelling studies, we examine the effects of personality on preferences for the status quo, for changes in environmental quality, and over the costs of investing in environmental improvement. Using a hybrid choice framework, we show that incorporating personality research into economic models can provide valuable behavioural insights, enriching explanations of why the demand for environmental goods varies across people.
    Keywords: personality, preference heterogeneity, hybrid choice models, stated preferences, choice models
    JEL: C35 D03 D12 D61 Q25 Q51
    Date: 2017
  24. By: Roberta De Filippis (Institute for Fiscal Studies); Antonio Guarino (Institute for Fiscal Studies); Philippe Jehiel (Institute for Fiscal Studies); Toru Kitagawa (Institute for Fiscal Studies and cemmap and University College London)
    Abstract: We present a social learning experiment in which subjects predict the value of a good in sequence. We elicit each subject’s belief twice: first (“first belief”), after he observes his predecessors’ prediction; second, after he also observes a private signal. Our main result is that subjects update on their signal asymmetrically. They weigh the private signal as a Bayesian agent when it confirms their first belief and overweight it when it contradicts their first belief. This way of updating, incompatible with Bayesianism, can be explained by ambiguous beliefs (multiple priors on the predecessor’s rationality) and a generalization of the Maximum Likelihood Updating rule. Our experiment allows for a better understanding of the overweighting of private information documented in previous studies.
    Keywords: Social learning experiment
    Date: 2017–03–24
  25. By: Philip J. Grossman; Catherine Eckel; Mana Komai; Wei Zhan
    Abstract: We address followers’ gender-based perception of leader’s effectiveness. Our experiment’s design removes factors that might affect leadership success, such as risk-taking and competitiveness. We employ a repeated weakest-link coordination game; 10 periods without a leader and 10 periods after the leader makes a short, “scripted” speech advising followers on how to maximize earnings. Followers then choose a costly bonus for the leader. The leader’s gender is the only variable that changes across sessions. Followers are more likely to heed the advice of the male leaders, are less likely to ascribe success to female leaders, and reward male leaders more.
    Keywords: Leadership, Gender, Coordination Game
    JEL: C92 J71 J16
    Date: 2017–04
  26. By: Stijn Baert (-)
    Abstract: This chapter aims to provide an exhaustive list of all (i.e. 90) correspondence studieson hiring discrimination that were conducted between 200 5 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: 2017–04
  27. By: Federico A. Bugni (Institute for Fiscal Studies and Duke University); Joel L. Horowitz (Institute for Fiscal Studies and Northwestern University)
    Abstract: Economic data are often generated by stochastic processes that take place in continuous time, though observations may occur only at discrete times. For example, electricity and gas consumption take place in continuous time. Data generated by a continuous time stochastic process are called functional data. This paper is concerned with comparing two or more stochastic processes that generate functional data. The data may be produced by a randomized experiment in which there are multiple treatments. The paper presents a test of the hypothesis that the same stochastic process generates all the functional data. In contrast to existing methods, the test described here applies to both functional data and multiple treatments. The test is presented as a permutation test, which ensures that in a finite sample, the true and nominal probabilities of rejecting a correct null hypothesis are equal. The paper also presents the asymptotic distribution of the test statistic under alternative hypotheses. The results of Monte Carlo experiments and an application to an experiment on billing and pricing of natural gas illustrate the usefulness of the test.
    Keywords: Functional data, permutation test, randomized experiment, hypothesis test
    JEL: C12 C14
    Date: 2017–04–18
  28. By: Andreas Leibbrandt; John Lynham
    Abstract: A popular solution to the Tragedy of the Commons is to create private property rights to access the commons. If resource users care about equity, they may be unwilling to respect property rights regimes that lead to less equitable outcomes. We explore in a series of laboratory experiments whether it is possible to undermine the efficiency of property rights solutions through the allocation process. We find that both the extent to which property rights are enforced and how they are allocated significantly affect extraction and compliance. Our findings suggest that one of the most popular allocation methods is suboptimal: we observe that occasional enforcement and the grandfathering of property rights is dominated by no enforcement and the equal allocation or inverse grandfathering of property rights. Our results challenge the view that equity is irrelevant for property rights solutions to the commons problem.
    Keywords: tragedy of the commons; privatization; grandfathering; equity; social norms
    JEL: A13 C92 D23 D62 D63 H23
    Date: 2017–04
  29. By: Casaburi, Lorenzo; Reed, Tristan
    Abstract: This paper presents an experimental approach to measure competition in agricultural markets, based on the random allocation of subsidies to competing traders. We compare prices of subsidized and unsubsidized crop traders to recover the key market structure parameter in a standard model of imperfect competition. By combining the experimental results with quasi-experimental estimates of the pass-through rate, we also estimate market size, or the effective number of traders competing for farmers' supply. In the context of the Sierra Leone cocoa industry, our results point to a competitive agricultural trading sector and suggest that the market size is substantially larger than the village. The methodology developed in this paper uses purely individual-level treatment to shed light on market structure. This approach may be useful for the many cases in which market-level randomization is not feasible.
    Keywords: Agricultural markets; Competition; field experiments.; interlinked transactions; intermediaries
    JEL: F14 O13 Q13
    Date: 2017–04

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.