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on Experimental Economics |
| By: | Leonardo Bursztyn; Bruno Ferman; Stefano Fiorin; Martin Kanz; Gautam Rao |
| Abstract: | This paper provides novel field-experimental evidence on status goods. We work with an Indonesian bank that markets platinum credit cards to high-income customers. In a first experiment, we show that demand for the platinum card greatly exceeds demand for a nondescript control product with identical benefits, suggesting demand for the pure status aspect of the card. Transaction data reveal that platinum cards are more likely to be used in social contexts, implying social image motivations. Combining price variation with information on the use of the card sheds light on the magnitude of the demand for social status. In a second experiment, we provide evidence of positional externalities from the consumption of these status goods. The final experiment shows that increasing self-esteem causally reduces demand for status goods. We infer that part of the demand for status is psychological in nature, and that social image is a substitute for self-image. |
| JEL: | C93 D03 D12 O12 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23414&r=exp |
| By: | Leonardo Bursztyn; Georgy Egorov; Stefano Fiorin |
| Abstract: | Social norms are typically thought to be persistent and long-lasting, sometimes surviving through growth, recessions, and regime changes. In some cases, however, they can quickly change. This paper examines the unraveling of social norms in communication when new information becomes available, e.g., aggregated through elections. We build a model of strategic communication between citizens who can hold one of two mutually exclusive opinions. In our model, agents communicate their opinions to each other, and senders care about receivers' approval. As a result, senders are more likely to express the more popular opinion, while receivers make less inference about senders who stated the popular view. We test these predictions using two experiments. In the main experiment, we identify the causal effect of Donald Trump's rise in political popularity on individuals' willingness to publicly express xenophobic views. Participants in the experiment are offered a bonus reward if they authorize researchers to make a donation to an anti-immigration organization on their behalf. Participants who expect their decision to be observed by the surveyor are significantly less likely to accept the offer than those expecting an anonymous choice. Increases in participants' perceptions of Trump's popularity (either through experimental variation or through the “natural experiment” of his victory) eliminate the wedge between private and public behavior. A second experiment uses dictator games to show that participants judge a person less negatively for publicly expressing (but not for privately holding) a political view they disagree with if that person's social environment is one where the majority of people holds that view. |
| JEL: | C90 D03 D72 D83 P16 Z10 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23415&r=exp |
| By: | Gächter, Simon (University of Nottingham); Huang, Lingbo (University of Nottingham); Sefton, Martin (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 real-effort 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, reference-dependent preferences |
| JEL: | C91 D12 D81 D84 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10754&r=exp |
| By: | Inukai, Keigo (Osaka University); Kawata, Keisuke (University of Tokyo); Sasaki, Masaru (Osaka University) |
| Abstract: | The paper develops a committee search model with ex-ante heterogeneous agents and designs laboratory experiments to test theoretical predictions. In the theoretical part of the study, there exists one and only one pivotal voter, who can perfectly and dominantly control the voting results of the committee search activities. The most important prediction is that nonpivotal voters become less picky in committee search than in single-agent search, but that a pivotal voter's voting behavior remains unchanged, regardless of the type of voting rules for the search. However, our experimental results did not support this prediction; not only the nonpivotal voters but also the pivotal voter became less picky in the committee search games. In addition, we found gender differences in voting behavior; females show more concern for other group members' payoff as well as themselves than do males. |
| Keywords: | experiments, committee search, plurality voting rules |
| JEL: | C91 D72 D83 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10760&r=exp |
| By: | Shinya Kajitani (Meisei University); Keiichi Morimoto (Meisei University); Shiba Suzuki (Seikei University) |
| Abstract: | This paper investigates the relationship between the feedback of performance information and effort input by students under a relative grading scheme. By conducting a randomized experiment in an economics course at a Japanese university, we demonstrate that relative performance information feedback improves the performance of students with only intermediate scores in the midterm examination, but worsens the performance of high-scoring students. A theoretical interpretation suggests that a decrease in uncertainty in the relative ability of students is responsible, which we refer to as “just-pass†behavior. |
| Keywords: | education, experiment, relative performance information feedback, tournaments |
| JEL: | D03 D81 I21 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:mei:wpaper:36&r=exp |
| By: | Vardan Baghdasaryan (American University of Armenia - American University of Armenia); Giovanna Iannantuoni (Università degli Studi di Milano-Bicocca - Università degli Studi di Milano-Bicocca [Milano]); Valeria Maggian (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: | 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 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01511596&r=exp |
| By: | Oana Peia (UCD - University College Dublin [Dublin]); Radu Vranceanu (THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS - Centre National de la Recherche Scientifique, Essec Business School) |
| Abstract: | This paper presents experimental evidence on depositor behavior under partial deposit insurance schemes. In the experiment, the size of a deposit insurance fund cannot fully cover all deposits and the level of insurance depends on the number of depositors running on the bank. We show that this form of strategic uncertainty about deposit coverage exerts a signi ficant impact on the propensity to withdraw, and results in a large frequency of bank runs. Runs are more likely when depositors have noisy information about the size of the insurance fund and as the maximum coverage increases, in line with a risk-dominant equilibrium selection mechanism. From a policy perspective, our results emphasize the limits of underfunded deposit insurance schemes in preventing systemic banking crises. |
| Keywords: | Bank runs,Deposit insurance,Risk dominance,Global games |
| Date: | 2017–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01510692&r=exp |
| By: | Erik O. Kimbrough (Simon Fraser University); Andrew D. McGee (University of Alberta); Hitoshi Shigeoka (Simon Fraser University) |
| Abstract: | Classroom peers are believed to influence learning by teaching each other, and the efficacy of this teaching likely depends on classroom composition in terms of peers’ ability. Unfortunately, little is known about peer-to-peer teaching because it is never observed in field studies. Furthermore, identifying how peer-to-peer teaching is affected by ability tracking—grouping students of similar ability—is complicated by the fact that tracking is typically accompanied by changes in curriculum and the instructional behavior of teachers. To fill this gap, we conduct a laboratory experiment in which subjects learn to solve logic problems and examine both the importance of peer-to-peer teaching and the interaction between peer-to-peer teaching and ability tracking. While peer-to-peer teaching improves learning among low-ability subjects, the positive effects are substantially offset by tracking. Tracking reduces the frequency of peer-to-peer teaching, suggesting that low-ability subjects suffer from the absence of high-ability peers to teach them. |
| Keywords: | Peer-to-peer Teaching, Ability Tracking, Peer Effects, Group Composition, Education and Inequality, Laboratory Experiment |
| JEL: | H32 H26 K42 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:sfu:sfudps:dp17-08&r=exp |
| By: | Pieter Desmet (TU Delf); Christoph Engel (Max Planck Institute for Research on Collective Goods) |
| Abstract: | Experimental participants are more likely to follow an arbitrary rule the more of their peers do so as well. The difference between unconditional and conditional rule following is most pro-nounced for individuals who follow few rules unconditionally. |
| Keywords: | conditional rule following, deontological motives, conditional cooperation, experiment |
| JEL: | A13 C91 D03 D63 K42 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2017_09&r=exp |
| By: | Bruttel, Lisa; Stolley, Florian; Utikal, Verena |
| Abstract: | This paper studies how the request for a favor has to be devised in order to maximize its chance of success. We present results from a mini-dictator game laboratory experiment in which giving entails an efficiency gain. Before the dictator decides, the recipient can send a free-form text message to the dictator. We find that the content of a message and its form do matter in the decision to give. Putting effort into the message by writing in a humorous and creative way pays off. We argue that this can be interpreted in terms of reciprocity. Mentioning reasons why the money is needed increases the generosity of dictators as well. Additionally, we find differences in the behavior of male and female dictators. Only men react positively to efficiency arguments, while only women react to messages that emphasize the specific power and responsibility of the dictator. |
| Keywords: | dictator game; communication; inequality; experiment |
| JEL: | C91 D63 D64 D83 |
| Date: | 2017–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:79140&r=exp |
| By: | Morone, Andrea; Nuzzo, Simone; Temerario, Tiziana |
| Abstract: | The recent literature on individual vs. group decisions over risk has brought about divergent results, mainly depending on the institutional rules through which groups take decisions. While some studies where group decisions relied on the majority rule showed no appreciable difference between individuals and groups’ preferences, others where unanimity among group members was required found collective decisions to be less risk averse than individual ones. Of course, these studies share the imposition of a choice rule to determine the groups’ outcome. Alternatively, in the study at hand, we elicited groups’ preferences over risk using a consensus rule, i.e. leaving groups free to endogenously solve the potential disagreement among their members, just as in many real life instances. Our results from a logit regression unambiguously show that individuals’ preferences are systematically further from the risk neutrality than those of groups. In particular, individuals are more risk seeker than groups when facing gambles with positive expected payoff difference and more risk averse in the opposite case. |
| Keywords: | Risk attitudes, group’s behaviour |
| JEL: | C91 C92 D01 |
| Date: | 2017–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:79332&r=exp |
| By: | Claudia Cerrone (Max Planck Institute for Research on Collective Goods); Leonhard K. Lades (University of Stirling, Economics) |
| Abstract: | The model of time-inconsistent procrastination by O'Donoughe and Rabin shows that individuals who are not aware of their present-bias (naïve) procrastinate more than individuals who are aware of it (sophisticated) or are not present-biased (time-consistent). This paper tests this prediction. We classify participants into types using a novel measure, and require them to perform a real-effort task on one out of three dates. We find that sophisticated participants perform the task significantly later than naïve participants. Our data suggest that this result may be explained by habit formation. |
| JEL: | C72 C73 D03 D91 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2017_08&r=exp |
| By: | Owen Powell; Natalia Shestakova |
| Abstract: | Many experiments have been conducted on market mispricing, however there is a distinct lack of guidance over how mispricing should be measured. This raises concerns about the sensitivity of mispricing results to variations in the measurement procedure. In this paper, we investigate the robustness of previous results with respect to four variations: the choice of interval length, the use of the bid-ask spread as a price proxy, the choice of aggregation function, and controlling for observable market characteristics. While a majority of previous results are unaffected, roughly 30% do change significance. |
| JEL: | C43 C90 D49 D84 G14 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:1702&r=exp |
| By: | Andrea Gallice; Ignacio Monzon |
| Abstract: | Abstract We propose a simple mechanism that sustains full cooperation in one-shot social dilemmas among a finite number of self-interested agents. Players sequentially decide whether to contribute to a public good. They do not know their position in the sequence, but observe the actions of some predecessors. Position uncertainty provides an incentive to contribute in order to induce potential successors to also do so. Full contribution can then emerge in equilibrium. Our mechanism also leads to full cooperation in the prisoners' dilemma. |
| Keywords: | Social Dilemmas; Position Uncertainty; Public Goods; Voluntary Contributions; Fundraising |
| JEL: | C72 D82 H41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:493&r=exp |
| By: | Ghidoni, Riccardo (Tilburg University, Center For Economic Research); Calzolari, G.; Casari, Marco |
| Abstract: | Understanding how to sustain cooperation in the climate change global dilemma is crucial to mitigate its harmful consequences. Damages from climate change typically occurs after long delays and can take the form of more frequent realizations of extreme and random events. These features generate a decoupling between emissions and their damages, which we study through a laboratory experiment. We find that some decision-makers respond to global emissions, as expected, while others respond to realized damages also when emissions are observable. On balance, the presence of delayed/stochastic consequences did not impair cooperation. However, we observed a worrisome increasing trend of emissions when damages hit with delay. |
| Keywords: | Social dilemma; Experiments; Greenhouse gas; pollution |
| JEL: | C70 C90 D03 Q54 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:081ac6f7-78e3-4c05-9b0a-4230e4e0d9f9&r=exp |
| By: | Valeria Maggian (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); Natalia Montinari (Université de Bologne - UNIBO - Università di Bologna [Bologna]) |
| 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 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01511175&r=exp |
| By: | Fricke, Hans; Lechner, Michael; Steinmayr, Andreas |
| Abstract: | What is the role of physical activity in the process of human capital accumu-lation? Brain research provides growing evidence of the importance of physical activity for various aspects of cognitive functions. An increasingly sedentary lifestyle could thus be not only harmful to population health, but also disrupt human capital accumulation. This paper analyzes the effects of on-campus recreational sports and exercise on educational outcomes of university students. To identify causal effects, we randomize financial incentives to encourage students' participation in on-campus sports and exercise. The incentives increased participation frequency by 0.26 times per week (47%) and improved grades by 0.14 standard deviations. This effect is primarily driven by male students and students at higher quantiles of the grade distribution. Results from survey data suggest that students substitute off-campus with on-campus physical activities during the day but do not significantly increase the overall frequency. Our findings suggest that students spend more time on campus and are better able to integrate studying and exercising, which may enhance the effectiveness of studying and thus improve student performance. |
| Keywords: | Human Capital; physical activity; randomized experiment; sports; student achievement |
| JEL: | C93 I12 I18 I23 J24 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12052&r=exp |