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on Experimental Economics |
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Issue of 2017‒06‒11
twenty-one papers chosen by |
| By: | Annarita Colasante (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Aurora García-Gallego (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Andrea Morone (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Tiziana Temerario (IVIE and Department of Economics, Universitat Jaume I, Castellón, Spain) |
| Abstract: | We study whether intra-group competition fosters cooperation even when cooperate is not a dominant strategy. We arranged an experimental Public Good Game comparing contributions in a risky treatment with contributions in a baseline standard treatment. The intra-group competition was induced by assigning different marginal per capita return (MPCR) in accordance to the size of the contribution itself. Results show that risky MPCR are detrimental for cooperation, while intra-group competition significantly reduces free riding. |
| Keywords: | cooperation; public good; intra-group competition; uncertainty |
| JEL: | C72 C92 D80 H41 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2017/08&r=exp |
| By: | Kimbrough, Erik O. (Simon Fraser University); McGee, Andrew (University of Alberta); Shigeoka, Hitoshi (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: | I24 C91 I28 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10783&r=exp |
| By: | Andrew Bacher-Hicks; Mark J. Chin; Thomas J. Kane; Douglas O. Staiger |
| Abstract: | There are three primary measures of teaching performance: student test-based measures (i.e., value added), classroom observations, and student surveys. Although all three types of measures could be biased by unmeasured traits of the students in teachers’ classrooms, prior research has largely focused on the validity of value-added measures. We conduct an experiment involving 66 mathematics teachers in four school districts and test the validity of all three types of measures. Specifically, we test whether a teacher’s performance on each measure under naturally occurring (i.e., non-experimental) settings predicts performance following random assignment of that teacher to a class of students. Combining our results with those from two previous experiments, we provide further evidence that value-added measures are unbiased predictors of teacher performance. In addition, we provide the first evidence that classroom observation scores are unbiased predictors of teacher performance on a rubric measuring the quality of mathematics instruction. Unfortunately, we lack the statistical power to reach any similar conclusions regarding the predictive validity of a teacher’s student survey responses. |
| JEL: | I21 J24 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23478&r=exp |
| By: | Wilson, Nicholas (Reed College); Pugatch, Todd (Oregon State University) |
| Abstract: | More than two of every five students who enrolled in college in 2007 failed to graduate by 2013. Peer tutoring services offer one approach toward improving learning outcomes in higher education. We conducted a randomized controlled experiment designed to increase take-up of university tutoring services. Brief, one-time messages increased tutoring take-up by 7 percentage points, or 23% of the control group mean. Attendance at multiple tutoring sessions increased by nearly the same amount, suggesting substantial changes in study habits in response to a simple and inexpensive intervention. We find little evidence of advertising-induced tutoring on learning outcomes. |
| Keywords: | peer tutoring, human capital investment, behavioral response to advertising, nudges, higher education |
| JEL: | D83 I23 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10784&r=exp |
| By: | Engl, Florian (University of Cologne); Riedl, Arno (Maastricht University); Weber, Roberto A. (University of Zurich) |
| Abstract: | Institutions are an important means for fostering prosocial behaviors, but in many contexts their scope is limited and they govern only a subset of all socially desirable acts. We use a laboratory experiment to study how the presence and nature of an institution that enforces prosocial behavior in one domain affects behavior in another domain and whether it also alters prosocial preferences and beliefs about others' behavior. Groups play two identical public good games. We vary whether, for only one game, there is an institution enforcing cooperation and vary also whether the institution is imposed exogenously or arises endogenously through voting. Our results show that the presence of an institution in one game generally enhances cooperation in the other game thus documenting a positive spillover effect. These spillover effects are economically substantial amounting up to 30 to 40 percent of the direct effect of institutions. When the institution is determined endogenously spillover effects get stronger over time, whereas they do not show a trend when it is imposed exogenously. Additional treatments indicate that the main driver of this result is not the endogeneity but the temporal trend of the implemented institution. We also find that institutions of either type enhance prosocial preferences and beliefs about others' prosocial behavior, even toward strangers, suggesting that both factors are drivers of the observed spillover effects. |
| Keywords: | public goods, institutions, spillover effect, social preferences, beliefs |
| JEL: | C92 D02 D72 H41 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10781&r=exp |
| By: | Biddle, Nicholas (Australian National University); Fels, Katja (Ruhr University Bochum); Sinning, Mathias (Australian National University) |
| Abstract: | This paper presents the findings of two Randomized Controlled Trials (RCTs) that were conducted in collaboration with the Australian Taxation Office (ATO). The first trial tests the effect of changes to let-ters (timing, social norms, color, and provision of information about charitable donations) on response rates of businesses, the timing of payments and the amount of tax debt payments. The second trial consists of two parts. The first part aims to raise awareness of the relevance of tax debt payment by changing internal guidelines used by field auditors. The second part focuses on studying the effect of changing the phone script used by desk auditors to offer assistance with payment arrangements and simplifying a follow-up letter. The findings of the first trial indicate that none of the treatments had a significant effect on any of the outcome measures considered. In contrast, the results of the second trial indicate that changing the phone script of desk auditors and simplifying the follow-up letter re-duced the proportion of default assessments raised by the ATO significantly, suggesting that business-es are responsive to certain types of nudges. |
| Keywords: | tax compliance, business taxation, behavioral insights, nudging |
| JEL: | C93 H25 H26 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10795&r=exp |
| By: | Filippin, Antonio (University of Milan); Gioia, Francesca (University of Edinburgh) |
| Abstract: | This paper studies if competition affects subsequent risk-taking behaviour by means of a laboratory experiment that manipulates the degree of competitiveness of the environment under equivalent monetary incentives. We find that competition increases risk aversion, especially for males, but not in a significant manner. When conditioning on the outcome, we find that males become significantly more risk averse after losing the tournament than after randomly earning the same low payoff. In contrast, males do not become more risk-seeking after winning the tournament, while females' average risk-taking behaviour is unaffected by tournament participation and outcomes. We interpret our findings in terms of males' reaction to negative outcomes driven by intrinsic motives, such as emotions or a shift in the locus of control from internal to external. |
| Keywords: | competition, risk attitudes, gender |
| JEL: | C81 C91 D81 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10792&r=exp |
| By: | Charlotte Ringdal; Hoem Sjursen |
| Abstract: | This paper studies whether increasing the wife’s bargaining power results in couples allocating more resources to their child, and, if so, what the underlying mechanisms for this are. We conduct a novel between-subject lab experiment in Tanzania, in which we vary the relative bargaining power between spouses. The paper provides two main insights. First, increasing the wife’s bargaining power does not result in an increase in the allocation to the child, but it does lead to equal allocations to boys and girls. Second, time preferences are important; it is more beneficial for the child that the most patient spouse has most bargaining power. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-128&r=exp |
| By: | Jonathan de Quidt; Johannes Haushofer; Christopher Roth |
| Abstract: | We propose a technique for assessing robustness of behavioral measures and treatment effects to experimenter demand effects. The premise is that by deliberately inducing demand in a structured way we can measure its influence and construct plausible bounds on demand-free behavior. We provide formal restrictions on choice that validate our method, and a Bayesian model that microfounds them. Seven pre-registered experiments with eleven canonical laboratory games and around 19,000 participants demonstrate the technique. We also illustrate how demand sensitivity varies by task, participant pool, gender, real versus hypothetical incentives, and participant attentiveness, and provide both reduced-form and structural analyses of demand effects. |
| JEL: | B41 C91 C92 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23470&r=exp |
| By: | Da Silva, Sergio; Da Costa Jr, Newton; Matsushita, Raul; Vieira, Cristiana; Correa, Ana; De Faveri, Dinorá |
| Abstract: | A recent population-wide study for Germany, where credit lines on current accounts are available to 80 percent of the population, finds that overdraft debt is more likely for people who give intuitive but incorrect answers on a cognitive reflection test. This suggests those consumers in debt have poorer cognitive reflection and, thus, lack of self control. The Germany study finds that “surprisingly, the level of income does not play a central role.” Here we discriminate the consumers in terms of their income by considering two experiments. In the first (pilot) experiment we do not discriminate consumers in terms of income and, as result, replicate the Germany study. In a follow-up experiment, which assembles a high-quality sample of high-income consumers, we find debt can no longer be explained by poor cognitive reflection. Apparently, high-income consumers treat debt as mere leverage, as companies do. |
| Keywords: | consumer behavior, consumer indebtedness, debt, overdraft, cognitive reflection |
| JEL: | D03 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:79518&r=exp |
| By: | Abigail Barr (School of Economics, University of Nottingham); Trudy Owens (School of Economics, University of Nottingham); Ashira Perera (School of Economics, University of Nottingham) |
| Abstract: | Using a specially designed experiment, we investigate whether and how interdependence in risk exposure i.e., risk taking by some members of a potential risk sharing group affecting not only their own but also their co-members risk exposure, affects both risk taking and ex post sharing. The experimental subjects were Sri Lankan small-holders who face interdependent risk and share when neighbors fall on hard times in everyday life. We find that the Sri Lankan farmers reward socially responsible risk taking and, under some circumstances, punish socially irresponsible risk taking. Their behaviour is consistent with socially responsible risk taking being cost dependent, although, here, the statistical evidence is inconclusive. Finally, social responsibility in risk taking and ex post sharing do not appear to be substitutes, rather, they appear to be co-determined. |
| Keywords: | behavioural experiment; risk-sharing; solidarity |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2017-08&r=exp |
| By: | Nobuyuki Hanaki (Université Côte d'Azur; GREDEG-CNRS; IUF); Eizo Akiyama (University of Tsukuba, Japan); Ryuichiro Ishikawa (University of Tsukuba, Japan) |
| Abstract: | By how much does the presence of behavioral uncertainty in an experimental asset market reduce subjects' confidence in their price forecasts? An incentivized interval forecast elicitation method is employed to answer this question. Each market consists of six traders, and the value of dividends is known. Two treatments are considered: six human traders (6H), and one human interacting with five computer traders whose behavior is known (1H5C). We find that while the deviation of the initial price forecasts from the fundamental value is significantly smaller in the 1H5C treatment than in the 6H treatment, the average confidence regarding the forecasts is not. We further analyze the relationships between subjects' confidence in their forecasts and their trading behavior, as well as their trading performance, in the 6H treatment. While subjects' high confidence in their short-term forecasts shows a negative correlation with their trading performance, high confidence in their long-term forecasts shows a positive correlation with trading performance. |
| Keywords: | Price forecasts, interval elicitation, experimental asset markets, behavioral uncertainty |
| JEL: | C90 D84 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2017-18&r=exp |
| By: | Dirk Bergemann (Cowles Foundation, Yale University); Alessandro Bonatti (MIT); Alex Smolin (Dept. of Economics, Yale University) |
| Abstract: | A data buyer faces a decision problem under uncertainty. He can augment his initial private information with supplemental data from a data seller. His willingness to pay for supplemental data is determined by the quality of his initial private information. The data seller optimally offers a menu of statistical experiments. We establish the properties that any revenue-maximizing menu of experiments must satisfy. Every experiment is a non-dispersed stochastic matrix, and every menu contains a fully informative experiment. In the cases of binary states and actions, or binary types, we provide an explicit construction of the optimal menu of experiments. |
| Keywords: | Information design, Price of information, Statistical experiments, Mechanism design, Price discrimination, Hypothesis testing |
| JEL: | D42 D82 D83 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2049r&r=exp |
| By: | Hubert Janos Kiss (Institute of Economics, Research Centre for Economic and Regional Studies and Eötvös Loránd University); Ismael Rodriguez-Lara (Middlesex University London, Department of Economics, Business School); Alfonso Rosa-Garcia (Universidad Catolica de Murcia, Facultad de Ciencias Juridicas y de la Empresa) |
| Abstract: | We provide experimental evidence that panic bank runs occur in the absence of problems with fundamentals and coordination failures among depositors, the two main culprits identified in the literature. Depositors withdraw when they observe that others do so, even when theoretically they should not. Our findings suggest that panic also manifests itself in the beliefs of depositors, who overestimate the probability that a bank run is underway. Loss-aversion has a predictive power on panic behavior, while risk or ambiguity aversion do not. |
| Keywords: | bank runs, beliefs, panic, coordination, observability, loss aversion |
| JEL: | C7 C9 D8 G2 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1710&r=exp |
| By: | Fafchamps, Marcel; Islam, Asadul; Malek, Abdul; Pakrashi, Debayan |
| Abstract: | We seek to improve the targeting of vocational training by inviting past trainees to select future trainees from a candidate pool. Some referees are rewarded or incentivized. Training increases the adoption of recommended practices and improves performance on average, but not all trainees adopt. Referred trainees are 3.7% more likely to adopt, but rewarding or incentivizing referees does not improve referral quality. When referees receive financial compensation, average adoption increases and referee and referred are more likely to coordinate their adoption behavior. |
| Keywords: | agricultural innovation; extension; Social Networks; targeting |
| JEL: | D83 O13 O33 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12070&r=exp |
| By: | Abigail Barr; Trudy Owens; Ashira Perera |
| Abstract: | We adopt a mixed methods approach to investigate whether and how heterogeneity in individual returns to a public good affects contributions. We engage smallholder farmers in Sri Lanka in: a one-shot, framed, lab-in-the-field experiment, within which the farmers’ rates of return to the public good are exogenously varied; and a survey including a question about their willingness to contribute time to the construction of a specific, relevant to them public good. In the former, we find weak evidence that heterogeneity in individual returns increases contributions. In the latter we find that those facing higher returns contribute more. We conclude that heterogeneity in returns does not explain why collective action remains a challenge in farming communities in developing countries. |
| Keywords: | lab-type behavioural experiment, collective action, heterogeneity, public goods JEL Classification: C93, D81, O12 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcre:17/05&r=exp |
| By: | Crosetto, Paolo (Université de Grenoble); Filippin, Antonio (University of Milan) |
| Abstract: | Gender differences in risk attitudes are frequently observed, although recent literature has shown that they are context dependent rather than ubiquitous. In this paper we try to rationalize the hetero-geneity of results investigating experimentally whether the presence of a safe option among the set of alternatives explains why females are more risk averse than males. We manipulate three widely used risk elicitation methods finding that the availability of a safe option causally affects risk attitudes. The presence of a riskless alternative does not entirely explain the gender gap but it has a significant effect in triggering or magnifying (when already present) such differences. Despite the pronounced instability that usually characterizes the measurement of risk preferences, we show estimating a structural model that the effect of a safe option is remarkably stable across tasks. This paper constitutes the first suc-cessful attempt to shed light on the determinants of gender differences in risk attitudes. |
| Keywords: | gender differences, risk attitudes, experiment, safe option |
| JEL: | C81 C91 D81 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10793&r=exp |
| By: | Christian Schitter (Department of Banking and Finance, University of Graz); Jürgen Fleiß (Department of Corporate Leadership and Entrepreneurship, University of Graz); Stefan Palan (Department of Banking and Finance, University of Graz) |
| Abstract: | This paper investigates the determinants of (dis)honesty of reporters filing unverified claims for money. First, does honest reporting increase when each reporter's unverified claim is made public? We present experimental evidence to this effect. The driver behind this is activation of the preference for appearing honest. Second, does honest reporting increase when it is public knowledge that reporters' claims affect others and reporters are reciprocally affected by others' claims? We find no such effect. Fear of losing out against others who untruthfully claim too much may outweigh honesty and pro-social considerations. |
| Date: | 2017–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpsses:2017-01&r=exp |
| By: | Alessandro Sontuoso (Philosophy, Politics and Economics, University of Pennsylvania); Sudeep Bhatia |
| Abstract: | Identifying the best course of action in games with multiple equilibria is a long-standing unresolved issue in strategic interaction. The concept of prominence as a criterion for equilibrium selection has been suggested, but has remained for the most part an informal notion, without a psychologically grounded characterization. In this paper we propose one such characterization: by drawing on existing theories of human memory, language, and decision making we define prominence in terms of frequency of exposure. In particular, we consider games where strategies are denoted by natural language labels, and we measure the prominence of each strategy by how often its label occurs in natural language corpora. Our specification of prominence yields sharp quantitative predictions about behavior in coordination and discoordination problems. Here we present three studies designed to test such predictions, and show that individuals do select strategies that fulfil our definition of prominence and they furthermore do so in a (boundedly) rational manner. |
| Keywords: | focal points, salience, accessibility, coordination, hide-and-seek, level-k |
| JEL: | C72 C91 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:ppc:wpaper:0009&r=exp |
| By: | Diederik Aerts; Suzette Geriente; Catarina Moreira; Sandro Sozzo |
| Abstract: | The Machina thought experiments pose to major non-expected utility models challenges that are similar to those posed by the Ellsberg thought experiments to subjective expected utility theory (SEUT). We test human choices in the `Ellsberg three-color example', confirming typical ambiguity aversion patterns, and the `Machina 50/51 and reflection examples', partially confirming the preferences hypothesized by Machina. Then, we show that a quantum-theoretic framework for decision-making under uncertainty recently elaborated by some of us allows faithful modeling of all data on the Ellsberg and Machina paradox situations. In the quantum-theoretic framework subjective probabilities are represented by quantum probabilities, while quantum state transformations enable representations of ambiguity aversion and subjective attitudes toward it. |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1706.02168&r=exp |
| By: | Da Silva, Sergio; De Faveri, Dinorá; Correa, Ana; Matsushita, Raul |
| Abstract: | We evaluate the relationship between social preferences, financial literacy and intertemporal choice in questionnaires distributed to university students. Most respondents perform well on a financial literacy test, and the majority show prosocial value orientation. Older students tend to be more prosocial, but we cannot confirm in our sample that females are more prosocial than males. We cannot confirm, either, that the prosocial are more financially literate than individualists and the competitive. Most respondents do not show hyperbolic discounting, and its incidence abates as both stakes and payoff delays increase. Prosocial participants also reveal to be more patient across the questionnaires. |
| Keywords: | Social preferences, Social Value Orientation, Financial literacy, Intertemporal choice, Hyperbolic discounting, Impatience |
| JEL: | D03 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:79535&r=exp |