nep-exp New Economics Papers
on Experimental Economics
Issue of 2017‒06‒25
nineteen papers chosen by
Daniel Houser
George Mason University

  1. Signaling in Auctions: Experimental Evidence By Olivier Bos; Francisco Gomez-Martinez; Sander Onderstal; Tom Truyts
  2. I (Don't) Like You! But Who Cares? Gender Differences in Same Sex and Mixed Sex Teams By Gerhards, Leonie; Kosfeld, Michael
  3. Spillover Effects of Institutions on Cooperative Behavior, Preferences, and Beliefs By Engl, Florian; Riedl, Arno; Weber, Roberto A.
  4. Do the Number of Appropriators from the Commons Matter in Controlled Laboratory Environments? By Neil Buckley; Stuart Mestelman; R. Andrew Muller; Stephen Schott; Jingjing Zhang
  5. The Effects of Financial Aid and Returns Information in Selective and Less Selective Schools: Experimental Evidence from Chile By Matías Busso; Taryn Dinkelman; Claudia Martínez; Dario Romero
  6. The effect of age and gender on labor demand – evidence from a field experiment By Carlsson, Magnus; Eriksson, Stefan
  7. The Impact of Sleep Restriction on Contributions and Punishment: First Evidence By Clark, Jeremy; Dickinson, David L.
  8. Are Normative Appeals Moral Taxes? Evidence from a Field Experiment on Water Conservation By Daniel A. Brent; Corey Lott; Michael Taylor; Joseph Cook; Kim Rollins; Shawn Stoddard
  9. Objective and subjective compliance: a norm-based explanation of 'moral wiggle room' By Kai Spiekermann; Arne Weiss
  10. The spillover effects of gender quotas on dishonesty By V. Maggian; N. Montinari
  11. A Flexible and Customizable Method for Assessing Cognitive Abilities By Andrea Civelli; Cary Deck
  12. What Do People 'Learn By Looking' at Direct Feedback on their Energy Consumption? Results of a Field Study in Southern France By Adnane Kendel; Nathalie Lazaric; Kevin Maréchal
  13. Do Non-Monetary Prices Target the Poor?: Evidence from a Field Experiment in India By Bridget Hoffmann
  14. Revealing the Economic Consequences of Group Cohesion By Gächter, Simon; Starmer, Chris; Tufano, Fabio
  15. Monetary Policy under Behavioral Expectations: Theory and Experiment By Cars Hommes; Domenico Massaro; Matthias Weber
  16. Tempting Goods, Self-Control Fatigue, and Time Preference in Consumer Dynamics1 By Shinsuke Ikeda; Takeshi Ojima
  17. Concurrent Validity and Feasibility of Short Tests Currently Used to Measure Early Childhood Development in Large Scale Studies: Methodology and Results By Marta Rubio-Codina; María Caridad Araujo; Orazio P. Attanasio; Sally Grantham-McGregor
  18. Culture, Compliance, and Confidentiality: Taxpayer Behavior in the United States and Italy By James Alm; Michele Bernasconi; Susan Laury; Daniel J. Lee; Sally Wallace
  19. Gender, Age, and Competition: a Disappearing Gap? By Jeffrey Flory; Uri Gneezy; Kenneth Leonard; John List

  1. By: Olivier Bos (Panthéon-Assas University, France); Francisco Gomez-Martinez (Universidad Carlos III de Madrid, Spain); Sander Onderstal (University of Amsterdam and Tinbergen Institute, The Netherlands); Tom Truyts (Saint-Louis University Brussels and University of Leuven, Belgium)
    Abstract: We study the relative performance of the first-price sealed-bid auction and the second-price sealed-bid auction in a laboratory experiment where bidders can signal information through their bidding behavior to an outside observer. We consider two different information settings: the auctioneer reveals either the identity of the winning bidder only, or she also reveals the winner’s payment to an outside observer. We find that the first-price sealed-bid auction in which the winner’s payment is revealed outperforms the other mechanisms in terms of revenue and efficiency. Our findings may have implications for the design of charity auctions, art auctions, and spectrum auctions.
    Keywords: Auctions; Signaling; Experiments
    JEL: C92 D44 D82
    Date: 2017–06–20
  2. By: Gerhards, Leonie (University of Hamburg); Kosfeld, Michael (Goethe University Frankfurt)
    Abstract: We study the effect of likability on female and male team behavior in a lab experiment. Extending a two-player public goods game and a minimum effort game by an additional pre-play stage that informs team members about their mutual likability we find that female teams lower their contribution to the public good in case of low likability, while male teams achieve high levels of cooperation irrespective of the level of mutual likability. In mixed sex teams, both females' and males' contributions depend on mutual likability. Similar results are found in the minimum effort game. Our results offer a new perspective on gender differences in labor market outcomes: mutual dislikability impedes team behavior, except in all-male teams.
    Keywords: gender differences, likability, experiment, team behavior
    JEL: C90 J16
    Date: 2017–06
  3. By: Engl, Florian (university of cologne); Riedl, Arno (General Economics 1 (Micro)); 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: 2017–06–13
  4. By: Neil Buckley; Stuart Mestelman; R. Andrew Muller; Stephen Schott; Jingjing Zhang
    Abstract: Many controlled laboratory experiments have shown non-binding communication among appropriators from a common pool to be an effective way to reduce over-appropriation from the commons. The controlled laboratory environments have tended to be environments with fewer than 10 participants. Recent work by Buckley et al. (2017) found that non-binding communication is not successful in reducing appropriation effort in a controlled laboratory environment with 12 participants. A conjecture was that there might be a difference between 12 participants and 8 participants (the typical number used by Ostrom et al. 1994 in their seminal work and used in many subsequent studies by others). This paper presents an environment that utilizes the CPR setting identical to that used by Buckley et al. (2017) reduces the number of appropriators from 12 to 8. Eight sessions (4 with and 4 without non-binding communication) are run using the Buckley et al. (2017) environment with 8 participants. The results suggest that the number of participants may not be an important factor in driving the differences between the impact that non-binding communication has on the Buckley et al. (2017) and Ostrom et al. (1994) environments. Alternate conjectures are presented to account for the differences.
    JEL: Q20 C72 C92
    Date: 2017–06–19
  5. By: Matías Busso; Taryn Dinkelman; Claudia Martínez; Dario Romero
    Abstract: Schools that provide higher education often belong to either a merit-based selective system or an open-access less selective system. This paper presents the results of a field experiment that provided Grade 12 students in Chile with tailored information about financial aid and average earnings and employment probabilities for schools and careers in both types of schools. No effect is found on the extensive margins of enrollment in the selective or in the less selective sector. Treated students change their intensive margin decisions: they choose careers and schools with lower expected wages and lower employment probabilities, but with higher quality relative to their baseline preferences.
    Keywords: Higher Education, Vocational Education and Training, School Choice, School Enrollment, School Attendance, High School, Human Capital Investment, Test scores, Student Loans, Scholarships, school choice, government loans, scholarships
    JEL: I22 I23 D83
    Date: 2016–11
  6. By: Carlsson, Magnus (Linnaeus University); Eriksson, Stefan (Department of Economics, Uppsala University)
    Abstract: In most countries, there are systematic age and gender differences in labor market outcomes. Older workers and women often have lower employment rates, and the duration of unemployment increases with age. These patterns may reflect age and gender differences in either labor demand (i.e. discrimination) or labor supply. In this study, we investigate the importance of demand effects by analyzing whether employers use information about a job applicant’s age and gender in their hiring decisions. To do this, we conducted a field experiment, where over 6,000 fictitious resumes with randomly assigned information about age (in the interval 35-70) and gender were sent to employers with a vacancy and the employers’ responses (callbacks) were recorded. We find that the callback rate starts to fall substantially early in the age interval we consider. This decline is steeper for women than for men. These results indicate that age discrimination is a widespread phenomenon affecting workers already in their early 40s in many occupations. Ageism and occupational skill loss due to aging are unlikely explanations of these effects. Instead, our employer survey suggests that employer stereotypes about three worker characteristics – ability to learn new tasks, flexibility/adaptability, and ambition – are important. We find no evidence of gender discrimination against women on average, but the gender effect is heterogeneous across occupations and firms. Women have a higher callback rate in female-dominated occupations and firms, and when the recruiter is a woman. These results suggest that an in-group bias affects hiring patterns, which may reinforce the existing gender segregation in the labor market.
    Keywords: age; gender; discrimination; field experiment; labor market
    JEL: J23 J71
    Date: 2017–06–15
  7. By: Clark, Jeremy (University of Canterbury); Dickinson, David L. (Appalachian State University)
    Abstract: We implement a one-week partial sleep restriction protocol to investigate the effect of sleep deprivation on joint production in a standard voluntary contributions mechanism (VCM) experiment. Additionally, the effect of sleep restriction on an individual's likelihood of sending costly peer punishment is examined. Actigraphy sleep monitoring watches are used to validate that our random assignment to sleep restricted (SR) and well-rested (WR) conditions generates significant differences in both objective nightly sleep duration and subject sleepiness. Using multiple measures of sleep restriction, and non-parametric as well as regression analysis, we find that when punishment is not available, sleep restriction does not affect the contributions made to joint production. When punishment is available, we find weak evidence that SR subjects contribute more than WR subjects, but there is no evidence that SR and WR subjects differ in the amount they punish others. However, we also find that SR subject contributions are significantly more sensitive to the introduction of peer punishment. SR subject punishment decisions may also be more sensitive to the deviation of their contributions from other group members' contributions and more sensitive to having received punishment themselves. Our results have implications for understanding how the norm enforcement availability may differentially impact individuals depending on their current sleep state.
    Keywords: sleep restriction, sleep deprivation, social dilemma, VCM, punishment, experiments
    JEL: C92 D03 H40 I12 J24
    Date: 2017–06
  8. By: Daniel A. Brent; Corey Lott; Michael Taylor; Joseph Cook; Kim Rollins; Shawn Stoddard
    Abstract: We investigate how normative appeals for water conservation drive behavioral change using a large-scale field experiment. Using a new social comparison that reduces the correlation between pre-treatment consumption and the difference from the peer group, we isolate the normative component of the message. The strength of the message, which we define as a household's performance relative to a peer group, is a primary driver of social comparisons' efficacy, consistent with social compar- isons imposing a moral cost on excess consumption. Relative to a nudge highlighting financial savings, social comparisons generate less persistent water savings and are more dependent on multiple mailers.
  9. By: Kai Spiekermann; Arne Weiss
    Abstract: We propose a cognitive-dissonance model of norm compliance to identify conditions for selfishly biased information acquisition. The model distinguishes between: (i) objective norm compliers, for whom the right action is a function of the state of the world; (ii) subjective norm compliers, for whom it is a function of their belief. The former seek as much information as possible; the latter acquire only information that lowers, in expected terms, normative demands. The source of 'moral wiggle room' is not belief manipulation, but the coarseness of normative prescriptions under conditions of uncertainty. In a novel experimental setup, we find evidence for such strategic information uptake. Our results suggest that attempts to change behavior by subjecting individuals to norms can lead to biased information acquisition instead of compliance.
    Keywords: norm compliance; uncertainty; experiment; self-serving biases; strategic learning; dictator game
    JEL: C91 D63 D83
    Date: 2016–03
  10. By: V. Maggian; N. Montinari
    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.
    JEL: D03 C91 J24
    Date: 2017–06
  11. By: Andrea Civelli (University of Arkansas); Cary Deck (University of Arkansas and Economic Science Institute, Chapman University)
    Abstract: Raven’s Progressive Matrices are a broadly used tool for measuring cognitive ability. This paper develops and validates a set of nonverbal puzzles that can be viewed as an extension of or substitute for the well-known Ravens tasks. Specifically, we describe the characteristics of our puzzles and provide a calibration of the matrices in terms of response accuracy and response time as a function of these characteristics. Then we directly compare within-subject performance on our puzzles and Ravens tasks. Finally, we replicate a previous experimental paper, substituting our puzzles for the Ravens matrices, and show the two tools have similar predictive success. Our approach offers several benefits due to the relatively large number of novel puzzles of a given difficulty level that can be generated.
    Keywords: Cognitive Abilities Tests, Raven’s Matrices, Experimental Economics Tools
    JEL: C9 C90 C91
    Date: 2017
  12. By: Adnane Kendel (Université Côte d'Azur; GREDEG-CNRS); Nathalie Lazaric (Université Côte d'Azur; GREDEG-CNRS); Kevin Maréchal (Gembloux Agro-BioTech; Université de Liège, Belgium)
    Abstract: The abundant literature on consumer feedback shows that it is an efficient instrument for reducing household energy consumption. However, the reported reductions are strongly dependent on contextual factors and on the type of feedback provided. Given the importance of learning to this respect, this dimension constitutes the core focus of the present study which reports the findings of the TICELEC (i.e. French acronym for information technologies for responsible electricity consumption) project in France. The experiment included a control group (G1: the self-monitoring group) and one equipped group (G2). All participants reduced their consumption and learnt either directly from feedback or indirectly through self-monitoring. The amount of energy savings, which is larger than in similar experiments, can be explained by two factors. First, the specificity of our sample (i.e. high income, high consumption) which allows for potentially large energy savings. Second, high involvement of participants and the building of trust. The quantitative and qualitative dimensions of learning are then discussed. Additionally, we focus on peak-load shifting in G2 with 2 subgroups (G21 and G22). The higher proportion of shifters in G22 and the higher ‘quality’ of their shifting suggest a higher level of learning enabled by the more sophisticated feedback. Although this translated into only a moderately higher rate of energy savings, the higher degree of absorbed knowledge (i.e. through ‘learning by looking through connecting’) might lead to a qualitatively distinctive type of energy saving.
    Keywords: Household energy saving, learning, feedback, residential consumption
    JEL: D10 D11 D12 D13 D14 D83 Q41
    Date: 2017–06
  13. By: Bridget Hoffmann
    Abstract: This paper uses willingness to pay (WTP) data from a field experiment in Hyderabad, India in 2013 to determine whether non-monetary prices better target health products to the poor than monetary prices. Monetary WTP is increasing in income and non-monetary WTP is weakly decreasing in income. Household fixed effects in a pooled sample of monetary WTP and non-monetary WTP are used to compare the correlation of income and WTP across price types. It is found that non-monetary WTP falls relative to monetary WTP as income rises. Finally, a greater fraction of demand is comprised of the poor at non-monetary prices.
    Keywords: Non-monetary Prices, Willingness to Pay, Wage Level, health expenditure, Potable water, Water Purifier, Household Income, Water quality, Household Expenditure, water purifier, health products, willingness to pay
    JEL: C93 I15 I14 D61 H42 O12
    Date: 2016–10
  14. By: Gächter, Simon (University of Nottingham); Starmer, Chris (University of Nottingham); Tufano, Fabio (University of Nottingham)
    Abstract: We introduce the concept of "group cohesion" to capture the economic consequences of ubiquitous social relationships in group production. We measure group cohesion, adapting the "oneness scale" from psychology. A comprehensive program of new experiments reveals the considerable economic impact of cohesion: higher cohesion groups are significantly more likely to achieve Pareto-superior outcomes in classic weak-link coordination games. We show that effects of cohesion are economically large, robust, and portable. We identify social preferences as a primary mechanism explaining the effects of cohesion. Our results provide proof of concept for group cohesion as a productive new tool of economic research.
    Keywords: social relationships, group cohesion, oneness, coordination, weak-link game, experiments, real groups
    JEL: C92 D03
    Date: 2017–06
  15. By: Cars Hommes (Amsterdam School of Economics (University of Amsterdam) & Tinbergen Institute); Domenico Massaro (Universit? Cattolica del Sacro Cuore & Complexity Lab in Economics); Matthias Weber (Bank of Lithuania & Faculty of Economics, Vilnius University)
    Abstract: Expectations play a crucial role in modern macroeconomic models. We consider a New Keynesian framework under rational expectations and under a behavioral model of expectation formation. We show how the economy behaves in the alternative scenarios with a focus on inflation volatility. Contrary to the rational model, the behavioral model predicts that inflation volatility can be lowered if the central bank reacts to the output gap in addition to inflation. We test the opposing theoretical predictions in a learning-to-forecast experiment. The results support the behavioral model and the claim that output stabilization can lead to less volatile inflation.
    Keywords: Experimental macroeconomics; Heterogeneous expectations; LtFE; Tradeoff inflation and output gap
    JEL: C90 E03 E52 D84
    Date: 2017–03–30
  16. By: Shinsuke Ikeda; Takeshi Ojima
    Abstract: We describe consumers’ dynamic decision-making under limited self-control, emphasizing the fatiguing nature of self-regulation. The temptation theory is extended in a two-good setting with tempting and non-tempting goods, where self-regulation in moderating tempting good consumption depreciates mental capital (willpower). The resulting non-homothetic feature of consumer preferences helps describe self-regulatory behavior in such an empirically relevant way that it depends on the nature of the tempting good (luxury or inferior) and on consumer wealthiness. First, richer consumers are more selfindulgent and impatient in consuming tempting luxuries, whereas less so in consuming tempting inferiors: marginal impatience is increasing in wealth for high-end brand wine whereas decreasing for junk foods. Second, self-control fatigue weakens implied patience for tempting good consumption. Third, upon a stressful shock, with the resulting increasing scarcity of willpower, self-indulgence and impatience for tempting good consumption increase over time. Fourth, without substantial difference in wealth holdings, naive consumers, unaware of the willpower constraint, display weaker self-control in the long run than the sophisticated consumers do.
    JEL: D90 E21
    Date: 2017–06
  17. By: Marta Rubio-Codina; María Caridad Araujo; Orazio P. Attanasio; Sally Grantham-McGregor
    Abstract: In low- and middle-income countries (LIMCs) measuring early childhood development (ECD) with standard tests in large scale surveys (i.e. evaluations of interventions) is difficult and expensive. Multi-dimensional screeners and single-domain tests ('short tests') are frequently used as alternatives. However, their validity in these circumstances is unknown. We examine the feasibility, reliability, and concurrent validity of three multi-dimensional screeners -the Ages and Stages Questionnaires (ASQ-3), the Denver Developmental Screening Test (Denver-II), the Battelle Developmental Inventory screener (BDI-2) -and two single-domain tests- the MacArthur-Bates Short-Forms (SFI and SFII) and the WHO Motor Milestones (WHO-Motor)-in 1,311 children 6-42 months in Bogota, Colombia. We compare scores on these short tests to those on the Bayley Scales of Infant and Toddler Development (Bayley-III), which we take as the 'gold standard'. The Bayley-III was given at a center by psychologists; whereas the short tests were administered in the home by interviewers, as in a survey setting. Concurrent validity of the multi-dimensional tests' cognitive, language, and fine motor scales with the corresponding Bayley-III scale is low below 19 months but increases with age, becoming moderate-to-high over 30 months. In contrast, gross motor scales' concurrence is high under 19 months and then decreases. Of the single-domain tests, the WHO-Motor has high validity with gross motor under 16 months, and the SFI and SFII expressive scales show moderate correlations with language under 30 months. Overall, the Denver-II seems the most feasible and valid multi-dimensional test and the ASQ-3 performs poorly under 31 months. By domain, gross motor development has the highest concurrence below 19 months, and language above. Results do not vary by household socio-economic status. Predictive validity investigation is nonetheless needed to further guide the choice of instruments for large scale studies.
    Keywords: Early Childhood Development, Language Development, Educational tests, Child development, Cognitive Development, desarrollo cognitivo, desarrollo del lenguaje
    JEL: I3 I2 I1 J1
    Date: 2016–08
  18. By: James Alm (Tulane University); Michele Bernasconi (Department of Economics, Cà Foscari University Of Venice); Susan Laury (Georgia State University); Daniel J. Lee (Rice University); Sally Wallace (Georgia State University, African Tax Institute and the University of Pretoria RSA)
    Abstract: This paper analyzes the impact of confidentiality of taxpayer information on the level of compliance in two countries with very different levels of citizen trust in government – the United States and Italy. Using identical laboratory experiments conducted in the two countries, we analyze the impact on tax compliance of “Full Disclosure” (e.g., release of photos of tax evaders to all subjects, along with information on the extent of their noncompliance) and of “Full Confidentiality” (e.g., no public dissemination of photos or noncompliance). Our empirical analysis applies a two-stage strategy that separates the evasion decision into its extensive (e.g., “participation”) and intensive (e.g. “amount”) margins. We find strong support for the notion that public disclosure acts as an additional deterrent to tax evaders, and that the deterrent effect is concentrated in the first stage of the two-stage model (or whether to evade or not). We also find that the deterrent effect is similar in the U.S. and in Italy, despite what appear to be different social norms of compliance in the two countries.
    Keywords: H2, H3
    Date: 2016
  19. By: Jeffrey Flory; Uri Gneezy; Kenneth Leonard; John List
    Abstract: Research on competitiveness at the individual level has emphasized sex as a physiological determinant, focusing on the gap in preference for competitive environments between young men and women. This study presents evidence that women's preferences over competition change with age such that the gender gap, while large for young adults, disappears in older populations due to the fact that older women are much more competitive. Our finding that tastes for competition appear just as strong among older women as they are among men suggests a simple gender-based view of competitiveness is misleading; age seems just as important as sex. These findings are consistent with one of the most commonly cited views on the deeper origins of gender differences: that they stem at least in part from human evolution.
    Date: 2017

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