nep-exp New Economics Papers
on Experimental Economics
Issue of 2017‒09‒03
29 papers chosen by

  1. Goal Setting, Academic Reminders, and College Success: A Large-Scale Field Experiment By Christopher R. Dobronyi; Philip Oreopoulos; Uros Petronijevic
  2. Moral Hazard: Experimental Evidence from Tenancy Contracts By Burchardi, Konrad B.; Gulesci, Selim; Lerva, Benedetta; Sulaiman, Munshi
  3. Do Beliefs about Peers Matter for Donation Matching? Experiments in the Field and Laboratory By Gee, Laura Katherine; Schreck, Michael J.
  4. Behaviorally Efficient Remedies – An Experiment By Christoph Engel; Lars Freund
  5. Committing the English and the Continental Way – An Experiment By Christoph Engel; André Schmelzer
  6. The Spillover Effects of Affirmative Action on Competitiveness and Unethical Behavior By Ritwik Banerjee; Nabanita Datta Gupta; Marie Villeval
  7. Motivational Goal Bracketing: An Experiment By Koch, Alexander K.; Nafziger, Julia
  8. Returns to Islamic Microfinance: Evidence from a Randomized Experiment in Pakistan By Maazullah,; Bedi, Arjun S.
  9. The Silent Treatment: LGBT Discrimination in the Sharing Economy By Rishi Ahuja; Ronan C. Lyons
  10. (Non)Randomization: A Theory of Quasi-Experimental Evaluation of School Quality By Yusuki Narita
  11. Return on trust is lower for immigrants By Cettolin, Elena; Suetens, Sigrid
  12. Maintaing vs. Milking Good Reputation when Customer Feedback is Inaccurate By Behnud Djawadi; Rene Fahr; Claus-Jochen Haake; Sonja Recker
  13. Inclusive Recruitment? Hiring Discrimination against Older Workers By Drydakis, Nick; MacDonald, Peter; Bozani, Vasiliki; Chiotis, Vangelis
  14. Being Watched over by a Conversation Robot Enhances Safety in Simulated Driving By Yoshinori Nakagawa; Kaechang Park; Hirotada Ueda; Hiroshi Ono
  15. Adoption of a New Payment System: Theory and Experimental Evidence By Jasmina Arifovic; John Duffy; Janet Jiang
  16. Social preferences and political attitudes: An online experiment on a large heterogeneous sample By Rudolf Kerschbamer; Daniel Muller
  17. Gender, Willingness to Compete and Career Choices along the Whole Ability Distribution By Buser, Thomas; Peter, Noemi; Wolter, Stefan C.
  18. Management, Supervision, and Health Care: A Field Experiment By Dunsch, Felipe A.; Evans, David K.; Eze-Ajoku, Ezinne; Macis, Mario
  19. Safe options induce gender differences in risk attitudes By Paolo Crosetto; Antonio Filippin
  21. The Gender Wage Gap in Europe: Job Preferences, Gender Convergence and Distributional Effects By Redmond, Paul; McGuinness, Seamus
  22. Intergenerational sustainability dilemma and a potential solution: Future ahead and back mechanism By Shibly Shahrier; Koji Kotani; Tatsuyoshi Saijo
  23. Equitable rent division By Rodrigo A. Velez
  24. Self-Control and Demand for Preventive Health: Evidence from Hypertension in India By Liang Bai; Benjamin Handel; Edward Miguel; Gautam Rao
  25. Heterogeneous Employment Effects of Job Search Programmes: A Machine Learning Approach By Knaus, Michael C.; Lechner, Michael; Strittmatter, Anthony
  26. Animal Welfare and Human Ethics: A Personality Study By Konstanze Albrecht; Florentin Krämer; Nora Szech
  27. Spontaneous Segregation of Agents Across Double Auction Markets By Aleksandra Alori\'c; Peter Sollich; Peter McBurney
  28. (How) Do Non-Cognitive Skills Programs Improve Adolescent School Achievement? Experimental Evidence By Martins, Pedro S.
  29. The swing voter's curse in social networks By Buechel, Berno; Mechtenberg, Lydia

  1. By: Christopher R. Dobronyi; Philip Oreopoulos; Uros Petronijevic
    Abstract: This paper presents an independent large-scale experimental evaluation of two online goal-setting interventions. Both interventions are based on promising findings from the field of social psychology. Approximately 1,400 first-year undergraduate students at a large Canadian university were randomly assigned to complete one of two online goal-setting treatments or a control task. Additionally, half of treated participants also were offered the opportunity to receive follow-up goal-oriented reminders through e-mail or text messages in an attempt to test a cost-effective method for increasing the saliency of treatment. Across all treatment groups, we observe no evidence of an effect on GPA, course credits, or second year persistence. Our estimates are precise enough to discern a seven percent standardized performance effect at a five percent significance level. Our results hold by subsample, for various outcome variables, and across a number of specifications.
    JEL: I23 J24
    Date: 2017–08
  2. By: Burchardi, Konrad B.; Gulesci, Selim; Lerva, Benedetta; Sulaiman, Munshi
    Abstract: We report results from a field experiment designed to estimate the effects of tenancy contracts on agricultural input choices, risk-taking, and output. The experiment induced variation in the terms of sharecropping contracts: some tenants paid 50% of output in compensation for land usage; others paid 25%; again others paid 50% of output and received cash, either fixed or stochastic. We find that tenants with higher output share utilized more inputs, cultivated riskier crops, and generated 60% more output relative to control. Cash transfers did not effect farm output. We interpret the increase in output as the incentive effect of sharecropping.
    Keywords: Agricultural Productivity; Contracts; Incentive Effects; Sharecropping
    JEL: C93 D22 O13
    Date: 2017–08
  3. By: Gee, Laura Katherine (Tufts University); Schreck, Michael J. (Analysis Group)
    Abstract: A popular fundraising tool is donation matching, where every dollar is matched by a third party. But field experiments find that matching does not always increase donations. This may occur because individuals believe that peer donors will exhaust the matching funds, so their donation is not pivotal to obtaining matching funds. We develop a theory of how beliefs about peers' donations affect one's own likelihood of donation. We test our theory using novel "threshold match" treatments in field and laboratory experiments. These treatments form small groups and offer a flat matching bonus if a threshold number of donations is received. One "threshold match" treatment more than doubles the donation rate in the field relative to no match. To better understand the mechanism behind this huge increase, we use a lab study to replicate the field results and further show that beliefs about peers' donations matter. Our theoretical, lab, and field results combined suggest people are more likely to donate when they believe they are more pivotal to securing matching money. Beliefs about others matter, and they should be taken into account when trying to increase donations.
    Keywords: charitable giving, field experiment, beliefs, public goods
    JEL: C93 D64 H41
    Date: 2017–08
  4. By: Christoph Engel (Max Planck Institute for Research on Collective Goods); Lars Freund (Max Planck Institute for Research on Collective Goods)
    Abstract: Under common law, the standard remedy for breach of contract is expectation damages. Under continental law, the standard is specific performance. The common law solution is ex post efficient. But is it also ex ante efficient? We use experimental methods to test whether knowing that non-fulfilment will only lead to damages deters mutually beneficial trade. The design excludes aversion against others willfully breaking their promises. We find that there is indeed less trade if specific performance is not guaranteed, provided the preference for the traded commodity is sufficiently pronounced.
    Keywords: remedies, breach of contract, specific performance, expectation damages, reliance damages, donation, experiment
    JEL: C91 D02 D03 D61 D62 D64 H23 K12
    Date: 2017–08
  5. By: Christoph Engel (Max Planck Institute for Research on Collective Goods); André Schmelzer (Max Planck Institute for Research on Collective Goods)
    Abstract: On the doctrinal surface, there is a deep divide between common and continental law when it comes to the origin of contractual obligations. Under continental law, in principle a unilateral promise suffices. Common law by contrast requires consideration. When it comes to deciding cases, the divide is much less pronounced. But for the most part the law does not govern people's lives through adjudication. It matches or molds their moral intuitions. We test these intuitions in the lab. If consideration is required, participants believe that all participants make more ambitious promises. But they themselves make a more cautious promise. These two effects cancel out, so that promises are not more likely to be kept with consideration.
    Keywords: contract, obligation, promise, consideration, experiment, modified dictator game
    JEL: C91 D02 D03 D12 D64 H41 K12
    Date: 2017–08
  6. By: Ritwik Banerjee (IIMB - Indian Institute of Management [Bangalore]); Nabanita Datta Gupta (Aarhus University [Aarhus]); Marie Villeval (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: We conduct an artefactual field experiment to examine various spillover effects of Affirmative Action policies in the context of castes in India. We test a) if individuals who enter tournaments in the presence of Affirmative Action policies remain competitive after the policy has been removed, and b) whether having been exposed to the policy generates unethical behavior and spite against subjects from the category who has benefited from the policy. We find that these policies substantially increase the confidence and the competitiveness of the backward caste members. However, we find no spillover effect on confidence and competitiveness once Affirmative Action is withdrawn: any gain in competitiveness due to the policy is then entirely wiped out. Furthermore, the strong existing bias of the dominant category against the backward category is not significantly aggravated by Affirmative Action, except when individuals learn that they have lost the previous competition.
    Keywords: Affirmative Action,castes,competitiveness,unethical behavior,field experiment
    Date: 2017–07–24
  7. By: Koch, Alexander K. (Aarhus University); Nafziger, Julia (Aarhus University)
    Abstract: We study in an online, real-effort experiment how the bracketing of non-binding goals affects performance in a work-leisure self-control problem. We externally induce the goal bracket – daily goals or a weekly goal – and within that bracket let subjects set goals for how much they want to work over a one-week period. Our theoretical model predicts (i) that weekly goals create incentives to compensate for a lower than desired performance today with the promise to work harder tomorrow, whereas daily goals exclude such excuses; (ii) that subjects with daily goals set higher goals in aggregate and work harder than those with weekly goals. Our data support these predictions. Surprisingly, however, when goals are combined with an externally enforced commitment that requires subjects to spend less than a minute each day on the task to get started working, performance deteriorates because of high dropout rates from the task.
    Keywords: self-control, goals, narrow bracketing, commitment devices, real effort, online experiment
    JEL: D03 D81 D91
    Date: 2017–08
  8. By: Maazullah, (ISS, Erasmus University Rotterdam); Bedi, Arjun S. (ISS, Erasmus University Rotterdam)
    Abstract: The global microfinance movement is driven by the claim that once poor micro-entrepreneurs are provided access to capital, they will be able to generate high returns. The existing evidence on returns to capital is mixed and too limited to substantiate this claim. This paper reports on a field experiment conducted in Pakistan, in co-operation with Akhuwat microfinance, in which interest free loans were randomly provided to microenterprises. We find that treatment leads to a significant increase in working capital and in business profits. Using randomized treatment as an instrument for capital, we find average monthly returns to capital of 8.6 to 11.9 a month. These returns are substantially higher than the interest rates charged by microfinance institutions in Pakistan.
    Keywords: returns to capital, microfinance, microenterprises, randomized experiment, Akhuwat microfinance
    JEL: O17 O16 C93
    Date: 2017–08
  9. By: Rishi Ahuja (Department of Economics, Trinity College Dublin); Ronan C. Lyons (Department of Economics, Trinity College Dublin)
    Abstract: Online marketplaces were built with the implicit promise of reducing discrimination. Over time, though, online marketplaces have increasingly been designed to reduce anonymity as an exercise in trust building. While the reduction of anonymity can build trust, such design choices can also facilitate discrimination. This study is the first to examine whether there is discrimination against those in same-sex relationships (SSRs) in the sharing economy. Specifically, we examine whether SSRs face discrimination on the Airbnb platform in Dublin, Ireland, through a field experiment. We find that guests in implied male SSRs are approximately 20-30 percent less likely to be accepted than identical guests in implied opposite-sex relationships (OSRs) and in female SSRs. This difference is driven by non-responses from hosts, not outright rejection, and persists regardless of a variety of host and location characteristics, although male hosts and those with many listings are less likely to discriminate. Discrimination against male SSRs was observed least in the most desirable locations. The findings are not consistent with taste-based discrimination but, with little evidence for statistical discrimination, they raise something of a puzzle about the underlying source of discrimination against those in SSRs.
    Keywords: discrimination; sharing economy; field experiment; Airbnb
    JEL: J16 R3
    Date: 2017–08
  10. By: Yusuki Narita (Cowles Foundation, Yale University)
    Abstract: Many centralized school admissions systems use lotteries to ration limited seats at oversubscribed schools. The resulting random assignment is used by empirical researchers to identify the effect of entering a school on outcomes like test scores. I first find that the two most popular empirical research designs may not successfully extract a random assignment of applicants to schools. When do the research designs overcome this problem? I show the following main results for a class of data-generating mechanisms containing those used in practice: One research design extracts a random assignment under a mechanism if and practically only if the mechanism is strategy-proof for schools. In contrast, the other research design does not necessarily extract a random assignment under any mechanism.
    Keywords: Matching Market Design, Natural Experiment, Program Evaluation, Random Assignment, Quasi-Experimental Research Design, School Eectiveness
    Date: 2016–12
  11. By: Cettolin, Elena; Suetens, Sigrid
    Abstract: Trustworthiness is key for successful economic and social interactions. We conduct an experiment with a representative sample of the Dutch population to study whether trustworthiness depends on the ethnicity of the interaction partner. Native Dutch trustees play trust games with an anonymous other, who is either another native Dutch or an immigrant from non-Western descent. We find that the trustees reciprocate trust up to 13% less frequently if the trustor is a non-Western immigrant than if he/she is native Dutch. This percentage increases up to 23% for trustees who report disliking ethnic diversity in society in a survey that took place one year before the experiment. Since the decision to reciprocate does not involve behavioral risk, we take our results as evidence of taste-based discrimination. The implication is that the return on trust is lower for immigrants from non-Western descent than for native Dutch.
    Keywords: ethnic diversity; representative sample; taste-based discrimination; trust game; trustworthiness
    JEL: C72 C9 D01 J15
    Date: 2017–08
  12. By: Behnud Djawadi (Paderborn University); Rene Fahr (Paderborn University); Claus-Jochen Haake (Paderborn University); Sonja Recker (Paderborn University)
    Abstract: In Internet transactions, customers and service providers often interact once and anonymously. To prevent deceptive behavior a reputation system is particularly important to reduce information asymmetries about the quality of the o?ered product or service. In this study we examine the e?ectiveness of a reputation system to reduce information asymmetries when customers may make mistakes in judging the provided service quality. In our model, a service provider makes strategic quality choices and short-lived customers are asked to evaluate the observed quality by providing ratings to a reputation system. The customer is not able to always evaluate the service quality correctly and possibly submits an erroneous rating according to a prede?ned probability. Considering reputation pro?les of the last three sales, within the theoretical model we derive that the service provider’s dichotomous quality decisions are independent of the reputation pro?le and depend only on the probabilities of receiving positive and negative ratings when providing low or high quality. Thus, a service provider optimally either maintains a good reputation or completely refrains from any reputation building process. However, when mapping our theoretical model to an experimental design we ?nd that a signi?cant share of subjects in the role of the service provider deviates from optimal behavior and chooses actions which are conditional on the current reputation pro?le. With respect to these individual quality choices we see that subjects use milking strategies which means that they exploit a good reputation. In particular, if the sales price is high, low quality is delivered until the price drops below a certain threshold, and then high quality is chosen until the price increases again.
    Keywords: Service Quality, Reputation Systems, Online Markets, Experimental Economics, Markovian Decision Process
    JEL: C73 C91 L12 L15 L86
    Date: 2017–08
  13. By: Drydakis, Nick (Anglia Ruskin University); MacDonald, Peter (Anglia Ruskin University); Bozani, Vasiliki (University of Crete); Chiotis, Vangelis (Anglia Ruskin University)
    Abstract: Addressing population ageing requires a rise in the activity rates of older workers. In this study, a field experiment for the period 2013-2015 in the UK, suggests that age discrimination persists at alarming levels. It shows that when two applicants engage in an identical job search, the older applicant would gain fewer invitations for interviews regardless of her/his experience or superiority for the appointment. The results also suggest that older applicants face higher occupational access constraints for blue-collar jobs than white-collar/pink-collar jobs, and that women face greater age discrimination than men. Worryingly, the outcomes suggest that older applicants gain poorer access to vacancies than younger applicants irrespective of written commitments to equal opportunities. The design of the study suggests that discrimination results from distaste for older applicants, which has not been eliminated by the introduction of anti-discrimination legislation. Eliminating ageism in recruitment requires organizations to adopt more inclusive HR policies at the earliest stages of the recruitment process. Social dialogue has a crucial role to play in shaping inclusive and discrimination free recruitment policies such that shared values and beliefs are not age-discriminatory but rather recognize the strengths and potential of workers from different age groups.
    Keywords: access to occupations, wages, ageism, women, discrimination
    JEL: C93 C9 J14 J1
    Date: 2017–08
  14. By: Yoshinori Nakagawa (Department of Management, Kochi University of Technology); Kaechang Park (Research Organization for Regional Alliance, Kochi University of Technology); Hirotada Ueda (Kyoto Sangyo University); Hiroshi Ono (Honda Motor Co.,Ltd.)
    Abstract: In the aging information society, replacing human passengers' protective effects on vehicle drivers with those of social robots is essential. However, effects of social robots' presence on drivers have not yet been fully explored. Thus, using a driving simulator and a conversation robot, this experimental study aimed to answer two research questions: (i) whether social robots' anthropomorphic qualities per se—not practical information the robot provides drivers—have protective effects by promoting cautious driving and alleviating crash risks and (ii) in what psychological processes such effects emerge. Participants were collected from young, middle-aged, and elderly cohorts (n = 37, 36, and 36, respectively). They were allocated to either the treatment group (simulated driving in a conversation robot's presence) or the control group (simulated driving alone), and their driving performance was measured. Emotions (peace of mind, loneliness, and concentration) were also measured in a post-driving questionnaire survey using our original, psychometrically sound scales. Although the older cohort did not demonstrate protective effects, perhaps due to motion sickness, young and middle cohorts drove cautiously, with the robot enhancing either peace of mind or concentration. Protective effects were partly ascribed to the robot's role of expressing sympathy, especially when drivers encountered not-their-fault minor incidents and became stressed. This finding suggests a new driving-safety approach, in which the central point is passengers receiving drivers’ emotions, rather than giving them information or warnings, regardless of whether passengers are humans or social robots.
    Keywords: Passenger effects on drivers, Social Robots, eak AI stance
    Date: 2017–08
  15. By: Jasmina Arifovic (Simon Fraser University); John Duffy (Department of Economics, University of California-Irvine); Janet Jiang (Bank of Canada)
    Abstract: We model the introduction of a new payment method that competes with an existing payment method. Due to network adoption effects, there are two symmetric pure strategy equilibria in which only one of the two payment methods is used. The equilibrium where only the new payment method is used is socially optimal. In an experiment, we find that, depending on the fixed fee for acceptance of the new payment method and on the choices made by participants on both sides of the market, either equilibrium can be selected. An evolutionary learning model provides a good characterization of our experimental data.
    Keywords: Payment methods; Network effects; E-money; Experimental economics.
    JEL: E41 C35 C83 C92
    Date: 2017–08
  16. By: Rudolf Kerschbamer; Daniel Muller
    Abstract: This paper investigates - in a large heterogeneous sample - the relationship between social preferences on the one hand, and socioeconomic factors and political preferences on the other hand. Socioeconomic factors correlate with social preferences, and social preferences robustly shape political attitudes and voting behavior in a particular way: Selfish subjects are the extremists on one side of the political spectrum - they are more likely to vote for a right-wing party, they are less inclined to favor redistribution and they are more likely to self-assess themselves as right-wing than all the other types. Inequality-averse subjects, altruists and maxi-min sit at the opposite end of the political spectrum, while all the other types behave less systematically and in a less extreme fashion. Overall, our evidence indicates that elicited social preferences are externally valid as a predictor for political attitudes, and that social preferences are fairly stable across contexts and over longer periods of time.
    Keywords: Distributional Preferences, Social Preferences, Equality Equivalence Test, Political Attitudes, Voting Behavior, German Internet Panel
    JEL: C91 D30 D63 D64 D72 H50
    Date: 2017–08–23
  17. By: Buser, Thomas (University of Amsterdam); Peter, Noemi (University of Groningen); Wolter, Stefan C. (University of Bern)
    Abstract: Men are generally found to be more willing to compete than women and there is growing evidence that willingness to compete is a predictor of individual and gender differences in career decisions and labor market outcomes. However, most existing evidence comes from the top of the education and talent distribution. In this study, we use incentivized choices from more than 1500 Swiss lower-secondary school students to ask how the gender gap in willingness to compete varies with ability and how willingness to compete predicts career choices along the whole ability distribution. Our main results are: 1. The gender gap in willingness to compete is essentially zero among the lowest-ability students, but increases steadily with ability and reaches 30–40 percentage points for the highest-ability students. 2. Willingness to compete predicts career choices along the whole ability distribution. At the top of the ability distribution, students who compete are more likely to choose a math or science-related academic specialization and girls who compete are more likely to choose academic over vocational education in general. At the middle, competitive boys are more likely to choose a business-oriented apprenticeship, while competitive girls are more likely to choose a math-intensive apprenticeship or an academic education. At the bottom, students who compete are more likely to succeed in securing an apprenticeship position. We also discuss how our findings relate to persistent gender differences in career outcomes.
    Keywords: willingness to compete, gender, career decisions, experiment
    JEL: C91 D03 J01 J16
    Date: 2017–08
  18. By: Dunsch, Felipe A. (World Bank); Evans, David K. (World Bank); Eze-Ajoku, Ezinne (Johns Hopkins University); Macis, Mario (Johns Hopkins University)
    Abstract: If health service delivery is poorly managed, then increases in inputs or ability may not translate into gains in quality. However, little is known about how to increase managerial capital to generate persistent improvements in quality. We present results from a randomized field experiment in 80 primary health care centers (PHCs) in Nigeria to evaluate the effects of a health care management consulting intervention. One set of PHCs received a detailed improvement plan and nine months of implementation support (full intervention), another set received only a general training session, an overall assessment and a report with improvement advice (light intervention), and a third set of facilities served as a control group. In the short term, the full intervention had large and significant effects on the adoption of several practices under the direct control of the PHC staff, as well as some intermediate outcomes. Virtually no effects remained one year after the intervention concluded. The light intervention showed no consistent effects at either point. We conclude that sustained supervision is crucial for achieving persistent improvements in contexts where the lack of external competition fails to create incentives for the adoption of effective managerial practices.
    Keywords: management, health care, supervision, economic development
    JEL: I15 M10 O15
    Date: 2017–08
  19. By: Paolo Crosetto (INRA - Institut National de la Recherche Agronomique, GAEL - Grenoble Applied Economics Laboratory - UPMF - Université Pierre Mendès France - Grenoble 2 - INRA - Institut National de la Recherche Agronomique); Antonio Filippin (Institute for the Study of Labor (IZA) Bonn, 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 heterogeneity 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 accross tasks. This paper constitutes the first successful attempt to shed light on the determinants of gender differences in risk attitudes.
    Keywords: safe option,risk attitudes,gender differences,experiment
    Date: 2017–05–30
  20. By: Estelle Bellity (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Fabrice Gilles (LEM - Lille - Economie et Management - Université de Lille, Sciences et Technologies - Université Catholique de Lille - Université de Lille, Sciences Humaines et Sociales - CNRS - Centre National de la Recherche Scientifique, TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique); Yannick L'Horty (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)
    Abstract: We evaluate the impact of encouraging students to practice literacy skills, as well as improvement in these skills, on academic performance in first-year university students. Several previous studies have attempted to understand drivers for academic success in university students. To our knowledge, none focus on directly analyzing the relations between such factors and students’ academic performance. We used a randomized experiment based on an encouragement design with a group of first-year students in Economics and Management in two French universities. For measuring the effects of encouragement, we included an innovative pedagogical tool for practicing literacy skills via a web platform, called Projet Voltaire. This tool also allowed us to get a good measure of the literacy skills of the students, both at the beginning and at the end of the first term of the academic year. During the entire semester, students had the opportunity to practice literacy skills using Projet Voltaire. To evaluate the impact of literacy on different final grades or final exam scores, and particularly on first-year grade averages, we distinguished between two randomly selected groups of students: some were encouraged to practice literacy skills, while others were only made aware of the option. As a measure of improvement in literacy skills, we use the difference between scores on the two literacy tests. Estimating intention to treat and local average treatment effect, we show that both encouragement to practice literacy skills and an improvement in literacy test scores over the first term are positively correlated with the academic performance of first-year university students, and in particular the probability that they will complete one or both semesters of the academic year.
    Keywords: orthographe, échec en licence, expérimentation
    Date: 2017–05–12
  21. By: Redmond, Paul (ESRI, Dublin); McGuinness, Seamus (Economic and Social Research Institute, Dublin)
    Abstract: The gender wage gap has declined in magnitude over time; however, the gap that remains is largely unexplained due to gender convergence in key wage determining characteristics. In this paper we show that the degree of gender convergence differs across countries in Europe. Most, if not all, of the wage gap is unexplained in some countries, predominantly in Eastern Europe, while in some central and peripheral countries, differences between the characteristics of males and females can still explain a relatively large proportion of the wage gap. We investigate whether gender differences relating to job preferences play a role in explaining the gender wage gap. We find that females are more motivated than males to find a job that is closer to home and offers job security, whereas males are motivated by financial gain. The average gender wage differential in Europe is 12.2 percent and gender differences in job preferences are associated with a 1.3 percentage point increase in the wage gap. We find that preferences explain more of the gender wage gap than the individual components relating to age, tenure and previous employment status. A quantile decomposition reveals that job preferences play a greater role in explaining the wage gap at the top of the wage distribution.
    Keywords: gender wage gap, job motives, Oaxaca, quantile decomposition
    JEL: J16 J24 J31 J71
    Date: 2017–08
  22. By: Shibly Shahrier (Research Center for Future Design, Kochi University of Technology); Koji Kotani (Research Center for Future Design, Kochi University of Technology); Tatsuyoshi Saijo (Research Center for Future Design, Kochi University of Technology)
    Abstract: Intergenerational sustainability is pivotal for the survival of human societies. However, current economic and political systems based on capitalism and democracy might not be effective at considering future generations’ needs, thereby compromising intergenerational sustainability (Schwartz, 2007, Shahrier et al., 2016, 2017). We design a new mechanism to improve intergenerational sustainability called the future ahead and back mechanism (FAB) and examine its effectiveness through field experiments consisting of intergenerational sustainability dilemma games (ISDGs). In such games, a lineup of consecutive generations is organized, and each generation can either maintain intergenerational sustainability (sustainable option) or maximize its own generation’s payoff by irreversibly imposing a cost on future generations (unsustainable option). In a basic ISDG, generations make the decision through deliberative democracy. In the ISDG with FAB, each generation is first asked to consider the decision of the current generation as if it is in the position of the next generation. Second, the generation makes the actual decision from its original position as the current generation. The results reveal that deliberative democracy does not prevent a majority of proself people from choosing unsustainable options, which is the mirror image of the results demonstrated in Hauser et al. (2014), thereby compromising intergenerational sustainability in the basic ISDG. By contrast, FAB is demonstrated to enable proself people to change their individual opinions from unsustainable to sustainable options, inducing more generations to choose sustainable options. We argue that the memories and experiences of what and how people request (or role-playing) as future generations in FAB trigger more logic-based reasoning than norm-based reasoning, thereby enhancing intergenerational sustainability.
    Keywords: Intergenerational sustainability dilemma, Capitalism and democracy, Culture and evolution, Future ahead and back mechanism
    Date: 2017–08
  23. By: Rodrigo A. Velez (Texas A&M University, Department of Economics)
    Abstract: How should a group of roommates allocate the rooms and contributions to rent in the house they lease? Economists have provided partial answers to this question in a literature that spans the least forty years. Unfortunately, these results were developed in a non-linear fashion, which obscures them to the non-specialist. Recently, computer scientists have developed an interest in this particular problem and have advanced from an algorithmic complexity perspective. Remarkably, an online application, (Goldman and Procaccia, 2014), has been deployed, gathering thousands of users around the world and sparking new questions about the optimal way to provide recommendations. With this new interest gaining traction in computer science, there is an evident need for a coherent development of the results in economics literature. This paper does so. In particular, we build connections among results that were seemingly unrelated and considerably simplify their development, fill in non-trivial gaps, and identify open questions. Our focus is on incentives issues, the area in which we believe economists have more to contribute in this discussion.
    Keywords: inequity aversion, general equilibrium
    JEL: C91 D63 C72
    Date: 2017–08–18
  24. By: Liang Bai; Benjamin Handel; Edward Miguel; Gautam Rao
    Abstract: Self-control problems constitute a potential explanation for the under-investment in preventive health care observed in low-income countries. A commonly proposed policy tool to solve such problems is offering consumers commitment devices. We conduct a field experiment to evaluate the effectiveness of different types of theoretically-motivated commitment contracts in increasing preventive doctor visits by hypertensive patients in rural India. We document varying levels of takeup of the different commitment contracts, but find no effects on actual doctor visits or individual health outcomes. Thus, a substantial number of individuals pay for commitments, but then fail to follow through on the specified task, losing money without experiencing any health benefit. We develop and structurally estimate a pre-specified model of consumer behavior under present bias with varying levels of naivete. The results are consistent with a large share of individuals being partially naive about their own self-control problems: in other words, they are sophisticated enough to demand some commitment, but overly optimistic about whether a given commitment is sufficiently strong to be effective. The results suggest that commitment devices may in practice be welfare diminishing, at least in some contexts, and serve as a cautionary tale about the role of these contracts in the health care sector.
    JEL: D91 I12
    Date: 2017–08
  25. By: Knaus, Michael C. (University of St. Gallen); Lechner, Michael (University of St. Gallen); Strittmatter, Anthony (University of St. Gallen)
    Abstract: We systematically investigate the effect heterogeneity of job search programmes for unemployed workers. To investigate possibly heterogeneous employment effects, we combine non-experimental causal empirical models with Lasso-type estimators. The empirical analyses are based on rich administrative data from Swiss social security records. We find considerable heterogeneities only during the first six months after the start of training. Consistent with previous results of the literature, unemployed persons with fewer employment opportunities profit more from participating in these programmes. Furthermore, we also document heterogeneous employment effects by residence status. Finally, we show the potential of easy-to-implement programme participation rules for improving average employment effects of these active labour market programmes.
    Keywords: machine learning, individualized treatment effects, conditional average treatment effects, active labour market policy
    JEL: J68 H43 C21
    Date: 2017–08
  26. By: Konstanze Albrecht (RWTH Aachen University); Florentin Krämer (University of Munich); Nora Szech (Karlsruher Institut für Technologie)
    Abstract: We revisit the long-standing question whether there is a relation between animal welfare and human ethics. Therefore, we elicit concern for animal welfare in an incentivized, direct, and real setup: Subjects choose between intensive farming versus organic living conditions for a hen. Guaranteeing organic living conditions is costly, but implies organic feed, access to daylight, and more space. We compare the interest in animal welfare with morally relevant dispositions in subjects, relying on well-established measures such as Machiavellianism scores and the Big 5 personality test. The data confirm a strong, positive relation between caring for animal welfare and moral dispositions.
    Keywords: animal welfare, human ethics, experiment, sustainability
    JEL: D01 D62 D69
    Date: 2017–08
  27. By: Aleksandra Alori\'c; Peter Sollich; Peter McBurney
    Abstract: In this paper we investigate the possibility of spontaneous segregation into groups of traders that have to choose among several markets. Even in the simplest case of two markets and Zero Intelligence traders, we are able to observe segregation effects below a critical value Tc of the temperature T; the latter regulates how strongly traders bias their decisions towards choices with large accumulated scores. It is notable that segregation occurs even though the traders are statistically homogeneous. Traders can in principle change their loyalty to a market, but the relevant persistence times become long below Tc.
    Date: 2017–08
  28. By: Martins, Pedro S. (Queen Mary, University of London)
    Abstract: Non-cognitive skills programs may be an important policy option to improve the academic outcomes of adolescents. In this paper, we evaluate experimentally the EPIS program, which is based on bi-weekly individual or small-group non-cognitive mediation short meetings with low-performing students. Our RCT estimates, covering nearly 3,000 7th and 8th-grade students across over 50 schools and a period of two years, indicate that the program increases the probability of progression by 11% to 22%. The effects are stronger amongst older students, girls, and in language subjects (compared to maths).
    Keywords: student achievement, non-cognitive skills, RCT, gender
    JEL: I20 I24 J08
    Date: 2017–08
  29. By: Buechel, Berno; Mechtenberg, Lydia
    Abstract: We study private communication in social networks prior to a majority vote on two alternative policies. Some (or all) agents receive a private imperfect signal about which policy is correct. They can, but need not, recommend a policy to their neighbors in the social network prior to the vote. We show theoretically and empirically that communication can undermine efficiency of the vote and hence reduce welfare in a common interest setting. Both efficiency and existence of fully informative equilibria in which vote recommendations are always truthfully given and followed hinge on the structure of the communication network. If some voters have distinctly larger audiences than others, their neighbors should not follow their vote recommendation; however, they may do so in equilibrium. We test the model in a lab experiment and find strong support for the comparative-statics and, more generally, for the importance of the network structure for voting behavior.
    Keywords: Strategic Voting; Social Networks; Swing Voter’s Curse; Information Aggregation
    JEL: D72 D83 D85 C91
    Date: 2017–07–10

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.