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on Experimental Economics |
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Issue of 2017‒09‒24
twenty-one papers chosen by |
| By: | Brocas, Isabelle; Carrillo, Juan D; Kodaverdian, Niree |
| Abstract: | We conduct a laboratory experiment to investigate the evolution of altruism and strategic giving from childhood to adulthood. 334 school-age children and adolescents (from K to 12th grade) and 48 college students participated in a one-shot dictator game and a repeated alternating version of the same dictator game. Each dictator game featured the choice between a fair split (4; 4) and a selfish split (6; 1) between oneself and an anonymous partner. We find that altruism (fair split in the one-shot game) increases with age in children and drops after adolescence, and cannot alone account for the development of cooperation in the repeated game. Older subjects reciprocate more and also better anticipate the potential gains of initiating a cooperative play. Overall, children younger than 7 years of age are neither altruistic nor strategic while college students strategically cooperate despite a relatively low level of altruism. Participants in the intermediate age range gradually learn to anticipate the long term benefits of cooperation and to adapt their behavior to that of their partner. A turning point after which cooperation can be sustained occurs at about 11-12 years of age. |
| Keywords: | altruism; developmental decision-making; repeated games; strategic giving |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12288&r=exp |
| By: | Loukas Balafoutas; Brent J. Davis; Matthias Sutter |
| Abstract: | Tournament incentives prevail in labor markets, in particular with respect to promotions. Yet, it is often unclear to competitors how many winners there will be or how many applicants compete in the tournament. While it is hard to measure how this uncertainty affects work performance and willingness to compete in the field, it can be studied in a controlled lab experiment. We present a novel experiment where subjects can compete against each other, but where the number of winners is either uncertain (i.e., unknown numbers of winners, but known probabilities) or ambiguous (unknown probabilities for different numbers of winners). We compare these two conditions with a control treatment with a known number of winners. We find that ambiguity induces a significant increase in performance of men, while we observe no change for women. Both men and women increase their willingness to enter competition with uncertainty and ambiguity, but men react slightly more than women. Overall, both effects contribute to men winning the tournament significantly more often than women under uncertainty and ambiguity. Hence, previous experiments on gender differences in competition may have measured a lower bound of differences between men and women. |
| Keywords: | gender, competition, uncertainty, ambiguity, experiments |
| JEL: | C91 D03 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2017-20&r=exp |
| By: | Loukas Balafoutas (University of Innsbruck); Brent J. Davis (University of Innsbruck); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | Tournament incentives prevail in labor markets, in particular with respect to promotions. Yet, it is often unclear to competitors how many winners there will be or how many applicants compete in the tournament. While it is hard to measure how this uncertainty affects work performance and willingness to compete in the field, it can be studied in a controlled lab experiment. We present a novel experiment where subjects can compete against each other, but where the number of winners is either uncertain (i.e., unknown numbers of winners, but known probabilities) or ambiguous (unknown probabilities for different numbers of winners). We compare these two conditions with a control treatment with a known number of winners. We find that ambiguity induces a significant increase in performance of men, while we observe no change for women. Both men and women increase their willingness to enter competition with uncertainty and ambiguity, but men react slightly more than women. Overall, both effects contribute to men winning the tournament significantly more often than women under uncertainty and ambiguity. Hence, previous experiments on gender differences in competition may have measured a lower bound of differences between men and women. |
| Keywords: | gender, competition, uncertainty, ambiguity, experiment |
| JEL: | C91 D03 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2017_18&r=exp |
| By: | Buechel, Berno; Mechtenberg, Lydia; Petersen, Julia |
| Abstract: | Successful performance – be it in school, at the job, or in sports activities – requires perseverance, i.e., persistent work on a demanding task. We investigate in a controlled laboratory experiment how an individual’s social environment affects perseverance. We find evidence for two kinds of peer effects: being observed by a peer can serve as a commitment device, while observing a peer can be informative. In particular, we show that successful peers affect perseverance positively if they communicate their success in a motivating way and negatively otherwise, while perseverance is unaffected by unsuccessful peers. Our experimental results suggest that peers affect perseverance indirectly, via influencing self-confidence. We turn to field data from an educational setting and find that students seem to be able to harness the power of peer effects, by selecting into groups that help them reach their goals. |
| Keywords: | Self-control; Peer Effects; Social Networks; Experiment |
| JEL: | C91 D90 I21 J24 |
| Date: | 2017–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00488&r=exp |
| By: | Bonnet, Céline; Hilger, James; Villas-Boas, Sofia B. |
| Abstract: | We estimate the effect of revealing expert opinion labels on wine product purchases by labelling a random subset of wine products within the consumers' retail shelf choice faced in a treated store. We use a detailed weekly product level panel scanner data set for labeled and unlabeled wines in the treated and comparable control stores before and after the implementation of a shelf labeling field experiment. We then combine the scanner data with additional information on the characteristics of each product, such as brand, varietal, region of production, and price point relative to other wines, to estimate the average and heterogeneous effects of the field experiment on wine consumption, shedding light into possible mechanisms behind those effects. First, we find there to be a positive and significant overall average effect and that demand increases more for higher score wines than for lower score wines. Additionally, we find that high scores matter more for prices in the lower quartile of the overall wine price distributions, which does not align with previous beliefs of consumers perceiving low price as signaling high quality. Our findings are instead consistent with pre treatment consumer behavior where consumers infer high quality for high prices, once quality is revealed. We find that demand does not move for these higher priced wine quartiles. We also estimate positive spillover effects of this experimental treatment within brand for untreated wines as the displayed average score of the wine brand increases. However, we find negative spillover effects for untreated wines that belong to intensively treated brands. |
| Keywords: | Field experiment; Labels; information; expert opinion; wine; product attributes |
| JEL: | C23 D12 H20 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:31956&r=exp |
| By: | Marco Faravelli (School of Economics, University of Queensland, Brisbane, Australia.); Kenan Kalayci (School of Economics, University of Queensland, Brisbane, Australia.); Carlos Pimienta (School of Economics, UNSW Business School, UNSW, Sydney, Australia.) |
| Abstract: | We test the turnout predictions of the standard two-party, private value, costly voting model through a large-scale, real effort experiment. We do this by recruiting 1,200 participants through Amazon's Mechanical Turk and employing a 2 x 2 between subjects design encompassing small (N=30) and large (N=300) elections, as well as close and one-sided elections. We find partial evidence of selfish instrumental voting. Participants with a higher opportunity cost are less likely to vote (cost effect); turnout rate decreases as the electorate size increases (size effect) in one-sided elections and increases the closer the election is (competition effect) in large elections. Contrary to the theoretical predictions, in large one-sided elections the majority turns out to vote at a higher rate than the minority. We propose an alternative theory assuming that voters obtain a small non-monetary utility if they vote and their party wins. |
| Keywords: | Costly Voting, Turnout, Field Experiment, Real Effort, Amazon's Mechanical Turk |
| JEL: | C93 D72 C72 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2017-16&r=exp |
| By: | Leonardo Becchetti; Vittorio Pelligra; Tommaso Reggiani |
| Abstract: | In this paper, we study by means of a framed field experiment on a representative sample of the population the effect on people's charitable giving of three, substantial and procedural, elements: information provision, belief elicitation and threshold on distribution. We frame this investigation within the 5X1000 tax scheme, a mechanism through which Italian taxpayers may choose to give a small proportion (0.5%) of their income tax to a voluntary organization to fund its activities. We find two main results: (i) providing information or eliciting beliefs about previous donations increases the likelihood of a donation, while thresholds have no effect; (ii) information about previous funding increases donations to organizations that received fewer donations in the past, while belief elicitation also increases donations to organizations that received most donations in the past, since individuals are more likely to donate to the organizations they rank first. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00613&r=exp |
| By: | David Gill; Victoria Prowse |
| Abstract: | Response times are a simple low-cost indicator of the process of reasoning in strategic games. In this paper, we leverage the dynamic nature of response-time data from repeated strategic interactions to measure the strategic complexity of a situation by how long people think on average when they face that situation (where we categorize situations according to the characteristics of play in the previous round). We find that strategic complexity varies significantly across situations, and we find considerable heterogeneity in how responsive subjects’ thinking times are to complexity. We also study how variation in response times at the individual level across rounds a?ects strategic behavior and success. We find that ‘overthinking’ is detrimental to performance: when a subject thinks for longer than she would normally do in a particular situation, she wins less frequently and earns less. The behavioral mechanism that drives the reduction in performance is a tendency to move away from Nash equilibrium behavior. Overthinking is detrimental even though subjects who think for longer on average tend to be more successful. Finally, cognitive ability and personality have no e?ect on average response times. |
| Keywords: | Response time; decision time; thinking time; strategic complexity; game theory; strategic games; repeated games; beauty contest; cognitive ability; personality |
| JEL: | C72 C91 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1296&r=exp |
| By: | Gerhardt, Holger; Schildberg-Hörisch, Hannah; Willrodt, Jana |
| Abstract: | A core prediction of recent “dual-self” models is that risk attitudes depend on self-control. While these models have received a lot of attention, empirical evidence regarding their predictions is lacking. We derive hypotheses from three prominent models for choices between risky monetary payoffs under regular and reduced self-control. We test the hypotheses in a lab experiment, using a well-established ego depletion task to reduce self-control, and measuring risk attitudes via finely graduated choice lists. Manipulation checks document the effectiveness of the depletion task. We find no systematic evidence in favor of the theoretical predictions. In particular, depletion does not increase risk aversion. |
| Keywords: | Risk attitudes, Self-control, Ego depletion, Dual-self models, Experiment |
| JEL: | C91 D03 D81 |
| Date: | 2017–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81490&r=exp |
| By: | Alger, Ingela; Weibull, Jörgen W. |
| Abstract: | Does altruism and morality lead to socially better outcomes in strategic interactions than selfishness. We shed some light on this complex and non-trivial issue by examining a few canonical strategic interactions played by egoists, altruists and moralists. By altruists we mean people who do not only care about their own material payoffs but also about those to others, and by a moralist we mean someone who cares about own material payoff and also about what would be his or her material payoff if others were to act like himself or herself. It turns out that both altruism and morality may improve or worsen equilibrium outcomes, depending on the nature of the game. Not surprisingly, both altruism and morality improve the outcomes in standard public goods games. In infinitely repeated games, however, both altruism and morality may diminish the prospects of cooperation, and to di¤erent degrees. In coordination games, morality can eliminate socially inefficient equilibria while altruism cannot. |
| Keywords: | altruism; morality; Homo moralis; repeated games; coordination games |
| JEL: | C73 D01 D03 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:tse:iastwp:31809&r=exp |
| By: | Denisova-Schmidt, Elena; Huber, Martin; Leontyeva, Elvira; Solovyeva, Anna |
| Abstract: | This paper examines how anti-corruption educational campaigns affect the attitudes of Russian university students towards corruption and academic integrity. About 2,000 survey participants were randomly assigned to one of four different information materials (brochures or videos) about the negative consequences of corruption or to a control group. Using machine learning to detect effect heterogeneity, we find that various groups of students react to the same information differently. Those who commonly plagiarize, who receive excellent grades, and whose fathers are highly educated develop stronger negative attitudes towards corruption in the aftermath of our intervention. However, some information materials lead to more tolerant views on corruption among those who rarely plagiarize, who receive average or above average grades, and whose fathers are less educated. Therefore, policy makers aiming to implement anti-corruption education at a larger scale should scrutinize the possibility of (undesired) heterogeneous effects across student groups. |
| Keywords: | Anti-Corruption Campaigns, Experiments, Corruption, Academic Integrity, University, Students, Russia |
| JEL: | D73 I23 C93 |
| Date: | 2017–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00487&r=exp |
| By: | Alger, Ingela; Weibull, Jörgen W. |
| Abstract: | Does altruism and morality lead to socially better outcomes in strategic interactions than selfishness? We shed some light on this complex and non-trivial issue by examining a few canonical strategic interactions played by egoists, altruists and moralists. By altruists we mean people who do not only care about their own material payoffs but also about those to others, and by a moralist we mean someone who cares about own material payoff and also about what would be his or her material payoff if others were to act like himself or herself. It turns out that both altruism and morality may improve or worsen equilibrium outcomes, depending on the nature of the game. Not surprisingly, both altruism and morality improve the outcomes in standard public goods games. In infinitely repeated games, however, both altruism and morality may diminish the prospects of cooperation, and to different degrees. In coordination games, morality can eliminate socially inefficient equilibria while altruism cannot. |
| Keywords: | altruism; morality; Homo moralis; repeated games; coordination games |
| JEL: | C73 D01 D03 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:31951&r=exp |
| By: | Christopher J. O'Leary (W.E. Upjohn Institute for Employment Research) |
| Abstract: | Research in the 1970s based on observational data provided evidence consistent with predictions from economic theory that paying unemployment insurance (UI) benefits to involuntarily jobless workers prolongs unemployment. However, some scholars also reported estimates that the additional time spent in subsidized job search was productive. That is, UI receipt tended to raise reemployment wages after work search among the unemployed. A series of field experiments in the 1980s investigated positive incentives to overcome the work disincentive effects of UI. These were followed by experiments in the 1990s that evaluated the effects of restrictions on UI eligibility through stronger work search requirements and alternative uses of UI. The new century has seen some related field experiments in employment policy, and reexamination of the earlier experimental results. This paper reviews the experimental evidence and considers it in the context of the current federal-state UI system. |
| Keywords: | field experiments, public employment policy, unemployment insurance, UI, employment service, ES, job search assistance, JSA, targeting employment services, profiling, WPRS, self-employment, short-time compensation, work sharing |
| JEL: | J65 J68 J48 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:17-279&r=exp |
| By: | Collins, Sean M.; James, Duncan; Servátka, Maroš; Woods, Daniel |
| Abstract: | The operation of the posted offer market with advance production environment (Mestelman and Welland, 1988), appropriately parameterized, differs from that of the market entry game (Selten and Gueth, 1982), appropriately presented, only in terms of price-setting. We establish the effect of this difference in price-setting on attainment of the competitive equilibrium allocation while controlling for effects relating to the presentation of the market entry game and to the stationarity or non-stationarity of environment. Free posting of prices promotes convergence to the competitive equilibrium allocation, while the typical market entry game data can be characterized as displaying cycling prices. |
| Keywords: | market entry game; posted offer market; advance production; isomorphism; equilibration |
| JEL: | C9 C91 D4 |
| Date: | 2017–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81489&r=exp |
| By: | Sergio Beraldo (Università di Napoli Federico II and CSEF) |
| Abstract: | I offer an impossibility result on nudging grounded in the theory of intentional action. I prove that if individuals are not open to money-pump manipulation and nudges are motivationally irrelevant, any induced choice is unintentional and just reflects the preferences of the choice architect. Autonomy is therefore violated, and nudging proves to be inconsistent with liberal principles at a fundamental level. |
| Keywords: | Nudging, Manipulation, Autonomy |
| JEL: | D03 D6 |
| Date: | 2017–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:485&r=exp |
| By: | Brad Humphreys (West Virginia University, Department of Economics); Candon Johnson (West Virginia University, Department of Economics) |
| Abstract: | Economic models predict that "superstar" players generate externalities that increase attendance and other revenue sources beyond their individual contributions to team success. We investigate the effect of superstar players on individual game attendance at National Basketball Association games from 1981/82 through 2013/14. Regression models control for censoring due to sellouts, quality of teams, unobservable team/season heterogeneity, and expected game outcomes. The results show higher home and away attendance associated with superstar players. Michael Jordan generated the largest superstar attendance externality, generating an additional 5,021/5,631 fans at home/away games. |
| Keywords: | superstar effect, attendance demand, censored normal estimator |
| JEL: | L83 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:17-16&r=exp |
| By: | James Fearon; Macartan Humphreys |
| Abstract: | We examine a public goods game in 83 communities in northern Liberia. Women contributed substantially more to a small-scale development project when playing with other women than in mixed-gender groups, where they contributed at about the same levels as men. We try to explain this composition effect using a structural model, survey responses, and a second manipulation. Results suggest women in the all-women condition put more weight on co-operation regardless of value of public good, fear of discovery, or desire to match others’ behaviour. Game players may have stronger motivation to signal public-spiritedness when primed to consider themselves representatives of the women of the community. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2017-163&r=exp |
| By: | Marianne Simonsen (Department of Economics and Business Economics, Aarhus University, Denmark); Lars Skipper (Department of Economics and Business Economics, Aarhus University, Denmark); Niels Skipper (Department of Economics and Business Economics, Aarhus University, Denmark) |
| Abstract: | This paper provides evidence of forward-looking behavior in the demand for prescription drugs, while relying on registry-based, individual-level information about the universe of Danish prescription drug purchases from 1995–2014. We exploit a universal shift in policy in early 2000 from a flat-rate to a non-linear insurance plan for prescription drugs that incentivizes stockpiling at the end of the coverage year. We extend the original framework of Keeler et al. (1977) and discuss how the institutional features of most health insurance contracts, at least theoretically, incentivize intertemporal substitution in purchases across coverage years. We describe how consumers react to the introduction of the non-linear plan by increasing spending by 80% immediately before the implementation of the new regime. Next, our main analysis takes advantage of the policy experiment to formally analyze behavior immediately prior to the end-of-year reset in the non-linear plan using a difference-in-difference strategy. We provide evidence that consumers react to this reset by stockpiling toward the end of the coverage year: consumers buy what amounts to an additional 20%. We detect heterogeneity in the size of the response by individual-level characteristics, proxies for health status, and drug type. We find no evidence of any immediate adverse health utilization effects associated with the stockpiling. We round off the paper with an analysis of the importance of stockpiling for estimates of price sensitivity. We find that ignoring intertemporal substitution across coverage years inflates price sensitivity estimates by a non-negligible amount. |
| Keywords: | prescription drugs, non-linear pricing, intertemporal shifting |
| JEL: | I11 I18 D12 |
| Date: | 2017–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2017-08&r=exp |
| By: | Jürgen Eichberger (Alfred Weber Institut, Universität Heidelberg.); Simon Grant (Research School of Economics, Australian National University.); David Kelsey (Department of Economics, University of Exeter) |
| Abstract: | We propose a solution concept for a class of extensive form games with ambiguity. Speci?cally we consider multi-stage games. Players have CEU preferences. The associated ambiguous beliefs are revised by Generalized Bayesian Updating. We assume individuals take account of possible changes in their preferences by using consistent planning. We show that if there is ambiguity in the centipede game it is possible to sustain ?cooperation? for many periods as part of a consistent-planning equilibrium under ambiguity. In a non-cooperative bargaining game we show that ambiguity may be a cause of delay in bargaining. |
| Keywords: | optimism, neo-additive capacity, dynamic consistency, consistent planning, centipede game, multi-stage game. |
| JEL: | D81 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:1705&r=exp |
| By: | Shirokova, G.; Laskovaia, A.; Osiyevskyy, O. |
| Abstract: | Strategic management and entrepreneurship literature traditionally pay substantive attention to rational decision-making processes with clear formalized plans and analytical procedures. Despite all the advantageous of planning-based logic, some scholars prefer alternative approaches to making decisions. In entrepreneurship field, the effectuation theory rose to prominence, emphasizing analogical rather than analytical reasoning. While prior effectuation research focused primarily on studying personal characteristics of entrepreneurs, this paper is intended to reach a new level in examining macro-level factors that may influence the efficiency of entrepreneurial cognitive processes. Particularly, we investigate how formal in-stitutions shape the relationship between venture cognitive logic of 4413 student entrepreneurs and performance of their ventures. We demonstrate that this relationship is to a large extent shaped by the characteristics of the country-level institutional environment (particularly, level of financial market development and generalized index of the ease of doing business). |
| Keywords: | effectuation, causation, institutions, GUESSS, ease of doing business, financial market development index, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:sps:wpaper:6447&r=exp |
| By: | Altantsetseg Batchuluun; Bayarmaa Dalkhjav; Soyolmaa Batbekh Author-Name: Amartuvshin Sanjmyatav Author-Name: Tsogt-Erdene Baldandorj |
| Abstract: | Mongolia is a lower-middle income country characterized by high youth unemployment and a large informal sector. Training programs have been implemented in order to promote employment and tackle these issues. In this study, we evaluate the impact of a vocational training program (VTP) through a field experiment conducted between 2013 and 2015. This time frame allows us to explore short and medium term impacts. In particular, we focus on three outcomes of interest: employment, earnings and job quality. We find a positive and short-term impact on employment and a positive impact on monthly earnings in short and medium terms. We also show that providing information about schooling returns increases attendance and reduces dropout, which may help improve the program’s impact in non-expensive ways. |
| Keywords: | vocational training programs, labor market, randomized controlled trial, employment, earnings, job quality. |
| JEL: | J18 J08 J24 J38 C93 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:piercr:2017-12&r=exp |