nep-exp New Economics Papers
on Experimental Economics
Issue of 2017‒10‒22
nineteen papers chosen by

  1. The effect of information on social preferences towards an outgroup of refugees: A field experiment By Bajrami, Leon; Loschelder, David D.; Mechtel, Mario
  2. Spillover Effects of Institutions on Cooperative Behavior, Preferences, and Beliefs By Florian Engl; Arno Riedl; Roberto A. Weber
  3. Democracy and compliance in public goods games By Gallier, Carlo
  4. Disapproval Aversion or Inflated Inequity Acceptance? The Impact of Expressing Emotions in Ultimatum Bargaining By Josie I Chen; Kenju Kamei
  5. Employment Discrimination in a Former Soviet Union Republic: Evidence from a Field Experiment By Asali, Muhammad; Pignatti, Norberto; Skhirtladze, Sophiko
  6. Too Lucky to be True - Fairness Views under the Shadow of Cheating By Stefania Bortolotti; Ivan Soraperra; Matthias Sutter; Claudia Zoller
  7. Partial Cartels and Mergers with Heterogenous Firms: Experimental Evidence By Gomez-Martinez, Francisco
  8. Measures of interpersonal trust: Evidence on their cross-national validity and reliability based on surveys and experimental data By Ryan E. Carlin; Gregory J. Love; Conal Smith
  9. How Much Priority Bonus Should be Given to Registered Organ Donors? An Experimental Analysis By Herr, Annika; Normann, Hans-Theo
  10. Accountability one step removed By Sonntag, Axel; Zizzo, Daniel John
  11. Partners in Crime: Diffusion of Responsibility in Antisocial Behaviors By Behnk, Sascha; Hao, Li; Reuben, Ernesto
  12. Cooperation in public goods games: Enhancing effects of group identity and competition By Horstmann, Elaine; Blankenberg, Ann-Kathrin; Schneider, Tim
  13. Teaching microeconomic principles with smartphones – lessons from classroom experiments with classEx By Humberto Llavador; Marcus Giamattei
  14. Revealed Preferences in a Sequential Prisoners' Dilemma: A Horse-Race Between Five Utility Functions By Topi Miettinen; Michael Kosfeld; Ernst Fehr; Jörgen W. Weibull
  15. The Ghost of Institutions Past: Tax Evasion and Asymmetric Path Dependence By Koch, Christian; Nikiforakis, Nikos; Kamm, Aaron
  16. Tie-Breaking Power in Committees By Wagner, Alexander K.; Granic, Dura-Georg
  17. The Effect of Object Distinctiveness on Object-Location Binding in Visual Working Memory By Yuri A. Markov; Igor S. Utochkin
  18. Labor Supply and the Value of Non-Work Time: Experimental Estimates from the Field By Alexandre Mas; Amanda Pallais
  19. Let's lock them in: Collusion under Consumer Switching Costs By Fourberg, Niklas

  1. By: Bajrami, Leon; Loschelder, David D.; Mechtel, Mario
    Abstract: Previous research has shown that individuals discriminate against outgroup members in economic decision-tasks (e.g., Chen and Li 2009, Hett et al. 2017, see also Social Identity Theory, Tajfel and Turner 1979). In this paper, we examine senders’ economic decisions in a dictator game, given that the receiver belongs to a refugee outgroup. First, we find that providing stylized information about the perspective of the receiver influences senders’ social preferences. Second, we show that political preferences matter substantially. Our data reveal that senders’ political orientation moderates the effect of information on their social preferences: While the information treatment strengthens social preferences towards outgroup members for more left-wing oriented participants, the treatment effect on participants who favor more right-wing parties is even negative. Our experiment allows to derive policy implications on how attitudes towards refugees could be altered.
    Keywords: outgroup discrimination,social identity,social preferences,refugees,information,field experiment
    Date: 2017
  2. By: Florian Engl; Arno Riedl; Roberto A. Weber
    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
  3. By: Gallier, Carlo
    Abstract: I investigate if, how, and why the effect of a contribution rule in a public goods game depends on how it is implemented: endogenously chosen or externally imposed. The rule prescribes full contributions to the public good backed by a nondeterrent sanction for those who do not comply. My experimental design allows me to disentangle to what extent the effect of the contribution rule under democracy is driven by self-selection of treatments, information transmitted via the outcome of the referendum, and democracy per se. In case treatments are endogenously chosen via a democratic decision-making process, the contribution rule significantly increases contributions to the public good. However, democratic participation does not affect participants' contribution behavior directly, after controlling for self-selection of treatments and the information transmitted by voting.
    Keywords: laboratory experiment,public good,democracy,endogenous institutions,voting,contribution rule,compliance
    JEL: C91 D02 D72 K42
    Date: 2017
  4. By: Josie I Chen (National Taipei University); Kenju Kamei (Durham Business School)
    Abstract: Past experimental research has shown that when rating systems are available, buyers are more generous in accepting unfair offers in ultimatum bargaining. But it at the same time suggests that sellers behave more fairly to avoid receiving negative feedbacks. This paper experimentally studies which effect is stronger with a rating system: buyers’ inflated inequity acceptance or sellers’ disapproval aversion. We explore this question by varying the information condition on buyers’ side. Our experiment shows that in the setup where the size of pie is common knowledge to both buyers and sellers, when a rating system is present, the sellers exhibit disapproval aversion but the buyers do not raise inequity acceptance. But on the other hand, when only sellers are aware of the size of the pie, sellers behave aggressively to exploit buyers and their behaviors do not change by the presence of a rating system, but instead, buyers raise inequity acceptance significantly with the rating system present. We discuss that these results can be explained by a theoretical model with sellers’ social disapproval aversion and buyers’ disappointment aversion, along with the players’ inequality aversion.Classification-JEL: C91, D03, D82, M21
    Keywords: experiment, ultimatum game, emotion, rating, disapproval aversion
    Date: 2017–10
  5. By: Asali, Muhammad (ISET, Tbilisi State University); Pignatti, Norberto (ISET, Tbilisi State University); Skhirtladze, Sophiko (ISET, Tbilisi State University)
    Abstract: We provide the first experimental evidence about ethnic discrimination in the labor market in Georgia. We randomly assign Georgian and non-Georgian, male and female, names to similar resumes and apply for jobs as advertised in help-wanted web sites in Georgia. We find that gender has no effect on the probability of callback, but a job applicant who is ethnic Georgian is twice more likely to be called for a job interview than an equally skilled ethnic non-Georgian (Azeri or Armenian). The almost 100% gap in callbacks is statistically significant and cannot be abridged by having more experience or education. Both taste-based discrimination and statistical discrimination models are consistent with the evidence provided in this study. Labor market discrimination tends to aggravate in economic busts.
    Keywords: employment discrimination, field experiment, former Soviet Union, business cycles
    JEL: J15 J71 C93 P23
    Date: 2017–09
  6. By: Stefania Bortolotti; Ivan Soraperra; Matthias Sutter; Claudia Zoller
    Abstract: The steady increase in inequality over the past decades has revived a lively debate about what can be considered a fair distribution of income. Public support for the extent of redistribution typically depends on the perceived causes of income inequality, such as differences in effort, luck, or opportunities. We study how fairness views and the extent of redistribution are affected by a hitherto overlooked, but relevant factor: immoral self-serving behavior that can lead to increased inequality. We focus on situations in which the rich have potentially acquired their fortunes by means of cheating. In an experiment, we let third parties redistribute resources between two stakeholders who could earn money either by choosing a safe amount or by engaging in a risky, but potentially more profitable, investment. In one treatment, the outcome of the risky investment is determined by a random move, while in another treatment stakeholders can cheat to obtain the more profitable outcome. Although third parties cannot verify cheating, we find that the mere suspicion of cheating changes fairness views of third parties considerably and leads to a strong polarization. When cheating opportunities are present, the share of subjects redistributing money from rich to poor stakeholders triples and becomes as large as the fraction of libertarians - i.e., participants who never redistribute. Without cheating opportunities, libertarian fairness views dominate, while egalitarian views are much less prevalent. These results indicate that fairness views and attitudes towards redistribution change significantly when people believe that income inequality is the result of cheating by the rich.
    Keywords: fairness views, redistribution, unethical behavior, inequality, experiment
    JEL: C91 D63 D81 H26
    Date: 2017
  7. By: Gomez-Martinez, Francisco
    Abstract: A usual assumption in the theory of collusion is that cartels are all-inclusive. In contrast, most real-world collusive agreements do not include all firms that are active in the relevant industry. This paper studies both theoretically and experimentally the formation and behavior of partial cartels. The theoretical model is a variation of Bos and Harrington’s (2010) model where firms are heterogeneous in terms of production capacities and individual cartel decisions are endogenized. The experimental study has two main objectives. The first goal is examine whether partial cartels emerge in the lab at all, and if so, which firms are part of it. The second aim of the experiment is to study the coordinated effects of a merger when partial cartels are likely to operate. The experimental results can be summarized as follows. We find that cartels are typically not all-inclusive and that various types of partial cartels emerge. We observe that market prices decrease by 20% on average after a merger. Our findings suggest that merger analysis that is based on the assumption that only full cartels forms produces misleading results. Our analysis also illustrates how merger simulations in the lab can be seen as a useful tool for competition authorities to back up merger decisions.
    Keywords: Experiments,Bertrand oligopoly,Cartels,Mergers
    Date: 2017
  8. By: Ryan E. Carlin (Georgia State University); Gregory J. Love (University of Mississippi); Conal Smith (OECD)
    Abstract: Interpersonal trust (i.e. trust in other people) is an issue of high interest to both policy-makers and researchers seeking to understand what drives social and economic outcomes. However, for trust to usefully inform policy and analysis it is necessary to have valid and reliable measures of it. Despite a large body of evidence on the relationship between trust and other social and economic outcomes, evidence on the validity of trust from experimental data is conflicting. In particular, while many studies find no correlation between survey measures of trust and experimental measures at an individual level, other studies suggest a significant, if modest, correlation at the country level. This article examines the relationship between survey and experimental measures of trust in others using a large dataset containing aggregate experimental and survey measures of trust from 167 studies conducted in 36 countries. Importantly, the dataset also includes individual measures of both survey and behavioural trust in seven countries, and data from two panel studies with repeated survey measures of trust. Using these multiple data sources, the paper investigates the degree to which survey measures of interpersonal trust are valid at both an individual and cross-country level. The paper shows the existence of a significant correlation between survey and experimental measures of interpersonal trust at the country-level. Evidence on measurement errors in existing small-scale studies underscores the importance of developing better quality data from both surveys and experiments.
    Keywords: Interpersonal trust, measurement, trust game
    JEL: C83 C91 Z10
    Date: 2017–10–19
  9. By: Herr, Annika; Normann, Hans-Theo
    Abstract: Experiments show that prioritizing registered donors on the waiting list impressively increases the willingness to register as an organ donor. We are the first to provide a comparative-statics analysis of the priority treatment by varying the number of bonus periods a registered person can skip on the waiting list. Our results indicate that a higher number of bonus periods significantly improves registration rates whereas a small bonus of only one period is of minor significance.
    JEL: I10 I18 C90
    Date: 2017
  10. By: Sonntag, Axel; Zizzo, Daniel John
    Abstract: In a repeated real effort team production experiment workers receive a distorted signal about their co-players’ previous efforts. We vary the degree to which production can be directly traced back to a participant’s real or randomly drawn effort level. We find that individuals produce much less and the decline of contributions over time is significantly steeper under high as compared to low accountability. In an additional endogenous accountability condition observe the highest effort level.
    JEL: C91 D82 M54
    Date: 2017
  11. By: Behnk, Sascha (University of Zurich); Hao, Li (University of Arkansas, Fayetteville); Reuben, Ernesto (New York University, Abu Dhabi)
    Abstract: Using a series of sender-receiver games, we find that two senders acting together are willing to behave more antisocially towards the receiver than single senders. This result is robust in two contexts: when antisocial messages are dishonest and when they are honest but unfavorable. Our results suggest that diffusion of responsibility is the primary reason for the increased antisocial behavior as our experimental design eliminates competing explanations. With a partner in crime, senders think that behaving antisocially is more acceptable and experience less guilt. Importantly, we identify a crucial condition for the increased antisocial behavior by groups: the partner in crime must actively participate in the decision-making. Our results have important implications for institutional design and promoting prosocial behaviors.
    Keywords: diffusion of responsibility, antisocial behavior, moral norms, guilt aversion
    JEL: D70 D91 C92 D63
    Date: 2017–09
  12. By: Horstmann, Elaine; Blankenberg, Ann-Kathrin; Schneider, Tim
    Abstract: A lot of economic and social situations can be described as contests in which agents need to distribute scare resources. Individual behavior plays an important role within these situations, while identity strongly impacts on behavior. This paper asks how group identity impacts the provision of a public good in a contest situation with different prize sharing rules. We show that group identity significantly increases contributions. Moreover, it turns out that identity affects how subjects react to different prize sharing rules. Our findings contribute to an increased understanding of the nature of group identity and its impact on economic behavior.
    Keywords: group identity,contest,public goods game,multi-level interaction,experiment
    Date: 2017
  13. By: Humberto Llavador; Marcus Giamattei
    Abstract: Classroom experiments as a teaching tool increase understanding and especially motivation. Traditionally, experiments have been run using pen-and-paper or in a computer lab. Pen-and-paper is time and resource consuming. Experiments in the lab require appropriate installations and impede the direct interaction among students. During the last two years, we have created fully elaborated packages to run a complete course in microeconomics principles using face-to-face experiments with mobile devices. The experiments are based on Bergstrom-Miller (2000), and we used classEx, a free online tool, to run them in the classroom.The packages were used at Universitat Pompeu Fabra with over 500 undergraduate students in the fall 2016. This paper presents our experience on classEx and the Bergstrom-Miller approach working in combination, and the lessons learned.
    Keywords: experiential learning, microeconomics, mobile devices, classroom experiments, classEx
    JEL: A22 C72 C90 D00
    Date: 2017–10
  14. By: Topi Miettinen; Michael Kosfeld; Ernst Fehr; Jörgen W. Weibull
    Abstract: We experimentally investigate behavior and beliefs in a sequential prisoner’s dilemma. Each subject had to choose an action as first-mover and a conditional action as second-mover. All subjects also had to state their beliefs about others’ second-mover choices. We find that subjects’ beliefs about others’ choices are fairly accurate on average. Using the elicited beliefs, we compare the explanatory power of a few current models of social and moral preferences. The data show clear differences in explanatory power between the preference models, both without and with control for the number of free parameters. The best-performing models explain about 80% of observed behavior. We use the estimated preference parameters to identify biases in subjects’ expectations. We find a consensus bias (whereby subjects believe others behave like themselves) and a certain optimism (whereby subjects overestimate probabilities for favorable outcomes), the former being about twice as strong as the second.
    Keywords: cooperation, prisoners’ dilemma, other-regarding preferences, categorical imperative, consensus effect, optimism
    JEL: C72 C90 D03 D84
    Date: 2017
  15. By: Koch, Christian; Nikiforakis, Nikos; Kamm, Aaron
    Abstract: In this study, we present evidence from a novel tax experiment featuring multiple equilbria. In the field, countries such as Greece seem to be stuck in a bad equilibrium with persistent high tax evasion while countries such as Germany seem to be in good equilibrium with persistent high compliance. Relatedly, our setting enables us to study our lab societies’ initial equilibrium selection and to what extent their compliance level is path dependent, i.e. depends on historical experience.
    JEL: C92 H26
    Date: 2017
  16. By: Wagner, Alexander K.; Granic, Dura-Georg
    Abstract: We investigate the effects of voting power in a committee in which one member (the chairman) holds, on top of a regular vote, also the power to break ties. The chairman is able to induce her preferred outcome much more often than predicted by theory, but only partially because of exercising tie-breaking power directly. The advantage of the chairman is largely determined by the limited strategic sophistication of committee members.
    JEL: C91 C92 D71 D72
    Date: 2017
  17. By: Yuri A. Markov (National Research University Higher School of Economics); Igor S. Utochkin (National Research University Higher School of Economics)
    Abstract: Visual working memory (VWM) is prone to interference from individual items competing for its limited capacity. At least two sources of such interference can be described: poor between-item distinctiveness (an inability to discriminate between items sharing common features) and imperfect binding (a problem with determining which of the remembered features belonged to which object). Here we investigate the links between distinctiveness and binding in VWM. In Experiment 1, we tested how object distinctiveness affects object recognition memory and memory for object-location conjunctions. In Experiment 2, we compared object-location binding under high and low distinctiveness with memory for locations when binding is not required. Object recognition decreased with low object distinctiveness, while the precision and the number of stored locations did not depend on either distinctiveness or the need for binding. However, the proportion of object-location swaps increased as object distinctiveness decreased, which might be caused by forgetting of objects. In general, our data support the idea of relatively independent object and location representations in VWM, and the independence of memory distinction and binding
    Keywords: visual working memory, distinctiveness, object-location binding, swap errors, binding problem
    JEL: Z
    Date: 2017
  18. By: Alexandre Mas; Amanda Pallais
    Abstract: We use a field experiment to estimate the marginal value of non-work time (MVT). During a national application process for phone survey and data entry positions, we randomly offered applicants alternative wage-hour bundles. Jobseeker choices over these bundles yield estimates for the MVT as a function of hours worked. These quantities trace out a labor supply relationship. As predicted by the conventional model of the allocation of time, the substitution effect is positive. Individual labor supply is highly elastic at low hours and becomes more inelastic at higher hours. For unemployed job applicants, the opportunity cost of a full-time job due to lost leisure, household production, and other non-work activities is approximately 60% of their estimated market wage. A similar estimate is found when we reproduce elements of this experiment in a nationally-representative survey.
    JEL: C93 J22 J64
    Date: 2017–10
  19. By: Fourberg, Niklas
    Abstract: I study consumer switching costs’ effect on firms’ price setting behavior in a 2x2 factorial design experiment with and without communication. For Bertrand duopolies the price level under consumer switching costs is lower vis-à-vis new consumers but not affected towards old consumers. Markets are overall less tacitly collusive which translates into higher incentives to collude explicitly. The results have antitrust implications especially for the focus of cartel screening.
    JEL: C7 C9 L13 L41
    Date: 2017

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