nep-exp New Economics Papers
on Experimental Economics
Issue of 2017‒10‒29
27 papers chosen by
Daniel Houser
George Mason University

  1. Why Should Majority Voting Be Unfair? By Breitmoser, Yves; Tan, Jonathan H.W.
  2. Household bargaining and spending on children: Experimental evidence from Tanzania By Ringdal, Charlotte; Sjursen, Ingrid Hoem
  3. Deception Under Time Pressure: Conscious Decision or a Problem of Awareness? By Kai A. Konrad; Tim Lohse; Sven A. Simon
  4. Does Voluntary Risk Taking Affect Solidarity? Experimental Evidence from Kenya By Renate Strobl; Conny Wunsch
  5. Group Influence in Sharing Experiments By Daniela Di Cagno; Werner Güth; Marcello Puca; Patrizia Sbriglia
  6. Nice to You, Nicer to Me: Does Self-Serving Generosity Diminish the Reciprocal Response? By Woods, Daniel; Servátka, Maroš
  7. Sticky Belief Adjustment: A Double Hurdle Model and Experimental Evidence By Timo Henckel; Gordon Menzies; Peter Moffat; Daniel J. Zizzo
  8. Status-Ranking Aversion By Jordi Brandts; Klarita Gërxhani; Arthur Schram
  9. Leveraging Technology to Engage Parents at Scale: Evidence from a Randomized Controlled Trial By Peter Leopold S. Bergman; Eric W. Chan
  10. Does risk communication really decrease cooperation in climate change mitigation? By Mike Farjam; Olexandr Nikolaychuk; Giangiacomo Bravo
  11. Risk Aversion as a Perceptual Bias By Mel Win Khaw; Ziang Li; Michael Woodford
  12. Commitment and (In)Efficiency: A Bargaining Experiment By Agranov, M.; Elliott, M.
  13. Gender Differences in the Development of Other-Regarding Preferences By John, Katrin; Thomsen, Stephan L.
  14. The Economics of Scale-Up By Jonathan M.V. Davis; Jonathan Guryan; Kelly Hallberg; Jens Ludwig
  15. Pushing Crime Around the Corner? Estimating Experimental Impacts of Large-Scale Security Interventions By Christopher Blattman; Donald Green; Daniel Ortega; Santiago Tobón
  16. Biased Beliefs About Random Samples: Evidence from Two Integrated Experiments By Daniel J. Benjamin; Don A. Moore; Matthew Rabin
  17. Team vs. Individual, Hypothesis Testing vs. Model Selection, and the Minimax Model By Yoshitaka Okano
  18. Transparency is overrated: communicating in a coordination game with private information By Cabrales, Antonio; Drouvelis, Michalis; Gurguc, Zeynep; Ray, Indrajit
  19. "Short-run Incentive and Information in Sequential Adoptions: An Antenatal Care Experiment in Rural Nigeria" By Yoshito Takasaki; Masayuki Takahashi
  20. Beyond perfect substitutability in public good games: heterogeneous structures of preferences By Marion Dupoux
  21. Sharing responsibility with a machine By Strobel, Christina; Kirchkamp, Oliver
  22. Teaching microeconomic principles with smartphones – lessons from classroom experiments with classEx By Marcus Giamattei; Humberto Llavador
  23. Spot On For Liars! How Public Scrutiny Influences Ethical Behavior By Ostermaier, Andreas; Uhl, Matthias
  24. Leveraging Wage Subsidies to Facilitate Fair Wages and Increase Social Welfare By Tomer Blumkin; Haim Pinhas; Ro'i Zultan
  25. Cooperation through Coordination in Two Stages By Todd R. Kaplan, Bradley J. Ruffle, Ze'ev Shtudiner
  26. Cheating in Academia: The Relevance of Social Factors By Alessandro Bucciol; Simona Cicognani; Natalia Montinari
  27. Kinship, Fractionalization and Corruption By Mahsa Akbari; Duman Bahrami-Rad; Erik O. Kimbrough

  1. By: Breitmoser, Yves (Humboldt University Berlin); Tan, Jonathan H.W. (Nottingham University)
    Abstract: The common use of majority rule in group decision making is puzzling. In theory, it inequitably favors the proposer, and paradoxically, it disadvantages voters further if they are inequity averse. In practice, however, outcomes are equitable. The present paper analyzes data from a novel experimental design to identify the underlying social preferences. Our experiment compares one-shot and indefinite horizon versions of random-proposer majority bargaining (the Baron-Ferejohn game) which allow us to disentangle behaviors compatible with altruism, inequity aversion, and reference dependent altruism. Most subjects are classified as reference-dependent altruists, around 10% are inequity averse. Subjects are egoistic when their payoff is below their reference point, they become efficiency concerned when satisfied, and the reference point is either the ex ante expectation or the opponent\'s payoff. Finally, we successfully test RDA out-of-sample on a number of distribution and bargaining games from three seminal social preference experiments.
    Keywords: bargaining; voting; experiment; social preferences; quantal response equilibrium;
    JEL: C72 C78 D72
    Date: 2017–10–26
  2. By: Ringdal, Charlotte (Dept. of Economics, Norwegian School of Economics and Business Administration); Sjursen, Ingrid Hoem (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: It is frequently assumed that money in the hands of women leads to better out-comes for their children than money in the hands of men. However, empirical and theoretical evidence are mixed. We conduct a novel between-subject lab-in-the-field experiment to study whether increasing the wife's control over resources causes a couple to allocate more to their child. The paper provides two main insights. First, increasing the wife's bargaining power does not increase the share allocated to the child, but leads to more gender-equal allocations to children. Second, time preferences are important in explaining household decision-making; it is better for the child that the most patient spouse has more relative bargaining power. Our results highlight the importance of taking a broader set of preferences into account when studying household decision-making, and suggest that policy aimed to increase spending on children should target the spouse with preferences most aligned with such spending.
    Keywords: Intra-household allocation; female bargaining Power; Tanzania
    JEL: C92 D13 J13
    Date: 2017–10–19
  3. By: Kai A. Konrad; Tim Lohse; Sven A. Simon
    Abstract: Time is a crucial determinant of deception, since some misreporting opportunities come as a surprise and require an intuitive decision while others allow for extensive reflection time. To be able to pursue a deceptive strategy, however, a subject must be aware of the misreporting opportunity. This paper provides experimental evidence on the role of the time dimension for dishonest decision-making and for the cognition process of the chance to deceive. We conduct a laboratory experiment of self-serving deceptive behavior which combines two exogenously varied levels of reflection time with a cognition process about the deception opportunity. We find that time pressure leads to more honesty compared to sufficient contemplation time. More importantly, decomposing misreporting into its two components, i.e., the cognition process of the misreporting opportunity and the conscious decision to misreport, reveals that more reflection time increases awareness of the misreporting opportunity. However, more time has no effect on the conscious decision of whether to misreport or not. Due to subjects’ lack of awareness under time pressure we conclude that honesty is the intuitive response.
    Keywords: time pressure, awareness, deception, contemplation, cognitive process, laboratory experiment
    JEL: C91 D83 K42
    Date: 2017
  4. By: Renate Strobl; Conny Wunsch
    Abstract: In this study we experimentally investigate whether solidarity, which is a crucial base for informal insurance arrangements in developing countries, is sensitive to the extent to which in-dividuals can influence their risk exposure. With slum dwellers of Nairobi our design measures subjects’ willingness to share income with a worse-off partner both in a setting where partici-pants could either deliberately choose or were randomly assigned to a safe or a risky project. We find that when risk exposure is a choice, willingness to give is roughly 9 percentage points lower compared to when it is exogenously assigned to subjects. The reduction of solidarity is driven by a change in giving behaviour of persons with the risky project. Compared to their counterparts in the random treatment, voluntary risk takers are seemingly less motivated to share their high payoff with their partner, especially if this person failed after choosing the risky project. This suggests that the willingness to show solidarity is influenced by both the desire for own compensation and attributions of responsibility. Our findings have important implications for policies that interact with existing informal insurance arrangements.
    Keywords: solidarity, risk taking, Kenya
    JEL: D81 C91 O12 D63
    Date: 2017
  5. By: Daniela Di Cagno; Werner Güth; Marcello Puca; Patrizia Sbriglia
    Abstract: We experimentally study how group identity and social influence affect proposers and recipients in Ultimatum and Impunity Games. To induce group identity and social effects, we assign individuals to different color groups and inform them about the median choice of their own group. When testing the relevance of this social signal for intentions and decisions we distinguish uni- and bi-dimensional behavior, the latter to let individuals select on which rule of conduct of the others to condition own behavior. When disagreement and conflicting views are possible, coordinating with group behavior may be less important and individuals may prefer self-serving. The bi-dimensional design apparently allows for more variety: tracking both group medians, only one or none.Social influence significantly affects behavior in Ultimatum but has much weaker impact in Impunity experiments. Social information seems to act in two ways: as a coordination device and as a learning device. However, the marginal impact of the signal and the direction of its influence is strongly role dependent.
    Keywords: ultimatum Game, impunity game, social influence, group identity, fairness, experiments.
    JEL: C90 C91
    Date: 2017–10
  6. By: Woods, Daniel; Servátka, Maroš
    Abstract: Reciprocity has been shown to be sensitive to perceived intentions, however, not much is known about the intensity of reciprocal responses to the precise nature of those intentions. For example, a person can strategically appear to be kind while being self-serving or can be selflessly (genuinely) kind. Do these two intentions elicit different reciprocal reactions? We propose a conjecture that self-serving but generous actions diminish the positively reciprocal response, compared to selfless generous actions. We classify actions that increase a recipient’s maximum payoff, but by less than the giver’s maximum payoff, as being self-serving generous actions, while classifying actions that increase a recipient’s maximum payoff by more than the giver’s as selfless generous actions. We hypothesize that selfless generous actions are considered more generous than self-serving generous actions, and that self-serving generous actions will therefore result in a diminished reciprocal response. We test this conjecture using two novel experimental designs. We find some evidence that subjects perceive self-serving generous actions as being less generous than selfless generous actions, but no empirical support for our conjecture on the diminished reciprocal response.
    Keywords: Reciprocity, generosity, self-serving, genuine, experiment, Revealed Altruism, lost wallet game, investment game
    JEL: C7 C72 C9 C91
    Date: 2017–09–26
  7. By: Timo Henckel (Australian National University); Gordon Menzies (Economics Discipline Group, University of Technology, Sydney); Peter Moffat (School of Economics, University of East Anglia); Daniel J. Zizzo (Newcastle University Business School)
    Abstract: Given a lack of perfect knowledge about the future, agents need to form expectations about variables affecting their decisions. We present an experiment where subjects sequentially receive signals about the true state of the world and need to form beliefs about which one is true, with payoffs related to reported beliefs. We control for risk aversion using the Offerman et al. (2009) technique. Against the baseline of Bayesian updating, we test for belief adjustment under-reaction and over-reaction and model the decision making process of the agent as a double hurdle model where agents first decide whether to adjust their beliefs and, if so, then decide by how much. We find evidence for sticky belief adjustment. This is due to a combination of: random belief adjustment; state-dependent belief adjustment, with many subjects requiring considerable evidence to change their beliefs; and Quasi-Bayesian belief adjustment, with insufficient belief adjustment when a belief change does occur.
    Keywords: belief revision; double hurdle model; expectations; overreaction; underreaction
    JEL: C34 C91 D03 D84
    Date: 2017–04–07
  8. By: Jordi Brandts; Klarita Gërxhani; Arthur Schram
    Abstract: We study whether women shy away from status ranking. Competition involves two main dimensions, rivalry for resources and status ranking. In our experiment we separate the effects of the latter dimension from those of the former. Participants do a task under non-rivalry incentives. Before performing the task individuals indicate whether they choose an environment with social-status ranking or one without. When the ranking is imposed on all others in the group, women choose status ranking less frequently than men. This finding complements the established result that women are averse to competing under rivalry for resources. Women also exhibit status-ranking aversion.
    Keywords: C91, J16
    Date: 2017–10
  9. By: Peter Leopold S. Bergman; Eric W. Chan
    Abstract: While leveraging parents has the potential to increase student performance, programs that do so are often costly to implement or they target younger children. We partner text-messaging technology with school information systems to automate the gathering and provision of information to parents at scale. In a field experiment across 22 middle and high schools, we used this technology to send automated text-message alerts to parents about their child’s missed assignments, grades and class absences. We pre-specified five primary outcomes. The intervention reduces course failures by 38% and increases class attendance by 17%. Students are more likely to be retained in the district. The positive effects are particularly large for students with below-average GPA and students in high school. There are no effects on standardized test scores however. We randomly chose either the mother or the father to receive the alerts, but there were no differential effects across these subgroups. As in previous research, the intervention appears to change parents’ beliefs about their child’s performance and increases parent monitoring. Our results show that this type of automated technology can improve student effort relatively cheaply and at scale.
    Keywords: education, information, experiments
    JEL: I20 I21 I24 I28
    Date: 2017
  10. By: Mike Farjam (Department of Social Studies, Linnaeus University, Växjö Sweden; and Linnaeus University Centre for Data Intensive Sciences & Applications (DISA@LNU), Växjö Sweden); Olexandr Nikolaychuk (Faculty of Economics and Business Administration, Friedrich Schiller University, Jena, Germany); Giangiacomo Bravo (Department of Social Studies, Linnaeus University, Växjö Sweden; and Linnaeus University Centre for Data Intensive Sciences & Applications (DISA@LNU), Växjö Sweden)
    Abstract: Effective communication of risks involved in the climate change discussion is crucial and despite ambitious protection policies, the possibility of irreversible consequences actually occurring can only be diminished but never ruled out completely. We present a laboratory experiment that studies how residual risk of failure affects willingness to contribute to climate protection policies. Contrary to our initial hypothesis, we find that the contributions were higher in treatments with residual risk than in treatments without one. We interpret this as an outcome of a psychological process where residual risk puts participants into an "alarm mode", keeping their contributions high. We discuss the broad practical implications this might have on the real world communication of climate change.
    Keywords: collective risk social dilemma, climate change mitigation, voluntary contribution, experiment, risk
    JEL: D71 Q54 H41 D80
    Date: 2017–10–18
  11. By: Mel Win Khaw; Ziang Li; Michael Woodford
    Abstract: The theory of expected utility maximization (EUM) proposed by Bernoulli explains risk aversion as a consequence of diminishing marginal utility of wealth. However, observed choices between risky lotteries are difficult to reconcile with EUM: for example, in the laboratory, subjects’ responses on individual trials involve a random element, and cannot be predicted purely from the terms offered; and subjects often appear to be too risk averse with regard to small gambles (while still accepting sufficiently favorable large gambles) to be consistent with any utility-of-wealth function. We propose a unified explanation for both anomalies, similar to the explanation given for related phenomena in the case of perceptual judgments: they result from judgments based on imprecise (and noisy) mental representation of the decision situation. In this model, risk aversion is predicted without any need for a nonlinear utility-of-wealth function, and instead results from a sort of perceptual bias | but one that represents an optimal Bayesian decision, given the limitations of the mental representation of the situation. We propose a specific quantitative model of the mental representation of a simple lottery choice problem, based on other evidence regarding numerical cognition, and test its ability to explain the choice frequencies that we observe in a laboratory experiment.
    JEL: C91 D80 D81 D87
    Date: 2017
  12. By: Agranov, M.; Elliott, M.
    Abstract: We conduct an experimental investigation of decentralized bargaining over the terms of trade in matching markets. We study if/when efficient matches are reached, and the terms of trade agreed upon. We find that mismatch is extensive, and persists as we change the nature of bargaining by moving from a structured experimental protocol to permitting free-form negotiations. We identify two sources of inefficiencies. Inefficiencies are driven by (a) players' rational responses to their bargaining positions changing as others reach agreement, and (b) the existence of players who are unwilling to accept low, inequitable payoffs.
    Date: 2017–10–17
  13. By: John, Katrin (Leibniz University of Hannover); Thomsen, Stephan L. (Leibniz University of Hannover)
    Abstract: We use data from a gender-neutral dictator and public goods game setting to analyze differences in other-regarding preferences between boys and girls aged 10 to 17. The results indicate a higher mean of dictator giving, degree of egalitarian decisions and lower frequency of selfish decisions, free-riding and efficiency concerns for girls. Gender differences are already established at approximately age 10. They cannot be explained by gender-specific increases in other-regarding preferences, differences in dispositions or the impact of personality traits. We conclude that genes and early social learning are the sources of gender differences in other-regarding preferences.
    Keywords: gender, other-regarding preferences, personality traits, dictator game, public goods game
    JEL: C91 D03 J16
    Date: 2017–09
  14. By: Jonathan M.V. Davis; Jonathan Guryan; Kelly Hallberg; Jens Ludwig
    Abstract: Most randomized controlled trials (RCT) of social programs test interventions at modest scale. While the hope is that promising programs will be scaled up, we have few successful examples of this scale-up process in practice. Ideally we would like to know which programs will work at large scale before we invest the resources to take them to scale. But it would seem that the only way to tell whether a program works at scale is to test it at scale. Our goal in this paper is to propose a way out of this Catch-22. We first develop a simple model that helps clarify the type of scale-up challenge for which our method is most relevant. Most social programs rely on labor as a key input (teachers, nurses, social workers, etc.). We know people vary greatly in their skill at these jobs. So social programs, like firms, confront a search problem in the labor market that can lead to inelastically-supplied human capital. The result is that as programs scale, either average costs must increase if program quality is to be held constant, or else program quality will decline if average costs are held fixed. Our proposed method for reducing the costs of estimating program impacts at large scale combines the fact that hiring inherently involves ranking inputs with the most powerful element of the social science toolkit: randomization. We show that it is possible to operate a program at modest scale n but learn about the input supply curves facing the firm at much larger scale (S × n) by randomly sampling the inputs the provider would have hired if they operated at scale (S × n). We build a simple two-period model of social-program decision making and use a model of Bayesian learning to develop heuristics for when scale-up experiments of the sort we propose are likely to be particularly valuable. We also present a series of results to illustrate the method, including one application to a real-world tutoring program that highlights an interesting observation: The noisier the program provider’s prediction of input quality, the less pronounced is the scale-up problem.
    JEL: D24 I2 J2 L25 L38 M5
    Date: 2017–10
  15. By: Christopher Blattman; Donald Green; Daniel Ortega; Santiago Tobón
    Abstract: Bogotá intensified state presence to make high-crime streets safer. We show that spillovers outweighed direct effects on security. We randomly assigned 1,919 “hot spot” streets to eight months of doubled policing, increased municipal services, both, or neither. Spillovers in dense networks cause “fuzzy clustering,” and we show valid hypothesis testing requires randomization inference. State presence improved security on hot spots. But data from all streets suggest that intensive policing pushed property crime around the corner, with ambiguous impacts on violent crime. Municipal services had positive but imprecise spillovers. These results contrast with prior studies concluding policing has positive spillovers.
    JEL: C93 K42 O10
    Date: 2017–10
  16. By: Daniel J. Benjamin; Don A. Moore; Matthew Rabin
    Abstract: This paper describes results of a pair of incentivized experiments on biases in judgments about random samples. Consistent with the Law of Small Numbers (LSN), participants exaggerated the likelihood that short sequences and random subsets of coin flips would be balanced between heads and tails. Consistent with the Non-Belief in the Law of Large Numbers (NBLLN), participants underestimated the likelihood that large samples would be close to 50% heads. However, we identify some shortcomings of existing models of LSN, and we find that NBLLN may not be as stable as previous studies suggest. We also find evidence for exact representativeness (ER), whereby people tend to exaggerate the likelihood that samples will (nearly) exactly mirror the underlying odds, as an additional bias beyond LSN. Our within-subject design of asking many different questions about the same data lets us disentangle the biases from possible rational alternative interpretations by showing that the biases lead to inconsistency in answers. Our design also centers on identifying and controlling for bin effects, whereby the probability assigned to outcomes systematically depends on the categories used to elicit beliefs in a way predicted by support theory. The bin effects are large and systematic and affect some results, but we find LSN, NBLLN, and ER even after controlling for them.
    JEL: B49 D99
    Date: 2017–10
  17. By: Yoshitaka Okano (School of Economics and Management, Kochi University of Technology)
    Abstract: We report results of an experiment comparing team and individual behavior in a two-player zero-sum game, and assess the predictive power of the minimax model. Based on hypothesis testing, the play of teams is consistent with the minimax hypothesis in the first half of the experiment, but the play of teams in the second half, and that of individuals in both halves are not. Based on model selection, the aggregated behavior of teams in the first half is best fitted by a belief-based learning model, whereas that of teams in the second half and that of individuals in both halves are best fitted by the minimax model. At the decision-maker level, the minimax model is best for about half of the teams and individuals.
    Keywords: Minimax, team decision-making, model selection, learning
    JEL: C72 C92
    Date: 2017–10
  18. By: Cabrales, Antonio; Drouvelis, Michalis; Gurguc, Zeynep; Ray, Indrajit
    Abstract: We consider an experiment with a version of the Battle of the Sexes game with two-sided private information, allowing a possible round of either one-way or two-way cheap talk before the game is played. We compare different treatments to study truthful revelation of information and subsequent payoffs from the game. We find that the players are overall truthful about their types in the cheap-talk phase in both one-way or two-way talk. Furthermore, the unique symmetric cheap-talk equilibrium in the two-way cheap talk game is played when they players fully reveal their information; however, they achieve higher payoffs in the game when the talk is one-way as the truthful reports facilitate desired coordination.
    Keywords: Battle of the Sexes; cheap talk; coordination; private information
    JEL: C72 C92 D83
    Date: 2017–10
  19. By: Yoshito Takasaki (Faculty of Economics, The University of Tokyo); Masayuki Takahashi (Poverty and Equity Global Practice, The World Bank)
    Abstract: This paper experimentally studies sequential adoptions of antenatal care in rural Nigeria. We consider two policy targets: nonadopters, who make no adoptions, and late adopters, who make a first adoption late. Incentivizing first adoption can sustainably promote sequential adoptions if nonadopters positively update their belief about the product or shift their dynamic decision (even without learning) or if late adopters hasten their adoption sequence. We jointly examine sustainability and complementarity of interventions. Cash incentive promoted hastening, but not learning or shifting. Information intervention was ineffective. Bundled information, however, nullified the hastening, because the composition of compliers to the incentive changed.
    Date: 2017–10
  20. By: Marion Dupoux (University of Gothenburg)
    Abstract: The literature on public good games is very focused on the additive separability of the values of the private and the public goods. Yet, the additive structure underlies a perfect substitutability relationship between private and public goods, which is a strong assumption. This paper studies the effect of payoff/preference structures on contributions to the public good within a voluntary contributions experiment in both homogeneous and heterogeneous groups. Within the structure of substitutability, I find that subjects free-ride more often when they interact with subjects of the other type (complementarity) for whom it is optimal to contribute. Introducing such a heterogeneity may provide a method for the identification of free-riders. Nonetheless, an advantageous inequality aversion emerges as well. This means that under perfect substitutability, subjects tend to dislike earning too much compared to their group member whose payoffs underlie complementarity, a more constraining structure.
    Keywords: public good game, substitutability/complementarity, structure of payoffs, free-riding, inequality
    JEL: C71 C90 C92 D70 H41
    Date: 2017–10
  21. By: Strobel, Christina; Kirchkamp, Oliver
    Abstract: More and more often the partner in this decision is not another human but, instead, a machine. Here we ask whether a machine partner affects our responsibility, our perception of the choice and our choice differently from a human partner. We use a modified dictator game with two joint decision makers: either two humans or one human and one machine. We find a strong treatment effect on perceived responsibility. We do, however, find only a small and insignificant effect on actual choices.
    JEL: C91 C92
    Date: 2017
  22. By: Marcus Giamattei; Humberto Llavador
    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
  23. By: Ostermaier, Andreas; Uhl, Matthias
    Abstract: We examine in a lab experiment whether people are more honest in public than in private. We find that outcome-minded subjects lie less in public to conform with expectations about others' behavior, which are ironically false. Rule-minded subjects, in turn, do not respond to public scrutiny. These findings challenge the common faith in public scrutiny to promote ethical behavior. While public scrutiny can improve ethical behavior, this effect is contingent on people's mindsets and expectations.
    JEL: D63
    Date: 2017
  24. By: Tomer Blumkin; Haim Pinhas; Ro'i Zultan
    Abstract: Wage subsidies can be provided directly to the worker, as in the federal Earned Income Tax Credit (EITC) program. They can also be provided indirectly by subsidizing the employer; by reducing the cost of labor, employers are induced to offer higher wages. The standard literature stipulates that the identity of the entity that is statutorily entitled for the subsidy bears no implications for the economic incidence. We propose and test a mechanism by which indirect subsidies can lead to higher social welfare. A substantial empirical literature establishes that workers reciprocate gifts in the form of higher wages with the gift of exerting higher effort. Thus, if a wage subsidy is implemented by indirectly subsidizing employers, employers face a lower cost of labor and increase their wages, leading workers to reciprocate with higher effort and productivity than achieved by providing the equivalent direct subsidy. A controlled laboratory experiment supports our behavioral hypotheses and confirms the behavioral and welfare implications
    Keywords: wage subsidies, welfare, gift exchange, tax incidence
    JEL: C92 H21 H22 H53 J33
    Date: 2017
  25. By: Todd R. Kaplan, Bradley J. Ruffle, Ze'ev Shtudiner (Wilfrid Laurier University)
    Abstract: Efficient cooperation often requires coordination, such that exactly one of two players takes an available action. If the decisions whether to pursue the action are made simultaneously, then neither or both may acquiesce leading to an inefficient outcome. However, inefficiency may be reduced if players move sequentially. We test this experimentally by introducing repeated two-stage versions of such a game where the action is individually profitable. In one version, players may wait in the first stage to see what their partner did and then coordinate in the second stage. In another version, sequential decision-making is imposed by assigning one player to move in stage one and the other in stage two. Although there are fewer cooperative decisions in the two-stage treatments, we show that overall subjects coordinate better on efficient cooperation and on avoiding both acquiescing. Yet, only some pairs actually achieve higher profits, while the least cooperative pairs do worse in the two-stage games than their single-stage counterparts. For these, rather than facilitating coordination, the additional stage invites attempts to disguise uncooperative play, which are met with punishment.
    Keywords: experimental economics, cooperation, efficiency, two-stage games, turntaking
    JEL: C90 Z13
    Date: 2017–09–30
  26. By: Alessandro Bucciol (Department of Economics (University of Verona)); Simona Cicognani (Department of Economics (University of Verona)); Natalia Montinari (University of Bologna)
    Abstract: We implemented an online anonymous survey targeted to current and former university students, where the interviewed are asked to indicate whether and to what extent they cheated during written exams. We want to learn if cheating is widespread, and if it correlates with social factors such as the level of trust in others, the beliefs about the peers’ dishonesty and perceived level of opportunism in the society. We find that 61% of the respondents report to have cheated once or more. Cheaters are more likely to report that their classmates and friends cheated, and that in general people can be trusted. In contrast, being aware of the sanction, earning top grades and thinking that people are willing to take advantage of others is negatively correlated with self-reported cheating. There is evidence of two different cheating styles: “social cheaters”, who self-report mostly that they have violated the rules interacting with others; “individualistic” cheaters, who self-report mostly that they have used prohibited materials. Only social cheaters seem affected by social factors: they exhibit higher levels of trust and lower levels of perceived opportunism compared to individualistic cheaters, while no differences between the two groups are found when looking at other dimensions.
    Keywords: Academic cheating, Honesty, Trust, Online survey
    JEL: I21 D01
    Date: 2017–10
  27. By: Mahsa Akbari (Simon Fraser University); Duman Bahrami-Rad (Simon Fraser University); Erik O. Kimbrough (Simon Fraser University)
    Abstract: By shaping patterns of relatedness and interaction, marriage practices influence the relative returns to norms of nepotism/favoritism versus norms of impartial cooperation. In-marriage (e.g. consanguineous marriage) yields a relatively closed society of related individuals and thereby encourages favoritism and corruption. Out-marriage creates a relatively open society with increased interaction between non-relatives and strangers, thereby encouraging impartiality. We report a robust association between in-marriage practices and corruption across countries and across Italian provinces. A stylized corruption experiment comparing subjects from two countries with divergent marriage patterns provides complementary evidence that the degree of impartiality varies with marriage patterns.
    Keywords: corruption, fractionalization, institutions, mating patterns, consanguinity, experiments
    JEL: D7 D0 C9 J1
    Date: 2017–07

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