nep-exp New Economics Papers
on Experimental Economics
Issue of 2017‒11‒19
forty-one papers chosen by

  1. Physician behavior under prospective payment schemes: Evidence from artefactual field and lab experiments By Hafner, Lucas; Reif, Simon; Seebauer, Michael
  2. Group behaviour in tacit coordination games with focal points: An experimental investigation By Stefania Sitzia; Jiwei Zheng
  3. Attention and novelty: An experimental investigation of order effects in multiple valuation tasks By Cameron A. Belton
  4. Peer sanctioning in isomorphic provision and appropriation social dilemmas By Abhijit Ramalingam; Antonio J. Morales; James M. Walker
  5. Giving in dictator games: Experimenter demand effect or preference over the rules of the game? By Nadine Chlass; Peter G. Moffatt
  6. Revisiting Gender Differences in Ultimatum Bargaining: Experimental Evidence from the US and China By Shuwen Li; Xiandong Qin; Daniel Houser
  7. The role of morals in three-player ultimatum games By Sandro Casal; Francesco Fallucchi; Simone Quercia
  8. Do Gender Preference Gaps Impact Policy Outcomes? By Ranehill, Eva; Weber, Roberto A.
  9. Optimistic and Stubborn: An Experimental Analysis of the Disposition Effect By Carlos Cueva Herrero; Iñigo Iturbe-Ormaetxe Kortajarene; Giovanni Ponti; Josefa Tomás Lucas
  10. Discrete Adjustment to a Changing Environment: Experimental Evidence By Mel Win Khaw; Luminita Stevens; Michael Woodford
  11. Do gender preference gaps impact policy outcomes? By Eva Ranehill; Roberto A. Weber
  12. Facing Yourself - A Note on Self-image By Armin Falk
  13. Risk-taking on Behalf of Others By Kristoffer W. Eriksen; Ola Kvaløy; Miguel Luzuriaga
  14. Testing Consumer Theory: Evidence From a Natural Field Experiment By Adena, Maja; Huck, Steffen; Rasul, Imran
  15. Self-Regulation Training and Job Search Effort: A Natural Field Experiment within an Active Labor Market Program By Eva m. Berger; Guenther Koenig; Henning Müller; Felix Schmidt; Daniel Schunk
  16. Tax morale and the role of social norms and reciprocity: Evidence from a randomized survey experiment By Doerrenberg, Philipp; Peichl, Andreas
  17. Tailored Bayesian Mechanisms: Experimental Evidence from Two-Stage Voting Games By Dirk Engelmann; Hans Peter Grüner
  18. Decentralized Matching Markets With(out) Frictions: A Laboratory Experiment By Joana Pais; Ágnes Pintér; Róbert F. Veszteg
  19. The Dollar Auction Game: A laboratory comparison between Individuals and Groups By Morone, Andrea; Nuzzo, Simone; Caferra, Rocco
  20. Thinking fast, thinking badly By Natalia Jimenez; Ismael Rodriguez-Lara; Jean-Robert Tyran; Erik Wengström
  21. The Effect of Positive Mood on Cooperation in Repeated Interaction By Proto, Eugenio; Sgroi, Daniel; Mahnaz Nazneen, Mahnaz
  22. The productivity puzzle and the problem with the rich: An experiment on competition, inequality and "team spirit" By Shaun P. Hargeaves Heap; Abhijit Ramalingam; Brock V. Stoddard
  23. Nudging to reduce meat consumption: Immediate and persistent effects of an intervention at a university restaurant By Kurz, Verena
  24. Humans reciprocate intentional harm by discriminating against group peers By David Hugh-Jones; Itay Ron; Ro'i Zultan
  25. The attraction and compromise effects in bargaining: Experimental evidence By Fabio Galeotti; Maria Montero; Anders Poulsen
  26. Employment Discrimination in Georgia: Evidence from a Field Experiment By Muhammad Asali; Norberto Pignatti; Sophiko Skhirtladze
  27. Cooperation and Punishment: The Individual-Level Perspective By Felix Albrecht; Sebastian Kube; Christian Traxler
  28. Behavioral Patterns and Reduction of Sub-Optimality: An Experimental Choice Analysis By Daniela Di Cagno; Arianna Galliera; Werner Güth; Noemi Pace
  29. Deviant or Wrong? The Effects of Norm Information on the Efficacy of Punishment By Cristina Bicchieri; Eugen Dimant; Erte Xiao
  30. Microfoundations, Behaviour, and Evolution: Evidence from Experiments By Bogliacino, Francesco; Codagnone, Cristiano
  31. On the Category Adjustment Model: Another look at Huttenlocher, Hedges, and Vevea (2000) By Duffy, Sean; Smith, John
  32. Measuring Indirect Effects of Unfair Employer Behavior on Worker Productivity – A Field Experiment By Matthias Heinz; Sabrina Jeworrek; Vanessa Mertins; Heiner Schumacher; Matthias Sutter
  33. Behavioural types in public goods games: A re-analysis by hierarchical clutering By Francesco Fallucchi; R. Andrew Luccasen; Theodore L. Turocy
  34. Training to teach science: experimental evidence from Argentina By Facundo Albornoz; María Victoria Anauati; Melina Furman; Mariana Luzuriaga; María Eugenia Podestá; Inés Taylor
  35. Boys will (still) be boys: Gender differences in trading activity are not due to differences in confidence By Carlos Cueva Herrero; Iñigo Iturbe-Ormaetxe Kortajarene; Giovanni Ponti; Josefa Tomás Lucas
  36. Biased policy professionals By Sheheryar Banuri; Stefan Dercon; Varun Gari
  37. Beyond the Breaking Point? Survey Satisficing in Conjoint Experiments By Bansak, Kirk; Hainmueller, Jens; Hopkins, Daniel J.; Yamamoto, Teppei
  38. Individual and group preferences over risk: does group size matter? By Morone, Andrea; Temerario, Tiziana; Nemore, Francesco
  39. Cutthroat Capitalism versus Cuddly Socialism: Are Americans more Meritocratic and Efficiency-Seeking than Scandinavians? By Ingvild Almås; Alexander W. Cappelen; Bertil Tungodden
  40. Obvious Mistakes in a Strategically Simple College Admissions Environment By Ran I. Shorrer; Sandor Sovago
  41. On punishment institutions and effective deterrence of illicit behavior By Buckenmaier, Johannes; Dimant, Eugen; Posten, Ann-Christin; Schmidt, Ulrich

  1. By: Hafner, Lucas; Reif, Simon; Seebauer, Michael
    Abstract: Recent experimental studies analyze the behavior of physicians towards patients and find that physicians care for their own profit as well as patient benefit. In this paper, we extend the experimental analysis of the physician decision problem by adding a third party representing the health insurance which finances medical service provision. Our results show that physicians take into account the payoffs of the third party, which can lead to underprovision of medical services. We conduct a laboratory experiment in neutral as well as medical framing using students and medical doctors as subjects. Subjects in the medically framed experiments behave weakly more patient orientated in contrast to neutral framing. A sample of medical doctors exhibits comparable behavior to students with medical framing.
    Keywords: health economic experiment,framing,physician behavior,prospective payment schemes
    JEL: C91 C93 I11 I18
    Date: 2017
  2. By: Stefania Sitzia (University of East Anglia); Jiwei Zheng (Universtiy of East Anglia)
    Abstract: This paper reports an experimental investigation where we compare groups and individual behavior on coordination games with payoff- irrelevant cues. We employ the disc game (Blume and Gneezy, 2010), the pie game (Crawford et al., 2008) and the bargaining table (Isoni et al., 2013). Our results show that groups choose more often according to the focal point cue than individuals when interests are aligned. Groups also perform better when identifying the focal point requires some level of cognition. In line with previous findings (Crawford et al., 2008; Isoni et al., 2013), when conflict of interest is introduced through payoff asymmetry, expected coordination rates fall for both groups and individuals, and they further decline as the payoff asymmetry increases. Additionally, groups' performance, unlike individuals' one, does not change across games, and this is due to groups using more effectively the focal cue to restrict their choices to only two strategies. Finally, groups that choose the not self-evident focal point tend to choose more often the focal point in the other games where instead it is easily identifiable.
    JEL: C72 C78 C91 C92
    Date: 2017
  3. By: Cameron A. Belton (University of East Anglia)
    Abstract: This paper implements a novel experimental design to investigate the presence of order effects across multiple valuation tasks for consumer goods, whereby earlier goods are valued more highly than later goods. The paper presents a novel explanation of order effects, relating to attention and novelty. Typically, multiple valuation tasks for consumer goods use the same good for valuation in each task. In this experiment the type of good valued in each task is varied, allowing two potential mechanisms to be disentangled: experimental novelty effects, whereby participants become less interested with completing later tasks, and good-specific novelty effects, whereby participants become less interested with the goods used in later tasks. The results find a particular importance of the first task; goods in the first task are valued significantly higher than later valued goods, evidence of experimental novelty effects, and goods of a similar type to the good in the first task are valued significantly higher than goods of a different type to the first, evidence of good-specific novelty. The paper discusses the potential implications of these findings.
    Keywords: order effects, attention, novelty, advanced disclosure
    JEL: C91 D12 D91
    Date: 2017–07–31
  4. By: Abhijit Ramalingam (University of East Anglia); Antonio J. Morales (University of Malaga); James M. Walker (Indiana University)
    Abstract: This study brings together two strands of experimental literature, positive versus negative frames of social dilemmas and the effectiveness of peer sanctioning in promoting cooperation. Examining provision and appropriation games that are strategically and payoff isomorphic, we find evidence of less cooperation in the appropriation game. We also find that peer sanctioning is able to overcome the decrease in cooperation in the appropriation game, leading to greater relative increases in contributions and earnings in that decision setting. This result is linked to the fact that low contributors are targeted for punishment more frequently in the appropriation game. All the experimental findings are compatible with the existence of reciprocal preferences a la Cox, Friedman and Sadiraj (2008).
    Keywords: social dilemma, experiment, provision, appropriation, cooperation, punishment, reciprocal preferences
    JEL: C72 C91 C92 D02 H41
    Date: 2017–04–11
  5. By: Nadine Chlass (University of Jena); Peter G. Moffatt (University of East Anglia)
    Abstract: Which preference underlies giving in dictator games? To date, the experimental evidence has either been interpreted as a preference over the distribution of pay-offs, or as an experimenter demand effect. We show that under strict dictator-dictator as well as strict dictator-recipient anonymity, giving in dictator games springs from a preference over the distribution of decision rights. In contrast, concerns which trigger experimenter demand (Andreoni and Bernheim 2009) are negatively correlated with dictator game giving. Our experiments cover a series of dictator game variants which have sparked the experimenter demand debate. In addition, we identify the sets of ethical ideals that dictators em-ploy to derive the 'right' course of action in a formal moral judgement test and model dictator transfers econometrically by means of dictators' actual ethical ideals. Our results explain the lion’s share of results from the literature: lower transfers when dictators earn the pie (Cherry et al. 2002); lower transfers when 'take' options are available (List 2007; Bardsley 2008); lower transfers when anonymity is lifted (Hoffmann et al. 1994); generous dictators consistently pre-ferring to avoid the game altogether, if given the option (Lazear et al. 2012), and findings that social norms and beliefs cause dictator transfers (Krupka and Weber 2013; Di Tella et al. 2015; Kimbrough and Vostroknutov 2015).
    Keywords: altruism, dictator games, moral judgement, experimenter demand effect, equality of decision rights, purely procedural preferences
    JEL: C91 D63 D64
    Date: 2017–07–03
  6. By: Shuwen Li (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Xiandong Qin (Department of Applied Economics, Shanghai Jiao Tong University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: We report results from a replication of Solnick (2001), which finds using an ultimatum game that, in relation to males, more is demanded from female proposers and less is offered to female responders. We conduct Solnick’s (2001) game using participants from a large US university and a large Chinese university. We find little evidence of gender differences across proposer and responder decisions in both locations. We do however find that, in comparison to Chinese participants, US proposers are more generous, while US responders are more demanding.
    Keywords: gender differences, cultural differences, laboratory experiment, ultimatum game, bargaining
    JEL: C78 C92 J16 Z10
    Date: 2017–10
  7. By: Sandro Casal (University of Milan); Francesco Fallucchi (University of East Anglia); Simone Quercia (University of Bonn)
    Abstract: We experimentally investigate the role of responders' moral concerns in three-player ultimatum bargaining. In our experiment, proposers can increase their share of the pie at the expenses of an NGO that conducts humanitarian aid in emergency areas. We find that responders are not willing to engage in 'immoral' transactions only when fully informed about proposers' behavior toward the NGO. Under complete information, their willingness to reject offers increases with the strength of the harm to the NGO. Moreover, the possibility to nullify the effects of the negative externality through rejection further increases their willingness to reject. We show that the latter result is better explained by a model of consequentialist moral concerns toward the NGO rather than deontological morality about own actions.
    Keywords: three-player ultimatum game, moral reasoning, experiment
    JEL: C72 C91 D6
    Date: 2017–05–10
  8. By: Ranehill, Eva (Department of Economics, School of Business, Economics and Law, Göteborg University); Weber, Roberto A. (Department of Economics, University of Zurich)
    Abstract: A large body of evidence documents systematic gender differences in a variety of important economic preferences, such as risk-taking, competition and pro-sociality. One potential implication of this literature is that increased female representation in decision-making bodies may significantly affect organizational and policy outcomes. However, research has yet to establish a direct connection from gender differences in simple economic choice tasks, to voting over policy and to the resulting outcomes. We conduct a laboratory experiment to provide a test of such a connection. In small laboratory “societies,” people repeatedly vote for a redistribution policy and engage in a real-effort production task. In this environment, we observe a substantial difference in voting behavior, with women voting for significantly more egalitarian redistribution policies. This gender difference is large relative to other differences based on observable characteristics and is partly explained by gender gaps in economic preferences and in beliefs about relative performance. Gender voting gaps persist with experience and in environments with varying degrees of risk. We also observe policy differences between male- and female-controlled groups, though these are considerably smaller than the mean individual differences—a natural consequence of the aggregation of individual preferences into collective outcomes. Thus, we provide evidence for why substantial and robust gender differences in preferences may often fail to translate into differential policy outcomes with increased female representation in policymaking.
    Keywords: gender differences; risk; altruism; redistributive preferences; experiment
    JEL: C91 C92
    Date: 2017–11
  9. By: Carlos Cueva Herrero (Dpto. Análisis Económico Aplicado); Iñigo Iturbe-Ormaetxe Kortajarene (Universidad de Alicante); Giovanni Ponti (Universidad de Alicante); Josefa Tomás Lucas (Universidad de Alicante)
    Abstract: The disposition effect (DE) is a common bias by which investors tend to sell profitable assets too soon and hold losing assets too long. We investigate psychological correlates of the DE in a standard experimental environment and find that subjects scoring high in optimism and stubbornness (difficulty recognizing one’s errors) tend to sell fewer losers and consequently exhibit a larger DE. We then test a beliefs-based explanation for these findings by conducting two additional treatments, called allocate (A) and choose (CH), in which we elicit price expectations after subjects are either randomly allocated assets, or forced to choose some, respectively. We find that subjects’ beliefs are more optimistic about assets that they own than about other assets, regardless of the treatment. However, while beliefs about owned assets in A adjust in line with Bayesian inference, beliefs remain stubbornly optimistic in CH even when an asset is more likely to be a loser.
    Keywords: Behavioral Finance, Trading, Biases, Psychological Measures, Beliefs, Cognitive Dissonance
    JEL: C91 D70 D81 D91
    Date: 2017–10
  10. By: Mel Win Khaw; Luminita Stevens; Michael Woodford
    Abstract: We conduct a laboratory experiment to shed light on the cognitive limitations that may affect the way decision makers respond to changes in their economic environment. The subjects solve a tracking problem: they estimate the probability of a binary event, which changes stochastically. The subjects observe draws and indicate their draw-by-draw estimate. Our subjects depart from the optimal Bayesian benchmark in systematic ways, but these deviations are not simply the result of some boundedly rational, but deterministic rule. Rather, there is a random element in the subjects' response to any given history of evidence. Moreover, subjects adjust their forecast in discrete jumps rather than after each new ring draw, even though there are no explicit adjustment costs. They adjust by both large and small amounts, contrary to the predictions of a simple Ss model of optimal adjustment subject to a fixed cost. Finally, subjects prefer to report “round number†probabilities, even though that requires exerting additional effort. Each of these regularities resembles the behavior of firms setting prices for their products. We develop a model of inattentive adjustment and compare its quantitative fit with alternative models of stochastic discrete adjustment used in the literature on price adjustment.
    JEL: C91 D84
    Date: 2016
  11. By: Eva Ranehill; Roberto A. Weber
    Abstract: Many studies document systematic gender differences in a variety of important economic preferences, such as risk-taking, competition and pro-sociality. One potential implication of this literature is that increased female representation in decision-making bodies may significantly alter organizational and policy outcomes. However, research has yet to establish a direct connection from gender differences in simple economic choice tasks, to voting over policy and to the resulting outcomes. We conduct a laboratory experiment to provide a test of such a connection. In small laboratory “societies,” people repeatedly vote for a redistribution policy and engage in a real-effort production task. Women persistently vote for more egalitarian redistribution. This gender difference is large relative to other voting differences based on observable characteristics and is partly explained by gender gaps in preferences and beliefs. Gender voting gaps persist with experience and in environments with varying degrees of risk. We also observe policy differences between male- and female-controlled groups, though these are considerably smaller than the mean individual differences—a natural consequence of the aggregation of individual preferences into collective outcomes. Thus, we provide evidence for why substantial and robust gender differences in preferences may often fail to translate into differential policy outcomes with increased female representation in policymaking.
    Keywords: Gender differences, risk, altruism, redistributive preferences, experiment
    JEL: C91 C92 J16 H23
    Date: 2017–11
  12. By: Armin Falk
    Abstract: Numerous signaling models in economics assume image concerns. These take two forms, as relating either to social image or self-image. While empirical work has identified the behavioral importance of the former, little is known about the role of self-image concerns. We exogenously vary self-image concerns in manipulating self-directed attention and study the impact on moral behavior. The choice context in the experiment is whether subjects inict a painful electric shock on another subject to receive a monetary payment. Three between-subjects conditions are studied. In the main treatment, subjects see their own face on the decision screen in a real-time video feed. In the two control conditions, subjects see either no video at all or a neutral video. We find that the exogenous increase in self-image concerns significantly reduces the fraction of subjects inflicting pain.
    Keywords: self-image, moral behavior
    JEL: D64 C91
    Date: 2017
  13. By: Kristoffer W. Eriksen; Ola Kvaløy; Miguel Luzuriaga
    Abstract: We present an experimental study on how people take risk on behalf of others. We use three different elicitation methods, and study how each subject makes decisions both on behalf of own money and on behalf of another individual’s money. We find a weak tendency of lower risk-taking with others’ money compared to own money. However, subjects believe that other participants take more risk with other people’s money than with their own. At the same time, subjects on average think that others are more risk averse than themselves. The data also reveals that subjects are quite inconsistent when making risk decisions on behalf of others, indicating random behavior. A large majority of subjects alternates between taking more risk, less risk or the same amount of risk with other people’s money compared to own money.
    Keywords: risk-taking, other people’s money, beliefs, preferences, experiment
    Date: 2017
  14. By: Adena, Maja (WZB); Huck, Steffen (WZB); Rasul, Imran (UCL)
    Abstract: We present evidence from a natural field experiment designed to shed light on whether individual behavior is consistent with a neoclassical model of utility maximization subject to budget constraints. We do this through the lens of a field experiment on charitable giving. We find that the behavior of at least 80% of individuals, on both the extensive and intensive margins, can be rationalized within a standard neoclassical choice model in which individuals have preferences, defined over own consumption and their contribution towards the charitable good, satisfying the axioms of revealed preference.
    Keywords: natural field experiment; revealed preference;
    JEL: C93 D01 D12 D64
    Date: 2017–11–02
  15. By: Eva m. Berger (Johannes Gutenberg-Universität Mainz, Germany); Guenther Koenig; Henning Müller (Johannes Gutenberg-University Mainz, Germany); Felix Schmidt (Johannes Gutenberg-University Mainz, Germany); Daniel Schunk (Johannes Gutenberg-University Mainz, Germany)
    Abstract: Recent evidence suggests that self-regulation plays an important role for the job finding success of unemployed persons. We conduct a randomized natural field experiment embedded in an established labor market reactivation program to examine the effect of a self-regulation training on job search effort—focusing on the effort put into preparing job applicationdocuments—of long-term unemployed participants. We find a positive treatment effect on effort operationalized as the quality of the submitted CV document as well as the probability of participants submitting their documents on time. Since the intervention comes at very low cost, a roll-out to other programs potentially has a high individual and social rate of return.
    Keywords: Active Labor Market Policy, Natural Field Experiment, Job Search Effort, Job Application Effort, Germany, Labor Market Reintegration, Unemployment, Reemployment, Self-Regulation, Non-Cognitive Skills, MCII
    Date: 2017–07–25
  16. By: Doerrenberg, Philipp; Peichl, Andreas
    Abstract: We present the first randomized survey experiment in the context of tax compliance to assess the role of social norms and reciprocity for intrinsic tax morale. We find that participants in a reciprocity treatment have significantly higher tax morale than those in a social-norm treatment. This suggests that a potential backfire effect of social norms is outweighed if the consequences of violating the social norm are made salient. We further document the anatomy of intrinsic motivations for tax compliance and present first evidence that previously found gender effects in tax morale are not driven by differences in risk preferences.
    Keywords: Tax compliance,Tax evasion,Intrinsic motivations,Tax morale,Social norms,Reciprocity
    JEL: H20 H32 H50 C93
    Date: 2017
  17. By: Dirk Engelmann; Hans Peter Grüner
    Abstract: Optimal voting rules have to be tailored to the underlying distribution of preferences. This paper shows that the introduction of a stage at which agents may themselves choose voting rules according to which they decide in a second stage may increase the sum of individuals’ payoffs if players are not all completely selfish. Our experiments aim to understand how privately informed individuals choose voting rules and vote given these rules. In a setting with an asymmetric distribution of valuations groups that can choose a voting rule do better than those who decide with a given simple majority voting rule.
    Keywords: two-stage voting, Bayesian voting, experiments
    JEL: C91 D70 D82
    Date: 2017
  18. By: Joana Pais; Ágnes Pintér; Róbert F. Veszteg
    Abstract: In a series of laboratory experiments, we explore the impact of different market features (the level of information, search costs, and the level of commitment) on agents’ behaviour and on the outcome of decentralized matching markets. In our experiments, subjects on each side of the market actively search for a partner, make proposals, and are free to accept or reject any proposal received at any time throughout the game. Our results suggest that a low information level boosts market activity but does not affect stability or efficiency of the final outcome, unless coupled with search costs. Search costs have a significant negative impact on market activity, and on both stability and efficiency. Finally, commitment harms stability slightly but acts as a disciplinary device to market activity and is associated with higher efficiency levels of the final outcome.
    Keywords: decentralized markets, two-sided matching, stability, efficiency, laboratory experiments
    JEL: C78 C91 D82
    Date: 2017–09
  19. By: Morone, Andrea; Nuzzo, Simone; Caferra, Rocco
    Abstract: The aim of this paper is to analyze bidders’ behavior, comparing individuals and groups’ decisions within the dollar auction framework. This game induces subjects to fall prey into the paradigm of escalation, which is driven by agents’ commitment to higher and higher bids. Whenever each participant commits himself to a bid, the lower bidder, motivated by the wish to win as well as to defend his prior investment, finds it in his best interest to place a higher bid to overcome his opponent. The latter mechanism may lead subjects to overbid. We find that the Nash equilibrium of the game is only rarely attained. Second, we detect clean evidence that groups’ decisions are, on average, superior to individuals’ decisions. Learning over time is clearly evident, leading individuals to perform nearly as good as groups in the final rounds of the game.
    Keywords: escalation,winner’s curse
    JEL: C91
    Date: 2017
  20. By: Natalia Jimenez (Universidad de Granada (Spain)); Ismael Rodriguez-Lara (Middlesex University London (United Kingdom)); Jean-Robert Tyran (Department of Economics, University of Copenhagen and University of Vienna (Austria)); Erik Wengström (University of Lund (Sweden))
    Abstract: We test for the construct validity of the cognitive reflection test (CRT) by eliciting response times. We find that incorrect answers to the CRT are quicker than correct answers. At the individual level, we classify subjects into impulsive and reflective, depending on whether they choose the incorrect intuitive answer or the correct answer the majority of the time. We show that impulsive subjects complete the test quicker than reflective subjects.
    Keywords: cognitive ability, cognitive reflection, response time, intuitive behavior, reflective behavior
    JEL: C91
    Date: 2017–11–02
  21. By: Proto, Eugenio (DepartmentofEconomics,University of Warwick, CAGE and IZA); Sgroi, Daniel (Department of Economics, University of Warwick,CAGE and Nuffield College, University of Oxford); Mahnaz Nazneen, Mahnaz (Department of Economics, University of Warwick)
    Abstract: Existing research supports two opposing mechanisms through which positive mood might affect cooperation. Some studies have suggested that positive mood produces more altruistic, open and helpful behavior, fostering cooperation. However, there is contrasting research supporting the idea that positive mood produces more assertiveness and inward-orientation and reduced use of information, hampering cooperation. We find evidence that suggests the second hypothesis dominates when playing the repeated Prisoner's Dilemma. Players in an induced positive mood tend to cooperate less than players in a neutral mood setting. This holds regardless of uncertainty surrounding the number of repetitions or whether pre-play communication has taken place. This finding is consistent with a text analysis of the pre-play communication between players indicating that subjects in a more positive mood use more inward-oriented, more negative and less positive language. To the best of our knowledge we are the rst to use text analysis in pre-play communication.
    Date: 2017
  22. By: Shaun P. Hargeaves Heap (King's College London); Abhijit Ramalingam (University of East Anglia); Brock V. Stoddard (University of South Dakota)
    Abstract: This paper examines with an experiment a new way that inequality and competition may interact to affect productivity: through team public goods contributions. While inequality within a team diminishes team cooperation in the absence of competition, we find there is no effect of inequality when teams compete. Competition boosts cooperation and more so in unequal teams. Thus, a decline in competition accompanied by growing inequality has a doubly adverse effect on productivity. The difference in the effect of inequality is driven by the behaviour of the 'rich'. They disengage from their teams but recover their 'team spirit' under competition.
    Keywords: public goods, experiment, team competition, inequality, endowment, within-group
    JEL: C72 C91 C92 D31 D63 D72 H41
    Date: 2017–04–05
  23. By: Kurz, Verena (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Changing dietary habits to reduce the consumption of meat is considered to have great potential to mitigate food-related greenhouse gas (GHG) emissions. To test if nudging can increase the consumption of vegetarian food, I conducted a field experiment with two university restaurants. At the treated restaurant, the salience of the vegetarian option was increased by changing the menu order, and by placing the dish at a spot visible to customers. The other restaurant served as a control. Daily sales data on the three main dishes sold were collected from September 2015 until June 2016. The experiment was divided into a baseline, an intervention, and a reversal period where the setup was returned to its original state. Results show that the nudge increased the share of vegetarian lunches sold by around 6 percentage points. The change in behavior is partly persistent, as the share of vegetarian lunches sold remained 4 percentage points higher than during the baseline period after the original setup was reinstated. The changes in consumption reduced GHG emissions from food sales around 5 percent.
    Keywords: nudging; field experiment; meat consumption; climate change mitigation
    JEL: C93 D03 D12 Q50
    Date: 2017–11
  24. By: David Hugh-Jones (University of East Anglia); Itay Ron; Ro'i Zultan (Ben-Gurion University of the Negev)
    Abstract: Cycles of intergroup revenge appear in large scale conflicts. We experimentally test the hypothesis that humans practice group-based reciprocity: if someone harms or helps them, they harm or help other members of that person's group. Subjects played a trust game, then allocated money between other people. Senders whose partners returned more in the trust game gave more to that partner's group members. The effect was about half as large as the effect of direct reciprocity. Receivers' allocations to group members were not affected by their partners' play in the trust game, suggesting that group reciprocity was only triggered when the partner’s intentions were unequivocal.
    Keywords: upstream reciprocity, group identity, intergroup conflict
    Date: 2017
  25. By: Fabio Galeotti (University of Lyon); Maria Montero (University of Nottingham); Anders Poulsen (University of East Anglia)
    Abstract: The Attraction Effect and Compromise Effect (AE and CE) were introduced for individual choice situations. We define and experimentally investigate the AE and CE for bargaining situations. Our data suggest that the AE and CE are significant in bargaining, when certain conditions, related to focal equilibrium selection criteria based on payoff equality, efficiency, and symmetry, are met.
    Keywords: bargaining, attraction effect, compromise effect, focality, equality, efficiency, symmetry
    JEL: C70 C72 C92
    Date: 2017–08–02
  26. By: Muhammad Asali (International School of Economics at Tbilisi State University, Tbilisi;); Norberto Pignatti (International School of Economics at Tbilisi State University, Tbilisi; IZA, Bonn); Sophiko Skhirtladze (ISET Policy Institute)
    Abstract: We provide 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.
    Date: 2017
  27. By: Felix Albrecht; Sebastian Kube; Christian Traxler
    Abstract: We explore the relationship between individuals’ disposition to cooperate and their inclination to engage in peer punishment as well as their relative importance for mitigating social dilemmas. Using a novel strategy-method approach we identify individual punishment patterns and link them with individual cooperation patterns. Classifying N = 628 subjects along these two dimensions documents that cooperation and punishment patterns are intuitively aligned for most individuals. However, the data also reveal a sizable share of free-riders that punish pro-socially and conditional cooperators that do not engage in punishment. Analyzing the interplay between types in an additional experiment, we show that pro-social punishers are more crucial for achieving cooperation than conditional cooperators. Incorporating information on punishment types explains large amounts of the between and within group variation in cooperation.
    Keywords: strategy method, punishment patterns, type classification, conditional cooperation, public-goods game
    JEL: C90 D03
    Date: 2016
  28. By: Daniela Di Cagno (LUISS, Rome); Arianna Galliera (LUISS, Rome and Politecnico di Milano); Werner Güth (LUISS, Rome and Max Planck Institute, Bonn); Noemi Pace (Department of Economics, University Of Venice Cà Foscari)
    Abstract: This paper attempts to identify behavioral patterns and compare their average success considering several criteria of bounded rationality. Experimentally observed choice behavior in various decision tasks is used to assess heterogeneity in how individual participants respond to 15 randomly ordered portfolio choices, each of which is experienced twice. Treatments differ in (not) granting probability information and in (not) eliciting aspirations. Since in our setting neither other regarding concerns nor risk attitude matter and probability of the binary chance move is (optimal) choice-irrelevant, categorizing decision types relies on parameter dependence and choice adaptations. We find that most participants reduce systematically sub-optimality when following the identified criteria.
    Keywords: (Un)Bounded Rationality, Satisficing, Experiments, Heterogeneity
    JEL: D03 D81 C91
    Date: 2017
  29. By: Cristina Bicchieri (University of Pennsylvania); Eugen Dimant (University of Pennsylvania); Erte Xiao (Monash University)
    Abstract: A stream of research examining the effect of punishment on conformity indicates that punishment can backfire and lead to suboptimal social outcomes. In such studies, the enforcement of a behavioral rule to cooperate originates from a single party. This feature may raise concern about the legitimacy of the rule and thereby make it easy for the agents to take a penalty and excuse their selfish behavior. We address the question of punishment legitimacy in our experiment by shedding light upon the importance of social norms and their interplay with punishment mechanisms. We show that the separate enforcement mechanisms of punishment and norms cannot achieve higher cooperation rates. In fact, conformity is significantly increased only in those cases when social norms and punishment are combined, but only when cooperation is cheap. Interestingly, when cooperation is expensive we find that the combination of punishment and empirical information about others conformity can also have traceable detrimental effects on conformity levels. Our results have important implications for researchers and practitioners alike.
    Keywords: Conformity, Experiments, Punishment, Social Norms, Trust Game
    Date: 2017
  30. By: Bogliacino, Francesco; Codagnone, Cristiano
    Abstract: The article discusses whether and to what extent experiments can contribute to a research paradigm based on the study of human behaviour in complex evolving environments and on the problem of asymmetric adjustment among different components of economic system along certain trajectories, focusing on the possibility that experimental evidence may represent an external consistency check on this type of heterodox modelling. It considers the evidence on rationality of human agents, and the possibility to identify a microfoundation alternative to homo oeconomicus, discussing the evidence on humans as strong reciprocators, as trusting individuals and as embedded in social norms.
    Keywords: Experiments; Causality; Heuristics; Learning; Bounded Rationality; Altruism; Punishment; Trust; Norms
    JEL: C18 C9 D1 D3
    Date: 2017–10
  31. By: Duffy, Sean; Smith, John
    Abstract: Huttenlocher, Hedges, and Vevea (2000) (Why do categories affect stimulus judgment? Journal of Experimental Psychology: General, 129, 220-241) introduce the category adjustment model (CAM), which posits that participants imperfectly remember stimuli in serial judgment tasks. In order to maximize accuracy, CAM holds that participants use information about the distribution of the stimuli to improve their judgments. CAM predicts that judgments will be a weighted average of imperfect memories of the stimuli and the mean of the distribution of stimuli. Huttenlocher, Hedges, and Vevea (2000) report on three experiments and the authors conclude that CAM is “verified.” We attempt to replicate Experiment 3 from Huttenlocher et al. (2000). We analyze judgment-level data rather than averaged data. We find evidence of a bias toward a set of recent stimuli rather than a bias toward the running mean. We also do not find evidence of the joint hypothesis that the participants learned the distribution of stimuli and employed this information in their judgments. The judgments in our dataset are not consistent with CAM. We discuss how the apparent defects in HHV went unnoticed and how such mistakes can be avoided in future research. Finally, we hope that the techniques that we employ will be used to test other datasets that are currently regarded as consistent with CAM or any Bayesian model of judgment.
    Keywords: judgment; memory; category adjustment model; central tendency bias; recency effects; Bayesian judgments
    JEL: C9 C91
    Date: 2017–11–08
  32. By: Matthias Heinz (University of Cologne and CEPR); Sabrina Jeworrek (Halle Institute for Economic Research and Otto von Guericke University Magdeburg); Vanessa Mertins (University of Vechta); Heiner Schumacher (KU Leuven); Matthias Sutter (Max Planck Institute for Research on Collective Goods)
    Abstract: We present a field experiment in which we set up a call-center to study how the productivity of workers is affected if managers treat their co-workers in an unfair way. This question cannot be studied in long-lived organizations since workers may change their career expectations (and hence effort) when managers behave unfairly towards co-workers. In order to rule out such confounds and to measure productivity changes of unaffected workers in a clean way, we create an environment where employees work for two shifts. In one treatment, we lay off parts of the workforce before the second shift. Compared to two different control treatments, we find that, in the layoff treatment, the productivity of the remaining, unaffected workers drops by 12 percent. We show that this result is not driven by peer effects or altered beliefs about the job or the managers’ competence, but rather related to the workers’ perception of unfair behavior of employers towards co-workers. The latter interpretation is confirmed in a survey among professional HR managers. We also show that the effect of unfair behavior on the productivity of unaffected workers is close to the upper bound of the direct effects of wage cuts on the productivity of affected workers. This suggests that the price of an employer’s unfair behavior goes well beyond the potential tit-for-tat of directly affected workers.
    Keywords: Gift exchange, Layoffs, Labor Markets, Fairness, Field Experiment
    JEL: C93 J50 J63
    Date: 2017–11
  33. By: Francesco Fallucchi (University of East Anglia); R. Andrew Luccasen (Mississippi University for Women); Theodore L. Turocy (University of East Anglia)
    Abstract: We re-analyse participant behaviour in standard economics experiments studying voluntary contributions to a public good. Previous approaches were based in part on a priori models of decision-making, such as maximising personal earnings, or reciprocating the behaviour of others. Many participants however do not conform to one of these models exactly, requiring ad hoc adjustments to the theoretical baselines to identify them as belonging to a given behavioural type. We construct a typology of behaviour based on a similarity measure between strategies using hierarchical clustering analysis. We identify four clearly distinct behavioural types which together account for over 90% of participants in six experimental studies. The resulting type classification distinguishes behaviour across groups more consistently than previous approaches.
    Keywords: behavioural types, cluster analysis, cooperation, public goods
    JEL: C65 C71 H41
    Date: 2017–08–08
  34. By: Facundo Albornoz; María Victoria Anauati; Melina Furman; Mariana Luzuriaga; María Eugenia Podestá; Inés Taylor
    Abstract: This paper uses a RCT implemented in state schools in Argentina to estimate the learning impact and cost-effectiveness of different teacher training methods: structured curricula and coaching. Our findings suggest that there is a substantial gain in terms of learning for students with teachers being trained using structured curricula and coaching (between 55% and 64% of a standard deviation more than those students in the control group). Coaching teachers does not appear as a cost-effective intervention since the unit cost per 0.1 standard deviation is more than twice the cost of using a structured curriculum only. However, additional coaching is particularly relevant for relatively inexperienced teachers. A structured curriculum and coaching also affect perceptions: teachers enjoyed more teaching Science, they taught more hours of Science and students learned more and developed more skills.
    Keywords: Science education; Teacher training; Experimental study
    Date: 2017
  35. By: Carlos Cueva Herrero (Dpto. Análisis Económico Aplicado); Iñigo Iturbe-Ormaetxe Kortajarene (Universidad de Alicante); Giovanni Ponti (Universidad de Alicante); Josefa Tomás Lucas (Universidad de Alicante)
    Abstract: The fact that men trade more than women in financial markets has been attributed to men’s overconfidence. However, evidence supporting this view is only indirect. We directly test this conjecture experimentally, by measuring confidence using monetary incentives before participants trade in a simulated market. We find that men are more confident and trade more than women, but we do not find that the difference in confidence explains the gender gap in trading activity. We explore alternative candidate channels such as risk aversion, financial literacy or competitiveness but find that these factors are also unlikely to play a role.
    Keywords: Behavioral Finance, Overconfidence, Overtrading
    JEL: C91 D70 D81 D91
    Date: 2017–10
  36. By: Sheheryar Banuri (University of East Anglia); Stefan Dercon (Blavatnik School of Government and Centre for the Study of African Economies); Varun Gari (The World Bank)
    Abstract: A large literature focuses on the biases of individuals and consumers, as well as "nudges" and other policies that can address those biases. Although policy decisions are often more consequential than those of individual consumers, there is a dearth of studies on the biases of policy professionals: those who prepare and implement policy on behalf of elected politicians. Experiments conducted on a novel subject pool of development policy professionals (public servants of the World Bank and the Department for International Development in the UK) show that policy professionals are indeed subject to decision making traps, including sunk cost bias, the framing of losses and gains, frame-dependent risk-aversion, and, most strikingly, confirmation bias correlated with ideological priors, despite having an explicit mission to promote evidence- informed and impartial decision making. These findings should worry policy professionals and their principals in governments and large organizations, as well as citizens themselves. A further experiment, in which policy professionals engage in discussion, shows that deliberation may be able to mitigate the effects of some of these biases.
    Date: 2017–10
  37. By: Bansak, Kirk (Stanford University); Hainmueller, Jens (Stanford University); Hopkins, Daniel J. (University of PA); Yamamoto, Teppei (MIT)
    Abstract: Recent years have seen a renaissance of conjoint survey designs within social science. To date, however, researchers have lacked guidance on how many attributes they can include within conjoint profiles before survey satisficing leads to unacceptable declines in response quality. This paper addresses that question using pre-registered, two-stage experiments examining choices among hypothetical candidates for U.S. Senate or hotel rooms. In each experiment, we use the first stage to identify attributes which are perceived to be uncorrelated with the attribute of interest--and so cannot be masked by those core attributes. In the second stage, we randomly assign respondents to conjoint designs with varying numbers of those filler attributes. We report the results of these experiments implemented via Amazon's Mechanical Turk or Survey Sampling International. They demonstrate that our core quantities of interest are generally stable, with relatively modest increases in survey satisficing when respondents face large numbers of attributes.
    Date: 2017–04
  38. By: Morone, Andrea; Temerario, Tiziana; Nemore, Francesco
    Abstract: In this paper we investigated group size impact on risk aversion when a majority rule is applied. Drawing on the widely used Holt and Laury’s (2002) lottery pairs, we observed a risky shift for both individual and groups regardless of their size. However, groups choices are shown to be closer to the risk-neutrality prediction. More interestingly, whereas smaller groups attitudes can be safely approximated by individual choices, larger groups reveal a statistically different risk-loving attitude. This risky shift becomes more prominent as group size increases.
    Keywords: Preferences; Group; Risk Attitude; Majority Rule; Laboratory.
    JEL: C91 C92 D1
    Date: 2017–11
  39. By: Ingvild Almås; Alexander W. Cappelen; Bertil Tungodden
    Abstract: There is a striking difference in income inequality and redistributive policies between the United States and Scandinavia. To study whether there is a corresponding cross-country difference in social preferences, we conducted the first large-scale international social preference experiment, with nationally representative samples from the United States and Norway. We introduce a new experimental approach, which combines the infrastructure of an international online market place and the infrastructure of a leading international data collection agency. A novel feature of our experiment is that Americans and Norwegians make real distributive choices in identical situations where they have complete information about the source of inequality and the cost of redistribution. We show that Americans and Norwegians differ significantly in fairness views, but not in the importance assigned to efficiency. The study also provides robust causal evidence of fairness considerations being much more fundamental for inequality acceptance than efficiency considerations in both countries.
    Date: 2016
  40. By: Ran I. Shorrer (Pennsylvania State University, United States of America); Sandor Sovago (Vrije Universiteit Amsterdam)
    Abstract: In a centralized marketplace that was designed to be simple, we identify participants whose choices are dominated. Using administrative data from Hungary, we show that college applicants make obvious mistakes: they forgo the free opportunity to receive a tuition waiver worth thousands of dollars. At least 10 percent of the applicants made such mistakes in 2013. Costly mistakes have externalities: they transfer tuition waivers from high- to low-socioeconomic status students, and increase the number of students attending college. To shed light on the mechanisms underlying mistakes, we exploit a reform that substantially increased the selectivity of admission with financial aid in some fields of study. Increased admission selectivity raises the likelihood of making obvious mistakes, especially among high-socioeconomic status and low-achieving applicants. Our results suggest that mistakes are more common when their expected cost is lower. Still, the average cost of a mistake in 2013 was 114-365 dollars.
    Keywords: College admissions, dominated strategies, market design, obvious misrepresentation, school choice, strategy-proof
    JEL: C70 D61 D63
    Date: 2017–11–10
  41. By: Buckenmaier, Johannes; Dimant, Eugen; Posten, Ann-Christin; Schmidt, Ulrich
    Abstract: Reducing criminal acts in society is a crucial duty of governments. Establishing punishment structures to attain this goal involves high costs. Typically, both theorists and practitioners resort to the adjustment of severity and/or certainty of punishment as effective deterrents of criminal behavior. One more cost effective, but scientifically understudied mechanism for effective deterrence is the swiftness of punishment. We carry out the first controlled economic experiment to study the effectiveness of swiftness of punishment along the following two dimensions: the timing of punishment and the timing of the resolution of uncertainty regarding punishment. Our results indicate an inverted u-shaped relation between the delay of punishment, the delay of uncertainty resolution regarding the detection of deviant behavior, and any resulting deterrence. In fact, institutions that either reveal detection and impose punishment immediately or maintain uncertainty about the state of detection and impose punishment sufficiently late deter individuals at equal rates. We conclude that the same institutional settings that are capable of reducing recidivism are also the ones deterring deviant behavior in the first place. Our results yield strong policy implications for designing effective institutions in mitigating misconduct and reducing recidivism.
    Date: 2017

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.