nep-exp New Economics Papers
on Experimental Economics
Issue of 2017‒12‒11
forty papers chosen by
Daniel Houser
George Mason University

  1. Identification of individuals and groups in a public goods experiment By Sven Christens; Astrid Dannenberg; Florian Sachs
  2. Self-Scanning and Self-Control: A Field Experiment on Real-Time Feedback and Shopping Behavior By Montinari, Natalia; Runnemark, Emma; Wengström, Erik
  3. Flat Bubbles in Long-Horizon Experiments: Results from two Market Conditions By Tomoe Hoshihata; Ryuichiro Ishikawa; Nobuyuki Hanaki; Eizo Akiyama
  4. Self-Scanning and Self-Control: A Field Experiment on Real-Time Feedback and Shopping Behavior By N. Montinari; E. Runnemark; E. Wengström
  5. Heterogeneous Effects of Performance Pay with Market Competition: Evidence from a Randomized Field Experiment By Friebel, Guido; Heinz, Matthias; Khashabi, Pooyan; Kretschmer, Tobias; Zubanov, Nick
  6. Nudging Participation and Spatial Agglomeration in Payment for Environmental Service Schemes By Laure Kuhfuss; Raphaële Préget; Sophie Thoyer; Frans P. de Vries; Nick Hanley
  7. Improving access to savings through mobile money: Experimental evidence from smallholder farmers in Mozambique By Catia Batista; Pedro Vicente
  8. Social Comparisons in Real Time: A Field Experiment of Residential Electricity and Water Use By Kažukauskas, Andrius; Broberg, Thomas; Jaraite, Jurate
  9. Individualized Self-learning Program to Improve Primary Education: Evidence from a Randomized Field Experiment in Bangladesh By Sawada Yasuyuki; Mahmud Minhaj; Seki Mai; Le An; Kawarazaki Hikaru
  10. Exercise Improves Academic Performance By Cappelen, Alexander W; Charness, Gary; Ekström, Mathias; Gneezy, Uri; Tungodden, Bertil
  11. A Quantitative Easing Experiment By A. Penalver; N. Hanaki; E. Akiyama; Y. Funaki; R. Ishikawa
  12. Intergenerational retrospective viewpoints and individual prefe ences of policies for future: A deliberative experiment for forest management By Yoshinori Nakagawa; Koji Kotani; Mika Matsumoto; Tatsuyoshi Saijo
  13. Fix the Game - Not the Dame: A Team Intervention to Restore Gender Equity in Leadership Evaluations By Jamie L. Gloor; Manuela C. Morf; Samantha Paustian-Underdahl; Uschi Backes-Gellner
  14. Economic essays on privacy, big data, and climate change By Dengler, Sebastian
  15. The social preferences of democratically elected decision makers and the conflict between wealth generation and distribution By Gaudeul, Alexia; Keser, Claudia
  16. Individual and group preferences over risk: Does group size matter? By Andrea Morone; Francesco Nemore; Tiziana Temerario
  17. The Double Dividend of Relative Auditing – Theory and Experiments on Corporate Tax Enforcement By Ralph-C. Bayer
  18. Failure of the Becker-Degroot-Marschak Mechanism in Inexperienced Subjects: New Tests of the Game Form Misconception Hypothesis By Bull, Charlie; Courty, Pascal; Doyon, Maurice; Rondeau, Daniel
  19. "Framing Game Theory" By Hitoshi Matsushima
  20. What do people ‘learn by looking’ at direct feedback on their energy consumption? Results of a field study in Southern France By Adnane A. Kendel; Nathalie N. Lazaric; Kevin Maréchal
  21. Preferences and decision support in competitive bidding By Fugger, Nicolas; Gillen, Philippe; Rasch, Alexander; Zeppenfeld, Christopher
  22. Masculine vs Feminine Personality Traits and Women’s Employment Outcomes in Britain: A Field Experiment By Drydakis, Nick; Sidiropoulou, Katerina; Patnaik, Swetketu; Selmanovic, Sandra; Bozani, Vasiliki
  23. Good news and bad news are still news: Experimental evidence on belief updating By Alexander Coutts
  24. Watch your Words: an Experimental Study on Communication and the Opportunity Cost of Delegation By Armenak Antinyan; Luca Corazzini; Elena D\'Agosotino; Filippo Pavesi
  25. The effect of time preferences on altruism By Davide Dottori; Caterina Giannetti
  26. On the Value of Persuasion by Experts By Alonso, Ricardo; Câmara, Odilon
  27. The value of progressivity: Evidence from survey experiments By Benoît Tarroux
  28. The Italian North-South Divide in Perceived Dishonesty: A Matter of Trust? By Giuseppe Attanasi; Alessandro Bucciol; Simona Cicognani; Natalia Montinari
  29. Alcohol Expenditure, Generosity and Empathy By David Fielding; Stephen Knowles; Kirsten Robertson
  30. Fairness to dairy cows or fairness to farmers: What counts more in the preferences of conventional milk buyers for ethical attributes of milk? By Markova-Nenova, Nonka; Wätzold, Frank
  31. Attrition in randomized control trials: Using tracking information to correct bias By Teresa Molina Millan; Karen Macours
  32. The Short and Long Run Impacts of Centralized Clearinghouses: Evidence from Matching Teach For America Teachers to Schools By Jonathan M.V. Davis
  33. Individual’s Risk Attitudes in sub-Saharan Africa: Determinants and Reliability of Self-reported Risk in Burkina Faso By Sephavand, Mohammad; Shahbazian, Roujman
  34. Loss Aversion, Upset Preference, and Sports Television Viewing Audience Size By Brad R. Humphreys; Levi Perez
  35. An evolutionary analysis of bidding behaviour in fair division games By Werner Güth; Paul Pezanis-Christou
  36. Cascading Defections from Cooperation Triggered by Present-Biased Behaviors in the Commons By Persichina, Marco
  37. The Effect of Democratic Decision Making on Investment in Reputation By BEN-YASHAR, Ruth; KRAUSZ, Miriam; NITZAN, Shmuel
  38. SUPPLEMENTARY ONLINE MATERIAL Performance, luck and equality: An experimental analysis of subjectsÕ preferences for different allocation criteria Published on the B.E. Journal of Economic Analysis and Policy By Leonardo Becchetti; Giacomo Degli Antoni; Stefania Ottone; Nazaria Solferino
  39. The Effects of Prior Shocks on Managerial Risk Taking: Evidence from Italian Professional Soccer By Alessandro Bucciol; Alessio Hu; Luca Zarri
  40. Competing Combinatorial Auctions By Kittsteiner, Thomas; Ott, Marion; Steinberg, Richard

  1. By: Sven Christens (University of Kassel); Astrid Dannenberg (University of Kassel); Florian Sachs (University of Magdeburg)
    Abstract: Revealing the identities of contributors has been shown to increase cooperation in public goods games. In this paper we experimentally investigate whether this finding holds true when decisions are made by groups rather than individuals. We distinguish between groups in which members can discuss face-to-face to reach a decision and groups in which members communicate via computer chat. The results confirm the positive effect of identification on cooperation among individuals. For groups, however, we only find a small and temporary effect of identification, irrespective of the type of communication. The reason for this is that the sensitivity to others’ opinions plays an important role for individual decisions but not for group decisions.
    Keywords: Climate change; public goods experiment; cooperation; group decisions; face-to-face communication; computer chat communication; identification; shame
    JEL: C72 C91 C92 H41
    Date: 2017
  2. By: Montinari, Natalia (Department of Economics, Bologna University, Italy); Runnemark, Emma (Department of Economics, Lund University); Wengström, Erik (Department of Economics, Lund University)
    Abstract: Payment and checkout at retail stores is increasingly being replaced by automated systems. One recent technological invention in this area is mobile self-scanning in which customers carry a mobile scanner while shopping. Mobile self-scanners give real-time feedback on spending. The device increases price saliency and enables customers to keep track of the total amount spent. Using a field experiment, we test if mobile self-scanning affects shopping behavior. Consumers of two grocery stores were allocated randomly to use a mobile self-scanner or not. Overall, we find that using the self-scanner has a negative but insignificant effect on total amount spent. However, the response to using the scanner is heterogeneous and for customers with low self-control, it significantly reduces both their spending and number of items bought when using the mobile scanner. Moreover, we find that consumers with low self-control are more likely to use the self-scanner than individuals with high self-control. Taken together, our results suggest that sophisticated individuals, that is, individuals who are aware of their self-control problem, use the scanner to control their spending.
    Keywords: Self-scanning; Self-control; Shopping Behavior; Real-time Feedback; Field Experiment
    JEL: D01 D12 M30
    Date: 2017–11–28
  3. By: Tomoe Hoshihata; Ryuichiro Ishikawa (University of Tsukuba); Nobuyuki Hanaki (Université Nice Sophia Antipolis; GREDEG-CNRS; IUF); Eizo Akiyama (University of Tsukuba, Japan)
    Abstract: We report the results of asset market experiments with a long horizon of 100 periods conducted under two market conditions: call markets and continuous double auctions. In both market formats, we observe flat bubbles, i.e., situations where market prices remain steady while fundamental values decrease as the experiments proceed, as well as multiple bubbles. We confirm the stylized facts found in short-horizon experimental asset markets such as bubble-crash price dynamics, and the similarity of the price dynamics between call markets and continuous double auctions. We also examine the relationship between individual trading performance and cognitive ability.
    Keywords: Experimental asset markets, call markets, continuous double auctions, long horizon, multiple bubbles, cognitive reflection test
    JEL: C90 D84
    Date: 2017–11
  4. By: N. Montinari; E. Runnemark; E. Wengström
    Abstract: Payment and checkout at retail stores is increasingly being replaced by automated systems. One recent technological invention in this area is mobile self-scanning in which customers carry a mobile scanner while shopping. Mobile self-scanners give real-time feedback on spending. The device increases price saliency and enables customers to keep track of the total amount spent. Using a field experiment, we test if mobile self-scanning affects shopping behavior. Consumers of two grocery stores were allocated randomly to use a mobile self-scanner or not. Overall, we find that using the self-scanner has a negative but insignificant effect on total amount spent. However, the response to using the scanner is heterogeneous and for customers with low self-control, it significantly reduces both their spending and number of items bought when using the mobile scanner. Moreover, we find that consumers with low self-control are more likely to use the self-scanner than individuals with high self-control. Taken together, our results suggest that sophisticated individuals, that is, individuals who are aware of their self-control problem, use the scanner to control their spending.
    JEL: D01 D12 M30
    Date: 2017–11
  5. By: Friebel, Guido; Heinz, Matthias; Khashabi, Pooyan; Kretschmer, Tobias; Zubanov, Nick
    Abstract: It is well established that the effectiveness of pay-for-performance (PfP) schemes depends on employee- and firm-specific factors. Much less is known about the role of factors outside the firm. We investigate the role of market competition on the effectiveness of PfP. Our theory posits that there are two counteracting effects, a business stealing and a competitor response effect, that jointly generate an inverted U-shape relationship between PfP effectiveness and competition. Weak competition creates low incentives to exert effort because there is little extra market to gain, while strong competition creates low incentives as competitors respond more. PfP hence has the strongest effect for moderate competition. We test this prediction with a field experiment on a retail chain which confirms our theory and refutes alternative explanations.
    Keywords: business stealing; competitor response; Management Practices; market competition; pay for performance (PfP)
    Date: 2017–11
  6. By: Laure Kuhfuss (School of Geography and Sustainable Development, University of St. Andrews); Raphaële Préget (INRA, UMR 1135 LAMETA, F-34000 Montpellier, France); Sophie Thoyer (Montpellier Supagro, UMR 1135 LAMETA, F-34000 Montpellier, France); Frans P. de Vries (Division of Economics, University of Stirling Management School, Stirling FK9 4LA, Scotland, UK); Nick Hanley (School of Geography and Sustainable Development, University of St. Andrews)
    Abstract: The environmental benefits from Payment for Environmental Service (PES) schemes can often be enhanced if landowners can be induced to enrol land in a spatially - coordinated manner. This is because the achievement of many targets for biodiversity conservation policy or water quality improvements are increasing in the spatial connectedness of enrolled land. One incentive mechanism which has been proposed by economists to achieve such connectedness is the Agglomeration Bonus (AB). There has also been an interest within the literature on PES design in using “nudges” to enhance participation and scheme performance. This paper explores whether a specific nudge in the form of information provided to participants on the relative environmental performance of their group can improve participation and spatial coordination, and enhance the AB performance. We design a laboratory experiment whereby the environmental benefits generated by a PES scheme are materialized by real contributions to an environmental charity, mirroring the situation in actual PES schemes where participants derive utility from contributing to the environmental outputs of the scheme, in addition to the monetary payoffs they receive. The experimental results confirm positive environmental outcomes derived under an AB, but the impact of the nudge is less environmentally effective. Interestingly, we find that the nudge does not significantly supercharge the AB, and can even worsen its performance
    Keywords: Social norms; Laboratory experiments; Coordination games; Agricultural policy;Environmental performance; Agri-environmental schemes; Charity
    JEL: C91 C92 Q15 Q18 Q57
    Date: 2017–11
  7. By: Catia Batista; Pedro Vicente
    Abstract: Investment in improved agricultural inputs is infrequent for smallholder farmers in Africa. One barrier may be limited access to formal savings. We designed and conducted a field experiment in rural Mozambique that randomized access to a savings account through mobile money to a sample of smallholder farmers. All subjects were given access to mobile money and information about fertilizer use. We also randomized whether closest farming friends were targeted by the same intervention. We find that the savings account increased savings, the probability of fertilizer use, by 31-36 pp, and the use of other agricultural inputs. We also show that the savings account increased household expenditures, in particular non-frequent ones. Our results suggest that the network intervention decreased social pressure to share resources and that the savings account protected farmers against this network pressure. JEL codes: D14, D85, Q12, Q14
    Keywords: Mobile money, savings, agriculture, smallholder farmers, social networks, field experiment, Mozambique, Africa. Length: 41 pages
    Date: 2017
  8. By: Kažukauskas, Andrius (CERE and the Department of Economics, Umeå University); Broberg, Thomas (CERE and the Department of Economics, Umeå University); Jaraite, Jurate (CERE and the Department of Economics, Umeå University)
    Abstract: A large body of literature shows that the provision of social comparisons can cause households to reduce residential energy and water use. In this paper, we carry out a field experiment that contributes to this literature in two important ways. First, we study a social comparison treatment that is continuous and communicated via pre-installed in-home displays, which are salient and updated in real time. Second, we estimate the effects of provision of social comparisons on two distinguished resources – electricity and water – in the same experimental setting. We find that, on average, our social comparison reduces daily residential energy consumption by 6.7 percent but has no effect on overall residential water use. The electricity savings are impersistent and occur in the evening hours, which only slightly overlap with peak hours. We argue that electricity conservation due to social comparisons is driven by short-run changes in households’ electricity saving behavior.
    Keywords: Consumer economics; Electricity; Field experiment; Real-time displays; Comparison information; Water
    JEL: D12 D83 L94 Q41
    Date: 2017–11–22
  9. By: Sawada Yasuyuki; Mahmud Minhaj; Seki Mai; Le An; Kawarazaki Hikaru
    Abstract: This paper reports on the results from a field experiment that tests the effectiveness of the globally popular Kumon learning method in improving the cognitive and non-cognitive abilities of disadvantaged pupils in Bangladesh. Using a randomized control trial design, we study the impact of this individualized self-learning approach among third and fourth graders studying at BRAC non-formal primary schools. The results show that students of both grades in the treatment schools record substantial and significant improvement in their cognitive abilities as measured by two different mathematics tests (Kumon diagnostic test score per minute and proficiency test score) after a period of 8 months, compared to students in the control schools. In terms of non-cognitive abilities, the results give some evidence of positive and significant impacts, particularly on the self-confidence of the pupils. Interestingly, this intervention also had a positive and significant impact on the ability of teachers’ to assess their students’ performance. Overall our results suggest the wider applicability of a properly designed non-formal education program in solving the learning crisis in developing countries.
    Keywords: education, self-learning, cognitive and non-cognitive outcomes, developing countries, randomized control trial
    Date: 2017–10
  10. By: Cappelen, Alexander W (The Choice Lab); Charness, Gary (University of California); Ekström, Mathias (The Choice Lab); Gneezy, Uri (University of California); Tungodden, Bertil (The Choice Lab)
    Abstract: We report the results of a randomized controlled trial testing whether incentivizing physical exercise improves the academic performance of college students. As expected, the intervention increases physical activity. The main result is that it generates a strong and significant improvement in academic performance, particularly for students who struggled at the baseline in terms of lifestyle habits. We also provide evidence on the underlying mechanisms: Students who were incentivized to exercise have a healthier life style and improved self-control. Overall, the study demonstrates that incentivizing students to exercise can be an important tool in improving educational achievements.
    Keywords: C93; I12; I18; I21; Z20
    JEL: C93 I12 I18 I21
    Date: 2017–09–08
  11. By: A. Penalver; N. Hanaki; E. Akiyama; Y. Funaki; R. Ishikawa
    Abstract: This paper presents experimental evidence that quantitative easing can be effective in raising bond prices even if bonds and cash are perfect substitutes and the path of interest rates is fixed. Despite knowing the fundamental value of bonds, participants in the experiment believed that bond prices would exceed this value when they knew that a central bank would buy a large fraction of the market in a quantitative easing operation. By contrast, there was no average deviation of prices from fundamentals when trading only occurred between participants themselves.
    Keywords: Quantitative Easing, Experimental asset markets.
    JEL: C90 D84 G21
    Date: 2017
  12. By: Yoshinori Nakagawa (Research Center for Future Design, Kochi University of Technology); Koji Kotani (Research Center for Future Design, Kochi University of Technology); Mika Matsumoto (Research Center for Future Design, Kochi University of Technology); Tatsuyoshi Saijo (Research Center for Future Design, Kochi University of Technology)
    Abstract: Brain scientists establish that projecting future events can influence how human brains function and possibly current decisions (Schultz et al., 1997, Gilbert and Wilson, 2007, Gerlach et al., 2014, Szpunara et al., 2014). We design and institute a deliberative experiment to test whether acquisition and experience of intergenerational retrospective viewpoints as one way of projecting future events affect individual preferences for policies. To this end, we employ a case-method approach for forest management policies in Kochi prefecture, Japan, because the problems extend over multiple generations in nature. We prepare two treatments of non-retrospective and retrospective settings where subjects are asked to read through a case of forest management and to reveal preferences for policies at individual and group levels through deliberative discussions. Subjects in the retrospective treatment go through a series of procedures to acquire intergenerational retrospective viewpoints, while those in the non-retrospective treatment do not. The results reveal that acquisition and experience of intergenerational retrospective viewpoints affect individual preferences for forest policies in the sense that the most favorite policies chosen by subjects in the retrospective treatment are different from those in the non-retrospective treatment. Subjects in the retrospective treatment have tendencies to choose the policies as the most favorite that fundamentally change status-quo, while those in the non-retrospective treatment are opposite. Overall, this result suggests that some education or training for acquiring intergenerational retrospective viewpoints as part of projecting future could possibly affect the ways of thinking and preferences for possible betterment of the future.
    Keywords: intergenerational retrospective viewpoint, preferences of policies
    Date: 2017–11
  13. By: Jamie L. Gloor (Technical University of Munich); Manuela C. Morf (Erasmus University of Rotterdam); Samantha Paustian-Underdahl (Florida International University); Uschi Backes-Gellner (University of Zurich)
    Abstract: The leadership literature shows consistent, sizeable, and persistent effects indicating that female leaders face significant biases in the workplace compared with male leaders. However, the social identity leadership literature suggests these biases might be overcome at the team level by adjusting the number of women in the team. Building on this work, we conducted 2 multiple source, multiple wave, multi-level randomized field experiments to test if the gender composition of teams helps to restore equity in leadership evaluations of men and women. Across two samples of university students engaged in a team-building exercise, we find that male leaders are rated as more prototypical leaders than female leaders despite no differences in leaders' self-reported prototypicality; however, this male leadership advantage is eliminated in gender-balanced teams. In Study 2, we extend this finding by supporting a moderated mediation model showing that leader gender and the team's gender composition interact to relate to perceived trust in the leader, through the mediating mechanism of leader prototypicality. Findings support the social identity model of organizational leadership and indicate a boundary condition of role congruity theory, bolstering our need for a more social relational, context-based approach to leadership.
    Keywords: gender; leadership; teams; social identity; prototypicality
    Date: 2017–01
  14. By: Dengler, Sebastian (Tilburg University, School of Economics and Management)
    Abstract: This doctoral thesis aims to advance our understanding of major topics of concern in the 21st century using theoretical as well as empirical economic methodologies. All three topics do and will continue to affect people’s lives as they can substantially shape the functioning of our societies. Thematically linked, Chapter 2 and 3 both focus on privacy choices and their consequences in the context of big data algorithms that target individual consumers. In contrast, Chapter 3 and 4 are linked methodologically as both present results from economic laboratory experiments, where the former focuses on cognitive challenges of individual decision-makers and the latter on challenges to coordination and cooperation between decision-makers. Chapter 2 presents results from a theoretical model where consumers face a monopolistic seller who is not only capable of perfect price discrimination but also more strategically sophisticated than the consumers. The model shows that consumers use a costly privacy-protective sales channel even in the absence of an explicit taste for privacy if they are not too strategically sophisticated. Chapter 3 presents results from an economic laboratory experiment related to the model developed before. Finding substantial deviations from Nash equilibrium predictions. Addressing cognitive constraints often present in privacy choices, some evidence for two alternative explanations is found: level-k thinking and reinforcement learning. A policy treatment resembling privacy-by-default mechanisms leads to a strong increase in hiding behavior. Chapter 4 presents results from an economic laboratory experiment of a dynamic resource extraction game that mimics the global multi-generation planning problem for climate change and fossil fuel extraction. The findings from this experiment suggest that successful cooperation does not only need to overcome a gap between individual incentives and public interests. There is also a fundamental heterogeneity between subjects with respect to beliefs and preferences about the way in which this should be achieved.
    Date: 2017
  15. By: Gaudeul, Alexia; Keser, Claudia
    Abstract: We run a laboratory experiment where some participants are selected to make investment decisions on behalf of others. We test whether a democratic context influences the social preferences of decision makers in terms of efficiency, altruism and concern for inequality. We find that decision makers who are selected democratically are generally more efficiency-oriented, but also more altruistic, than leaders who are selected at random or by ability. Because wealth generation and distribution sometime conflict, efficiency is no higher with democratic leaders, although payoffs are more equal. We interpret our results in terms of a democratic norm that mitigates how elections may otherwise lead to an enhanced feeling of entitlement to one's role. We exclude a selection effect and discuss the drivers of our results in terms of belief in the legitimacy of the selection procedure and reduced social distance.
    Keywords: altruism,democracy,earned role,efficiency,elitism,entitlement effect,inequality,majority-rule,meritocracy,social preferences
    JEL: C91 D63 D64
    Date: 2017
  16. By: Andrea Morone; Francesco Nemore; Tiziana Temerario
    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 D01
    Date: 2017–11–12
  17. By: Ralph-C. Bayer (School of Economics, University of Adelaide)
    Abstract: Recent papers have shown that theoretically tax authorities can not only reduce tax evasion but also boost output in oligopolies by conditioning the audit effort spent on a firm on all firms' tax returns in an industry. In this paper we revisit these results and extend the class of relative audit rules with this property by including discontinuous rules. Field experiments testing the theory predictions would require randomizing audit rules across many otherwise identical industries and are therefore impractical. Instead we conduct laboratory tests of the theoretical mechanisms of a variety of rules. We find that both dividends of relative auditing, i.e. less evasion and higher output, materialize in the laboratory. The behavioral mechanism generating the higher output differs somewhat from the one propagated by theory though.
    Keywords: corporate-tax evasion, relative audit rules, experimental tests
    JEL: H26 D43 K4
    Date: 2017–11
  18. By: Bull, Charlie; Courty, Pascal; Doyon, Maurice; Rondeau, Daniel
    Abstract: Substantial efforts have been devoted to understanding deviations from optimal behavior in games. Cason and Plott (2014, hereafter CP) propose that sub-optimal behavior may be explained by game form misconception (GFM), a failure of game form recognition, rather than by non-standard preferences or framing effects. Following CP's application of the GFM theory to the Becker-DeGroot-Marschak mechanism (Becker et al., 1964, hereafter BDM), this paper explores whether GFM can robustly explain bidding mistakes by inexperienced subjects. We derive two new tests of the GFM hypothesis based on comparing subject behavior in the misconceived task (BDM) and on the task it is misconceived for (a first price auction). While we do replicate Cason and Plot's original results, our additional tests are inconsistent with a first price misconception explaining observed deviations from optimal bidding in the BDM. At a minimum, additional forms of misconception are necessary to explain observed bidding behavior.
    Keywords: Becker-DeGroot-Marschak; game form misconception; Game form recognition; mistake; preference elicitation.
    JEL: C8 C9
    Date: 2017–12
  19. By: Hitoshi Matsushima (Faculty of Economics The University of Tokyo)
    Abstract: An economic agent (player) sometimes fails to correct hypothetical (contingent) thinking, which may increase the occurrence of anomalies in various economic situations. This paper demonstrates a method to encourage such a boundedly rational player to practice correct hypothetical thinking in strategic situations with imperfect information. We introduce a concept termed "frame" as a description of a synchronized cognitive procedure, through which a player decides multiple actions in a step-by-step manner, shaping his (or her) strategy selection as a whole. We could regard a frame as a supposedly irrelevant factor from the viewpoint of full rationality. However, this paper theoretically shows that in a multi-unit auction with private values, the ascending proxy auction has a significant advantage over the second-price auction in terms of the boundedly rational players' incentive to practice correct hypothetical thinking, because of the difference, not in physical rule, but in background frame, between these auction formats. By designing frames appropriately, we generally show that any static game that is solvable in iteratively undominated strategies is also solvable even if players cannot practice correct hypothetical thinking without the help of a well-designed frame.
    Date: 2017–11
  20. By: Adnane A. Kendel; Nathalie N. Lazaric; Kevin Maréchal
    Abstract: The abundant literature on consumer feedback shows that it is an efficient instrument for reducing household energy consumption. However, the reported reductions are strongly dependent on contextual factors and on the type of feedback provided. Given the importance of learning to this respect, this dimension constitutes the core focus of the present study which reports the findings of the TICELEC (i.e. French acronym for information technologies for responsible electricity consumption) project in France. The experiment included a control group (G1: the self-monitoring group) and one equipped group (G2). All participants reduced their consumption and learnt either directly from feedback or indirectly through self-monitoring. The amount of energy savings, which is larger than in similar experiments, can be explained by two factors. First, the specificity of our sample (i.e. high income, high consumption) which allows for potentially large energy savings. Second, high involvement of participants and the building of trust. The quantitative and qualitative dimensions of learning are then discussed. Additionally, we focus on peak-load shifting in G2 with 2 subgroups (G21 and G22). The higher proportion of shifters in G22 and the higher ‘quality’ of their shifting suggest a higher level of learning enabled by the more sophisticated feedback. Although this translated into only a moderately higher rate of energy savings, the higher degree of absorbed knowledge (i.e. through ‘learning by looking through connecting’) might lead to a qualitatively distinctive type of energy saving.
    Keywords: Feedback; Household energy saving; Learning; Residential consumption
    Date: 2017–09
  21. By: Fugger, Nicolas; Gillen, Philippe; Rasch, Alexander; Zeppenfeld, Christopher
    Abstract: We examine bidding behavior in first-price sealed-bid and Dutch auctions, which are strategically equivalent under standard preferences. We investigate whether the empirical breakdown of this equivalence is due to (non-standard) preferences or due to the different complexity of the two formats (i.e., a different level of mathematical/ individual sophistication needed to derive the optimal bidding strategy). We first elicit measures of individual preferences and then manipulate the degree of complexity by offering various levels of decision support. Our results show that the equivalence of the two auction formats only breaks down in the absence of decision support. This indicates that the empirical breakdown is caused by differing complexity between the two formats rather than non-standard preferences.
    Keywords: Auctions,Decision support system,Experiment,Loss aversion,Preferences
    JEL: D44 D81
    Date: 2017
  22. By: Drydakis, Nick; Sidiropoulou, Katerina; Patnaik, Swetketu; Selmanovic, Sandra; Bozani, Vasiliki
    Abstract: In the current study, we utilized a correspondent test to capture the way in which firms respond to women who exhibit masculine and feminine personality traits. In doing so, we minimized the potential for reverse causality bias and unobserved heterogeneities to occur. Women who exhibit masculine personality traits have a 4.3 percentage points greater likelihood of gaining access to occupations than those displaying feminine personality traits. In both male- and female-dominated occupations, women with masculine personality traits have an occupational access advantage, as compared to those exhibiting feminine personality traits. Moreover, women with masculine personality traits take up positions which offer 10 percentage points higher wages, in comparison with those displaying feminine personality traits. Furthermore, wage premiums are higher for those exhibiting masculine personality traits in male-dominated occupations, than for female-dominated positions. To the best of our knowledge, this is the first field experiment to examine the effect of masculine and feminine personality traits on entry-level pay scales. As feminine personality traits are stereotypically attributed to women, and these characteristics appear to yield fewer rewards within the market, they may offer one of many plausible explanations as to why women experience higher unemployment rates, whilst also receiving lower earnings, as compared to men.
    Keywords: Masculine traits,Feminine traits,Occupational Access,Wages,Field experiment
    JEL: J16 J31
    Date: 2017
  23. By: Alexander Coutts
    Abstract: Bayesian updating remains the benchmark for dynamic modeling under uncertainty within economics. Recent theory and evidence suggest individuals may process information in a biased manner when it relates to personal characteristics or future life outcomes. Specifically, updating has been found to be symmetric, with good news receiving more weight than bad news. I put this theory and evidence to the test, by examining information processing across multiple contexts with varying stake conditions. I do not find that good news is over-weighted relative to bad news, but in fact, I find the opposite asymmetry. However these updating patterns are present more generally, including when news is neither good nor bad. While updating across all context and stake conditions is asymmetric and conservative, posteriors remain well approximated by those calculated using Bayes’ rule. I investigate further possible determinants of asymmetry and conservatism, finding that the former is sensitive to signal types and the latter is driven solely by non-updates. Most importantly these patterns are present across all contexts, cautioning against the interpretation of asymmetric updating or other deviations from Bayes’ rule as being motivated by psychological biases. JEL codes: C91, D83, D84
    Keywords: Beliefs, Bayes' rule, asymmetric belief updating, conservatism, overconfidence
    Date: 2017
  24. By: Armenak Antinyan (International Academy of Business and Economics, Tianjin University of Finance and Economics); Luca Corazzini (Department of Economics, University of Venice \"Ca’ Foscari\"); Elena D\'Agosotino (Department of Economics (SEAM), University of Messina.); Filippo Pavesi (Department of Economics (University of Verona))
    Abstract: We consider a principal-agent relationship, and study the interplay between communication and the opportunity cost of delegation in influencing the principal’s choice to delegate and the agent’s propensity to prove worthy of trust. In order to this, we adopt a lost-wallet game in which the agent that wishes to be trusted can send a free-form message to his counterpart in the initial stage of the game. We find that communication is effective since it attenuates the effect of the opportunity cost of delegation on the principal’s choice. In particular, when the opportunity cost of delegation is high, communication increases beliefs on the amount that the agent will return in case of delegation. Moreover, we find that non-precise statements of intent are more frequent in the presence of lower opportunity costs of delegation, in which case we document an illusion effect: the agent incorrectly expects non-precise communication to exert positive effects on principal’s beliefs and her propensity to delegate.
    Keywords: Communication, Promises, Trust, Delegation, Guilt, Lost-Wallet Game, Language Precision
    JEL: C7 C9 D03 D8
    Date: 2017–12
  25. By: Davide Dottori; Caterina Giannetti
    Abstract: We study the effect of time preference on donations relying on a panel dataset of Italian households. After developing an intertemporal model to derive theorethical implications on the relationship between impatience and altruistic donation, we address the issue empirically, relying on a quasiexperimental setting. We find that both the amount and the probability of donating (i.e. altruism) vary non linearly with impatience in intertemporal choice, eventually declining at higher level of impatience. Consistent with previous experimental evidence, these results support the view that psychological discounting matters for altruistic behaviour and, more in general, that individual parameters, often not directly observable, add up to tax policies to determine altruistic behaviours.
    Keywords: Two-limit Tobit, Generalized Propensity Score, Quasi-experiment, Altruism, Discounting
    JEL: C21 D03 D64
    Date: 2017–01–01
  26. By: Alonso, Ricardo; Câmara, Odilon
    Abstract: We consider a persuasion model in which a sender influences the actions of a receiver by selecting an experiment (public signal) from a set of feasible experiments. We ask: does the sender benefit from becoming an expert - observing a private signal prior to her selection? We provide necessary and sufficient conditions for a sender to never gain by becoming informed. Our key condition (sequential redundancy) shows that the informativeness of public experiments can substitute for the sender's expertise. We then provide conditions for private information to strictly benefit or strictly hurt the sender. Expertise is beneficial when the sender values the ability to change her experimental choice according to her private information. When the sender does not gain from expertise, she is strictly hurt when different types cannot pool on an optimal experiment.
    Keywords: Bayesian persuasion; experts.; information design
    JEL: D83
    Date: 2017–12
  27. By: Benoît Tarroux (Université de Rennes 1, CREM UMR CNRS 6211, France)
    Abstract: The aim of this paper is to investigate how people value tax progressivity. More precisely, I study the potential trade-off between improvement of the final income distribution and progressivity of the tax schedule. To do this, I designed survey experiments, in which respondents are asked to rank different taxation-redistribution schemes in different treatments differing in terms of information availability: (1) when only information about final incomes is provided; (2) when information about average tax rates is also available. Using a within-subject design, the instability of ranking between (1) and (2) indicates whether or not they value tax progressivity. The main result is that respondents have a strong preference for tax progressivity, that is, they accept to worsen the final income distribution in exchange for tax progressivity. This finding is robust to two experimental variations: First, the mere fact of providing a new information can not account for this finding; Second, providing information pieces about pre-tax incomes and tax liabilities does not affect the preference for progressive taxation.
    Keywords: Tax progressivity, Optimal taxation, Survey experiment
    JEL: D63 H21 C9
    Date: 2017–11
  28. By: Giuseppe Attanasi; Alessandro Bucciol; Simona Cicognani; Natalia Montinari
    Abstract: We present novel data on the perception of dishonesty in the public sector in Italy, from a survey we carried out in August 2017. They concern a sample of about 1,000 attendees at a mass-gathering music festival in Southern Italy, whose audience includes a relevant fraction of subjects residing in North Italy. The survey includes questions on perceived dishonesty at both an institutional and social dimension. We measure whether regional differences in the perception of dishonesty persist even when controlling for generalized trust, the quality of institutions at the regional level, as well as socio-demographic characteristics. We find that respondents from the North or living abroad perceive lower level of dishonesty in the public sector compared to respondents from the South. Once objective measures of corruption and governance at the regional level are accounted for, the geographical gap disappears, while generalized trust still matters. This evidence suggests that individual and geographic differences in generalized trust must be taken into account as they can affect the support for policy interventions aimed at reducing dishonesty in the public sector.
    Keywords: Cultural event; Corruption; Dishonest behavior; Generalized Trust; Italy.
    JEL: A13 D73 K42 Z13
    Date: 2017
  29. By: David Fielding (Department of Economics, University of Otago, New Zealand); Stephen Knowles (Department of Economics, University of Otago, New Zealand); Kirsten Robertson (Department of Marketing, University of Otago, New Zealand)
    Abstract: Existing studies suggest that alcohol dependency (or recovery from alcohol dependency) is associated with lower levels of empathy and generosity. We present results from a charitable donation experiment which shows that in a student population, higher levels of alcohol expenditure are associated with significantly less generosity. However, there is no significant association between alcohol expenditure and empathy (as measured by the Empathy Quotient Scale), which suggests that the relationship between alcohol expenditure on generosity is mediated through some other channel.
    Keywords: alcohol; generosity; empathy; Dictator Game
    JEL: D64 I19
    Date: 2017–12
  30. By: Markova-Nenova, Nonka; Wätzold, Frank
    Abstract: We investigate the willingness-to-pay (WTP) of German conventional milk buyers for ethical attributes of milk production through a choice experiment. Respondents have the highest WTP for animal welfare – free-stall plus summer pasture – followed by biodiversity conservation, support for small, below-average-income farms, and regional milk production. Respondents also have a positive WTP to support all farms but only in combination with regional production. We further find a positive WTP to support small farms in combination with tethering. This implies animal-welfare concerns are somewhat counterbalanced by fairness aspects. Our insights may support developing labels for ethical aspects of milk production.
    Keywords: dairy production, ethical attributes, fairness, choice modelling, latent class model, biodiversity, grassland
    JEL: Q13 Q18 Q5 Q51 Q57
    Date: 2017–12–01
  31. By: Teresa Molina Millan; Karen Macours
    Abstract: This paper starts from a review of RCT studies in development economics, and documents many studies largely ignore attrition once attrition rates are found balanced between treatment arms. The paper analyzes the implications of attrition for the internal and external validity of the results of a randomized experiment with balanced attrition rates, and proposes a new method to correct for attrition bias. We rely on a 10-years longitudinal data set with a nal attrition rate of 10 percent, obtained after intensive tracking of migrants, and document the sensitivity of ITT estimates for schooling gains and labour market outcomes for a social program in Nicaragua. We nd that not including those found during the intensive tracking leads to an overestimate of the ITT effects for the target population by more than 35 percent, and that selection into attrition is driven by observable baseline characteristics. We propose to correct for attrition using inverse probability weighting with estimates of weights that exploit the similarities between missing individuals and those found during an intensive tracking phase. We compare these estimates with alternative strategies using regression adjustment, standard weights, bounds or proxy information. JEL codes:
    Date: 2017
  32. By: Jonathan M.V. Davis
    Abstract: Many labor markets have adopted centralized clearinghouses using variants of the deferred acceptance algorithm (DAA) in hopes of improving market outcomes. Despite the prevalence of these clearinghouses, evidence of their impacts is limited. This paper presents the first evidence from a field experiment of the impacts of adopting the DAA on short- and long-run match outcomes from a new application of market design. I worked with Teach for America (TFA) to match high school teachers to schools in Chicago using the DAA at a series of âinterview days,â while keeping its original âFirst Offer Mechanismâ (FOM) unchanged for elementary school teachers. I show that the FOM gives almost no autonomy to teachers and promotes strategic early hiring in theory and in practice. In contrast, the variant of the DAA I implemented allows teachers to pick their most preferred offer and I show that it is non-manipulable via preferences by either teachers or schools. I use a difference-in-difference strategy - comparing changes in outcomes over time for TFA high school teachers to the change among TFA elementary school teachers in Chicago - to measure the impact of adopting the DAA on short-run outcomes, like matches, hiring, sorting across schools, and preferences over matches, and on three long-run outcomes: teachersâ retention, satisfaction, and performance. I find that adopting the DAA reduces attrition through teachersâ two-year commitment to TFA by 9.9 percentage points (pp). This effect is driven by a 7.2 pp reduction in attrition prior to TFAâs initial summer training. While teachers were happier, they were not more productive. Using TFAâs preferred performance metric, I estimate that teachers who could have been matched with the DAA were 0.3 standard deviations less effective in their first year, but were nearly equally effective in their second year. However, up to two thirds of the decline in first-year performance can be attributed to the DAA shifting teachers to schools with lower average performance. The decline is not explained by higher retention among lower performing teachers. Revealed preference suggests the DAA was better for TFA Chicago: it was used at all of its interview days in 2015 and 2016.
    JEL: I2 L3 M12
    Date: 2017–11–27
  33. By: Sephavand, Mohammad (Department of Economics); Shahbazian, Roujman (Individual’s Risk Attitudes in sub-Saharan Africa: Determinants and Reliability of Self-reported Risk in Burkina Faso)
    Abstract: Risk taking is an important topic in Africa, as access to financial institutions and social security is scarce. Data on risk attitudes in Africa is limited and the available data collected might not be reliable. We investigate the determinants of risk attitudes and the reliability of survey data in a sub-Saharan country, like Burkina Faso. Using a large representative panel survey of 31 677 individuals, we analyze the determinants and the test-retest reliability for different risk attitudes in general, traffic and financial matters. Our results show that determinants such as individual’s sex and age are significantly associated with willingness to take risk. Women have more reliable risk measures compared to men, older individuals have more reliable risk measures than younger individuals and those with high education exhibit a higher reliability in terms of their self-reported risk attitude compared to people with low education. Reliability differs across risk attitudes; risk-taking in traffic has the highest
    Keywords: risk attitudes; determinants of risk-taking; test-retest reliability; Burkina Faso
    JEL: D81 J10
    Date: 2017–11–06
  34. By: Brad R. Humphreys (West Virginia University, Department of Economics); Levi Perez (University of Oviedo, Department of Economics)
    Abstract: A growing body of research examines the effect of loss aversion (LA) on consumers’ decisions to watch or attend sporting events. Much of this research focuses on live game attendance. In contrast to the predictions of uncertainty of outcome hypothesis (UOH), loss-averse consumers prefer watching either potential upsets, or dominant performances by strong favorites, to events with uncertain outcomes. We test for LA vs. UOH effects in television viewing audience data for free over-the-air broadcasts of 304 Spanish football matches from 2008/09 to 2015/16. This setting generates substantial variation home team win probabilities because of the presence of Real Madrid CF and FC Barcelona. The results support the importance of LA/upset preferences: audience size for matches when home teams are large underdogs and when heavily favored are larger than for matches with uncertain outcomes, even when controlling for observable and unobservable factors affecting the number of viewers.
    Keywords: loss aversion, upset preference, consumer decisions, television audience, football
    JEL: L82 L15
    Date: 2017–11
  35. By: Werner Güth (Max Planck Institute for Collective Goods (Bonn) and LUISS (Rome)); Paul Pezanis-Christou (School of Economics, University of Adelaide)
    Abstract: We justify risk neutral equilibrium bidding in commonly known fair division games with incomplete information and counterfactual considerations via (i) optimally responding to individual conjectural beliefs concerning other bidders' behavior, what avoids counterfactual bidding, and (ii) determining the evolutionarily stable conjectural beliefs when fitness is measured by expected payoffs, what does not require common knowledge. Compared to auctions, fair division games feature interactive bidding contests in closed groups due to sharing the sales price equally among bidders. We axiomatically justify the game forms of first- and second-price fair division games, the former (latter) being over-bidding (under-bidding) proof, and we provide a condition for evolutionarily stable bidding to coincide with equilibrium bidding irrespectively of the number of bidders.
    Date: 2017–10
  36. By: Persichina, Marco
    Abstract: This work shows that defective behaviors from the cooperative equilibrium in the management of common resources can be fueled and triggered by the presence of agents with myopic behaviors; a similar phenomenon is also possible with cooperative motivations. This paper demonstrates and discusses that the apparent and detectable decay of the cooperative choices in the dilemmas of common resources are not an exclusive and indisputable signal of an escalation in free-riding intentions, but can also be an outcome of the present-biased preferences and myopic behaviors of the cooperative agents. In fact, within the context populated by conditional cooperators with a heterogeneous myopic discount factor, in the absence of information about agents’ intentions, the present-biased preferences can trigger a strategy that directs the community to excessively increase its harvesting level, even in presence of the other-regarding motives. The behavior implemented by naïve agents, even if done with cooperative intent, can activate a dynamic of cascading defections from the cooperative strategy within the harvester group. Therefore, a lowering of the cooperative behaviors can also be the effect of the absence of coordination instruments in response to the cognitive bias that influences human behaviors.
    Keywords: Present bias, Commons, Cooperation, Cascading Defections, Naïve Agent.
    JEL: C71 C73 D03 D90 Q20 Q29
    Date: 2016–07–20
  37. By: BEN-YASHAR, Ruth; KRAUSZ, Miriam; NITZAN, Shmuel
    Abstract: Students wish to increase the probability of being admitted to a prestigious school. Job candidates are interested in the probability of getting a desirable job. Defendants are concerned about the probability of being acquitted. In all such binary settings, the probability of the desirable outcome to individuals can be affected by their reputation. Applying a standard uncertain dichotomous choice benchmark setting, we focus on how the nature of the applied decision-making rule affects the individuals' incentive to invest in improvement of their reputation. Our main results establish that a democratic (non - democratic) decision-making system based on the simple majority (unanimity) rule ensures maximal (minimal) marginal productivity of reputation that increases (decreases) with the size of the decision-making committee.
    Keywords: decision making structure, investment in reputation
    JEL: D7
    Date: 2017–11
  38. By: Leonardo Becchetti (Department of Economics, Universitˆ Tor Vergata); Giacomo Degli Antoni (University of Milano-Bicocca); Stefania Ottone (University of Milano-Bicocca); Nazaria Solferino (University of Calabria-Unical)
    Abstract: This is an online appendix
    Date: 2017–12
  39. By: Alessandro Bucciol (Department of Economics (University of Verona)); Alessio Hu (University of Verona); Luca Zarri (Department of Economics (University of Verona))
    Abstract: A growing empirical literature documents that managerial risk taking is linked to an individual’s history of relevant shocks. Using male soccer data on 32 teams and 2160 matches covering eight seasons of the Italian premier league (“Serie A”), we provide clean evidence that change in managerial risk taking – proxied by a team coach’s decision to alter the initial system of play in a match – significantly depends on having experienced wins or defeats in the recent past. In particular, we show that prior shocks matter, as change in risk taking strongly and positively depends on prior defeats. Single defeats and heavy defeats make the coaches more risk seeking (opting for more offensive systems of play). In contrast, passing through multiple defeats in a row and experiencing single wins are associated with more cautious risk-taking behavior. Changing risk taking, though, does not seem to pay off in terms of match outcomes. Finally, we interestingly document that in top teams managerial risk taking is not sensitive at all to prior shocks, regardless of their positive or negative direction.
    Keywords: Managerial Risk Taking, Prior Shocks, Field Data, Soccer
    JEL: D81 D91
    Date: 2017–11
  40. By: Kittsteiner, Thomas; Ott, Marion; Steinberg, Richard
    Abstract: We investigate if and how revenue-maximizing auctioneers restrict combinatorial bidding in the presence of auctioneer competition. Two sellers offer the same set of two heterogeneous items to six bidders in a VCG mechanism. Each bidder desires either the first item, the second item, or the package of both items. First, each seller decides on which packages to allow bids. Then, each bidder selects which of the two sellers’ auctions to participate in. We find that, in contrast to a monopolistic seller, duopolistic sellers do not both offer an unrestricted VCG mechanism, i.e., a combinatorial auction. Rather they segment the market via their respective choice of allowable package bids: One seller attracts bidders who desire a single item; the other seller attracts bidders who desire both items.
    Keywords: Auctioneer competition,Combinatorial auctions,VCG mechanism
    JEL: D44 C72 D82
    Date: 2017

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