nep-exp New Economics Papers
on Experimental Economics
Issue of 2018‒06‒18
27 papers chosen by
Daniel Houser
George Mason University

  1. The health-taste trade-off in consumer decision making: An experimental approach By Georgia S. Papoutsi; Stathis Klonaris; Andreas C. Drichoutis
  2. The (Un)compromise Effect By Ekström, Mathias
  3. On the design and implementation of environmental conservation mechanisms : Evidence from field experiments By Kitesa, Rahel
  4. Common-Value Public Goods and Informational Social Dilemmas By Caleb A. Cox; Brock Stoddard
  5. Cooperation Creates Special Moral Obligations By Alexander W. Cappelen; Varun Gauri; Bertil Tungodden
  6. Bridging the intention-behavior gap? The effect of plan-making prompts on job search and employment By Martin Abel; Rulof Burger; Eliana Carranza; Patrizio Piraino
  7. Determining the Extent of Statistical Discrimination: Evidence from a field experiment in India By Islam, Asadul; Pakrashi, Debayan; Wang, Liang Choon; Zenou, Yves
  8. Fairness in Winner-Take-All Markets By Bjorn Bartling; Alexander Cappelen; Mathias Ekström; Erik Ø. Sørensen; Bertil Tungodden
  9. Sales Performance and Social Preferences By Essl, Andrea; von Bieberstein, Frauke; Kosfeld, Michael; Kröll, Markus
  10. Fairness in Winner-Take-All Markets By Bartling, Björn; Cappelen, Alexander W; Ekström, Mathias; Sørensen, Erik Ø.; Tungodden, Bertil
  11. A Behavioral Theory of Allocation in the Dictator Game By Osório, António (António Miguel)
  12. Social accountability and service delivery: Experimental evidence from Uganda By Fiala, Nathan; Premand, Patrick
  13. Augmenting Markets with Mechanisms By Duffie, Darrell; Antill, Samuel
  14. The Influence of Bribery and Relative Reciprocity on a Physician's Prescription Decision - An Experiment By Vanessa Hilleringmann
  15. Group size effects in social evolution By Nöldeke, Georg; Peña, Jorge
  16. Conditional Cooperation:Review and Refinement By Christian Thöni; Stefan Volk
  17. Nudging financial and demographic literacy: experimental evidence from an Italian Trade Union Pension Fund By Francesco C. Billari; Carlo A. Favero; Francesco Saita
  18. Negotiating a Better Future: How Interpersonal Skills Facilitate Inter-Generational Investment By Ashraf, Nava; Bau, Natalie; Low, Corinne; McGinn, Kathleen
  19. Trust in State and Non-State Actors: Evidence from Dispute Resolution in Pakistan By Daron Acemoglu; Ali Cheema; Asim I. Khwaja; James A. Robinson
  20. Less Is Not More: Information Presentation Complexity and 401(k) Planning Choices By Cardella, Eric; Kalenkoski, Charlene M.; Parent, Michael
  21. The Effect of Economic Consequences on Social Judgment and Choice: Reward Interdependence and the Preference for Sociability versus Competence By Belmi, Peter; Pfeffer, Jeffrey
  22. Long-lasting effects of relative age at school By Lionel Page; Dipanwita Sarkar; Juliana Silva-Goncalves
  23. Dynamic Legislative Bargaining with Veto Power: Theory and Experiments By Nunnari, Salvatore
  24. Who benefits from universal child care? Estimating marginal returns to early child care attendance By Thomas Cornelissen; Christian Dustmann; Anna Raute; Uta Schönberg
  25. Trust and privacy: How trust affects individuals' willingness to disclose personal information By Heldman, Christina; Enste, Dominik
  26. Inequity Aversion, Welfare Measurement and the Gini Index By Ulrich Schmidt; Philipp Christoph Wichardt
  27. Experiments on macroeconomics: methods and applications By Camille Cornand; Frank Heinemann

  1. By: Georgia S. Papoutsi (Agricultural Economics Research Institute, Hellenic Agricultural Organization “Demeter”); Stathis Klonaris (Department of Agricultural Economics & Rural Development, Agricultural University of Athens); Andreas C. Drichoutis (Department of Agricultural Economics & Rural Development, Agricultural University of Athens)
    Abstract: Understanding human eating behaviour can highlight avenues for intervention by policy makers and industry. With this goal in mind, we evaluate the claim that consumers are willing to trade-off taste for health benefits, by performing a controlled laboratory experiment where we simultaneously auctioned two different functional snack products: an energy bar and a novel carob-based snack. We varied on a between-subjects basis the order of taste and product information which was communicated to participants through informational labeling. We also investigated in a within-subjects design the effect of expectations for the snacks, blind tasting and product information on sensory evaluations and on willingness to pay. Results indicate that tasting and information have economically and statistically significant effects on overall food assessment with respect to prior product expectations. Provision of information shortly before consumption, makes consumers less strict on their taste evaluation and increases their purchasing intent in order to improve the healthfulness of their diet. When information is provided after taste, it only exerts influence with respect to the carob-based snack. Furthermore, blind tasting has a negative effect on liking, irrespective of the product being evaluated. Finally, the econometric results reveal that older respondents tend to bid higher for functional snacks.
    Keywords: laboratory experiments, sensory evaluations, functional snack, labeling, willingness to pay
    JEL: C91 D12 D44 M31
    Date: 2018
  2. By: Ekström, Mathias (Department of Economics, NHH – Norwegian School of Economics)
    Abstract: The current study provides the first experimental test of the compromise effect, i.e. the tendency to choose middle options, in a naturally occurring setting. Simultaneously, I propose and evaluate a novel nudge intended to stimulate active choice—the (un)compromise effect—a compromise effect without an explicit middle option. 63,494 recipients of a mail fundraiser were randomly assigned to one of three sets of suggested donations: [$10, $50, $100, $__ ]; [$10, $50, $100, $250, $500, $__ ]; or [$10, $500, $__ ]. The results support both the compromise effect and the (un)compromise effect: extending the range increased the fraction donating $100 as well as the average donation—independent of whether the middle suggested donations were present or not. Hence, by only providing informative end points, organizations can affect decision-making and at the same time promote individuality through active choice. The results also shed light on why suggested alternatives affect choice in general: they reduce the cognitive cost of figuring out what actions are appropriate.
    Keywords: Choice architecture; Compromise effect; Consumer choice; Field experiment; Philanthropy
    JEL: C93 D03 D64
    Date: 2018–05–07
  3. By: Kitesa, Rahel (Tilburg University, School of Economics and Management)
    Abstract: This doctoral dissertation consists of three chapters on the design and implementation of environmental conservation mechanisms using economic experiments. The first chapter examines how variations in information and context affect the outcomes of valuation using field experiment. The chapter shows the evidence that people’s contributions increase significantly and substantially if attention is drawn to their own responsibility in the deforestation and desertification process, suggesting, the ‘responsibility effect’ is important in the valuation-an extension of the previous examination on the role of behavior in valuation. The second chapter revisits Payment for Ecosystem Services (PES) and the determination of the optimal price by comparing the performance of Uniform Price Auctions (UPA) and Take-it-or-leave (TILI) mechanism. Using both laboratory and field experiments it is found that given the same level of price, the sign-up rate to a PES project differs between the two mechanisms. More subjects are willing to sign-up in TILI than was predicted in UPA. The findings also suggest that this disparity can be explained by the hypothesis of more deliberate decision making in UPA than TILI. The third chapter examines how trust and trustworthiness evolve in the community (engaged in public good provision) to predict the sustainability of common good conservation. The chapter deals with trust and trustworthiness, as important social norms, between the cooperators and non- cooperator in common good provision. The findings of the chapter support the hypothesis that higher trust is placed on the cooperators than non-cooperators with payoff consequences-contrary to standard economic prediction. The cooperator type receives more money, but sends and returns less to non-cooperators which allow the cooperator type to receive a consistently higher payoff- which was predicted by the Ostrom’s theory of collective actions.
    Date: 2018
  4. By: Caleb A. Cox; Brock Stoddard
    Abstract: We experimentally examine the role of private information and communication in a public goods environment with uncertain returns. We consider a public goods game in which the Marginal Per Capita Return (MPCR) is either high or low. Before contributing, three players observe private signals correlated with the true MPCR and then send cheap talk messages to one another. There are social gains from truthful communication, but a private incentive to exaggerate. We compare treatments with and without cheap talk, finding that messages are largely truthful and influence contribution decisions. In further treatments, we increase the incentive to exaggerate and find reduced truthfulness and smaller gains from communication Key Words: public goods, experiment, information, cheap talk, game theory, cooperation
    JEL: C72 D83 H41
    Date: 2018
  5. By: Alexander W. Cappelen; Varun Gauri; Bertil Tungodden
    Abstract: A large-scale economic experiment, conducted on a representative sample of the US popula- tion, shows that cooperation creates special moral obligations. Participants in the experiment, acting as impartial spectators, transferred significantly more money to an unlucky worker when two individuals had cooperated than when they had worked independently. We further show that the effect of cooperation is strongly associated with political affiliation, with Democrats attaching significantly more importance to cooperation as a source of moral obligation than Republicans. Our findings shed light on the foundations of redistributive preferences and may contribute to explain the often observed asymmetry in moral concern for different groups of individuals, both nationally and internationally.
    Keywords: cooperation, distributive justice, redistribution
    Date: 2018
  6. By: Martin Abel (Middlebury College); Rulof Burger (Department of Economics, Stellenbosch University); Eliana Carranza (World Bank); Patrizio Piraino (University of Cape Town)
    Abstract: We test the effects of plan-making on job search and employment. In a field experiment with unemployed youths, participants who complete a detailed job search plan increase the number of job applications submitted (15%) but not the time spent searching, consistent with intention-behavior gaps observed at baseline. Job seekers in the plan-making group diversify their search strategy and use more formal search channels. This greater search efficiency and effectiveness translate into more job offers (30%) and employment (26%). Weekly reminders and peer-support sub-treatments do not improve the impacts of plan-making, suggesting that limited attention and accountability are unlikely mechanisms.
    Keywords: Action Plan; Job Search; Active Labor Market Policy
    JEL: J64 J68 C93 D91
    Date: 2018
  7. By: Islam, Asadul; Pakrashi, Debayan; Wang, Liang Choon; Zenou, Yves
    Abstract: In order to determine the relative size of taste-based and statistical discrimination, we develop a simple model to distinguish these two theories. We then test the model's predictions of caste-based discrimination by conducting a field experiment that elicits patients' rankings of physicians of different castes and years of experience in the healthcare market in India. We also run a survey and conduct lab-in-the-field experiments to measure patients' attitudes towards different caste groups. We find that 47 to 80 percent of patients statistically discriminate physicians. The overwhelming size of statistical discrimination has important implications for the use of Affirmative Action policies in India.
    Keywords: caste; discrimination; field experiment; health
    JEL: I15 J15 O12
    Date: 2018–05
  8. By: Bjorn Bartling (University of Zurich); Alexander Cappelen (Norwegian School of Economics); Mathias Ekström (Norwegian School of Economics); Erik Ø. Sørensen (Norwegian School of Economics); Bertil Tungodden (Norwegian School of Economics)
    Abstract: The paper reports the first experimental study on people’s fairness views on extreme income inequalities arising from winner-take-all reward structures. We find that the majority of participants consider extreme income inequality generated in winner-take-all situations as fair, independent of the winning margin. Spectators appear to endorse a “factual merit” fairness argument for no redistribution: the winner deserves all the earnings because these earnings were determined by his or her performance. Our findings shed light on the present political debate on redistribution, by suggesting that people may object less to certain types of extreme income inequality than commonly assumed.
    Keywords: winner-take-all reward structures, fairness, income inequality
    JEL: C91 D63
    Date: 2018–05
  9. By: Essl, Andrea (University of Bern); von Bieberstein, Frauke (University of Bern); Kosfeld, Michael (Goethe University Frankfurt); Kröll, Markus
    Abstract: We use an incentivized experimental game to uncover heterogeneity in otherregarding preferences among salespeople in a large Austrian retail chain. Our results show that the majority of agents take the welfare of others into account but a significant fraction reveals self-regarding behavior. Matching individual behavior in the game with firm data on sales performance shows that higher concern for others is significantly associated with higher revenue per customer. At the same time, it is also associated with fewer sales per day. Both effects offset each other, so that the overall association with total sales revenue becomes insignificant. Our findings highlight the nuanced role of self- vs. other-regarding concerns in sales contexts with important implications for management and marketing research.
    Keywords: other-regarding preferences, sales performance, experimental games
    JEL: C91 D91 M31
    Date: 2018–04
  10. By: Bartling, Björn (Department of Economics, NHH – Norwegian School of Economics); Cappelen, Alexander W (Department of Economics, NHH – Norwegian School of Economics); Ekström, Mathias (Department of Economics, NHH – Norwegian School of Economics); Sørensen, Erik Ø. (Department of Economics, NHH – Norwegian School of Economics); Tungodden, Bertil (Department of Economics, NHH – Norwegian School of Economics)
    Abstract: The paper reports the first experimental study on people’s fairness views on extreme income inequalities arising from winner-take-all reward structures. We find that the majority of participants consider extreme income inequality generated in winner-take-all situations as fair, independent of the winning margin. Spectators appear to endorse a “factual merit” fairness argument for no redistribution: the winner deserves all the earnings because these earnings were determined by his or her performance. Our findings shed light on the present political debate on redistribution, by suggesting that people may object less to certain types of extreme income inequality than commonly assumed.
    Keywords: Winner-take-all reward structures; Fairness; Income inequality
    JEL: C91 D63
    Date: 2018–05–07
  11. By: Osório, António (António Miguel)
    Abstract: This paper attempts to explain the behavior observed in the dictator game without explicitly assuming a utility function. Alternatively, I consider the representative behavior of a society composed of heterogeneous individuals in terms of altruism and self-interest. Based on these two principles, I present an allocation that aggregates the society's preferences. The result depends crucially on the value of the resource under dispute for the dictator. Even if the value of the resource is extremely important for the dictator, the dictator cannot justify a share of the resource larger than 3/4 of the total. An allocation proposing more than this share of the resource cannot reach social consensus. On the other extreme, if the value of the resource is sufficiently unimportant for the society, an equal split of the resource emerges in the limit. Keyword: Dictator Game; Allocation Rules; Altruism; Self-interest; Conflict Resolution. JEL classifi cation: C91, D03, D63, D74.
    Keywords: Disseny d'experiments, Economia del benestar, Decisió de grup, 33 - Economia,
    Date: 2018
  12. By: Fiala, Nathan; Premand, Patrick
    Abstract: Corruption and mismanagement of public resources can affect the quality of government services and undermine growth. Can citizens in poor communities be empowered to demand better-quality public investments? We look at whether providing social accountability training and information on project performance can lead to improvements in local development projects. The program we study is unique in its size and integration in a national program. We find that offering communities a combination of training and information on project quality leads to significant improvements in household welfare. However, providing either social accountability training or project quality information by itself has no welfare effect. These results are concentrated in areas that are reported by local officials as more corrupt or mismanaged, suggesting local agents have significant information about where corruption and mismanagement is worse. We show evidence that the impacts come in part from community members increasing their monitoring of local projects, making more complaints to local and central officials and increasing cooperation. We also find modest improvements in people's trust in the central government. The results suggest that government-led, large-scale social accountability programs can strengthen communities' ability to address corruption and mismanagement as well as improve services.
    Keywords: social accountability,community training,scorecards,corruption,service delivery
    JEL: D7 H4 O1
    Date: 2018
  13. By: Duffie, Darrell (Stanford University); Antill, Samuel (?)
    Abstract: We compute optimal mechanism designs for each of a sequence of size-discovery sessions, at which traders submit reports of their excess inventories of an asset to a session operator, which allocates transfers of cash and the asset. The mechanism design induces truthful reports of desired trades and perfectly reallocates the asset across traders. Between sessions, in a dynamic auction market, traders strategically lower their price impacts by shading their bids, causing socially costly delays in rebalancing the asset across traders. As the expected frequency of size-discovery sessions is increased, market depth is further lowered, offsetting the efficiency gains of the size-discovery sessions. Adding size-discovery sessions to a double-auction market has no social value, beyond that of an initializing session. If the mechanism design relies on the double-auction market for information from prices, bidding incentives are further weakened, strictly reducing overall market efficiency.
    Date: 2017–12
  14. By: Vanessa Hilleringmann (Paderborn University)
    Abstract: Focusing on a physician's relationship to a briber and a patient, this experiment analyzes the influence of a bribe on a physician's treatment decision. We conduct a partner treatment, in which briber and physician play together for the whole experiment and a stranger treament, where briber and physician are re-matched every period. With the help of the two treatments, we vary the relative reciprocity between the physician and the two other actors, briber and patient. Additionally we use a follow up questionnaire to measure the behavioral motivation of the participants. We find that reciprocity leads to bribery relationships: In the partner treatment physicians act corruptly more often. Just the variation of the relative reciprocity between the treatments shows differences in the behavior of the subjects. Differences in the participants' preferences deliver no explanation for their behavior in our experiment.
    Keywords: Corruption, Reciprocity, Physician-Patient Relationship
    JEL: I12 I18 D73
    Date: 2018–05
  15. By: Nöldeke, Georg; Peña, Jorge
    Abstract: How the size of social groups affects the evolution of cooperative behaviors is a classic question in evolutionary biology. Here we investigate group size effects in evolutionary games in which individuals choose whether to cooperate or defect. We find that increasing the group size decreases the proportion of cooperators at both stable and unstable rest points of the replicator dynamics. This implies that larger group sizes can have negative effects (by reducing the amount of cooperation at stable polymorphisms) and positive effects (by enlarging the basin of attraction of more cooperative outcomes) on the evolution of cooperation. These two effects can be simultaneously present in games whose evolutionary dynamics features both stable and unstable rest points, such as public goods games with participation thresholds. Our theory recovers and generalizes previous results and is applicable to a broad variety of social interactions that have been studied in the literature.
    Keywords: evolution of cooperation; evolutionary game theory; replicator dynamics; public goods games
    JEL: C73 H41
    Date: 2018–05
  16. By: Christian Thöni; Stefan Volk
    Abstract: Fischbacher, Gächter, and Fehr (2001), henceforth FGF, introduced an experimental design to measure conditional cooperation in public goods games. We collected data from 17 replication studies of FGF and observed that the criteria used to identify types are not always consistent. We refine FGF’s definition of types to resolve ambiguous cases in FGF and its replications. Using our new classification scheme, we find in our combined data set with more than 7,000 individual observations that FGF’s original findings are by-and-large stable: conditional cooperation is the predominant pattern; free-riding is frequent, while non-minimal, unconditional cooperation is very rare.
    Keywords: Conditional cooperation; public goods game; replication
    JEL: H41 C91 C72
    Date: 2018–06
  17. By: Francesco C. Billari; Carlo A. Favero; Francesco Saita
    Abstract: In this article, we present and test experimentally a low-cost, Internet-based, financial literacy program that we designed for implementation with the largest industrial pension fund in Italy. The program, Finlife (Financial Education and Planning for a Long Life) included 1) an instructional video and materials on financial, and demographic, literacy, provided online; 2) an experimental design that explicitly allows to evaluate the impact of the online content on financial and demographic literacy, as well as on short-term behavioral changes; 3) a follow-up that allows to assess the stability of some of the experimental outcomes. Finlife was designed to be a low-cost and scalable approach to increase financial and demographic literacy, consistently with a ‘nudge’ philosophy. Our findings show that Finlife delivered a substantially and statistically significant increase in financial and demographic literacy, as well as a push towards seeking more information on financial markets and choices related to financial planning.
    Keywords: financial literacy, demographic literacy, field experiment, Finlife
    JEL: D91
    Date: 2017
  18. By: Ashraf, Nava; Bau, Natalie; Low, Corinne; McGinn, Kathleen
    Abstract: Using a randomized control trial, we examine whether offering adolescent girls non-material resources - specifically, negotiation skills -can improve educational outcomes in a low-income country. In so doing, we provide the first evidence on the effects of an intervention that increased non-cognitive, interpersonal skills during adolescence. Long-run administrative data shows that negotiation training significantly improved educational outcomes over the next three years. The training had greater effects than two alternative treatments (offering girls a safe physical space with female mentors and offering girls information about the returns to education), suggesting that negotiation skills themselves drive the effect. Further evidence from a lab-in-the-field experiment, which simulates parents' educational investment decisions, and a midline survey suggests that negotiation skills improved girls' outcomes by moving households' human capital investments closer to the efficient frontier. This is consistent with an incomplete contracting model, where negotiation allows daughters to strategically cooperate with parents.
    Keywords: Gender; Human Capital; Intrahousehold Allocation; non-cognitive skills; strategic cooperation
    JEL: D13 I24 J16 O15
    Date: 2018–05
  19. By: Daron Acemoglu; Ali Cheema; Asim I. Khwaja; James A. Robinson
    Abstract: Lack of trust in state institutions, often due to poor service provision, is a pervasive problem in many developing countries. If this increases reliance on non-state actors for crucial services, the resulting self-reinforcing cycle can further weaken the state. This paper examines whether such a cycle can be disrupted. We focus on dispute resolution in rural Punjab, Pakistan. We find that providing information about reduced delays in state courts leads to citizens reporting higher willingness to use state courts and to greater fund allocations to the state in two lab-in-the-field games designed to measure trust in state and non-state actors in a high-stakes setting. More interestingly, we find indirect effects on non-state actors. After receiving state positive information, respondents report lower likelihood of using non-state institutions and reduce funds allocated to them in field games. Furthermore, we find similar direct and indirect effects on a battery of questions concerning people’s beliefs about these actors, including a decreased allegiance to the non-state actor. We rationalize these results with a model of motivated reasoning whereby reduced usage of non-state institutions makes people less likely to hold positive views about them. These results indicate that, despite substantial distrust of the state in Pakistan, credible new information can change beliefs and behavior. The feedback loop between state ineffectiveness and the legitimacy of non-state actors may be reversible.
    JEL: C91 C93 D02 D73 D74 D83 K40 O17 P16
    Date: 2018–05
  20. By: Cardella, Eric (Texas Tech University); Kalenkoski, Charlene M. (Texas Tech University); Parent, Michael (University of Texas at Austin)
    Abstract: This paper presents the results of an experiment that is designed to examine how information presentation and complexity impact retirement-savings behavior. The experiment is performed twice, using both a Qualtrics panel of new employees and a sample of business school students. In this experiment, participants first were provided with either a long or short description of a hypothetical employer-sponsored 401(k) plan. Then they were asked whether they would enroll in the hypothetical plan and, if so, what percentage of their salary they would contribute. If they chose to contribute, they were asked how they would like to allocate their contribution between stocks and bonds. Participants were offered the option to stick with pre-assigned default options such as a 4% contribution and a 50-50 stocks and bonds split. The hypothesis is that providing concise information with helpful recommendations would improve choices over providing lengthy and detailed information. However, controlling for demographic and other factors, this hypothesis was not supported by the data, for either the new employees or the business school students. Thus, the data suggest that simplifying the presentation of retirement-plan information to employees is unlikely to result in vastly improved retirement-planning choices.
    Keywords: retirement planning, 401(k), information complexity, nudge, choice architecture
    JEL: G11 H31 J32 D83 C90
    Date: 2018–05
  21. By: Belmi, Peter (University of Virginia); Pfeffer, Jeffrey (Stanford University)
    Abstract: Competence and sociability (warmth) are fundamental dimensions of social judgment in organizations. However, these qualities are frequently seen as negatively related, with mixed evidence on which is more important. In three studies (N = 993) we investigated the effects of reward interdependence on the preference for sociability versus competence. We predicted that reward interdependence would elicit a more instrumental, calculative mindset, which in turn, would lead individuals to value competence more. Study 1 surveyed working adults who were in actual work groups and found that those who worked in more (vs. less) reward interdependent environments were more likely to think instrumentally and calculatively when considering potential colleagues. This mindset, in turn, was associated with a greater tendency to value competence over sociability. Studies 2 and 3 used an experimental design and found that when people imagined or anticipated working in a situation in which their economic outcomes depended in part on others, they were more likely to adopt an instrumental focus and choose a "competent jerk" over a "lovable fool". These results call into question a vast social judgment literature that has made claims about the importance of sociability and related constructs without considering the context, and particularly the reward interdependence, often inherent in organizational contexts.
    Date: 2018
  22. By: Lionel Page; Dipanwita Sarkar; Juliana Silva-Goncalves
    Abstract: We investigate the long term effects on behaviour of relative age at school. We conduct an online experimental survey with a sample of 1007 participants aged 24 to 60 years old, who were born at most two months before or after the school entry cut-off date in four Australian states. We find that participants who were among the oldest in the classroom throughout their school years display higher self-confidence in the adult age compared to those who were among the youngest. They are also more willing to enter in some form of competition, declare taking more risk in a range of domains in their life and being more trusting of other people. These results offer important insights on the possible behavioural mechanisms underlying the differences in career outcomes between people who were relatively young and old at school. They are also relevant for the prospective design of policies to mitigate inequalities created by school entry cut-off dates.
    Keywords: Relative age, education, behavioural traits, online experiment
    JEL: D91 H75 I24
    Date: 2018–06–06
  23. By: Nunnari, Salvatore
    Abstract: In many domains, committees bargain over a sequence of policies and a policy remains in effect until a new agreement is reached. In this paper, I argue that, in order to assess the consequences of veto power, it is important to take into account this dynamic aspect. I analyze an infinitely repeated divide-the-dollar game with an endogenous status quo policy. I show that, irrespective of legislators' patience and the initial division of the dollar, policy eventually gets arbitrarily close to full appropriation by the veto player; that convergence to this outcome is slower, and the power to veto less valuable, in more patient committees; and that the veto player supports reforms that decrease his allocation. These results stand in sharp contrast to the properties of models where committees bargain over a single policy. The main predictions of the theory find support in controlled laboratory experiments.
    Keywords: Dynamic Legislative Bargaining; Endogenous Status Quo; Laboratory experiments; Markov perfect equilibrium; Veto Power
    JEL: C72 C73 C78 C92 D71 D72 D78
    Date: 2018–05
  24. By: Thomas Cornelissen (University of York); Christian Dustmann (University College London, CReAM); Anna Raute (Queen Mary University); Uta Schönberg (University College London, CReAM)
    Abstract: In this paper, we examine the heterogeneous treatment effects of a universal child care (preschool) program in Germany by exploiting the exogenous variation in attendance caused by a reform that led to a large staggered expansion across municipalities. Drawing on novel administrative data from the full population of compulsory school entry examinations, we find that children with lower (observed and unobserved) gains are more likely to select into child care than children with higher gains. This pattern of reverse selection on gains is driven by unobserved family background characteristics: children from disadvantaged backgrounds are less likely to attend child care than children from advantaged backgrounds but have larger treatment effects because of their worse outcome when not enrolled in child care.
    Keywords: Universal child care, child development, marginal treatment effects
    JEL: J13 J15 I28
    Date: 2018–06
  25. By: Heldman, Christina; Enste, Dominik
    Abstract: Even though people regularly express concern about sharing personal information online and fear a loss of privacy, their behavior seldom matches their opinions - A phenomenon called Privacy Paradox and researched for over 20 years. Several influencing factors have been identified. A central one of these is trust, which strongly impacts the relationship between general concerns and actual behavior. This study investigates the impact of trust on the decision to disclose sensitive information online and examines the antecedents of that trust, focusing on the disposition to trust using a computerized laboratory experiment. Results indicate that dispositional trust determines the level of trust placed in the recipient of private data, especially when the person is unfamiliar with this recipient. This knowledge can be useful for business and politics in the design of marketing strategies and consumer protection policies. The study furthermore provides valuable insights on the relatedness between trust measures, which are discussed.
    JEL: C90 D91 O33
    Date: 2018
  26. By: Ulrich Schmidt; Philipp Christoph Wichardt
    Abstract: Over the last decades, research in behavioural economics has demonstrated that individual welfare (utility), as relevant for economic decision making, depends not only on absolut but also on distributional aspects. Moreover, evidence is gathering that something similar holds for aggregate welfare, i.e. that GDP alone is an insufficient predictor for various supposedly welfare related variables on a societal level. This note shows that distributional concerns on an aggregate level can indeed be derived from distributional concerns on an individual level: integrating individual inequity aversion into a utilitarian social welfare function yields a simple welfare measure which comprises both GDP and income inequality as measured by the Gini index.
    Keywords: Gini index, inequality, welfare
    JEL: D01 D63
    Date: 2018
  27. By: Camille Cornand (Univ Lyon, CNRS, GATE UMR 5824, F-69131 Ecully, France); Frank Heinemann (Technische Universität Berlin, Chair of Macroeconomics, H 52 - Straße des 17. Juni 135 - 10 623 Berlin, Germany)
    Abstract: This chapter lays out in which respects laboratory experiments can be useful for macroeconomics and discusses some of the methods used in such experiments.
    Keywords: laboratory experiments, macroeconomics
    JEL: C9
    Date: 2018

This nep-exp issue is ©2018 by Daniel Houser. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.