nep-exp New Economics Papers
on Experimental Economics
Issue of 2018‒07‒23
23 papers chosen by

  1. Risky Choices and Solidarity: Why Experimental Design Matters By Strobl, Renate; Wunsch, Conny
  2. Using Ethical Dilemmas to Predict Antisocial Choices with Real Payoff Consequences: An Experimental Study By Dickinson, David L.; Masclet, David
  3. Green, yellow or red lemons? Framed field experiment on houses energy labels perception. By Edouard Civel; Nathaly Cruz-Garcia
  4. The Economic Relevancy of Risk Preferences Elicited Online and With Low Stakes By Gibson, John; Johnson, David
  5. An experimental method for the elicitation of implicit attitudes to privacy risk By Frik, Alisa; Gaudeul, Alexia
  6. Trust and Delegated Investing: A Money Doctors Experiment By Germann, Maximilian; Loos, Benjamin; Weber, Martin
  7. Voting as a War of Attrition By Kwiek, Maksymilian; Marreiros, Helia; Vlassopoulos, Michael
  8. Incentives By James C. Cox; Vjollca Sadiraj
  9. Arbitrage Opportunities: Anatomy and Remediation By Peter, Bossaerts; Jason, Shachat; Kuangli, Xie
  10. The effect of gender-targeted conditional cash transfers on household expenditures: evidence from a randomized experiment By Alex Armand; Orazio Attanasio; Pedro Carneiro; Valérie Lechene
  11. The Signal of Applying for a Job under a Vacancy Referral Scheme By Van Belle, Eva; Caers, Ralf; De Couck, Marijke; Di Stasio, Valentina; Baert, Stijn
  12. Testing the Waters: Behavior across Participant Pools By Snowberg, Erik; Yariv, Leeat
  13. The St. Petersburg Paradox Despite Risk-seeking Preferences: An Experimental Study By James C. Cox; Eike B. Kroll; Marcel Lichters; Vjollca Sadiraj; Bodo Vogt
  14. Inclusive Cognitive Hierarchy in Collective Decisions By Yukio Koriyama; Ali Ozkes
  15. Looking at the Bright Side: The Motivation Value of Overconfidence By Chen, Si; Schildberg-Hörisch, Hannah
  16. Group Size Effect and Over-Punishment in the Case of Third Party Enforcement of Social Norms By Kenju Kamei
  17. Challenges in Adolescent Reading Intervention: Evidence from a Randomized Control Trial By Naihobe Gonzalez; Sophie MacIntyre; Pilar Beccar-Varela
  18. Permutation tests for equality of distributions of functional data By Federico A. Bugni; Joel L. Horowitz
  19. Who benefits from universal child care? Estimating marginal returns to early child care attendance By Cornelißen, Thomas; Dustmann, Christian; Raute, Anna; Schönberg, Uta
  20. Is joy an emotional function of age and gender? By Alvi, Mohsin; Mirza, Mohammad Haris; Ikram, Midra; Khoso, Ameer Bux; Mukhtar, Amber
  21. Less cheating? The effects of prefilled forms on compliance behavior By Fochmann, Martin; Müller, Nadja; Overesch, Michael
  22. Attention and Selection Effects By Sandro Ambuehl; Axel Ockenfels; Colin Stewart
  23. Misperceived Social Norms: Female Labor Force Participation in Saudi Arabia By Leonardo Bursztyn; Alessandra L. González; David Yanagizawa-Drott

  1. By: Strobl, Renate (University of Basel); Wunsch, Conny (University of Basel)
    Abstract: Negative income shocks can either be the consequence of risky choices or random events. A growing literature analyzes the role of responsibility for neediness for informal financial support of individuals facing negative income shocks based on randomized experiments. In this paper, we show that studying this question involves a number of challenges that existing studies either have not been aware of, or have been unable to address satisfactorily. We show that the average effect of free choice of risk on sharing, i.e. the comparison of mean sharing across randomized treatments, is not informative about the behavioural effects and that it is not possible to ensure by the experimental design that the average treatment effect equals the behavioural effect. Instead, isolating the behavioural effect requires conditioning on risk exposure. We show that a design that measures subjects preferred level of risk in all treatments allows isolating this effect without additional assumptions. Another advantage of our design is that it allows disentangling changes in giving behaviour due to attributions of responsibility for neediness from other explanations. We implement our design in a lab experiment we conducted with slum dwellers in Nairobi that measures subjects’ transfers to a worse-off partner both in a setting where participants could either deliberately choose or were randomly assigned to a safe or a risky project. We find that free choice matters for giving and that the effects depend on donors’ risk preferences but that attributions of responsibility play a negligible role in this context.
    Keywords: Solidarity; risk taking; experimental design
    JEL: C91 D63 D81 O12
    Date: 2018–06–14
  2. By: Dickinson, David L. (Appalachian State University); Masclet, David (University of Rennes)
    Abstract: Anti-social behaviours are costly to organizations, and the ability to identify predictors of such behaviours can be valuable. In this paper, we used a within-subjects laboratory design to study choices in the well-known (hypothetical) Trolley problem as well as in a real payoff money-burning experiment that can inform our understanding of moral preferences and antisocial behavior. Choices in both environments respond to incentives (i.e., the relative price of the ethical decision). Trolley problem decisions are consistent with previously known results – individuals prefer no action over action, and they prefer to avoid direct over indirect responsibility when negative consequences would be similar in either instance. In analyzing the determinants of anti-social money burning, our data identify money burning due to inequality aversion, but we also find evidence of pure nastiness (burning money of others to increase one's advantageous inequality). Importantly, we find that willingness to commit ethically dubious acts in the Trolley problem significantly predicts money burning and, more specifically, nastiness. We conclude that choices in hypothetical environments can predict consequential and inefficient antisocial behaviours. Also, utilitarian behaviour in the Trolley dilemma is not linked to antisocial money burning, which contrasts with conclusions in the literature.
    Keywords: experiments, money burning, ethical dilemmas, anti-social behavior, trolley problem
    JEL: C90 C91 Z10
    Date: 2018–06
  3. By: Edouard Civel; Nathaly Cruz-Garcia
    Abstract: Labels are increasingly popular among policy-makers, companies and NGOs to improve consumers awareness, especially about environmental footprints. Yet, the efficiency of these informational tools is mostly looked as their ability to shift behaviors, whereas their first goal is to enable people to discriminate labelled goods. This paper studies how the complex information displayed by houses' Energy Performance Certificates is processed by real economic agents. Through a randomized framed field experiment on 3,000 French subjects, we test the impact of these labels on people's perception of a home energy performance. Results evidence that 24% of subjects did not take heed of the energy label. Unexpectedly, we find out that gender is the most differentiating characteristic in this changing sensitivity to energy performance certificates. We interpret this effect by the Selectivity Hypothesis: energy labels design engages more male subjects.Among sensitive subjects, energy labels' efficiency to transmit information is mixed, as our results indicate a Bayesian reading of houses energy labels. Subjects identify separately each label's grades, and their perception is not systematically biased by individual characteristics, but idiosyncratic features blur their judgment. Moreover, this perception exhibits strong asymmetries. While worsening grades induce decreasing judgments, upgrading label's class do not strongly enhance people's evaluation of energy quality: on the contrary, top level quality label seems to undergo skepticism and intensifies idiosyncratic noise.
    Keywords: Information treatment ; Experimental economics ; Cognitive psychology ; Green Value ; Energy efficiency.
    JEL: D03 D12 D83 L15
    Date: 2018
  4. By: Gibson, John; Johnson, David
    Abstract: We explore the relevancy of subjects' risk preferences recovered using a subjective risk question to those recovered from the incentivized lottery experiments of Holt and Laury (2002), Gneezy and Potters (1997), and Johnson and Webb (2016). While a statistically significant relationship between subjective and incentivized risk measures has been documented, existing papers utilize laboratory (or lab-in-field) experiments with moderately large stakes. We investigate whether this relationship is preserved in an online environment with small stakes. Our results are consistent with the previous literature, suggesting that the correlation between subjective and incentivized risk measures is preserved online and with small stakes.
    Keywords: Subjective Risk Preferences; Incentivized Risk Measures; Online Experiments
    JEL: C90 D01 D03
    Date: 2018–06–08
  5. By: Frik, Alisa; Gaudeul, Alexia
    Abstract: We test an experimental method for the elicitation of implicit attitudes to privacy risk. We ask individuals to decide whether to incur the risk of revealing private information to other participants. This type of risk that involves a social component corresponds to privacy threats that individuals may face in the field. We derive a measure of individual attitudes to privacy risk with our method. We empirically test the validity of this measure by running a laboratory experiment with 148 participants. Our results confirm that the willingness to incur a privacy risk is driven by a complex array of factors including risk attitudes, self-reported value for private information, and general attitudes to privacy (derived from survey methods in our study). We also observe that attitudes to privacy risk depend on the order in which measures of risk attitude are elicited, but do not depend on whether there is a preexisting threat to privacy, over which participants have no control. We explain how our method can be simplified and extended for use in eliciting attitudes to a wide range of privacy risks and various types of private information.
    Keywords: privacy; attitudes; disclosure; risk; control; personal information; laboratory experiment
    JEL: C91 D18 D81 O30
    Date: 2018–07–11
  6. By: Germann, Maximilian; Loos, Benjamin; Weber, Martin
    Abstract: A recent theory by Gennaioli, Shleifer, and Vishny (2015) proposes that trust is an important component for delegated investing. This paper tests the theory in a laboratory experiment. Participants first play a trust game. Participants then act as investors who have to make two separate, delegated investment decisions. Using the amount returned in the trust game as measure of trustworthiness, we show that investors are willing to take substantially more risk when a money manager is more trustworthy, even if this manager charges higher costs. The willingness to take more risk and pay higher costs is increasing in the difference in trustworthiness of the two money managers. This finding is robust to different specifications of the difference in trustworthiness.
    Keywords: Investment Decision; Money Doctor; risk aversion; Trust
    JEL: G11 G23
    Date: 2018–06
  7. By: Kwiek, Maksymilian (University of Southampton); Marreiros, Helia (Universidade Catolica Portuguesa, Porto); Vlassopoulos, Michael (University of Southampton)
    Abstract: We study communication in committees selecting one of two alternatives when consensus is required and agents have private information about their preferences. Delaying the decision is costly, so a form of multiplayer war of attrition emerges. Waiting allows voters to express the intensity of their preferences and may help to select the alternative correctly more often than simple majority. In a series of laboratory experiments, we investigate how various rules affect the outcome reached. We vary the amount of feedback and the communication protocol available to voters: complete secrecy about the pattern of support; feedback about this support; public communication; and within-group communication. The feedback no-communication mechanism is worse than no feedback benchmark in all measures of welfare - the efficient alternative is chosen less often, waiting cost is higher, and thus net welfare is lower. Our headline result is that adding communication restores net efficiency, but in different ways. Public communication does poorly in terms of selecting the correct alternative, but limits the cost of delay, while group communication improves allocative efficiency, but has at best a moderate effect on delay.
    Keywords: voting, intensity of preferences, supermajority, conclave, war of attrition, communication
    JEL: C78 C92 D72 D74
    Date: 2018–06
  8. By: James C. Cox; Vjollca Sadiraj
    Abstract: Incentives are a major part of what defines the "economics" part in experimental economics. We discuss experimental approaches to addressing confounds that can arise with incentive payments to experimental subjects. They include choice of salient payoff levels to insure dominance, experience to promote understanding, alternative institutional formats to vary accessibility of payoff information, and lottery payoffs to induce risk neutrality. We examine issues that arise with response mode effects and game form misconception. Choice of which instruments to use and when to use them is part of the art of experimental design that should be informed by the research questions of interest and the type of confounds that are expected in a given environment and economic institution. One confound that is frequently not addressed in the literature is use of payoff protocols that are not incentive compatible. We call attention to this issue.
    Keywords: experiments, methodology, incentives
    JEL: C90
    Date: 2018–07
  9. By: Peter, Bossaerts; Jason, Shachat; Kuangli, Xie
    Abstract: We introduce an experimental design where arbitrage opportunities emerge reliably and repeatedly. We observe significantly higher sell-side than buy-side arbitrage opportunities. We study ways to mitigate them. Relaxing margin requirements, shortsale restrictions, or both have neither statistically nor economically significant effects. Increasing competition (more participants, each with small stakes), and more impactful, participants’ stakes (few wealthy participants each with large exposures), generate large reductions in arbitrage opportunities. Hence, we advocate increased competition for small markets, and allowance for large stakes in large markets, rather than relaxation of rules on margin purchases or shortsales.
    Keywords: Limits of arbitrage, Experimental asset markets, Market capitilization
    JEL: C92 D53 G12
    Date: 2018–06
  10. By: Alex Armand (Institute for Fiscal Studies and University of Navarra (Spain)); Orazio Attanasio (Institute for Fiscal Studies and University College London); Pedro Carneiro (Institute for Fiscal Studies and University College London); Valérie Lechene (Institute for Fiscal Studies and University College London)
    Abstract: This paper studies the differential effect of targeting cash transfers to men or women on the structure of household expenditures on non-durables. We study a policy intervention in the Republic of Macedonia, offering cash transfers to poor households, conditional on having their children attending secondary school. The recipient of the transfer is randomized across municipalities, with payments targeted to either the mother or the father of the child. We show that the gender of the recipient has an effect on the structure of expenditure shares. Targeting transfers to women increases the expenditure share on food by about 4 to 5 percentage points. At low levels of food expenditure, we observe a shift towards a more nutritious diet as a result of targeting women.
    Keywords: CCT, intra-household, gender, expenditure.
    JEL: D12 D13 E21 O12
    Date: 2018–06–01
  11. By: Van Belle, Eva (Ghent University); Caers, Ralf (KU Leuven); De Couck, Marijke (Free University of Brussels); Di Stasio, Valentina (Utrecht University); Baert, Stijn (Ghent University)
    Abstract: Persistent unemployment across OECD countries has led to increasing investments in activation programmes and, as a consequence, rigorous evaluations of the effectiveness of these programmes. The results of these evaluations have been mixed at best. To improve the effectiveness of the activation programmes, it is important to know why we observe these unsatisfactory results. One possible explanation that has been largely underexplored is the signal these programmes send to prospective employers. We investigate this signalling effect in the context of a job-vacancy referral system. To this end, we conduct a state-of-the-art vignette experiment in which HR professionals make hiring decisions concerning fictitious job candidates who apply either under a job-vacancy referral system or directly (without referral). By analysing the experimental data, we provide first causal evidence for a substantial adverse effect of referral on the probability of being hired. In addition, our experimental design allows us to explore whether this effect is heterogeneous by job candidate and recruiter characteristics and what exactly is signalled by the job-vacancy referral. In particular, we find that employers perceive referred candidates as being less motivated than other candidates.
    Keywords: signalling, activation policies, job referral, policy evaluation, unemployment
    JEL: J68 J23 C91
    Date: 2018–06
  12. By: Snowberg, Erik; Yariv, Leeat
    Abstract: We leverage a large-scale incentivized survey eliciting behaviors from (almost) an entire university student population, a representative sample of the U.S. population, and Amazon Mechanical Turk (MTurk) to address concerns about the external validity of experiments with student participants. Behavior in the student population offers bounds on behaviors in other populations, and correlations between behaviors are largely similar across samples. Furthermore, non-student samples exhibit higher measurement error. Adding historical lab participation data, we find a small set of attributes over which lab participants differ from non-lab participants. Using an additional set of lab experiments, we see no evidence of observer effects.
    Keywords: Experiments; External Validity; Lab Selection
    JEL: B41 C80 C90
    Date: 2018–06
  13. By: James C. Cox; Eike B. Kroll; Marcel Lichters; Vjollca Sadiraj; Bodo Vogt
    Abstract: The St. Petersburg Paradox is one of the oldest challenges of expected value theory. Thus far, explanations of the paradox aim at small probabilities being perceived as zero and the boundedness of utility of the outcome. This paper provides experimental results showing that neither diminishing marginal utility of the outcome nor perception of small probabilities can explain the paradox. We find that even in situations where subjects are risk-seeking, and zeroing-out small probabilities supports risktaking, the St. Petersburg Paradox exists. This indicates that the paradox cannot be resolved by the arguments advanced to date.
    Keywords: expected utility, risk preferences, gains, losses, St. Petersburg
    JEL: C91 D81
    Date: 2018–07
  14. By: Yukio Koriyama (Department of Economics, Ecole Polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique); Ali Ozkes (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales)
    Abstract: We study the implications of structural models of non-equilibrium thinking, in which players best respond while holding heterogeneous beliefs on the cognitive levels of others. We introduce an inclusive cognitive hierarchy model, in which players are capable of projecting the self to others in regard to their cognitive level. The model is tested in a laboratory experiment of collective decision-making, which supports inclusiveness. Our theoretical results show that inclusiveness is a key factor for asymptotic properties of deviations from equilibrium behavior. Asymptotic behavior can be categorized into three distinct types: naïve, Savage rational with inconsistent beliefs, and sophisticated.
    Keywords: collective decision-making,bounded rationality,cognitive hierarchy,information aggregation
    Date: 2018–06
  15. By: Chen, Si (Bonn Graduate School of Economics); Schildberg-Hörisch, Hannah (Heinrich Heine University Düsseldorf)
    Abstract: The motivation value of confidence postulates that individual effort provision is increasing in beliefs on one's own productivity. This relationship also holds for overconfident individuals who have exaggerated productivity beliefs (motivation value of overconfidence). We present first empirical evidence on the existence of a motivation value of absolute overconfidence that many microeconomic models build on. Moreover, we document that debiasing information increases the accuracy of productivity beliefs of overconfident individuals but comes at the cost of diminished effort provision – a result that is of obvious relevance for many contexts such as labor relations or learning at school. As a further conceptual contribution, we offer a novel strategy for identifying significant overconfidence at the individual level.
    Keywords: overconfidence, effort provision, laboratory experiment
    JEL: C91 D91
    Date: 2018–05
  16. By: Kenju Kamei (Durham University Business School)
    Abstract: One of the important topics in public choice is how people’s free-riding behavior could differ by group size in collective action dilemmas. This paper experimentally studies how the strength of third party punishment in a prisoner’s dilemma could differ by the number of third parties in a group. Our data indicate that as the number of third party punishers increases in a group, the average punishment intensity per third party punisher decreases. However, the decrease rate is very mild and therefore the size of total punishment in a group substantially increases with an increase in group size. As a result, third party punishment becomes a sufficient deterrent against a player selecting defection in the prisoner’s dilemma when the number of third party punishers is sufficiently large. Nevertheless, when there are too many third party punishers in a group, a defector’s expected payoff is far lower than that of a cooperator due to strong aggregate punishment, while some cooperators are even hurt through punishment. Therefore, the group incurs a huge efficiency loss. Such over-punishment results from third party punishers’ conditional punishment behaviors: their punishment intensity is positively correlated with their beliefs on the peers’ punitive actions. Some possible ways to coordinate punishment among peers even when group size is very large, thus enabling the efficiency loss to be mitigated, are also discussed in the paper.
    Keywords: experiment, cooperation, third party punishment, dilemma, group size effect
    JEL: C92 D72 D78 H41
    Date: 2018–04
  17. By: Naihobe Gonzalez; Sophie MacIntyre; Pilar Beccar-Varela
    Abstract: This study presents findings on the implementation and impacts of Leveled Literacy Intervention (LLI) in Oakland, California, where the school district conducted the nation’s first randomized controlled trial of LLI in secondary grades.
    Keywords: adolescent literacy, reading intervention, randomized control trial
    JEL: I
  18. By: Federico A. Bugni (Institute for Fiscal Studies and Duke University); Joel L. Horowitz (Institute for Fiscal Studies and Northwestern University)
    Abstract: Economic data are often generated by stochastic processes that take place in continuous time, though observations may occur only at discrete times. For example, electricity and gas consumption take place in continuous time. Data generated by a continuous time stochastic process are called functional data. This paper is concerned with comparing two or more stochastic processes that generate functional data. The data may be produced by a randomized experiment in which there are multiple treatments. The paper presents a test of the hypothesis that the same stochastic process generates all the functional data. In contrast to existing methods, the test described here applies to both functional data and multiple treatments. The test is presented as a permutation test, which ensures that in a finite sample, the true and nominal probabilities of rejecting a correct null hypothesis are equal. The paper also presents the asymptotic distribution of the test statistic under alternative hypotheses. The results of Monte Carlo experiments and an application to an experiment on billing and pricing of natural gas illustrate the usefulness of the test.
    Keywords: Functional data, permutation test, randomized experiment, hypothesis test
    JEL: C12 C14
    Date: 2018–03–06
  19. By: Cornelißen, Thomas; Dustmann, Christian; Raute, Anna; Schönberg, Uta
    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
  20. By: Alvi, Mohsin; Mirza, Mohammad Haris; Ikram, Midra; Khoso, Ameer Bux; Mukhtar, Amber
    Abstract: Historically, psychological researches on emotion were focused more on negative emotions. Recently, researchers have directed their attention towards positive emotion because of positive emotions is in crises throughout the globe (Fredrickson et al, 2003). So, it is an emerging field of study, many areas of which are under developed. The present research is aimed at exploring two of such areas: gender and age differences in positive emotions. Because of the suggested importance of studying discrete units of positive emotion, only one emotion i.e. joy was selected for the study. Dispositional Positive Emotion Scale-Joy sub scale was administered on 479 participants (331 men, 148 women), age ranging between 20 and 49. Following two hypotheses were generated: first, women feel lesser joy than men; and second, intensity of joy feeling varies with age. The results were consistent with the first hypothesis. For the second hypothesis, no significant differences are found in the feeling of joy among people belonging to different age groups.
    Keywords: Dispositional Positive Emotion Scale (DPES), Gender, Age, Independent Sample T-test, Anova
    JEL: A14 D03 M5 Y1 Z1
    Date: 2017–09–25
  21. By: Fochmann, Martin; Müller, Nadja; Overesch, Michael
    Abstract: As a consequence of the digital transformation, individuals are often confronted with prefilled forms or prefilled data entry masks. In situations where cheating and lying are of concern, prefilling and defaults might reduce dishonest behavior. In a controlled experiment, we investigate how correctly and incorrectly prefilled forms influence compliance behavior. We frame our experiment as filing the annual income tax return. We show that correct prefilling enhances compliance. However, in cases of incorrect prefilling, we observe asymmetric effects. If prefilled income is lower than true income, we find no positive compliance effect, and compliance is on the same level as with blank forms. If prefilled income is higher than true income, prefilling still has a positive effect on compliance. In that case, compliance is on the same level as with correctly prefilled forms and higher than with blank forms. Our study contributes to the literature on cheating and lying by showing that prefilled forms and defaults affect compliance by changing the moral costs of dishonest behavior.
    Keywords: Dishonesty,Defaults,Prefilled Forms,Tax Compliance,Behavioral Economics
    JEL: C91 D14 H26
    Date: 2018
  22. By: Sandro Ambuehl; Axel Ockenfels; Colin Stewart
    Abstract: Who participates in transactions when information about the consequences must be learned? We show theoretically that decision makers for whom acquiring and processing information is more costly respond more strongly to changes in incentive payments for participating and decide to participate based on worse information. With higher payments, the pool of participants thus consists of a larger proportion of individuals who have a worse understanding of the consequences of their decision. We conduct a behavioral experiment that confirms these predictions, both for experimental variation in the costs of information acquisition and for various measures of information costs, including school grades and cognitive ability. These findings are relevant for any transaction combining a payment for participation with uncertain yet learnable consequences.
    Keywords: rational inattention, incentives, selection effects, cognitive ability, experiment, repugnant transactions
    JEL: D01
    Date: 2018
  23. By: Leonardo Bursztyn (University of Chicago, Department of Economics); Alessandra L. González (The University of Chicago); David Yanagizawa-Drott (University of Zurich)
    Abstract: Through the custom of guardianship, husbands typically have the final word on their wives’ labor supply decisions in Saudi Arabia, a country with very low female labor force participation (FLFP). We provide incentivized evidence (both from an experimental sample in Riyadh and from a national sample) that the vast majority of young married men in Saudi Arabia privately support FLFP outside of home from a normative perspective, while they substantially underestimate the level of support for FLFP by other similar men – even men from their same social setting, such as their neighbors. We then show that randomly correcting these beliefs about others increases married men’s willingness to let their wives join the labor force (as measured by their costly sign-up for a job-matching service for their wives). Finally, we find that this decision maps onto real outcomes: four months after the main intervention, the wives of men in our original sample whose beliefs about acceptability of FLFP were corrected are more likely to have applied and interviewed for a job outside of home. Together, our evidence indicates a potentially important source of labor market frictions, where job search is underprovided due to misperceived social norms.
    Keywords: social norms, female labor force participation, Saudi Arabia
    JEL: C90 D83 D91 J22 Z10
    Date: 2018–07

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.