nep-exp New Economics Papers
on Experimental Economics
Issue of 2018‒09‒03
48 papers chosen by

  1. Optimal Design of Experiments in the Presence of Interference*, Second Version By Sarah Baird; Aislinn Bohren; Craig McIntosh; Berk Ozler
  2. Supporting Private Provision of Ecosystem Services through Contracts: Evidence from Lab and Field Experiments By Li, Zhi; Liu, Pengfei; Swallow, Stephen K.
  3. The demand and supply for esteem: an experimental analysis By Blacklow, Paul; Corman, Amy Beth; Sibly, Hugh
  4. Economic Experiments for Policy Analysis and Program Design: A Guide for Agricultural Decisionmakers By Higgins, Nathaniel; Hellerstein, Daniel; Wallander, Steven; Lynch, Lori
  5. Enhancing central bank communications with behavioural insights By Bholat, David; Broughton, Nida; Parker, Alice; Ter Meer, Janna; Walczak, Eryk
  6. Cooperation with lists By Adrian Hillenbrand
  7. Spatial competition with demand uncertainty: A laboratory experiment By Bonein, Aurélie; Turolla, Stéphane
  8. Economic Experiments for Policy Analysis and Program Design: A Guide for Agricultural Decisionmakers By Higgins, Nathaniel; Hellerstein, Daniel; Wallander, Steven; Lynch, Lori
  9. Balancing Complexity and Rent-Seeking in Multi-Attribute Conservation Procurement Auctions: Evidence from a Laboratory Experiment By Banerjee, Simanti; Conte, Marc N.
  10. Paying for What Kind of Performance? Performance Pay and Multitasking in Mission-Oriented Jobs By Jones, Daniel; Tonin, Mirco; Vlassopoulos, Michael
  11. Salience of Law Enforcement: A Field Experiment By Dur, Robert; Vollaard, Ben
  12. Experimental estimates of men's and women's willingness to compete: Does the gender of the partner matter? By Jung, Seeun; Vranceanu, Radu
  13. Efficient Institutions and Effective Deterrence: On Timing and Uncertainty of Punishment By Johannes Buckenmaier; Eugen Dimant; Ann-Christin Posten; Ulrich Schmidt
  14. Persuasion, justification and the communication of social impact By Manuel Foerster; Joel (J.J.) van der Weele
  15. Amazon Mechanical Turk Workers Can Provide Consistent and Economically Meaningful Data By Johnson, David; Ryan, John
  16. Can group giving boost contribution? Effects of different subsidy schemes in a laboratory experiment By Shigeharu Okajima; Yukihiko Funaki; Hiroko Okajima; Nobuyuki Uto
  17. Attitudes towards Euro Area Reforms: Evidence from a Randomized Survey Experiment By Mathias Dolls; Nils Wehrhofer
  18. Accuracy and Retaliation in Repeated Games with Imperfect Private Monitoring: Experiments By Yutaka Kayaba; Hitoshi Matsushima; Tomohisa Toyama
  19. One-off subsidies and long-run adoption – Experimental evidence on improved cooking stoves in Senegal By Bensch, Gunther; Peters, Jörg
  20. The Demotivating Effect (and Unintended Message) of Retrospective Awards By Robinson, Carly D.; Gallus, Jana; Lee, Monica G.; Rogers, Todd
  21. Are Reference Points Merely Lagged Beliefs Over Probabilities? By Ori Heffetz
  22. Evaluating intergenerational persistence of economic preferences: A large scale experiment with families in Bangladesh By Shyamal Chowdhury; Matthias Sutter; Klaus F. Zimmermann
  23. Optimizing the tie-breaker regression discontinuity design By Art B. Owen; Hal Varian
  24. Narratives, Imperatives, and Moral Reasoning By Benabou, Roland; Falk, Armin; Tirole, Jean
  25. Normative change and culture of hate: An experiment in online environments By Amalia Álvarez; Fabian Winter
  26. Evaluating intergenerational persistence of economic preferences: A large scale experiment with families in Bangladesh By Chowdhury, Shyamal; Sutter, Matthias; Zimmermann, Klaus F.
  27. FarmAgriPoliS: An agricultural business management game for behavioral experiments, teaching, and gaming By Appel, Franziska; Balmann, Alfons; Dong, Changxing; Rommel, Jens
  28. Caseworker's Discretion and the Effectiveness of Welfare-to-Work Programs By Bolhaar, Jonneke; Ketel, Nadine; van der Klaauw, Bas
  29. Caseworker's discretion and the effectiveness of welfare-to-work programs By Bolhaar, Jonneke; Ketel, Nadine; van der Klaauw, Bas
  30. Bribes vs. Taxes: Market Structure and Incentives By Amodio, Francesco; Choi, Jieun; De Giorgi, Giacomo; Rahman, Aminur
  31. Debarment and Collusion in Procurement Auctions By Claudia Cerrone; Author-Name: Yoan Hermstruwer
  32. The Impacts of Household Water Quality Testing and Information on Safe Water Behaviors: Evidence from a Randomized Experiment in Ghana By Okyere, Charles Yaw; Pangaribowo, Evita Hanie; Asante, Felix Ankomah; von Braun, Joachim
  33. The Proper Scope of Behavioral Law and Economics By Christoph Engel
  34. The role of experiments for policy design By Werner, Peter; Riedl, Arno
  35. Too Little or Too Much? Actionable Advice in an Early-Childhood Text Messaging Experiment By Cortes, Kalena E.; Fricke, Hans; Loeb, Susanna; Song, David S.
  36. Individual time preferences of married couples in a fisheries society By Yayan Hernuryadin; Koji Kotani; Tatsuyoshi Saijo
  37. Do women ask for lower salaries? The supply side of the gender pay gap By Martín González Rozada; Eduardo Levy Yeyati
  38. Anchoring in Project Duration Estimation By Lorko, Matej; Servátka, Maroš; Zhang, Le
  39. Behavioral Insights for Agri-Environmental Program and Policy Design By Janusch, Nicholas; Palm-Forster, Leah H.; Messer, Kent D.; Ferraro, Paul J.
  40. Psychological Aspect of Monitoring Accuracy in Repeated Prisoners’ Dilemma By Yutaka Kayaba; Hitoshi Matsushima; Tomohisa Toyama
  41. Choking under pressure -- Evidence of the causal effect of audience size on performance By René Böheim; Dominik Grübl; Mario Lackner
  42. Self-regulation promotes cooperation in social networks By Dario Madeo; Chiara Mocenni
  43. Reputation is required for cooperation to emerge in dynamic networks By Jose A. Cuesta; Carlos Gracia-L\'azaro; Yamir Moreno; Angel S\'anchez
  45. Effects of Poverty On Impatience By Bartos, Vojtech; Bauer, Michal; Chytilova, Julie; Levely, Ian
  46. Too Many Cooks Spoil the Broth? Geographic Concentration, Social Norms, and Knowledge Transfer By Di Stefano, Giada; A. King, Andrew; Verona, Gianmario
  47. A Panel Quantile Approach to Attrition Bias in Big Data: Evidence from a Randomized Experiment By Matthew Harding; Carlos Lamarche
  48. Seeing a Triangle in a 3d Scene Monocularly and Binocularly By Vasily Minkov; Tadamasa Sawada

  1. By: Sarah Baird (Department of Global Health, George Washington University); Aislinn Bohren (Department of Economics, University of Pennsylvania); Craig McIntosh (Department of Economics, UC San Diego); Berk Ozler (The World Bank)
    Abstract: This paper formalizes the optimal design of randomized controlled trials (RCTs) in the presence of interference between units, where an individual's outcome depends on the behavior and outcomes of others in her group. We focus on randomized saturation (RS) designs, which are two-stage RCTs that first randomize the treatment saturation of a group, then randomize individual treatment assignment. Our main contributions are to map the potential outcomes framework with partial interference to a regression model with clustered errors, calculate the statistical power of different RS designs, and derive analytical insights for how to optimally design an RS experiment. We show that the power to detect average treatment effects declines precisely with the ability to identify novel treatment and spillover estimands, such as how effects vary with the intensity of treatment. We provide software that assists researchers in designing RS experiments.
    Keywords: Experimental Design, Causal Inference
    JEL: C93 O22 I25
    Date: 2017–11–30
  2. By: Li, Zhi; Liu, Pengfei; Swallow, Stephen K.
    Abstract: The free riding incentive that exists in public good provision has been a major obstacle to establishing markets or payment incentives for ecosystem services. The use of monetary incentives to induce private provision of public goods has gained increasing support, including from the USDA Office of Environmental Markets, to help to market ecosystem services provided by alternative farmland management practices. Using a series of lab experiments and a pilot field experiment, we explore new ways to raise money from individuals to pay farmers for alternative management practices. In our proposed mechanisms, individuals receive an assurance contract that offers qualified contributors an assurance payment as compensation in the event that total contributions fail to achieve the threshold needed to fund the public good. Contributors qualify by contracting to support provision with a minimum contribution. Our public good involves delaying the harvest of a ten-acre hayfield to allow grassland birds to nest successfully. Evidence from lab experiments shows that the provision probability, consumer surplus, and social welfare significantly increase when the assurance contract is present, while the producer surplus suffers from a slight decrease. Consistent with the lab experiment, our pilot field experiment shows that a higher assurance payment may reduce individual contribution amounts. Our proximate motivation is to support bird habitat provided by farmland, but our approach contributes to the private provision of ecosystem services and other types of public goods in general.
    Keywords: Environmental Economics and Policy
    Date: 2017–12–01
  3. By: Blacklow, Paul (Tasmanian School of Business & Economics, University of Tasmania); Corman, Amy Beth (Deparment of Economics, University of Melbourne); Sibly, Hugh (Tasmanian School of Business & Economics, University of Tasmania)
    Abstract: People enjoy judging and receiving the approval of others. They may modify their behaviour in costly ways to obtain such approval. This paper presents an experiment in which some participants can, at a cost, appear to others to have a better performance on a real effort task than they really do. The only motivation for such an action is esteem seeking. The provision of esteem is also recorded. We measure esteem seeking when participants are facing both high and low performing partners. We model our experiment theoretically: individuals generate income party to undertake consumption but also partly to gain esteem. Our results are consistent with theory: those with low marginal utility of consumption engage in esteem seeking.
    Keywords: Esteem, Image, Laboratory Experiment
    JEL: C92 D91
    Date: 2018
  4. By: Higgins, Nathaniel; Hellerstein, Daniel; Wallander, Steven; Lynch, Lori
    Abstract: This report examines the use of experiments for building evidence to inform agricultural policy, providing an introduction to the field of experimental economics and discussing the increasing use of field experiments and randomized controlled trials in the social sciences and in government. See related Amber Waves article Gathering Experimental Evidence To Improve the Design of Agricultural Programs.
    Keywords: Agricultural and Food Policy, Institutional and Behavioral Economics
    Date: 2017–08–01
  5. By: Bholat, David (Bank of England); Broughton, Nida (Behavioural Insight Team); Parker, Alice (Bank of England); Ter Meer, Janna (Behavioural Insights Team); Walczak, Eryk (Bank of England)
    Abstract: In this joint Bank of England and Behavioural Insights Team study, we test the effectiveness of different approaches to central bank communications. Using an online experiment with a representative sample of the UK population, we measure how changes to the Bank of England’s summaries of the Inflation Report impact comprehension and trust in its policy messages. We find that the recently introduced Visual Summary of the Inflation Report improves comprehension of its main messages in a statistically significant way compared to the traditional executive summary. We also find that public comprehension and trust can be further improved by making the Visual Summary more relatable to people’s lives. Our findings thus shed light on how central banks can improve communication with the public at a time when trust in public institutions has fallen, while the responsibilities delegated to central banks have increased.
    Keywords: Central bank communications; central bank legitimacy; experimental economics; behavioural economics; Bank of England Vision 2020
    JEL: A12 A13 A29 C21 C83 C90 C91 C93 D83 D91 E52 E58 M38
    Date: 2018–08–15
  6. By: Adrian Hillenbrand (Max Planck Institute for Research on Collective Goods)
    Abstract: Group tasks are often organized by a list: group members state their willingness to contribute by entering their names on a publicly visible, empty list. Alternatively, one could organize the group task by starting with a full list: every group member is already entered on the list and non-cooperators have to cross out their names. Indeed, strong behavioral differences are observed when comparing (otherwise identical) environments with empty and full lists in a laboratory experiment with repeated interaction. Cooperation in the empty list is high in early periods, but is decreasing. In the full list, cooperation starts low, but is actually increasing, surpassing cooperation in the empty list treatment in later periods. Two factors, diffusion of responsibility and unraveling of cooperation seem to drive the results.
    Keywords: Cooperation; Institutions; Coordination; Framing; Experiment; Volunteer’s Dilemma
    JEL: C71 C73 C92
    Date: 2018–01
  7. By: Bonein, Aurélie; Turolla, Stéphane
    Abstract: Motivated by recent research on product differentiation, we conduct laboratory experiments to study how (aggregate) demand uncertainty influences location choices and price competition in the original Hotelling (1929)’s model. We provide new predictions on the effect of risk attitudes on both decisions under demand uncertainty and confront them with the data. Our experimental results support the predictions that demand uncertainty acts as a differentiation force for risk-neutral and risk-lover subjects. By contrast, we do not verify that demand uncertainty leads risk-averse subjects to agglomerate. This is explained primarily by learning effects and heterogeneous behaviors within this risk profile. Finally, we observe various price-setting behaviors, ranging from an attempt to collude to a price war, depending on the level of differentiation.
    Keywords: International Relations/Trade
    Date: 2017–12–20
  8. By: Higgins, Nathaniel; Hellerstein, Daniel; Wallander, Steven; Lynch, Lori
    Abstract: Economic experiments can help inform the design and implementation of government policies, especially newly conceived or novel policies. This report reviews experimental methods, with a focus on when and how they can be effectively used to inform agricultural program decisions. To illustrate the capabilities of experimental methods, five case studies are presented. First, a laboratory study examines whether it is possible to improve the cost-effectiveness of auctions similar to those used in voluntary land retirement programs. A second laboratory study, with both students and farmers, illustrates how a combination of targeting and bonuses may be able to improve environmental outcomes by encouraging coordination among conservation program enrollees. The third study, conducted in the field to more closely mimic real-world conditions, measures how farmers trade off current income against future income and finds farmers will accept less money if paid today rather than in the future. The fourth and fifth studies are randomized controlled trials testing the marketing of USDA programs; these show how outreach letters can increase participation in the Conservation Reserve Program and in county committee elections.
    Keywords: Environmental Economics and Policy, Institutional and Behavioral Economics, Research Methods/ Statistical Methods
    Date: 2017–08–17
  9. By: Banerjee, Simanti; Conte, Marc N.
    Abstract: Conservation procurement auctions are implemented under conditions that deviate from those assumed to derive predictions of bidder behavior. Existing research has emphasized the sensitivity of auction performance and bidder behavior to auction design choices. In the conservation context, procuring agencies must decide how to provide bidders with information about the environmental quality of different conservation practices to manage the trade-off between an increased probability of selecting the optimal practice and increased rent-seeking behavior associated with this information. We utilize an induced-value laboratory experiment to explore how access to quality information and variation in the bid-submission protocol can best be combined to improve auction performance. We nd that the auction performs best when a bid-menu format, in which subjects submit bids for all their practices, is combined with information about the environmental quality rank of available conservation practices.
    Keywords: Research Methods/ Statistical Methods
    Date: 2017–12–12
  10. By: Jones, Daniel (University of Pittsburgh); Tonin, Mirco (Free University of Bozen/Bolzano); Vlassopoulos, Michael (University of Southampton)
    Abstract: How does pay-for-performance (P4P) impact productivity, multitasking, and the composition of workers in mission-oriented jobs? These are central issues in sectors like education or healthcare. We conduct a laboratory experiment, manipulating compensation and mission, to answer these questions. We find that P4P has positive effects on productivity on the incentivized dimension of effort and negative effects on the non-incentivized dimension for workers in non-mission-oriented treatments. In mission-oriented treatments, P4P generates minimal change on either dimension. Participants in the non-mission sector – but not in the mission-oriented treatments – sort on ability, with lower ability workers opting out of the P4P scheme.
    Keywords: prosocial motivation, performance pay, multitasking, sorting
    JEL: C91 M52 J45
    Date: 2018–07
  11. By: Dur, Robert (Erasmus University Rotterdam); Vollaard, Ben (Tilburg University)
    Abstract: We conduct a field experiment to examine whether the deterrent effect of law enforcement depends on the salience of law enforcement activity. Our focus is on illegal disposal of household garbage in residential areas. At a random subset of 56 locations in a mid-sized city, law enforcement officers supplemented their regular enforcement activities by the practice of putting brightly-colored warning labels on illegally disposed garbage bags. This treatment made the existing enforcement activities suddenly much more apparent to residents. We find evidence for a substantial reduction in illegal disposal of garbage in response to the treatment.
    Keywords: law enforcement, deterrence, perception, salience, disorder
    JEL: C93 K42
    Date: 2018–06
  12. By: Jung, Seeun (Inha University, Department of Economics); Vranceanu, Radu (ESSEC Research Center, ESSEC Business School)
    Abstract: In a classical experiment, Niederle and Vesterlund (2007) used the dichotomous choice of individuals between a piece rate and a tournament payment scheme as an indication of their propensity to compete. This paper reports results from a two person interaction of a similar type to analyze whether the preference for competition is dependent on the gender of the partner. It introduces a Becker–DeGroot–Marschak mechanism to elicit individual willingness to compete (WTC), defined as the amount of money that makes an individual indifferent between the two compensation schemes. Even when controlling for risk aversion, past performance and overconfidence, the male WTC is e3.30 larger than the female WTC. The WTC instrument allows for a more precise analysis of the impact of the partner's gender on the taste for competition.
    Keywords: willingness-to-compete; experiments; gender effect; BDM mechanism
    JEL: C91 D03
    Date: 2017–01
  13. By: Johannes Buckenmaier; Eugen Dimant (Philosophy, Politics and Economics, University of Pennsylvania); Ann-Christin Posten; Ulrich Schmidt
    Abstract: This paper presents the first controlled economic experiment to study celerity, i.e. the effectiveness of swiftness of punishment in reducing illicit behavior. We consider two dimensions: timing of punishment and timing of the resolution of uncertainty regarding the punishment. We find a surprising u-shaped relation between deterrence and the delays of punishment and uncertainty resolution. Institutions that either reveal detection and impose punishment immediately or maintain uncertainty about the state of detection and impose punishment sufficiently late are equally effective at deterring illicit behavior. Our results yield strong implications for the design of institutional policies to mitigate misconduct and reduce recidivism.
    Keywords: Deterrence, Institutions, Punishment, Swiftness, Uncertainty
    JEL: C91 D02 D81 K42
  14. By: Manuel Foerster (University of Hamburg); Joel (J.J.) van der Weele (Universiteit van Amsterdam)
    Abstract: We experimentally investigate strategic communication about the impact of prosocial actions, which is central to policy debates about foreign aid or the environment. In our experiment, a “sender” receives an informative but noisy signal about the impact of a charitable donation. She then sends a message to a “receiver”, upon which both subjects choose whether to donate. The sender faces a trade-off between persuading the receiver to act and justifying her own inaction. We find evidence for both motives. Increasing the visibility of the sender’s actions increases the justification motive and makes senders more likely to report low impact, reducing giving among receivers. These results show the intimate links between reputation and com- munication in moral domains, and help understand the fraught nature of political discussions about social impact.
    Keywords: cheap talk; image concerns; information aggregation; charitable giving; economic experiments
    JEL: C91 D83 D91
    Date: 2018–08–26
  15. By: Johnson, David; Ryan, John
    Abstract: We explore the consistency of the characteristics of individuals who participate in studies posted on Amazon Mechanical Turk (AMT). The primary individuals analyzed in this study are subjects who participated in at least two of eleven experiments that were run on AMT between September of 2012 to January of 2018. We demonstrate subjects consistently report a series of demographic and personality characteristics. Further, subjective willingness to take risk is found to be significantly correlated with decisions made in a simple lottery experiment with real stakes - even when the subjective risk measure is reported months, sometimes years, in the past. This suggests the quality of data obtained via AMT is not significantly harmed by the lack of control over the conditions under which the responses are recorded.
    Keywords: Online Experiment; Risk; Consistency; Amazon Mechanical Turk; Experiment
    JEL: C81 C89 C90 C99
    Date: 2018–07–12
  16. By: Shigeharu Okajima (Kobe University); Yukihiko Funaki (Waseda University); Hiroko Okajima (Towson University); Nobuyuki Uto
    Abstract: Charitable giving is sometimes made collectively by a group of people. This form of philanthropy, called group giving, is gaining popularity in practice, but little has been studied in literature. Accordingly, a laboratory experiment is conducted to examine how group giving reacts to different rebate subsidies that are awarded based on the collective giving level of a group. The results show that group giving is particulary effective in boosting a giving rate in a stepwise rebate scheme. A stepwise rebate seems to encourage major contributors to contribute even more so that a rebate threshold is crossed for sure. In contrast, group giving slightly drives down a giving rate in a proportional rebate scheme. These results provide useful information for charitable organizations to develop a new intervention to increase charitable giving. This study also supplements the existing literature by providing empirical results on group giving.
    Keywords: donation, laboratory experiment, group behavior, rebate scheme, electricity
    JEL: C91 C91 D91 Q48
    Date: 2017–09
  17. By: Mathias Dolls; Nils Wehrhofer
    Abstract: We present the first evidence on public attitudes towards two prominent euro area reform proposals (European Unemployment Benefit Scheme and Sovereign Insolvency Procedure) and assess potential impediments to their implementation by means of a randomized survey experiment in Germany. We find that there is a low willingness among German voters to accept fiscal risk-sharing through common unemployment insurance, while a sovereign insolvency procedure aimed at strengthening market discipline is supported by a majority of the electorate. Our randomized treatments confronting survey participants with potential adverse effects of the reforms lead to significant downward shifts in approval rates. Altruism, cosmopolitanism, political preference and income are important predictors of support for the reform proposals. We also show that there is a striking contrast between the low level of support for transfers to other euro area member states and a broad acceptance of inner German transfers.
    Date: 2018
  18. By: Yutaka Kayaba (University of Tokyo); Hitoshi Matsushima (University of Tokyo); Tomohisa Toyama (International Christian University)
    Abstract: We experimentally examine repeated prisoner’s dilemma with random termination, in which monitoring is imperfect and private. Our estimation indicates that a significant proportion of subjects follow generous tit-for-tat strategies, stochastic extensions of tit-for-tat. However, the observed retaliating policies are inconsistent with the generous tit-for-tat equilibrium behavior. Contrary to the prediction of equilibrium theory, subjects tend to retaliate more with high accuracy than with low accuracy. They tend to retaliate more than the equilibrium theory predicts with high accuracy, while they tend to retaliate less with low accuracy.
    Date: 2018–04
  19. By: Bensch, Gunther; Peters, Jörg
    Abstract: Free distribution of a technology can be an effective development policy instrument if its adoption is socially inefficient and hampered by affordability constraints. Improved cookstoves may be such a case: they generate high environmental and public health returns, but adoption is generally low. Based on a randomized controlled trial in rural Senegal, this paper studies whether one-time free cookstove distribution affects households’ willingness to pay (WTP) in the long run. Effects might be negative because people anchor their WTP on the earlier zero price (reference dependence) or positive because information deficits about potential benefits are overcome. We find that households who received a free stove six years back exhibit a higher WTP today compared to control households. Potential reference dependence effects are thus at least compensated by learning effects. Our findings suggest that one-time free distribution does not spoil future prices and might even be a stepping stone for future market establishment.
    Keywords: Consumer/Household Economics, Demand and Price Analysis, Resource /Energy Economics and Policy
    Date: 2017–04–04
  20. By: Robinson, Carly D. (Harvard U); Gallus, Jana (UCLA); Lee, Monica G. (Stanford U); Rogers, Todd (Harvard U)
    Abstract: It is common for organizations to offer awards to motivate individual behavior, yet few empirical studies evaluate their effectiveness in the field. We report a randomized field experiment (N = 15,329) that tests the impact of two types of symbolic awards on student attendance: pre-announced awards (prospective) and surprise awards (retrospective). Contrary to our pre-registered hypotheses, prospective awards had no impact while the retrospective awards decreased subsequent attendance. Survey studies provide evidence suggesting that receiving retrospective awards may demotivate the behavior being awarded by inadvertently signaling (a) that recipients have performed the behavior more than their peers have; and (b) that recipients have performed the behavior to a greater degree than was organizationally expected. A school leaders survey shows that awards for attendance are common, and that the organizational leaders who offer these awards are unaware of their potential demotivating impact.
    Date: 2018–06
  21. By: Ori Heffetz
    Abstract: What explains the mixed evidence from laboratory tests of Kőszegi and Rabin’s (2006 and later) model of expectations-based reference-dependent preferences? We investigate one hypothesis: to become (behavior-affecting) reference points, probability beliefs have to sink in—being merely lagged, as the theory requires, is not sufficient. Past experiments with conflicting findings exogenously endowed subjects with beliefs that were equally lagged, but possibly unequally sunk-in. In four experiments, whose designs replicate past KR-nonsupporting experiments, we add new sink-in manipulations that endow individuals with additional, visual/physical probability impressions. Our findings are more KR-supporting in an endowment-effect setting but not in an effort-provision setting.
    JEL: D12 D84 D91 J22
    Date: 2018–06
  22. By: Shyamal Chowdhury (University of Sydney, IZA Bonn); Matthias Sutter (Max Planck Institute for Research on Collective Goods); Klaus F. Zimmermann (Maastricht University, UNU-MERIT and GLO)
    Abstract: Economic preferences – like time, risk and social preferences – have been shown to be very influential for real-life outcomes, such as educational achievements, labor market outcomes, or health status. We contribute to the recent literature that has examined how and when economic preferences are formed, putting particular emphasis on the role of intergenerational transmission of economic preferences within families. Our paper is the first to run incentivized experiments with fathers and mothers and their children by drawing on a unique dataset of 1,999 members of Bangladeshi families, including 911 children, aged 6-17 years, and 544 pairs of mothers and fathers. We find a large degree of intergenerational persistence as the economic preferences of mothers and fathers are significantly positively related to their children’s economic preferences. Importantly, we find that socio-economic status of a family has no explanatory power as soon as we control for parents’ economic preferences. A series of robustness checks deals with the role of older siblings, the similarity of parental preferences, and the average preferences within a child’s village.
    Keywords: Intergenerational transmission of preferences, time preferences, risk preferences, social preferences, children, parents, Bangladesh, socio-economic status, experiment
    JEL: C90 D1 D90 D81 D64 J13 J24 J62
    Date: 2018–02
  23. By: Art B. Owen; Hal Varian
    Abstract: Motivated by customer loyalty plans, we study tie-breaker designs which are hybrids of randomized controlled trials (RCTs) and regression discontinuity designs (RDDs). We quantify the statistical efficiency of a tie-breaker design in which a proportion $\Delta$ of observed customers are in the RCT. In a two line regression, statistical efficiency increases monotonically with $\Delta$, so efficiency is maximized by an RCT. That same regression model quantifies the short term value of the treatment allocation and this comparison favors smaller $\Delta$ with the RDD being best. We solve for the optimal tradeoff between these exploration and exploitation goals. The usual tie-breaker design experiments on the middle $\Delta$ subjects as ranked by the running variable. We quantify the efficiency of other designs such as experimenting only in the second decile from the top. We also consider more general models such as quadratic regressions.
    Date: 2018–08
  24. By: Benabou, Roland (Princeton University); Falk, Armin (briq, University of Bonn); Tirole, Jean (IDEI)
    Abstract: By downplaying externalities, magnifying the cost of moral behavior, or suggesting not being pivotal, exculpatory narratives can allow individuals to maintain a positive image when in fact acting in a morally questionable way. Conversely, responsibilizing narratives can help sustain better social norms. We investigate when narratives emerge from a principal or the actor himself, how they are interpreted and transmitted by others, and when they spread virally. We then turn to how narratives compete with imperatives (general moral rules or precepts) as alternative modes of communication to persuade agents to behave in desirable ways.
    Keywords: moral behavior, prosocial behavior, narratives, imperatives, justifications, rules, Kantian reasoning, deontology, consequentialism, utilitarianism, norms, organizations
    JEL: D62 D64 D78 D83 D85 D91 H41 K42 L14 Z13
    Date: 2018–07
  25. By: Amalia Álvarez (Max Planck Institute for Research on Collective Goods); Fabian Winter (Max Planck Institute for Research on Collective Goods)
    Abstract: We present an online experiment in which we investigate the impact of perceived social acceptability on online hate speech, and measure the causal effect of specific interventions. We compare two types of interventions: counter-speaking (informal verbal sanctions) and censoring (deleting hateful content). The interventions are based on the belief that individuals infer acceptability from the context, using previous actions as a source of normative information. The interventions are based on the two conceptualizations found in the literature: 1) what do others normally do, i.e., descriptive norms; and 2) what happened to those who violated the norm, i.e., injunctive norms. Participants were significantly less likely to engage in hate speech when prior hate content had been moderately censored. Our results suggest that normative behavior in online conversations might, in fact, be motivated by descriptive norms rather than injunctive norms. With this work we present some of the first experimental evidence investigating the social determinants of hate speech in online communities. The results could advance the understanding of the micro-mechanisms that regulate hate speech. Also, such findings can guide future interventions in online communities that help prevent the spread of hate.
    Keywords: online experiments, social norms, hate speech, social influence, pluralistic societies
    Date: 2018–02
  26. By: Chowdhury, Shyamal; Sutter, Matthias; Zimmermann, Klaus F.
    Abstract: Economic preferences – like time, risk and social preferences – have been shown to be very influential for real-life outcomes, such as educational achievements, labor market outcomes, or health status. We contribute to the recent literature that has examined how and when economic preferences are formed, putting particular emphasis on the role of intergenerational transmission of economic preferences within families. Our paper is the first to run incentivized experiments with fathers and mothers and their children by drawing on a unique dataset of 1,999 members of Bangladeshi families, including 911 children, aged 6-17 years, and 544 pairs of mothers and fathers. We find a large degree of intergenerational persistence as the economic preferences of mothers and fathers are significantly positively related to their children’s economic preferences. Importantly, we find that socio-economic status of a family has no explanatory power as soon as we control for parents’ economic preferences. A series of robustness checks deals with the role of older siblings, the similarity of parental preferences, and the average preferences within a child’s village.
    Keywords: Consumer/Household Economics, Health Economics and Policy, Institutional and Behavioral Economics, Labor and Human Capital, Research Methods/ Statistical Methods, Risk and Uncertainty
    Date: 2018–03–28
  27. By: Appel, Franziska; Balmann, Alfons; Dong, Changxing; Rommel, Jens
    Abstract: Business management games have been used for decades, primarily for educational purposes, training, and entertainment. More recently, the use of such games has expanded to an experimental platform. Usually business management games are directly designed and developed for one or more of these purposes; however, this paper discusses another possibility: the development of a business management game based on an existing agent-based model. We encourage this use and describe the extension of the agent-based model AgriPoliS, which has been widely used to analyze structural change in agriculture. We document the resulting software FarmAgriPoliS and provide a systematic classification of FarmAgriPoliS into the framework of business management games with agricultural background. Furthermore, we evaluate the suitability of FarmAgriPoliS for teaching, experimental use, and online gaming.
    Keywords: Agribusiness, Farm Management, Institutional and Behavioral Economics, Teaching/Communication/Extension/Profession
    Date: 2018–03–30
  28. By: Bolhaar, Jonneke (CPB Netherlands Bureau for Economic Policy Analysis); Ketel, Nadine (University of Gothenburg); van der Klaauw, Bas (Vrije Universiteit Amsterdam)
    Abstract: In this paper we focus on the role of caseworkers in the assignment and take-up of welfare-to-work programs. We conduct a field experiment that generates exogenous variation in the assignment to different policy regimes to caseworkers. The experiment allows us to provide evidence on the effectiveness of welfare-to-work programs and to study how caseworkers exploit their discretion in assigning these programs to welfare recipients. We find substantial heterogeneity in how caseworkers assign welfare-to-work programs. Participation in the experiment and learning about the effectiveness of the different programs does not induce caseworkers to focus more on the effective programs. This implies that obtaining knowledge about welfare-to-work programs is not enough to improve policy, also effort on implementation is required.
    Keywords: field experiment, welfare-to-work, caseworkers
    JEL: C93 I38 J64 J08
    Date: 2018–07
  29. By: Bolhaar, Jonneke (CPB Netherlands Bureau for Economic Policy Analysis); Ketel, Nadine (Department of Economics, School of Business, Economics and Law, Göteborg University); van der Klaauw, Bas (VU University Amsterdam,Tinbergen Institute)
    Abstract: In this paper we focus on the role of caseworkers in the assignment and take-up of welfare-to-work programs. We conduct a field experiment that generates exogenous variation in the assignment to different policy regimes to caseworkers. The experiment allows us to provide evidence on the effectiveness of welfare-to-work programs and to study how caseworkers exploit their discretion in assigning these programs to welfare recipients. We find substantial heterogeneity in how caseworkers assign welfare-to-work programs. Participation in the experiment and learning about the effectiveness of the different programs does not induce caseworkers to focus more on the effective programs. This implies that obtaining knowledge about welfare-to-work programs is not enough to improve policy, also effort on implementation is required.
    Keywords: field experiment; welfare-to-work; caseworker
    JEL: C93 I38 J08 J64
    Date: 2018–07
  30. By: Amodio, Francesco (McGill University); Choi, Jieun (World Bank); De Giorgi, Giacomo (University of Geneva); Rahman, Aminur (World Bank)
    Abstract: Firms in developing countries often avoid paying taxes by making informal payments to tax officials. These bribes may raise the cost of operating a business, and the price charged to consumers. To decrease these costs, we designed a feedback incentive scheme for business tax inspectors that rewards them according to the anonymous evaluation submitted by inspected firms. We show theoretically that feedback incentives decrease the equilibrium bribe amount, but make firms with more inelastic demand more attractive for inspectors. A tilted scheme that attaches higher weights to the evaluation of smaller firms limits the scope for targeting and decreases the bribe amount to a lesser extent. We evaluate both schemes in a field experiment in the Kyrgyz Republic and find evidence that is consistent with the model predictions. By decreasing bribes, our intervention reduces the average cost for firms and the price they charge to consumers. Since fewer firms substitute bribes for taxes, tax revenues increase. Our study highlights the role of firm heterogeneity and market structure in shaping the relationship between firms and tax inspectors, and provides clear evidence of pass-through of bribes to consumers.
    Keywords: business tax, incentives, market structure, demand elasticity
    JEL: D22 D40 H26 H71 O12
    Date: 2018–07
  31. By: Claudia Cerrone (Max Planck Institute for Research on Collective Goods); Author-Name: Yoan Hermstruwer (Max Planck Institute for Research on Collective Goods; Competition Authority, Lisboa, Portugal)
    Abstract: This paper explores the impact of debarment as a deterrent of collusion in first-price procurement auctions. We develop a procurement auction model where bidders can form bidding rings, and derive the bidding and collusive behavior under no sanction, debarment and fines. The model's predictions are tested through a lab experiment. We find that debarment and fines both reduce collusion and bids. The deterrent effect of debarment increases in its length. However, the debarment of colluding bidders reduces effciency and increases the bids of non-debarred bidders. The latter suggests that the market size reduction resulting from debarment may trigger tacit collusion.
    Keywords: debarment, collusion, procurement auctions, procurement law, sanctions
    JEL: C92 D03 D44 K21 K42
    Date: 2018–04
  32. By: Okyere, Charles Yaw; Pangaribowo, Evita Hanie; Asante, Felix Ankomah; von Braun, Joachim
    Abstract: Households in developing countries face an enormous set of health risks from using contaminated water sources. In 2014, a group of 512 households relying on unimproved water, sanitation and hygiene practices in the Greater Accra region of Ghana were randomly selected to participate in the intervention on water quality self-testing and to receive water quality improvement messages (information). The treatment group was separated into two groups: (1) a school children intervention group and (2) an adult household members intervention group, to identify the role of intra-household decision making or resource allocation in the delivery of water quality information. The comparison group neither participated in the water quality self-testing nor received information. The impacts of the experiment are estimated using intention-to-treat (ITT), instrumental variable (IV) and differences-in-differences (DiD) estimators. Participation rate, which is used as a proxy for uptake, is higher among the school children intervention group in comparison to the adult intervention group. The results show that the household water quality testing and information experiment increase the choice of improved water sources and other safe water behaviors. The study implies that household water quality testing and information could be used as “social marketing” strategy in achieving safe water behaviors. The school children intervention group is more effective in the delivery of water quality information, thereby making a strong case of using school children as “agents of change” in improving safe water behaviors. The study also finds limited evidence of gender differentiated impacts based on the gender of the participants, especially in terms of improved water source choices. The findings have implications on the Sustainable Development Goals (SDGs), particularly on improvement in safe water behaviors and microbial analysis of water quality by providing practical experiences from resource poor settings.
    Keywords: Health Economics and Policy, Institutional and Behavioral Economics, Research Methods/ Statistical Methods
    Date: 2017–03–31
  33. By: Christoph Engel (Max Planck Institute for Research on Collective Goods)
    Abstract: Behavioral law and economics applies the conceptual tools of behavioral economics to the analysis of legal problems and legal intervention. These models, and the experiments to test them, assume an institution free state of nature. In modern societies, the law’s subjects never see this state of nature. However a rich arrangement of informal and formal institutions creates generalized trust. If individuals are sufficiently confident that nothing too bad will happen, they are freed up to interact with strangers as if they were in a state of nature. This willingness dramatically reduces transaction cost and enables division of labor. If generalized trust can be assumed, simple economic models are appropriate. But they must be behavioral, since otherwise individuals would not want to run the risk of interaction.
    Date: 2018–01
  34. By: Werner, Peter (General Economics 1 (Micro)); Riedl, Arno (General Economics 1 (Micro))
    Abstract: In this paper, we review selected evidence to demonstrate the value of experiments for policy design with a focus on environmental policy and tax policy. Experiments can substantially improve ex-ante predictions about the outcomes of policy interventions, for example, by serving as “testbeds” to compare alternative market rules and mechanisms under tightly controlled conditions. Experiments also yield important insights into systematic deviations from strict rationality and into the heterogeneity of preferences among decision-makers that can form the basis for the (re-) design of policies. Besides describing various experimental approaches applied in the areas of environmental policy and tax policy, we also discuss further directions for successful collaborations between experimental economists and political decision-makers.
    Keywords: experiments, policy design, policy evaluation, behavioral regularities, non-standard preferences, environmental policy, tax policy
    Date: 2018–08–27
  35. By: Cortes, Kalena E. (Texas A&M University); Fricke, Hans (Stanford University); Loeb, Susanna (Stanford University); Song, David S. (Stanford University)
    Abstract: Text-message based parenting programs have proven successful in improving parental engagement and preschoolers' literacy development. The tested programs have provided a combination of (a) general information about important literacy skills, (b) actionable advice (i.e., specific examples of such activities), and (c) encouragement. The regularity of the texts – each week throughout the school year – also provided nudges to focus parents' attention on their children. This study seeks to identify mechanisms of the overall effect of such programs. It investigates whether the actionable advice alone drives previous study's results and whether additional texts of actionable advice improve program effectiveness. The findings provide evidence that text messaging programs can supply too little or too much information. A single text per week is not as effective at improving parenting practices as a set of three texts that also include information and encouragement, but a set of five texts with additional actionable advice is also not as effective as the three-text approach. The results on children's literacy development depend strongly on the child's pre-intervention literacy skills. For children in the lowest quarter of the pretreatment literacy assessments, only providing one example of an activity decreases literacy scores by 0.15 standard deviations relative to the original intervention. Literacy scores of children in higher quarters are marginally higher with only one tip per week. We find no positive effects of increasing to five texts per week.
    Keywords: text messaging, parental engagement, literacy and reading skills, and parent-child activities
    JEL: I21 I24 J18
    Date: 2018–07
  36. By: Yayan Hernuryadin (Ministry of Marine Affairs and Fisheries, Republic of Indonesia); Koji Kotani (School of Economics and Management, Kochi University of Technology); Tatsuyoshi Saijo (School of Economics and Management, Kochi University of Technology)
    Abstract: Overexploitation of marine resources in Indonesia is threatening their sustainability and is considered to be induced by shortsightedness of fishermen and/or of their wives at household level. Given this states of affairs, we address individual time preferences of married couples (fishermen and their wives) in fisheries. To this end, we conduct an individual discounting elicitation experiment with 200 married couples (200 fishermen and 200 fishermen’s wives) in an Indonesian fisheries society, Karawang regency. We find that fishermen’s discount factors are slightly higher than their wives’ ones on an average with positive correlation between the two, and their incomes have idiosyncratic influences on individual time preferences of a couple. Fishermen’s incomes weakly influence only wives’ time preferences, while wives’ incomes significantly and positively affect not only fishermen’s but also wives’ time preferences to be farsighted. The betafit regression demonstrates that a wife’s (fisherman’s) discount factor increases by 5.1% (5.6 %) when a wife’s income increases by 1 million Rp. This result suggests that economic empowerment of fishermen’s wives is key for sustainability of marine resources and societies in Indonesia.
    Keywords: Time preferences, Income, Fishermen, Fishermen's wives, Fisheries society
    Date: 2018–08
  37. By: Martín González Rozada; Eduardo Levy Yeyati
    Abstract: The gender gap usually denotes observable differences between men and women that are influenced by the social environment. In the workplace, it refers to systematic differences in job opportunities and salaries (controlling for the characteristics of the job and the employee). Statistics have shown that men often earn more for the same work than women, a difference that may reflect that men work more hours (an aspect compounded by the fact that they work highly-paid overtime) or tend to work relatively more in high-pay activities (horizontal gap), to prevail in top positions within a company (vertical gap), or to be offered lower pay for the same work. Most of these analyses are based on outcomes (actual wages being paid), as it is usually assumed that the gap is driven by a demand bias: for a number or reasons, a male society is willing to pay less for a woman than for a man doing the same task. But is it not possible that the gender gap is already embedded in the labor supply? To what extent the gender pay gap reflects an “ask gap”? More specifically: do women ask for less, for the same exact job? Many factors can determine gender-driven differences in labor supply. For starters, men and women may exhibit gender differences in preferences or self-assessments regarding specific occupational choices. Cortes & Pan (2017) based on features described in the BLS’s Occupational Information Network (or O*NET), document that the female-to-male-ratio (FMR) increases for occupations in a softer competitive environment, exhibiting a larger social contribution, or enjoying greater flexibility and a lower intensity in physical effort; and that more competitive and inflexible environments are associated with a larger gender gap. Kleinjans, Krassel & Dukes (2017) argue that women display a preference for jobs with “occupational prestige” and high social standing (at the expense of a lower wage). Finally, Correll (2001) reports that occupational choices are gender determined: males are perceived (by males and females) as better equipped for math (despite weak supporting empirical evidence in this regard), which in turn may determine performance self-assessment and, ultimately, occupational choices. In addition, it has been pointed out that women prefer to work in female-friendly environments. For example, Lordan and Pischke (2016) find a strong positive relationship between female satisfaction and the female-to-male-ratio, both in the occupation and in the firm, while males either like or are indifferent to the share of males in an occupation. Barbulescu and Bidwell (2013) find that women prefer jobs with better anticipated work-life balance and lower identification with stereotypically masculine jobs, which results in lower expectations of job offer success in male dominated jobs. Another aspect highlighted by the literature relates to women´s relative propensity to wage bargain. On this front, the evidence is mixed. Early studies find that women are less likely than men to initiate negotiations (Babcock & Laschever 2003; Babcock et al 2007), and experimental research has shown that women choose competitive pay-offs to a lesser extent than men (as Datta Gupta et al, 2006 suggests, because of higher risk aversion; see also Niederle & Vesterlund, 2005). However, Artz, Goodhall & Oswald (2016) finds no evidence that women are less prone to requesting wage raises than men, while Kaschner, Kugler, Reif & Brodbeck (2013), based on a meta-analysis of 24 studies that explore gender differences related to wage negotiations, conclude that women have a lower, albeit minor, propensity to negotiate, and Freund, Hüffmeier, Mazei & Stuhlmacher (2014), in another meta-analysis of 51 studies of negotiation outcomes, find that men tend to reach better economic outcomes than women but the difference narrows for women with negotiation experience, or when negotiation ranges are explicitly communicated (a result also reported by Leibbrandt & List (2012). Existing studies on the supply-side determinants of the gender gap based quantitative data on actual asked wages are relatively scarce and yield mixed results. Based on survey where recent social science graduates in Sweden are asked to report their respective bids “for the initial job they got in their field of major”, Save-Soderbergh (2007) finds that women “consistently submit lower wage bids than men do” (due to “lack of incentives to safe promote”). Alternatively, Galperin, Cruces and Greppi (2017), based on a field experiment where 2800 frelancers were asked to apply for a job using an online platform for short-term contracts in Spain (Nubelo), find that “women don´t ask for less”.
    Date: 2018–07
  38. By: Lorko, Matej; Servátka, Maroš; Zhang, Le
    Abstract: The success of a business project often relies on the accuracy of its project duration estimates. Inaccurate and overoptimistic project schedules can result in significant project failures. In this paper, we explore whether the presence of anchors, such as relatively uninformed suggestions or expectations of the duration of project tasks, play a role in the project estimating and planning process. We conduct a controlled laboratory experiment to test the effect of anchors on task duration estimates. We find strong anchoring effects and systematic estimation biases that do not vanish even after the task is repeatedly estimated and performed. We also find that such persisting biases can be caused by not only externally provided anchors, but also by the planner’s own initial task duration estimate.
    Keywords: Project management, project planning, time management, anchors, anchoring effect, task duration, duration estimation, time estimation, anchoring bias
    JEL: C91 D83 D92 O21 O22
    Date: 2018–08–13
  39. By: Janusch, Nicholas; Palm-Forster, Leah H.; Messer, Kent D.; Ferraro, Paul J.
    Abstract: Insights from other behavioral sciences (e.g., psychology, neuroscience) have slowly been infiltrating mainstream economic thought and are now routinely informing the design of programs and policies in multiple domains. The same insights hold promise for designing more effective agri-environmental programs and policies. Motivated by the MINDSPACE categorization of behavioral insights introduced by Dolan et al. (2012), we develop the Ag-E MINDSPACE framework (where “Ag-E” stands for agri-environmental) to organize a review of the experimental literature on behavioral insights within the agri-environmental domain. The mnemonic MINDSPACE categorizes the behavioral impacts of messengers, incentives, norms, defaults, salience, priming, affect, commitments, and ego. Our Ag-E MINDSPACE framework further categorizes these insights as they apply to relevant agri-environmental issues, which are affected by the decisions of producers and consumers. Designed as a practical guide for researchers and an aid to practitioners in deciding which behavioral interventions to embed in their programs, this review summarizes the estimated effect sizes of behavioral interventions that are relevant for agri-environmental applications. We find that, unlike other policy domains, in which one can find dozens of relevant behavioral studies, the agri-environmental domain is characterized by a paucity of behavioral studies that can guide practitioners. Practitioners are thus forced to either (i) assume that results from other domains, which are largely focused on consumer decision-making in contexts such as healthcare, anti-poverty, education, and finance, can be applied to the agri-environmental programs and policies, or (ii) collaborate with researchers to replicate and extend the insights from other domains to important agri-environmental contexts.
    Keywords: Environmental Economics and Policy, Health Economics and Policy
    Date: 2017–12–01
  40. By: Yutaka Kayaba (University of Tokyo); Hitoshi Matsushima (University of Tokyo); Tomohisa Toyama (International Christian University)
    Abstract: This study theoretically investigates an infinitely repeated prisoners' dilemma in which the monitoring technology is imperfect and private. In contrast to previous works, we shed light on the psychological aspect of monitoring imperfection rather than its informational aspect. We demonstrate a behavioral model in which a player is motivated not only by pure self-interest but also by social preferences such as reciprocity and naïveté. We then focus on the possibility that a generous tit-for-tat strategy, a simple Markovian stochastic strategy, satisfies equilibrium properties. We show that the prediction from the behavioral model is opposed to, but much more compatible with, daily experiences and existing experimental evidence than the prediction from the standard model with pure self-interest.
    Date: 2018–04
  41. By: René Böheim; Dominik Grübl; Mario Lackner
    Abstract: We analyze performance under pressure and estimate the causal effect of audience size on the success of free throws in top-level professional basketball. We use data from the National Basketball Association (NBA) for the seasons 2007/08 through 2015/16. We exploit the exogenous variation in weather conditions on game day to establish a causal link between attendance size and performance. Our results confirm a sizeable and strong negative effect of the number of spectators on performance. Home teams in (non-critical) situations at the beginning of games perform worse when the audience is larger. This result is consistent with the theory of a home choke rather than a home field advantage. Our results have potentially large implications for general questions of workplace design and help to further understand how the social environment affects performance. We demonstrate that the amount of support, i.e. positive feedback, from a friendly audience does affect performance.
    Keywords: performance under pressure; choking; social pressure
    JEL: D03 J24 M54
    Date: 2018–08
  42. By: Dario Madeo; Chiara Mocenni
    Abstract: Cooperative behavior in real social dilemmas is often perceived as a phenomenon emerging from norms and punishment. To overcome this paradigm, we highlight the interplay between the influence of social networks on individuals, and the activation of spontaneous self-regulating mechanisms, which may lead them to behave cooperatively, while interacting with others and taking conflicting decisions over time. By extending Evolutionary game theory over networks, we prove that cooperation partially or fully emerges whether self-regulating mechanisms are sufficiently stronger than social pressure. Interestingly, even few cooperative individuals act as catalyzing agents for the cooperation of others, thus activating a recruiting mechanism, eventually driving the whole population to cooperate.
    Date: 2018–07
  43. By: Jose A. Cuesta; Carlos Gracia-L\'azaro; Yamir Moreno; Angel S\'anchez
    Abstract: Melamed, Harrell, and Simpson have recently reported on an experiment which appears to show that cooperation can arise in a dynamic network without reputational knowledge, i.e., purely via dynamics [1]. We believe that their experimental design is actually not testing this, in so far as players do know the last action of their current partners before making a choice on their own next action and subsequently deciding which link to cut. Had the authors given no information at all, the result would be a decline in cooperation as shown in [2].
    Date: 2018–03
  44. By: Kiet, Nguyen Tuan
    Abstract: Shrimp farming in many parts of the world causes pollution to the environment. Upstream shrimp farmers dump untreated waste water that typically contains unconsumed feed, chemicals and even diseases into river system, polluting surrounding areas as well as downstream areas. We study experimentally solutions to the wastewater pollution problem of shrimp farming with upstream and downstream externality. The results show that an external monitoring and certification agency does not help while communication helps greatly laboratory shrimp farmers in solving the pollution problems. Once the problem is solved, the farmers manage to sustain self-governance. This suggests the possibility of community-based solutions in the field
    Keywords: Agricultural and Food Policy, Community/Rural/Urban Development, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety
    Date: 2016–08–25
  45. By: Bartos, Vojtech (LMU Munich); Bauer, Michal (CERGE-EI and Institute of Economic Studies); Chytilova, Julie (Institute of Economic Studies); Levely, Ian (Wageningen University)
    Abstract: We study two psychological channels how poverty may increase impatient behavior -- an effect on time preference and reduced attention. We measured discount rates among Ugandan farmers who made decisions about when to enjoy entertainment instead of working. We find that experimentally induced thoughts about poverty-related problems increase the preference to consume entertainment early and delay work. The effect is equivalent to a 27 p.p. increase in the intertemporal rate of substitution. Using monitoring tools similar to eye tracking, a novel feature for this subject pool, we show this effect is not due to a lower ability to sustain attention.
    Keywords: poverty; scarcity; time discounting; preferences; inattention; decision-making process;
    Date: 2018–07–30
  46. By: Di Stefano, Giada; A. King, Andrew; Verona, Gianmario
    Abstract: A long tradition in social science research emphasizes the potential for knowledge to flow among firms co-located in dense areas. Scholars have suggested numerous modes for these flows, including the voluntary transfer of private knowledge from one firm to another. Why would the holder of valuable private knowledge willingly transfer it to a potential and closely proximate competitor? In this paper, we argue that geographic concentration has an effect on the expected compliance with norms governing the use of transferred knowledge. The increased expected compliance favors trust and initiates a process of reciprocal exchange. To test our theory, we use a scenario-based field experiment in gourmet cuisine, an industry in which property rights do not effectively protect knowledge and geographic concentration is common. Our results confirm our conjecture by showing that the expectation that a potential co-located firm will abide by norms mediates the relationship between geographic concentration and the willingness to transfer private knowledge.
    Keywords: Geographic Concentration; Density; Knowledge Transfer; Social Norms; Field Experiment; Hospitality Industry
    JEL: L10
    Date: 2016–10–25
  47. By: Matthew Harding; Carlos Lamarche
    Abstract: This paper introduces a quantile regression estimator for panel data models with individual heterogeneity and attrition. The method is motivated by the fact that attrition bias is often encountered in Big Data applications. For example, many users sign-up for the latest program but few remain active users several months later, making the evaluation of such interventions inherently very challenging. Building on earlier work by Hausman and Wise (1979), we provide a simple identification strategy that leads to a two-step estimation procedure. In the first step, the coefficients of interest in the selection equation are consistently estimated using parametric or nonparametric methods. In the second step, standard panel quantile methods are employed on a subset of weighted observations. The estimator is computationally easy to implement in Big Data applications with a large number of subjects. We investigate the conditions under which the parameter estimator is asymptotically Gaussian and we carry out a series of Monte Carlo simulations to investigate the finite sample properties of the estimator. Lastly, using a simulation exercise, we apply the method to the evaluation of a recent Time-of-Day electricity pricing experiment inspired by the work of Aigner and Hausman (1980).
    Date: 2018–08
  48. By: Vasily Minkov (National Research University Higher School of Economics); Tadamasa Sawada (National Research University Higher School of Economics)
    Abstract: Theoretical understanding of a visual stimulus in a psychophysical experiment is critical for controlling the experiment and for interpreting its results. This fact encourages vision scientists to use “simple” visual stimuli. A triangle in a 3D scene is one of the simplest stimuli for studying 3D perception. In this study, we analyzed geometrical properties of a relation between the triangle and its retinal image using a computer algorithm. Based on the analysis, we discuss validity of results of past studies that used triangles as their visual stimuli.
    Keywords: shape constancy; shape ambiguity; visual space; Euclidean geometry; non-Euclidean geometry; binocular disparity; P3P problem.
    JEL: Z
    Date: 2018

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