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on Experimental Economics |
| By: | Cátia Batista; Marcel Fafchamps; Pedro C. Vicente |
| Abstract: | SMS information campaigns are increasingly used for policy. To investigate their effectiveness, we conduct a lab-in-the-field experiment to study information sharing through mobile phone messages. Subjects are rural households in Mozambique who have access to mobile money. In the base treatment, subjects receive an SMS containing information on how to redeem a voucher. They can share this information with other exogeneously assigned subjects. We find that few participants redeem the voucher. They nonetheless share it with others and many share information they do not use themselves. Information is shared more when communication is anonymous and we find no evidence of homophily in information sharing. We introduce treatments to vary the cost of sending a message, shame those who do not send the voucher to others, or allow subjects to appropriate the value of information. All decrease information sharing. To encourage information sharing, the best is to keep it simple. |
| JEL: | D64 D83 O33 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24908&r=exp |
| By: | Vojtech Bartos; Ian Levely |
| Abstract: | We show how sanctioning is more effective in increasing cooperation between groups than within groups. We study this using a trust game among ethnically diverse subjects in Afghanistan. In the experiment, we manipulate i) sanctioning and ii) ethnic identity. We find that sanctioning increases trustworthiness in cross-ethnic interactions, but not when applied by a co-ethnic. While we find higher in-group trustworthiness in the absence of sanctioning, the availability and use of the sanction closes this gap. This has important implications for understanding the effect of institutions in developing societies where ethnic identity is salient. Our results suggest that formal institutions for enforcing cooperation are more effective when applied between, rather than within, ethnic groups, due to behavioral differences in how individuals respond to sanctions. |
| Keywords: | sanctions, cooperation, crowding out, moral incentives, ethnicity, Afghanistan |
| JEL: | D01 D02 C93 J41 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7179&r=exp |
| By: | Tetsuya KAWAMURA; Takanori Ida; Kazuhito Ogawa |
| Abstract: | An understanding of crowd funding—an increasingly attractive alternative means of financing research and development—could assist effective campaign design. A randomized control trial online field experiment determined which participants donated toward the research and development of next-generation space power plants, and which of three intervention types facilitate donation: “matching”, “social pressure” and “matching & pressure”. Results indicate that: (1) all intervention types increased the donation rates significantly; (2) the total effects of “matching” and “pressure” surpassed the effect of “matching & pressure” for participants with low intrinsic motives, but not for participants with high intrinsic motives. |
| Keywords: | Online Field Experiment, Donation, Matching Fund, Social Pressure, Crowding out,Intrinsic Motives |
| JEL: | C93 D03 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-18-005&r=exp |
| By: | Grosch, Kerstin; Ibanez, Marcela; Viceisza, Angelino |
| Abstract: | Competitive bonuses are commonly used to promote higher productivity in the workplace. Yet, these types of incentives could have negative spillovers on coworkers' prosocial behavior in subsequent tasks. To investigate this question, we conduct a lab-in-the-eld experiment in Ghana. In a between-subjects design, participants complete a real-eort task under a competitive, threshold, or random payment while holding payment dierentials constant across treatments. Before and after, we measure prosociality through a public goods and a social value orientation game. Competition reduces prosociality when the dispersion of payments is high. However, when there is less at stake, competition does not aect prosociality. |
| Keywords: | Institutional and Behavioral Economics, Labor and Human Capital |
| Date: | 2017–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:266141&r=exp |
| By: | Valeria Burdea (University of Nottingham, School of Economics); Maria Montero (University of Nottingham, School of Economics); Martin Sefton (University of Nottingham, School of Economics) |
| Abstract: | We use laboratory experiments to study communication games with partially verifiable information. In these games, based on Glazer and Rubinstein (2004, 2006), an informed sender sends a two-dimensional message to a receiver, but only one dimension of the message can be verified. We compare a treatment where the receiver chooses which dimension to verify with one where the sender has this verification control. We find significant differences in outcomes across treatments. Specifically, receivers are more likely to observe senders’ best evidence when senders have verification control. However, receivers' payoffs do not differ significantly across treatments, suggesting they are not hurt by delegating verification control. We also show that in both treatments the receiver's best reply to senders' observed behavior is close to the optimal strategy identified by Glazer and Rubinstein. |
| Keywords: | communication, partially verifiable messages, verification control, experiment |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2018-07&r=exp |
| By: | Penney, Jeffrey; Tolley, Erin; Goodyear-Grant, Elizabeth |
| Abstract: | We analyze the results of a large-scale experiment wherein subjects participate in a hypothetical primary election and must choose between two fictional candidates who vary by sex and race. We find evidence of affnities along these dimensions in voting behaviour. A number of phenomena regarding these affnities and their interactions are detailed and explored. We find that they compete with each other on the basis of race and gender. Neuroeconomic metrics suggest that people who vote for own race candidates tend to rely more on heuristics than those who do not. |
| Keywords: | Financial Economics, Public Economics |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:quedwp:274696&r=exp |
| By: | Peia, Oan (University College Dublin); Vranceanu, Radu (ESSEC Research Center, ESSEC Business School) |
| Abstract: | This paper presents experimental evidence on depositor behavior under partial deposit insurance schemes. In the experiment, the size of a deposit insurance fund cannot fully cover all deposits and the level of insurance depends on the number of depositors running on the bank. We show that this form of strategic uncertainty about deposit coverage exerts a significant impact on the propensity to withdraw, and results in a large frequency of bank runs. Runs are more likely when depositors have noisy information about the size of the insurance fund and as the maximum coverage increases, in line with a risk-dominant equilibrium selection mechanism. From a policy perspective, our results emphasize the limits of underfunded deposit insurance schemes in preventing systemic banking crises. |
| Keywords: | Bank runs; Deposit insurance; Risk dominance; Global games |
| JEL: | C91 D83 G02 G21 |
| Date: | 2017–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-17005&r=exp |
| By: | Lubomir Cingl (Department of Institutional, Environmental and Experimental Economics, Faculty of Economics, University of Economics in Prague, Nam. Winstona Churchilla 4, 130 67 Prague, Czech Republic; CERGE-EI Foundation Teaching Fellow); Vaclav Korbel (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic) |
| Abstract: | This paper reports on a lab-in-the- eld experiment that investigates differences in rule-violating behavior between the inmates of juvenile detention centers and regular adolescents from primary schools of similar age in response to three specific contexts: (i) when they interact with ingroup and outgroup members, (ii) when they are exposed to an unfair economic situation and (iii) when the rule-violating behavior is exposed to others. Our results show substantial similarities between the delinquents and non-problematic adolescents. Even though the juvenile delinquents violate rules more, we nd no evidence of ingroup favoritism. Moreover, both groups care similarly about their social image and do not violate rules substantially more after the unfair treatment. Our findings thus show that juvenile delinquents are not inherently di erent from non-problematic adolescents and highlight the importance of social values for successful resocialization. |
| Keywords: | delinquency, adolescence, rule-violation, experiment, random allocation game |
| JEL: | C93 I21 J13 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2018_18&r=exp |
| By: | Basteck, Christian (ECARES Brussels); Klaus, Bettina (University of Lausanne); Kübler, Dorothea (WZB Berlin Social Science Center) |
| Abstract: | The use of lotteries is advocated to desegregate schools. We study lottery quotas embedded in the two most common school choice mechanisms, namely deferred and immediate acceptance mechanisms. Some seats are allocated based on merit (e.g., grades) and some based on lottery draws. We focus on the effect of the lottery quota on truth-telling, the utility of students, and the student composition at schools, using theory and experiments. We find that the lottery quota strengthens truth-telling in equilibrium when the deferred acceptance mechanism is used while it has no clear effect on truth-telling in equilibrium for the immediate acceptance mechanism. This finds support in the experiment. Moreover, the lottery quota leads to more diverse school populations in the experiments, as predicted. Comparing the two mechanisms, students with the lowest grades profit more from the introduction of the lottery under immediate than under deferred acceptance. |
| Keywords: | school choice; immediate acceptance mechanism; deferred acceptance mechanism; lotteries; experiment; market design; |
| JEL: | C78 C91 D82 I24 |
| Date: | 2018–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:114&r=exp |
| By: | Simone Haeckl (Department of Economics, Vienna University of Economics and Business); Rupert Sausgruber (Department of Economics, Vienna University of Economics and Business); Jean-Robert Tyran (Department of Economics, University of Copenhagen) |
| Abstract: | We provide a new measure of work motivation and show that motivation shapes the effects of team incentives and observation by peers on performance. In particular, we measure motivation to work hard as the deviation from the money-maximizing benchmark in a real-effort experiment. While we find that average output increases in response to team incentives and observation, we find that highly motivated workers do not respond. The reason is that highly motivated workers already work hard and increasing effort even further is very costly to them. |
| Keywords: | real-effort experiment, cooperation, team, intrinsic motivation, labors |
| JEL: | C91 J33 L20 |
| Date: | 2018–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1808&r=exp |
| By: | Agranov, Marina; Cotton, Christopher; Tergiman, Chloe |
| Abstract: | In a variety of settings, budgets are set by a committee that interacts repeatedly over many budget cycles. To capture this, we study a model of repeated multilateral bargaining by a budget committee. Our focus is on the transition of agenda setting power from one cycle to the next, and how such considerations affect bargaining and coalition formation over time. Specifically, we compare a rule that approximates the budget process in many parliamentary democracies in which a vote of confidence is traditionally attached to each budget proposal, and a rule that approximates the budget process in congressional systems where party leadership must maintain the support of a majority of other legislators to hold onto power. As is standard in the literature, we use stationary equilibrium refinements to make predictions about behavior in our environments. In a controlled laboratory experiment, we find no support for the standard equilibrium refinements used in the literature. In sharp contrast to the theoretical predictions, in the experiment, both rules give rise to stable and persistent coalitions in terms of coalition size, identity, and shares of coalition partners and feature high persistence of agenda-setter power. Our results call into question the validity of restricting attention to history independent strategies in dynamic bargaining games. We conclude by showing that weakening the standard equilibria concepts to allow players to condition on one piece of history (the most recent deviator) is enough to generate equilibria which are consistent with outcomes and behavior observed in the experiments. |
| Keywords: | Financial Economics, Political Economy |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:quedwp:274700&r=exp |
| By: | Christian Basteck; Bettina Klaus; Dorothea Kuebler |
| Abstract: | The use of lotteries is advocated to desegregate schools. We study lottery quotas embedded in the two most common school choice mechanisms, namely deferred and immediate acceptance mechanisms. Some seats are allocated based on merit (e.g., grades) and some based on lottery draws. We focus on the effect of the lottery quota on truth-telling, the utility of students, and the student composition at schools, using theory and experiments. We find that the lottery quota strengthens truth-telling in equilibrium when the deferred acceptance mechanism is used while it has no clear effect on truth-telling in equilibrium for the immediate acceptance mechanism. This finds support in the experiment. Moreover, the lottery quota leads to more diverse school populations in the experiments, as predicted. Comparing the two mechanisms, students with the lowest grades profit more from the introduction of the lottery under immediate than under deferred acceptance. |
| Keywords: | School choice; immediate acceptance mechanism; deferred acceptance mechanism; lotteries, experiment; market design |
| JEL: | C78 C91 D82 I24 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:18.06&r=exp |
| By: | Elsa Voytas (Princeton University); Laia Balcells (Georgetown University); Valeria Palanza (Universidad Catolica de Chile) |
| Abstract: | Can transitional justice museums promote reconciliation after political violence? Existing scholarship suggests that transitional justice policies aid processes of reconciliation and promote tolerance by acknowledging and imparting a shared history of past events. These notions motivate the widespread construction of transitional justice museums. Skeptics, however, caution that such policies can induce a polarizing effect, ingraining societal divisions. This project draws on evidence from a novel field experiment studying the Museum of Memory and Human Rights in Santiago, Chile to answer this question. Our findings suggest that though perceptions of the museum vary along ideological lines, Chilean university students display greater support for democratic institutions, are more likely to reject institutions associated with the repressive period, and are more likely to approve of restorative transitional justice policies after visiting regardless of their ideological priors. These results suggest that memorial museums can support processes of reconciliation by influencing political attitudes of visitors. |
| Keywords: | Transitional justice, Latin America, field experiments, reconciliation, museums and memorials, memory, Chile |
| JEL: | N46 C93 D74 F51 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:pri:esocpu:10&r=exp |
| By: | Kuhfuss, Laure; Preget, Raphaele; Thoyer, Sophie; de Vries, Frans; Hanley, Nick |
| Abstract: | The environmental benefits from Payment for Environmental Service (PES) schemes can often be enhanced if farmers can be induced to enrol land in a spatially-coordinated manner. This is because the achievement of many targets for biodiversity conservation policy or water quality improvements are increasing in the spatial connectedness of enrolled land. One incentive mechanism which has been proposed by economists to achieve such connectedness is the Agglomeration Bonus (the AB). There has also been an interest within the literature on PES design in using “nudges” to enhance participation and performance. In this paper, we test whether a specific nudge in the form of information provided to participants on the environmental performance of their group can improve participation and spatial coordination, and/or enhance the impacts of the AB. We design a lab experiment whereby the environmental benefits generated by a PES scheme are generated by real contributions to an environmental charity. We argue that this mirrors the situation in actual PES schemes where participants derive utility from contributing to the environmental outputs of the scheme, in addition to the monetary payoffs they receive. Our results confirm the environmental benefits of the AB, but the impact of our nudge is much less environmentally effective. Interestingly, we find that the nudge does not significantly supercharge the AB, and can even worsen its performance. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2018–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc18:273497&r=exp |
| By: | Battaglini, Marco; Nunnari, Salvatore; Palfrey, Thomas R |
| Abstract: | This paper reports the results from a laboratory experiment designed to study political distortions in the accumulation of public debt. A legislature bargains over the levels of a public good and of district specific transfers in two periods. The legislature can issue or purchase risk-free bonds in the first period and the level of public debt creates a dynamic linkage across policymaking periods. In line with the theoretical predictions, we find that public policies are inefficient and efficiency is increasing in the size of the majority requirement, with higher investment in public goods and lower debt associated with larger majority requirements. Debt is lower when the probability of a negative shock to the economy in the second period is higher indicating that even in a political equilibrium debt is used to smooth consumption and to insure against political uncertainty. Finally, also in line with the theoretical predictions, we find that dynamic distortions are eliminated independently of the voting rule when the first period majority can commit to a policy for the second period. The experiment however highlights two phenomena that are surprising in terms of standard theory and have not been previously documented. First, balancing the budget in each period is a focal point, leading to lower distortions than predicted. Second, higher majority requirements induce significant delays in reaching an agreement. |
| Keywords: | Bargaining; Dynamic Political Economy; Laboratory experiments; public debt |
| JEL: | C78 C92 D71 D72 H41 H54 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13097&r=exp |
| By: | Cornelissen, Thomas (University of York); Dustmann, Christian (University College London); Raute, Anna (University of Mannheim); Schönberg, Uta (University College London) |
| 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: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11688&r=exp |
| By: | Ronayne, David; Sgroi, Daniel |
| Abstract: | We present results from an experiment involving 1,500 participants on whether, when and why good advice is ignored, focusing on envy and stubbornness. Participants performance in skill-based and luck-based tasks generated a probability of winning a bonus. About a quarter ignored advice that would have increased their chance of winning. Good advice was followed less often when the adviser was relatively highly remunerated or the task was skill-based. More envious advisees took good advice more often in the skill-based task, but higher adviser remuneration significantly reduced this effect. Susceptibility to the sunk cost fallacy reduced the uptake of good advice. |
| Keywords: | Financial Economics |
| Date: | 2018–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uwarer:269082&r=exp |
| By: | Proto, Eugenio; Sgroi, Daniel; Nazneen, Mahnaz |
| Abstract: | Existing research supports two opposing mechanisms through which positive mood might affect cooperation. Some studies have suggested that positive mood produces more altruistic, open and helpful behavior, fostering cooperation. However, there is contrasting research supporting the idea that positive mood produces more assertiveness and inward-orientation and reduced use of information, hampering cooperation. We find evidence that suggests the second hypothesis dominates when playing the repeated Prisoner’s Dilemma. Players in an induced positive mood tend to cooperate less than players in a neutral mood setting. This holds regardless of uncertainty surrounding the number of repetitions or whether pre-play communication has taken place. This finding is consistent with a text analysis of the pre-play communication between players indicating that subjects in a more positive mood use more inward-oriented, more negative and less positive language. To the best of our knowledge we are the first to use text analysis in pre-play communication. |
| Keywords: | Financial Economics |
| Date: | 2017–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uwarer:269091&r=exp |
| By: | Thomas Cornelissen; Christian Dustmann; Anna Christina Raute; Uta Schönberg |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7162&r=exp |
| By: | Götte, Lorenz; Tripodi, Egon |
| Abstract: | We propose an experiment that prevents social learning and allows to disentangle mechanisms of social influence. Subjects observe another individual's incentives, but not their behavior. We find conformity: when individuals believe that incentives make others contribute more, they also increase their contributions. Conformity is driven by individuals who feel socially close to their partner. However, when incentives don't raise others' contributions, individuals reduce contributions. This pattern cannot be explained by incentive inequality (Breza et al., 2017). We conclude that norm adherence is weakened when incentives are ineffective. Our results show that information about others' economic environment generates social influence |
| Keywords: | Online Experiment; prosocial behavior; social influence |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13078&r=exp |
| By: | Depenbusch, Lutz |
| Abstract: | We analyze the gender price gap (GPG) in Central Kenyan vegetable markets. Exploiting differences in the combination of the gender of the household head, the person controlling production, and the seller, we control for other gender related in uences. We cannot identify a signifcant GPG for the population as a whole but find an u-shaped relationship between the GPG and the sold quantities. Also, we observe that female control over marketing is negatively associated with the commercialization of vegetable trade. This indicates that besides the absence of an average GPG, women are disadvantaged in larger scale markets. These findings support recent experimental evidence that the GPG depends on the perceived competence and entitlement as women are traditionally active in small scale local vegetable trade but not in large scale trade in the survey region. Also, it is a warning that women might be left behind in an increasingly commercializing market, even though they traditionally controlled it. |
| Keywords: | Consumer/Household Economics, Farm Management, Institutional and Behavioral Economics, Production Economics |
| Date: | 2017–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:264020&r=exp |
| By: | Liebenehm, Sabine; Waibel, Hermann |
| Abstract: | In this paper, we analyze risk and time preferences as factors related to technology adoption. In the context of West African small-scale cattle farm households, we examine why the adoption of prophylactic drugs as an ex-ante risk management strategy to protect cattle from tsetse-transmitted African Animal Trypanosomosis (AAT) despite experts’ recommendation is low. To do so, we conducted two types of economic field experiments: (i) to elicit farmers’ risk and time preferences, considering additional behavioral information beyond standard economic theory and (ii) to observe farmers’ adoption decision of alternative drug treatments to manage the risk of AAT. Results show that loss aversion and high discount rates are associated with low prophylaxis take-up. More specifically, farmers value losses of animals that are infected with AAT larger than gains from healthy animals and short-term benefits from therapeutic treatment over long-term benefits from prophylactic treatment. As a consequence, a loss averse and impatient farmer that is less likely to apply AAT prophylaxis forgives chances of higher and sustainable returns, thereby deteriorates risk management abilities and likely perpetuates poverty. We suggest that the consideration of farmers’ risk and time preferences can help improving the effectiveness of livestock extension and veterinary services in West Africa. |
| Keywords: | Livestock Production/Industries, Research and Development/Tech Change/Emerging Technologies, Risk and Uncertainty |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi17:261993&r=exp |
| By: | John Duffy (Department of Economics, University of California-Irvine); Jonathan Lafky (Carleton College) |
| Abstract: | We propose a model of how public behavior changes in response to the evolution of privately held preferences. Our aim is to rationalize the tendency for individuals who hold minority viewpoints to falsely report their preferences by taking actions favored by the majority. We do this using a game involving a tension between honest expression of one's true preferences and a desire to conform to the behavior of others. In an experimental test of our model, we find confirmatory support for the model's main predictions, that even after a majority of the population shares what was previously an unpopular minority opinion, a lack of mutual awareness among members of the new majority can allow continued public support for the old status quo, and that the onset and speed of transitions to new, majority-held opinions depend on the relative difference in rewards from conformity versus truthful expression. |
| Keywords: | Conflict; conformity; social change; hypocrisy; insincerity; groupthink; pluralistic ignorance; preference falsification; experimental economics |
| JEL: | C92 D74 D82 D83 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:181902&r=exp |
| By: | Freudenreich, Hanna; Musshoff, Oliver; Wiercinski, Ben |
| Abstract: | A farmer’s uncertainty preferences can play a large role in how he makes production decisions on the farm. We attempt to understand how farmers’ household characteristics as well as past harvest shocks affect uncertainty preferences of maize farmers in southern Mexico. By using a series of incentivized lottery games, we estimate coefficients that correspond to Cumulative Prospect Theory, namely the probability weighting function, the curvature of the value function and loss aversion, along with a coefficient for ambiguity aversion. These are estimated controlling for survey data of sociodemographic characteristics as well as maize harvest losses incurred between 2012-2014. Our results provide evidence that having experienced more severe harvest losses leads to more risk aversion and stronger overweighting of small probabilities. Higher losses are not related to loss aversion or ambiguity aversion. |
| Keywords: | Community/Rural/Urban Development, Farm Management, Risk and Uncertainty |
| Date: | 2017–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:256212&r=exp |
| By: | Fischer, Sabine; Wollni, Meike |
| Abstract: | In the last decades global food value chains have seen the need for increasing vertical coordination in order to secure quality standards. A prominent way to govern the relationships between farmers and agri-business firms are farming contracts. We study the role of trust, risk and time preferences for farmers' contract choices in a discrete choice experiment among Ghanaian pineapple farmers. We find that experimental measures of trust, risk and time preferences can predict preferences for contract attributes. Especially trust has economically important effects on the willingness to pay for transparent quality controls. Differences in preferences for timing of payment and timing of agreement making cannot be explained by trust levels but by time preferences. Risk-sharing in form of reduced quality requirements is less important for risk-seeking individuals compared to risk-neutral or risk-averse farmers. Including behavioral preferences can significantly improve the explanatory power of the models. Our results indicate that preferences affect farmers' participation constraints and argue that a diversification of contract offers might increase the willingness of farmers to participate in contract farming. This has implications for companies who aim at developing stable long-term relationships with farmers. |
| Keywords: | Agribusiness, Institutional and Behavioral Economics, International Development |
| Date: | 2017–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:264875&r=exp |
| By: | Gschwandtner, Adelina; Jang, Cheul; McManus, Richard |
| Abstract: | Increased pollution leads to a constant decrease of drinking water quality worldwide. Due to safety concerns, unpleasant taste and odour only about 3% of the population in South Korea is drinking untreated tap water. The present study uses choice experiments and cost-benefit analysis to investigate the feasibility of installing advanced water treatments in Cheongju waterworks in South Korea. The waterworks is situated in the middle of the country and is providing more than half a million people with drinking water. The study shows that the lower bound of the median WTP for installing a new advanced water treatment system is about $ 2 US/month, which is similar to the average expenditures for bottled water per household in South Korea. Scenarios under which the instalment of the advanced water treatments is feasible are discussed together with environmental solutions in the long-run. |
| Keywords: | Environmental Economics and Policy, International Development |
| Date: | 2018–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc18:273472&r=exp |
| By: | Mickael Beaud; Mathieu Lefebvre; Julie Rosaz |
| Abstract: | This paper investigates if and how other-regarding preferences governing giving decisions in dictator games are affected in risky environments in which the payoff of the recipient is random. We demonstrate that, whenever the risk is actuarially neutral, the donation of dictators with a purely ex post view of fairness should, in general, be affected by the riskyness of the recipient’s payoff, while dictators with a purely ex ante view should not be. Our experimental data show no statistically significant impact of the recipient’s risk exposure on dictators’ giving decisions and, therefore, give weak empirical support to the purely ex post view of fairness. This result appears to be robust to both the experimental design (within or between subjects) and to the origin of the recipient’s risk exposure (chosen by the recipient or imposed to the recipient).. |
| Keywords: | laboratory experiments dictator games, background risk, other-regarding preferences, inequality aversion, impure altruism, ex ante and ex post views of fairness |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpceem:18-14&r=exp |
| By: | Hajibabaei, Ehsan; Ghasmi, Alireza; Hosseini, Seyed Abbas |
| Abstract: | Non-conservative dense flow frontal velocity has been simulated two dimensionally by fluent numerical code. The outcomes have been compared with experimental results. Numerical simulation was conducted as two-phase through Euler-Lagrange method. Reynolds-Stress Turbulent Model (RSM) with non-uniform grid and shredding mesh on the channel floor. The results obtained from numerical model of head frontal velocity show a good compliance with experiment results and greatly help analyzing the pattern of fluid movement in different scales. |
| Keywords: | dense flow, fluent, head frontal velocity |
| JEL: | L63 L65 Q1 Q15 Q16 Q51 Q53 Q55 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88383&r=exp |
| By: | Jha, Saumitra (Stanford University); Shayo, Moses (Hebrew University of Jerusalem) |
| Abstract: | How can we help individuals handle financial decisions in an increasingly complex environment? We explore an easily scalable avenue for improving financial understanding: learning by online trading in stocks. We randomly assign 1345 adults incentives and opportunities to trade stocks for 4-7 weeks, with no additional educational content. The treatment significantly improves financial literacy and attenuates the gender gap in self-assessed financial knowledge. Treated individuals are more likely to subsequently invest in stocks and less likely to seek external advice. The effects strengthen for those exposed to index funds, foreign assets, and rising or more volatile asset prices. |
| JEL: | G11 J16 O16 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3673&r=exp |
| By: | Ogutu, Sylvester; Fongar, Andrea; Gödecke, Theda; Jäckering, Lisa; Mwololo, Henry; Njuguna, Michael; Wollni, Meike; Qaim, Matin |
| Abstract: | We analyze how agricultural extension can be made more effective in terms of increasing smallholder farmers’ adoption of pro-nutrition technologies, such as biofortified crops. In a randomized controlled trial with farmers in Western Kenya, we implemented several extension treatments and evaluated their effects on the adoption of beans that were biofortified with iron and zinc. Difference-in-difference estimates show that intensive agricultural training tailored to local conditions can increase technology adoption considerably. Within less than one year, adoption of biofortified beans increased from almost zero to more than 20%. Providing additional nutrition training further increased adoption by another 10-12 percentage points, as this has helped farmers to better appreciate the technology’s nutritional benefits. These results suggest that effective nutrition training through agricultural extension services is possible. Providing marketing training did not lead to additional adoption effects, although the study period may have been too short to measure these effects properly. This study is a first attempt to analyze how improved designs of agricultural extension can help to make smallholder farming more nutrition-sensitive. More research in this direction is needed. |
| Keywords: | Community/Rural/Urban Development, Food Security and Poverty, Institutional and Behavioral Economics, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2018–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:266309&r=exp |
| By: | Cusolito, Ana Paula; Dautovic, Ernest; McKenzie, David J. |
| Abstract: | Many innovative start-ups and SMEs have good ideas, but do not have these ideas fine-tuned to the stage where they can attract outside funding. Investment readiness programs attempt to help firms to become ready to attract and accept outside equity funding through a combination of training, mentoring, master classes, and networking. We conduct a five-country randomized experiment in the Western Balkans that works with 346 firms and delivers an investment readiness program to half of these firms, with the control group receiving an inexpensive online program instead. A pitch event was then held for these firms to pitch their ideas to independent judges. The investment readiness program resulted in a 0.3 standard deviation increase in the investment readiness score, with this increase occurring throughout the distribution. Two follow-up surveys show that these judges' scores predict investment readiness and investment outcomes over the subsequent two years. Treated firms attain significantly more media attention, and are 5 percentage points (p.p.) more likely to have made a deal with an outside investor, although this increase is not statistically significant (95 confidence interval of -4.7 p.p., +14.7p.p.). |
| Keywords: | entrepreneurship; equity investment; Innovation; Investment readiness; randomized controlled trial.; start-ups |
| JEL: | L26 M13 M2 O12 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13098&r=exp |
| By: | Jaime Thomas; Thomas D. Cook; Alice Klein; Prentice Starkey; Lydia DeFlorio |
| Abstract: | In this article, the authors examine a scale-up of an early math intervention to the state level, using a cluster randomized controlled trial. |
| Keywords: | education, content area, outcome evaluation (other than economic evaluation), design and evaluation of programs and policies, program design and development, program implementation |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:a8a3ae786a7249f29973cb5b0f13d096&r=exp |
| By: | Jansson, Joakim (Stockholm University); Tyrefors, Björn (Research Institute of Industrial Economics (IFN)) |
| Abstract: | In this paper, we first present novel evidence of grading bias against women at the university level. This is in contrast to previous results at the secondary education level. Contrary to the gender composition at lower levels of education in Sweden, the teachers and graders at the university level are predominantly male. Thus, an in-group bias mechanism could consistently explain the evidence from both the university and secondary education level. However, we find that in-group bias can only explain approximately 20 percent of the total grading bias effect at the university level. |
| Keywords: | Grading bias; University; Discrimination; Education; Anonymous grading |
| JEL: | I23 J16 |
| Date: | 2018–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1226&r=exp |
| By: | Bitsch, Linda; Hanf, Jon; Hildenbrand, Andreas; Pabst, Evelyn; Schilling, Ulrich |
| Abstract: | Zur Abschöpfung der erhöhten Zahlungsbereitschaften der Nachfrager werden auf Weingütern Weinverkostungen durchgeführt. Bisher wird in Deutschland für die Teilnahme an einer Weinverkostung kein positiver Preis verlangt, obwohl eine Weinverkostung mit fixen und variablen Kosten verbunden ist. Eine Lösung Entgelt zu generieren, besteht darin, den Nachfragern die Preissetzung durch Pay-What-You-Want-Mechanismen zu überlassen. Ziel dieses Beitrags ist, die mögliche Einführung des Pay-What-You-Want-Mechanismus bei Weinverkostungen zu untersuchen. Zusätzlich wird untersucht, ob und wie weit die Zahlungsbereitschaft sowohl durch Informationen zu den Weinen als auch durch Referenzpreise beeinflusst werden kann. Des Weiteren wird analysiert, inwiefern Weinwissen dabei eine Rolle spielt. Zur Beantwortung der Fragen wird ein Modell entwickelt sowie ein Experiment aufgebaut und durchgeführt. Wird ein Pay-What-You-Want-Mechanismus verwendet, werden positive Zahlungen geleistet. Die Bereitstellung von Informationen zu den Weinen kann die geleiste-ten Zahlungen erhöhen. Die Angabe eines Referenzpreises erhöht die Zahlungen nicht. Die Angabe eines Referenzpreises zusammen mit der Bereitstellung von Informationen kann die Zahlungen erhöhen. Mit Wein vertrautere Nachfrager leisten keine höheren Zahlungen. |
| Keywords: | Agribusiness |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi17:261994&r=exp |
| By: | Sophie Cetre (IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris); Max Lobeck (PSE - Paris School of Economics); Claudia Senik (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, UP4 - Université Paris-Sorbonne); Thierry Verdier (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Using a choice-experiment in the lab, we look at preferences over pairs of income distributions within small groups in a firm-like setting. Is one type of distribution capable of attracting votes unanimously? It turns out that Pareto-dominance is the most important choice criterion: in binary choices over two distributions, all subjects prefer larger inequality when it makes everyone weakly better off. This is true,no matter whether income distribution is based on merit or luck. Unanimity only breaks once subjects' positions within the income distribution are fixed and known ex-ante. However, even then, 75% subjects prefer Pareto-dominant distributions. This suggests that efficiency motives are of primary importance, more so than the origin of inequality. |
| Keywords: | Distributive preferences,Inequality,Choice experiment |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01863359&r=exp |
| By: | Sandra Polania Reyes |
| Abstract: | This study tests an unintended benefit of a Conditional cash transfer program in Colombia: an improvement in coordination among its beneficiaries. A sample of 714 beneficiaries participate in a minimum effort coordination game. Those enrolled in the program for over a year are not just coordinating; they are more likely to exert the highest level of effort and reach higher earnings. Collected data is sufficiently rich to establish that improvement in coordination is not due to potential confounding mechanisms such as willingness to cooperate, connectivity or socio-economic characteristics. A structural choice model of the individual decision to coordinate sheds light on the role of beliefs about others’ behavior and suggests the presence of a coordination device to avoid the risk dominant equilibrium: the certainty in assessing what others might do. Participants are required to interact with local program officials, community leaders and fellow beneficiaries. We argue that this social component of the CCT changed the structure of beliefs about others’ behavior, which allowed beneficiaries to overcome coordination failures. The findings support nascent initiatives to influence beliefs through policy interventions. |
| Keywords: | field experiments, coordination, conditional cash transfer programs, cooperation |
| JEL: | C92 D70 D78 Z13 |
| Date: | 2018–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:col:000416:016519&r=exp |
| By: | Vojtech Bartos; Michal Bauer; Julie Chytilova; Ian Levely |
| 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: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp623&r=exp |
| By: | Susan Athey; Guido Imbens |
| Abstract: | In this paper we study estimation of and inference for average treatment effects in a setting with panel data. We focus on the setting where units, e.g., individuals, firms, or states, adopt the policy or treatment of interest at a particular point in time, and then remain exposed to this treatment at all times afterwards. We take a design perspective where we investigate the properties of estimators and procedures given assumptions on the assignment process. We show that under random assignment of the adoption date the standard Difference-In-Differences estimator is is an unbiased estimator of a particular weighted average causal effect. We characterize the proeperties of this estimand, and show that the standard variance estimator is conservative. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1808.05293&r=exp |
| By: | Philipp Lergetporer; Katharina Werner; Ludger Wößmann |
| Abstract: | To study how information about educational inequality affects public concerns and policy preferences, we devise survey experiments in representative samples of the German population. Providing information about the extent of educational inequality strongly increases concerns about educational inequality but only slightly affects support for equity-oriented education policies, which is generally high. The small treatment effects are not due to respondents’ failure to connect policies with educational inequality or aversion against government interventions. Support for compulsory preschool is the one policy with a strong positive information treatment effect, which is increased further by informing about policy effectiveness. |
| Keywords: | inequality, education, information, survey experiment |
| JEL: | D30 H52 I24 H11 D63 D83 D72 P16 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7192&r=exp |
| By: | Erik Brynjolfsson; Xiang Hui; Meng Liu |
| Abstract: | Artificial intelligence (AI) is surpassing human performance in a growing number of domains. However, there is limited evidence of its economic effects. Using data from a digital platform, we study a key application of AI: machine translation. We find that the introduction of a machine translation system has significantly increased international trade on this platform, increasing exports by 17.5%. Furthermore, heterogeneous treatment effects are all consistent with a substantial reduction in translation-related search costs. Our results provide causal evidence that language barriers significantly hinder trade and that AI has already begun to improve economic efficiency in at least one domain. |
| JEL: | D8 F1 F14 O3 O33 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24917&r=exp |
| By: | Häfner, Kati; Zasada, Ingo; Sagebiel, Julian |
| Abstract: | To reduce greenhouse-gas emissions from agriculturally used peatlands a new agri-environmental measure for peatland protection through water logging was established. To investigate which factors influence the willingness of farmers to participate in the measure we apply a discrete choice experiment. Measure characteristics such as contract length, assured acceptance of the cut grass, support in the cooperation with neighbours, effort to register and financial compensation are considered. The very new scheme targeted at climate protection could therefore be adjusted and better tailored to different farm types. |
| Keywords: | Environmental Economics and Policy, Farm Management |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi17:262178&r=exp |
| By: | Johny, J.; Veettil, P.C.; Yashodha, Y. |
| Abstract: | Contract farming in seed production has played a great instrumental role to bring private investment into seed research and production. Poor functioning of institutions hinders the full potential benefits of seed contracts to reach to producers. Seed producers are the most important part of the seed supply chain and thereby the present study attempt to analyze the producer's preference for group contract and its impact on welfare of actors in the seed value chain. We propose two types of group contracts, viz, contract B (company-organizer-seed producers group (SPG)) and C (company-SPG). We carried out an economic experiment using real producers and organizers of the seed contracts, where producers face a choice between an existing contract and either of proposed group contracts. The experiment consists of two treatments, i) concealed and revealed price information and ii) presence and absence of local organizer in producer sessions. We find that preference for contract B is higher than contract C and existing contract. Contract B shows higher price bargaining under the concealed price information compared to revealed treatment. We find group life of 3.78 periods and more than half of the groups (53%) survived throughout the five rounds indicating a very high sustainability. |
| Keywords: | Agribusiness |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:276042&r=exp |
| By: | Marion Krämer; Santosh Kumar; Sebastian Vollmer |
| Keywords: | Health Economics and Policy |
| Date: | 2018–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:269560&r=exp |
| By: | Bartos, Vojtech (University of Munich) |
| Abstract: | How does scarcity affect individual willingness to share and willingness to enforce sharing from others? Sharing in poor communities gains importance as an insurance mechanism during adverse shocks, yet shocks make it costlier to share. I conducted repeated economic experiments in both a lean and a relatively plentiful post-harvest season with the same group of Afghan subsistence farmers experiencing annual seasonal scarcities. I separate altruistic motives from enforcement effects using dictator and third party punishment games. While altruistic sharing remains temporally stable, the enforcement of sharing weakens substantially in times of scarcity. Temporal norms fluctuations seem to drive the results. |
| Keywords: | afghanistan; scarcity; seasonality; sharing; social norms; |
| JEL: | C93 D63 I32 Z13 |
| Date: | 2018–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:115&r=exp |
| By: | Christoph Huber; Juergen Huber |
| Abstract: | With a novel experimental design we investigate whether risk perception, return expectations, and investment propensity are influenced by the scale of the vertical axis in charts. We explore this for two presentation formats, namely return charts and price charts, where we depict low- and high-volatility assets with distinct trends. We find that varying the scale strongly affects people's risk perception, as a narrower scale of the vertical axis leads to significantly higher perceived riskiness of an asset even if the underlying volatility is the same. Furthermore, past returns predict future return expectations almost perfectly. In our setting perceived profitability was considered more important than perceived riskiness when making investment choices. Overall we show that adapting the scale of a chart makes it easier to recognize yearly return variations within a single security, but at the same time makes it harder to identify differences between dissimilar securities. This is something regulators should be aware of and take into account in the rules they set. |
| Keywords: | behavioral finance, judgment, risk perception, scaling, presentation format |
| JEL: | D14 D18 G11 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2018-15&r=exp |