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on Experimental Economics |
| By: | Billur Aksoy (Texas A&M University, Department of Economics); Marco A. Palma (Texas A&M University, Department of Agricultural Economics) |
| Abstract: | We study the impact of scarcity on cheating and in-group favoritism using a two-stage lab-in-the-field experiment with low-income coffee farmers in a small, isolated village in Guatemala. During the coffee harvesting months, farmers in this village experience a significant income boost from selling their coffee beans. However, during the non-harvesting months, they experience a substantial decline in income, inducing a pronounced state of scarcity, while other factors remain similar. Using this distinctive variance in income, we first conducted our experiment before the coffee harvest (Scarcity period). We then repeated the experiment-with the same group of subjects-during the harvest season (Abundance period). First, using the Fischbacher and Follmi-Heusi (2013) die-roll paradigm, we find that subjects cheat at high levels in both periods when they are the beneficiaries of the cheating. Scarcity does not impact this cheating behavior. Secondly, using subjects' natural village identity, we find significant in-group favoritism for cheating in the Abundance period, which disappears during the Scarcity period. Finally, using a dictator game, we show that this finding holds when the cost of favoring an in-group member is monetary rather than moral. |
| Keywords: | dishonesty, lab-in-the-field experiment, pro-social cheating, scarcity, social identity. |
| JEL: | C93 D63 D64 |
| URL: | http://d.repec.org/n?u=RePEc:txm:wpaper:20180918-001&r=exp |
| By: | Sseruyange, J.; Bulte, E. |
| Abstract: | Many development interventions involve training of beneficiaries, based on the assumption that knowledge and skills will spread “automatically” among a wider target population. However, diffusion of knowledge (or innovations) can be slow and incomplete. We use a randomized field experiment in Uganda to assess the impact of providing incentives for knowledge diffusion, and pay trained individuals a fee if they share knowledge obtained during a financial literacy training. Our main results are that incentives increase knowledge sharing, and that it may be cost-effective to provide such incentives. We also document an absence of assortative matching in the social learning process. |
| Keywords: | International Development, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:275896&r=exp |
| By: | Björn Bartling; Vanessa Valero; Roberto A. Weber |
| Abstract: | We investigate whether growth in consumer income causes an increased willingness to pay to mitigate negative externalities from consumption. Correlational field evidence suggests a positive relationship between income and social responsibility. To investigate a causal link, we conduct a laboratory market experiment in which firms and consumers can exchange products that differ in the degree to which they mitigate negative external impacts at the expense of higher production costs. Our treatments exogenously vary consumers’ incomes. Our experimental results reveal that growth in consumer income causes an increase in the share of socially responsible consumption in the laboratory. Such a causal relationship is significant from a policy perspective, as it implies that some negative external impacts of consumption activity can be mitigated as societies experience economic growth. |
| Keywords: | Social responsibility, income growth, normal goods, laboratory experiment, market game |
| JEL: | C92 D31 D62 M14 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:299&r=exp |
| By: | CASAL Sandro; FALLUCCHI Francesco; QUERCIA Simone |
| Abstract: | We experimentally investigate the role of moral concerns in three-player ultimatum bargaining. In our experimental paradigm, proposers can increase the overall size of the pie at the expenses of an NGO that conducts humanitarian aid in emergency areas. In a first study, we find that responders are not willing to engage in ?immoral? transactions only when fully informed about proposers? behavior toward the NGO. Under complete information, their willingness to reject offers increases with the strength of the harm to the NGO. Moreover, the possibility to compensate the NGO through rejection further increases their willingness to reject. In a second study aimed at gauging the importance of different motives behind rejections, we show that the two most prevalent motives are to compensate the NGO or to diminish inequality between responders and proposers. Punishing proposers? unkind intentions towards the NGO or rejecting on the basis of pure deontological reasons constitute less important motives. |
| Keywords: | mini ultimatum game; morals; experiment |
| JEL: | C72 C91 D64 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2018-15&r=exp |
| By: | Reuben, E.; Suetens, Sigrid (Tilburg University, School of Economics and Management) |
| Abstract: | We study the strategies used by experimental subjects in repeated sequential prisoners’ dilemma games to identify the underlying motivations behind instrumental reciprocity—that is, reciprocating cooperation only as long as there is future interaction. Importantly, we designed the games so that instrumental reciprocity is a mistake for payoff-maximizing individuals irrespective of their beliefs. We find that, despite the fact instrumental reciprocity is suboptimal, it one of the most important reasons why subjects cooperate. Moreover, although the use of instrumental reciprocity is sensitive to the costs of deviating from the payoff-maximizing strategy, these costs alone cannot explain the high frequency with which subjects choose to reciprocate instrumentally. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:bb75c476-bc08-4d64-b1b0-5275c245a423&r=exp |
| By: | Mágó, Mánuel (Tilburg University, School of Economics and Management) |
| Abstract: | This dissertation consists of five chapters and covers three topics, all in the broader field of game theory. There are three main chapters. In Chapter 3 the focus is on power measures, functions that assign a power to every node in any graph. The connectivity power measure is introduced and characterized on the class of graphs. The connectivity power measure assigns to every node in any graph the number of connected sets the node is a part of. Chapter 4 focuses on graph games, cooperative games with cooperation restricted by communication networks represented by graphs. The average connected contribution value and the larger family of power values are introduced and axiomatized on the class of graph games. The average connected contribution value of a player in a graph game is defined as the average of the player's marginal contributions in connected coalitions the player is a part of. In Chapter 5 a new framing of the well-studied prisoner’s dilemma game is introduced. The new framing is achieved by representing the game in an unconventional way by telling players that they are deciding what their opponents have to do. It is shown in a laboratory experiment that the framing affects the decisions of subjects. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:e7822a6b-a2db-4ce9-bd08-b750251c1123&r=exp |
| By: | Böheim, René; Grübl, Dominik; Lackner, Mario |
| 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 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus005:6524&r=exp |
| By: | René Böheim (Department of Economics, Vienna University of Economics and Business); Dominik Grübl (Department of Economics, Johannes Kepler University Linz (JKU)); Mario Lackner (Christian Doppler Laboratory "Aging, Health, and the Labor Market") |
| 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: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp270&r=exp |
| By: | Sun, Chen (Tilburg University, School of Economics and Management) |
| Abstract: | The dissertation applies experimental methods to study a few questions in economics. Chapter 2 studies how the intertemporal allocation of monetary rewards is influenced by the size of the total budget, with a particular interest in the channels of influence. Chapter 3 introduces a new method of measuring intertemporal preferences, and then applies the method to investigate how people choose between combinations of monetary incomes on different dates. Chapter 4 examines whether the behavior of making a choice between two options has a direct effect on subsequent belief about the attractiveness of the two options. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:0e1ad2b5-e3fb-494f-92ad-a5570dc744a9&r=exp |
| By: | Hossain, Marup; Mullally, Conner C.; Ara, Jinnat |
| Keywords: | Consumer/Household Economics, International Development, Labor and Human Capital |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:259943&r=exp |
| By: | Mickaël Beaud (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Mathieu Lefebvre (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique); Julie Rosaz (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique) |
| 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 give weak empirical support to the purely ex post view of fairness. |
| Keywords: | Laboratory experiments dictator games,background risk,other-regarding preferences,Inequality aversion,impure altruism,ex ante and ex post views of fairness |
| Date: | 2018–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01872072&r=exp |
| By: | Li, Tongzhe; Fooks, Jacob; Messer, Kent D. |
| Keywords: | Environmental Economics and Policy, Resource/Energy Economics and Policy, Institutional and Behavioral Economics |
| Date: | 2017–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:259127&r=exp |
| By: | Gallenstein, Richard; Flatnes, Jon Einar; Dougherty, John; Mishra, Khushbu; Miranda, Mario; Sam, Abdoul |
| Keywords: | Financial Economics, International Development, Agricultural Finance |
| Date: | 2017–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:259210&r=exp |
| By: | Weijie Zhong |
| Abstract: | In this paper we study the optimal mechanism in selling information to decision makers with private prior knowledge about payoff relevant state. When the underlying decision problem has a continuum of actions, optimal mechanism has a continuum of experiments. Buyers with more extreme private beliefs purchase less amount of information at lower prices. When distribution of decision maker`s type becomes more dispersed, more buyers will be included in the market and all buyer type will be sold a more informative experiment. |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1809.06770&r=exp |
| By: | Duke, Joshua M.; Gao, TianHang |
| Keywords: | Institutional and Behavioral Economics, Land Economics/Use, Community/Rural/Urban Development |
| Date: | 2017–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:258227&r=exp |
| By: | Bazzani, Claudia; Nayga, Rodolfo M. Jr.; Caputo, Vincenzina |
| Keywords: | Institutional and Behavioral Economics, Marketing, Research Methods/Statistical Methods |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:261215&r=exp |
| By: | Andreas Ziegler (University of Kassel) |
| Abstract: | Based on data from a large-scale computer-based survey among more than 3700 German citizens, this paper empirically disentangles the determinants of the general change of electricity contracts and the specific change to green electricity contracts. Our econometric analysis reveals a strong relevance of behavioral factors and individual values and norms. For example, patience (which was measured by an incentivized experiment included in the survey) has a significantly positive effect on both general switches to alternative electricity contracts and specific switches to green electricity contracts. Furthermore, trust and (less robust) social preferences (also measured by an incentivized experiment) have additional significantly positive effects on the specific change to green electricity contracts. Our estimation results also imply an important role of political identification, i.e. an ecological policy orientation is strongly significantly positively correlated with the change to green electricity contracts. Furthermore, several household specific factors like relocation decisions as well as socio-demographic and socio-economic variables like household income are also relevant. The empirical analysis thus provides new explanation patterns for the phenomenon that relatively few households regularly change their electricity contracts and specifically switch to green electricity contracts, although they have high stated preferences for such changes. Our insights suggest several directions for policy and electricity suppliers to increase these switching rates. For example, the high importance of trust for the change to green electricity contracts suggests transparency initiatives of electricity suppliers to decrease concerns against renewable energies. |
| Keywords: | Switching electricity contracts, green electricity, behavioral factors, artefactual field experiments, individual values and norms |
| JEL: | A13 C93 D12 D91 Q41 Q42 Q50 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201827&r=exp |
| By: | Christopher Blattman; Nathan Fiala; Sebastian Martinez |
| Abstract: | In 2008, Uganda granted hundreds of small groups $400/person to help members start individual skilled trades. Four years on, an experimental evaluation found grants raised earnings by 38% (Blattman, Fiala, Martinez 2014). We return after 9 years to find these start-up grants acted more as a kick-start than a lift out of poverty. Grantees' investment leveled off; controls eventually increased their incomes through business and casual labor; and so both groups converged in employment, earnings, and consumption. Grants had lasting impacts on assets, skilled work, and possibly child health, but had little effect on mortality, fertility, health or education. |
| JEL: | C93 D13 J24 O12 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24999&r=exp |
| By: | Arindrajit Dube; Alan Manning; Suresh Naidu |
| Abstract: | We show that wages in administrative data and in online markets exhibit considerable bunching at round numbers that cannot all be explained by rounding of responses in survey data. We consider two hypotheses—worker left-digit bias and employer optimization frictions—and derive tests to distinguish between the two. Symmetry of the missing mass distribution around the round number suggests that optimization frictions are more important. We show that a more monopsonistic market requires less optimization frictions to rationalize the bunching in the data, and use this to derive bounds on employer market power. We provide experimental validation of these results from an online labor market, where rewards are also highly bunched at round numbers. By randomizing wages for an identical task, our online experiment provides an independent estimate of the extent of employer market power, and fails to find evidence of any discontinuity in the labor supply function as predicted by workers’ left-digit bias. Overall, the extent and form of round-number bunching suggests both employer mis-optimization and wage setting power are important features of the labor market. |
| JEL: | D03 D22 J3 J42 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24991&r=exp |
| By: | Gauriot, Romain (University of Sydney); Heger, Stephanie A. (University of Sydney); Slonim, Robert (University of Sydney) |
| Abstract: | We challenge a commonly used assumption in the literature on social preferences and show that this assumption leads to significantly biased estimates of the social preference parameter. Using Monte Carlo simulations, we demonstrate that the literature's common restrictions on the curvature of the decision-makers utility function can dramatically bias the altruism parameter. We show that this is particularly problematic when comparing altruism between groups with well-documented differences in risk aversion or diminishing marginal utility, i.e., men versus women, giving motivated by pure versus warm glow motives, and wealthy versus poor. |
| Keywords: | altruism, marginal utility, biased inferences |
| JEL: | C91 D64 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11721&r=exp |
| By: | Pathikrit Basu; Kalyan Chatterjee; Tetsuya Hoshino; Omer Tamuz |
| Abstract: | We study a repeated game with payoff externalities and observable actions where two players receive information over time about an underlying payoff-relevant state, and strategically coordinate their actions. Players learn about the true state from private signals, as well as the actions of others. They commonly learn the true state (Cripps et al., 2008), but do not coordinate in every equilibrium. We show that there exist stable equilibria in which players can overcome unfavorable signal realizations and eventually coordinate on the correct action, for any discount factor. For high discount factors, we show that in addition players can also achieve efficient payoffs. |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1809.00051&r=exp |
| By: | Yeboah, Felix K.; Lupi, Frank; Kaplowitz, Michael D.; Kerr, John M. |
| Keywords: | International Development, Consumer/Household Economics, Institutional and Behavioral Economics |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:259977&r=exp |
| By: | Omotilewa, Oluwatoba J.; Ricker-Gilbert, Jacob; Ainembabazi, John H.; Shively, Gerald E. |
| Keywords: | International Development, Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies |
| Date: | 2017–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:258109&r=exp |
| By: | Anna Bartczak (University of Warsaw, Faculty of Economic Sciences); Wiktor Budziński (University of Warsaw, Faculty of Economic Sciences); Bernadeta Gołębiowska (University of Warsaw, Faculty of Economic Sciences) |
| Abstract: | We investigate individuals’ preferences for renewable energy development in Poland. Our main objective is to examine whether preferences for avoiding externalities from renewable energy development near respondents’ place of residence are influenced by their personal beliefs about the negative effects of wind turbine activity. We focus on attitudes towards wind power because it has had the most dynamic development among all renewable energy sources in Poland. To elicit values on avoiding renewable energy externalities, we use a choice experiment (CE) approach. To conduct our analysis we applied a theoretically robust econometric approach, the hybrid mixed logit model. From our analysis of data from a large sample of the Polish population, we find that beliefs about wind turbine have distinct negative effects on respondents’ preferences concerning renewable energy development. Respondents who generally have an opinion about potential wind turbine effects would like to have input on renewable energy development in their neighbourhood. Latent beliefs that wind power is not harmful enhance respondents’ preferences for implementing a wind energy project and enhance preferences against solar power development. These beliefs appears to be significantly correlated with respondents’ marginal utility of money. |
| Keywords: | beliefs about negative effects, choice experiment, preference heterogeneity, renewable energy externalities, stated preferences |
| JEL: | D12 H41 Q48 Q51 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2018-19&r=exp |
| By: | Grewenig, Elisabeth (ifo Institute); Lergetporer, Philipp (ifo Institute); Simon, Lisa (ifo Institute); Werner, Katharina (ifo Institute); Woessmann, Ludger (ifo Institute and LMU Munich) |
| Abstract: | A general concern with the representativeness of online surveys is that they exclude the \"offline\" population that does not use the internet. We run a large-scale opinion survey with (1) onliners in web mode, (2) offliners in face-to-face mode, and (3) onliners in face-to-face mode. We find marked response differences between onliners and offliners in the mixed-mode setting (1 vs. 2). Response differences between onliners and offliners in the same face-to-face mode (2 vs. 3) disappear when controlling for background characteristics, indicating mode effects rather than unobserved population differences. Differences in background characteristics of onliners in the two modes (1 vs. 3) indicate that mode effects partly reflect sampling differences. In our setting, re-weighting online-survey observations appears a pragmatic solution when aiming at representativeness for the entire population. |
| Keywords: | online survey; representativeness; mode effects; offliner; public opinion; |
| JEL: | C83 D91 I20 |
| Date: | 2018–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:117&r=exp |
| By: | Kassas, Bachir; Palma, Marco; Hall, Charles |
| Abstract: | Using a public goods experiment with heterogeneous income and marginal-per-capita-returns (MPCR), this paper investigates the main drivers of behavior for high- and low-income individuals playing separately and in mixed groups. A finite mixture model was used to split each income type into two categories. While a third of low-income individuals were “free-riders”, the dominant portion was classified as “opportunists”, who try to benefit from the presence of high-income individuals by encouraging contributions through cooperation. “Free-riders” were far less among high-income individuals, where the overruling majority were “selfists” who, due to self-interest and caution, contribute less when low-income individuals are present. |
| Keywords: | Institutional and Behavioral Economics |
| Date: | 2018–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea18:266456&r=exp |
| By: | Ward, Patrick S.; Kumar, Neha; De Nicola, Francesca; Hill, Ruth; Makhija, Simrin; Spielman, David J.; Magnan, Nicholas |
| Keywords: | International Development, Risk and Uncertainty, Institutional and Behavioral Economics |
| Date: | 2017–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:258090&r=exp |
| By: | Fischer, Torben (University of Mannheim); Frölich, Markus (University of Mannheim); Landmann, Andreas (Paris School of Economics) |
| Abstract: | We present robust evidence on the presence of adverse selection in hospitalization insurance for low-income households. A large randomized control trial from Pakistan allows us to separate adverse selection from moral hazard, to estimate how selection changes at different points of the demand curve and to test simple measures against adverse selection. The results reveal substantial selection in individual policies, leading to welfare losses and the threat of a market breakdown. Bundling insurance policies at the household or higher levels almost eliminates adverse selection, thus mitigating its welfare consequences and creating the possibility for sustainable insurance supply. |
| Keywords: | adverse selection, health insurance, Pakistan |
| JEL: | I13 D82 O12 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11751&r=exp |
| By: | Backstrom, Jesse D.; Eckel, Catherine; Rholes, Ryan; Tangvatcharapong, Meradee |
| Keywords: | Political Economy, Public Economics, Institutional and Behavioral Economics |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:259936&r=exp |
| By: | Guanxing Fu; Ulrich Horst |
| Abstract: | We analyze linear McKean-Vlasov forward-backward SDEs arising in leader-follower games with mean-field type control and terminal state constraints on the state process. We establish an existence and uniqueness of solutions result for such systems in time-weighted spaces as well as a {convergence} result of the solutions with respect to certain perturbations of the drivers of both the forward and the backward component. The general results are used to solve a novel single-player model of portfolio liquidation under market impact with expectations feedback as well as a novel Stackelberg game of optimal portfolio liquidation with asymmetrically informed players. |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1809.04401&r=exp |
| By: | Weng, Weizhe; Morrison, Mark; Boyle, Kevin J.; Boxall, Peter C. |
| Keywords: | Environmental Economics and Policy, Land Economics/Use, Resource/Energy Economics and Policy |
| Date: | 2017–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea17:259179&r=exp |