|
on Experimental Economics |
| By: | Chavez, Daniel E.; Palma, Marco A.; Nayga Jr., Rodolfo M. |
| Abstract: | The proneness of stated preference choice experiments to hypothetical bias has increased the popularity of incentivized or real discrete choice experiments (RDCE). One challenge that practitioners face when designing RDCE is that some of the product alternatives may not be available for the study. To avoid deception, researchers should truthfully inform respondents that only a certain percentage of the product alternatives is available for the experiment. But would the proportion of available products influence the results of the RDCE? Using an induced value choice experiment, we varied the number of potentially binding alternatives in four treatments: 0%, 33%, 66%, and 100% to assess the effect of availability of product alternatives on choice behavior. We designed the induced value experiment with a profit maximization optimal strategy for agents (i.e., with a unique known profit-maximizing alternative). Our results suggest that incentives matter in that the percentage of optimal choices was lowest in the 0% treatment. Interestingly, however, we did not find statistically significant differences in amount of optimal choices in the 33%, 66%, and 100% treatments, suggesting that one could conduct an incentivized RDCE without the need to have all the product alternatives be made available in the study. |
| Keywords: | Institutional and Behavioral Economics, Marketing |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea18:266327&r=exp |
| By: | Robert L. McDonald; Thomas A. Rietz |
| Abstract: | Investment ratings (e.g., by Morningstar) provide a simple ordinal scale (e.g., 1 to 5) for comparing investments. Typically, ratings are assigned within categories — groups of assets sharing common characteristics — but using the same ordinal scale for all groups. Comparing such categorized ratings across categories is potentially misleading. We study the effect of categorized ratings in an asset allocation experiment in which subjects make repeated allocation decisions under complete information. Subjects initially see no ratings, and they then see either categorized or uncategorized ratings. Although ratings convey no information, categorized ratings affect subject investment choices and harm performance in the experiment. Subjects do not simply invest more in highly rated assets. Rather, rating effects seem to occur when ratings conflict with subjects’ own evaluation of assets: subjects reduce their investment in a high quality asset which receives an intermediate rating, but they do not increase their investment in a high-quality asset that receives a high rating. Knowledge and experience help with the base allocation task but do not mitigate the harmful effect of categorized ratings. |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25046&r=exp |
| By: | Muller, Paul; Habla, Wolfgang |
| Abstract: | We show that limited attention and present bias contribute to low levels of exercise. First, in a large randomized experiment, we find that email reminders increase gym visits by 13 % and that they benefit nearly all types of individuals. Limited attention can explain these effects. Second, using a novel dataset, we find that many bookings for gym classes are canceled, and that bookings are made even for classes that never have a waiting list. Comparing these findings to the predictions of a dynamic discrete choice model, we conclude that many gym members use bookings to commit themselves to future attendance. |
| Keywords: | health behavior,randomized experiment,reminders,nudging,habit formation,limited attention,time inconsistency |
| JEL: | C93 D91 I12 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:18041&r=exp |
| By: | Muller, Paul (Department of Economics, School of Business, Economics and Law, Göteborg University); Habla, Wolfgang (Centre for European Economic Research(ZEW) and University of Mannheim.) |
| Abstract: | We show that limited attention and present bias contribute to low levels of exercise. First, in a large randomized experiment, we find that email reminders increase gym visits by 13 % and that they benefit nearly all types of individuals. Limited attention can explain these effects. Second, using a novel dataset, we find that many bookings for gym classes are canceled, and that bookings are made even for classes that never have a waiting list. Comparing these findings to the predictions of a dynamic discrete choice model, we conclude that many gym members use bookings to commit themselves to future attendance. |
| Keywords: | health behaviour; randomized experiment; reminders; nudging; habit formation; limited attention; time inconsistency |
| JEL: | C93 D91 I12 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0743&r=exp |
| By: | Nisvan Erkal (Department of Economics, The University of Melbourne); Lata Gangadharan (Department of Economics, Monash University); Boon Han Koh (Department of Economics, The University of Melbourne) |
| Abstract: | Leaders often make decisions under risk and uncertainty. Using a controlled laboratory experiment motivated by a simple theoretical framework, we investigate group members' biases in the attribution of their leaders' outcomes in an environment where only outcomes are observable. We find that group members' expectations about the leader's type are shaped by the leadership appointment mechanism. Moreover, upon observing the outcomes of their leaders' decisions, members attribute good outcomes more to luck and place too little weight on their prior beliefs in their updating behavior. Importantly, we find that the biases tend to be driven by those subjects who choose low effort as leaders. |
| Keywords: | Leadership; Decision-making under risk; Beliefs about others' actions; |
| JEL: | C92 D91 D81 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:2040&r=exp |
| By: | Kairies-Schwarz, Nadja; Harrison, Glenn W.; Han, Johann |
| Abstract: | Recent evidence on nonlinear insurance contracts finds that individuals react to the embedded dynamic incentives by changing health care utilization. However, with field data it is difficult to keep the spot price among individuals constant while systematically varying the future price. To do so, we use a controlled laboratory experiment in which subjects are insured by a health plan with a deductible and go through a cycle of periods. In each period they face probabilistic health events and have to choose whether to seek treatment or not. We vary the likelihood of hitting the deductible by varying the number of periods and the height of the deductible, as well as controlling whether subjects receive regular information updates on their remaining deductible. We also elicit individual risk and time preferences. Our results show that varying the future price has a significant effect on spending behavior, regardless of whether the same future price is reached by changing the deductible or the number of periods. At an individual level, we identify perfectly forward-looking as well as perfectly myopic individuals. We find that a relationship between spending on health care and risk preferences, forward-looking behavior and giving information on the height of the deductible. |
| Keywords: | Health insurance,nonlinear prices,forward-looking behavior,laboratory experiment,risk and time preferences. |
| JEL: | I13 C91 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc18:181588&r=exp |
| By: | Camille Cornand (Univ Lyon, CNRS, GATE UMR 5824, F69130 Ecully, France); Paul Hubert (Sciences Po-OFCE, 10 place de Catalogne, 75014 Paris, France) |
| Abstract: | Establishing the external validity of laboratory experiments in terms of inflation forecasts is crucial for policy initiatives to be valid outside the laboratory. Our contribution is to document whether different measures of inflation expectations based on various categories of agents (participants to experiments, households, industry forecasters, professional forecasters, financial market participants and central bankers) share common patterns by analyzing: the forecasting performances of these different categories of data; the information rigidities to which they are subject; the determination of expectations. Overall, the different categories of forecasts exhibit common features: forecast errors are comparably large and autocorrelated, forecast errors and forecast revisions are predictable from past information, which suggests the presence of information frictions. Finally, the standard lagged inflation determinant of inflation expectations is robust to the data sets. There is nevertheless some heterogeneity among the six different sets. If experimental forecasts are relatively comparable to survey and financial market data, central bank forecasts seem to be superior. |
| Keywords: | inflation expectations, experimental forecasts, survey forecasts, market-based forecasts, central bank forecasts |
| JEL: | E3 E5 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1821&r=exp |
| By: | Priyanka Chakraborty (Southern Methodist University); Danila Serra (Southern Methodist University) |
| Abstract: | Top leadership positions involve the necessity of making decisions, like promotions, demotions and dismissals, which please some employees and upset others. We examine whether gender differences in aversion to the possibility of worker backlash may contribute to the gender leadership gap. We address this question through a novel laboratory experiment that simulates corporate decision-making. We find that: 1) women are significantly less likely to self-select into a managerial position when facing the possibility of receiving angry messages from employees; 2) once in a leadership position, women perform no differently than men; 3) male and female managers have different leadership styles; and 4) female managers receive significantly more angry messages from employees. |
| Keywords: | Gender differences, leadership, experiment. |
| JEL: | C92 D91 J16 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:1807&r=exp |
| By: | Adena, Maja; Huck, Steffen |
| Abstract: | We provide the first field evidence pointing at the role of pure self-image, inde-pendent of social image, in charitable giving. In an online fundraising campaign for a social youth project run on an opera ticket booking platform we document how individuals appear to engage in self-deception to preserve their self-image. In addition, we provide evidence on stark adverse long-run effects of the fund-raising campaign for ticket sales. “Avoiding the ask,” opera customers who faced more insistent online fundraising buy fewer tickets in the following season. Our results suggest that fundraising management should not decide in isolation about their campaigns, even if very successful. Rather broader operational concerns have to be considered. |
| Keywords: | online fundraising,quasi-experiment,self-image |
| JEL: | D64 D03 D12 C93 L31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2016306r2&r=exp |
| By: | Klaus Abbink (Department of Economics, Monash University); Lu Dong (Nanjing Audit University); Lingbo Hugang (Nanjing Audit University) |
| Abstract: | Communication has been regarded as one of the most effective devices in promoting team cooperation. But asymmetric communication sometimes breeds collusion and is detrimental to team efficiency. Here, we present experimental evidence showing that excluding one member from team communication hurts team cooperation: the communicating partners collude in profit allocation against the excluded team member, and the latter reacts by refraining from exerting effort. We further show that allowing the partners to reach out to the excluded member helps to restore cooperation and fairness in profit allocation. But it does not stop the partners from talking behind the other member. They sometimes game the system by tricking the excluded member to contribute but then grabbing all profits for themselves. |
| Keywords: | communication, fairness, collusion, allocation, team cooperation, laboratory experiment |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2018-11&r=exp |
| By: | Simixhiu, Amantia; Ziegler, Andreas |
| Abstract: | Based on data from a computer-based survey among more than 500 German respondents, this paper empirically examines the effect of actual equivalent income and estimated income position as well as behavioral factors on absolute and relative donations. Donations were measured in an incentivized framed field experiment, i.e. the respondents could spend money for three prominent environmental and social organizations. The perceived relative income refers to the estimated percentage of German households with a lower equivalent income compared to the own equivalent income. Furthermore, the behavioral factors are based on experimentally validated survey questions. Our preliminary econometric analysis with Tobit models shows that both actual equivalent income and estimated income position have significantly positive effects on absolute donations, whereby the effect of actual equivalent income is more dominant. This suggests that income perceptions play a minor role for donations compared to actual income. Surprisingly and in contrast to previous studies, income has a solid significantly negative effect on relative donations for all income groups. In addition, negative reciprocity has a significantly negative effect on both absolute and relative donations, which underlines the relevance at least of this behavioral factor. The estimation results also reveal that life satisfaction is significantly positively related with absolute donations. This suggests that positive feelings play an important role for donation activities. |
| Keywords: | Environmental and social donations,behavioral factors,actual equivalent income,estimated income position,Tobit models,framed field experiment |
| JEL: | C93 D31 D64 H24 H40 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc18:181600&r=exp |
| By: | Carpenter, Jeffrey P. (Middlebury College) |
| Abstract: | Theory commonly posits agents who care both for the level of provision of a public good and the extent to which they personally contribute to the cause. Simply put, agents feel some "warm glow" from the donations they make. I discuss a fundraiser devised to exogenously vary the incentive to give and identify the structural parameters of warm glow. Estimates suggest that for participants claiming warm glow as their primary motivation, its shape is increasing and concave. Nevertheless, welfare analysis suggests that warm glow is unlikely to be the only important factor in the decision to give. |
| Keywords: | public good, altruism, warm glow, structural estimate, philanthropy, pari mutuel lottery, fundraising, field experiment, survey validation |
| JEL: | H41 D03 D64 C93 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11760&r=exp |
| By: | Giuseppe Attanasi (Université Côte d'Azur, CNRS, GREDEG, France); Laura Concina (FONCSI, Toulouse); Caroline Kamate (FONCSI, Toulouse); Valentina Rotondi (Bocconi University, Milan) |
| Abstract: | We use a controlled laboratory experiment to study firm's and insurer's behavior when the firm can protect itself against potential technological damages. The probability of a catastrophic event is objective, and the firm's costly investment in safety reduces it. The firm can also buy an insurance with full or partial refund against the consequences of the catastrophic event, which ultimately reduces the variance of the firm's investment-in-safety lottery. In the insurer-firm game, first the insurer decides which contract to propose to the firm, then the firm simultaneously decides whether or not to buy this contract and whether or not to invest in the reduction of the probability of the catastrophic events. We parametrize the insurer-firm game such that: (i) a risk-neutral insurer maximizes his expected profit by o↵ering an actuarially fair contract with full insurance; (ii) a risk-neutral firm is indi↵erent between investing in safety and accepting a fair insurance contract. We aim at understanding whether investment in safety and insurance are substitutes or complements in the firm's risk management of catastrophic events. In line with our predictions, the experimental results suggest that they are substitutes rather than complements: the firm's investment in safety measures is a↵ected by the insurer's proposed contract, the latter usually involving only partial insurance. |
| Keywords: | Decision under risk, Losses, Small probabilities, Probability reduction, Technological disasters, Insurance, Deductible |
| JEL: | D81 G22 K32 Q58 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2018-24&r=exp |
| By: | Sébastien Duchêne; Eric Guerci; Nobuyuki Hanaki; Charles N. Noussair |
| Abstract: | This paper studies the influence of allowing borrowing and short selling on market prices and traders’ forecasts in an experimental asset market. We verify, although not statistically significantly so, that borrowing tends to increase asset overvaluation and price orecasts, while short selling tends to reduce these measures. We also show that a number of results on beliefs, traders’ types, cognitive sophistication, and earnings obtained in earlier experimental studies in which borrowing and short selling are not possible, generalize to markets with borrowing and short sales. |
| Keywords: | experimental asset market, bubble, short sales, margin buying |
| JEL: | C9 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpceem:18-18&r=exp |
| By: | Segovia, Michelle S.; Palma, Marco A.; Nayga Jr., Rodolfo M. |
| Abstract: | By randomizing the order in which participants perform a cognitive test and a food choice task in a controlled experiment, we show that overweight and obese participants exhibit an anticipatory food reward effect. Eye tracking data revealed that temptation, in the form of visual attention, and emotional arousal was higher under low cognitive resources. The anticipation of food reward helped enhance the mental resources of overweight and obese individuals and improve their performance in a cognitive test. However, there was no anticipation reward among normal weight participants. Our results support the notion that rewarding processes underlying food intake present similar patterns to those behind other forms of addiction. |
| Keywords: | Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Institutional and Behavioral Economics |
| Date: | 2018–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea18:266457&r=exp |
| By: | Orazio Attanasio (University College London); Helen Baker-Henningham (Tropical Medicine Research Institute, University of the West Indies); Raquel Bernal (Universidad de los Andes); Costas Meghir (Yale University); Diana Pineda (Fundacio´n E´xito); Marta Rubio-Codina (EDePo@IFS) |
| Abstract: | This paper evaluates the effects of the implementation of a structured early stimulation curriculum combined with a nutritional intervention through public large-scale parenting support services for vulnerable families in rural Colombia, known as FAMI, using a clustered randomized controlled trial. We randomly assigned 87 towns in rural areas to treatment and control and 1,460 children younger than 1 year of age were assessed at baseline. The interventions were also complemented with training, supervision and coaching of FAMI program facilitators. We assessed program effects on children’s nutritional status, and on cognitive and socio-emotional development; as well as on parental practices. The interventions had a positive and significant effect on a cognitive development factor based on the Bayley-III of 0.15 standard deviations. We also report a reduction of 5.8 percentage points in the fraction of children whose height-for-age is below -1 standard deviation. We do not find any effects on socio-emotional development. We report positive and statistically significant effects on the quality of the home environment (0.34 SD). |
| Keywords: | early childhood development, parenting, early stimulation, program scale-up |
| JEL: | J13 I10 I20 H43 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2018-073&r=exp |
| By: | Bossler, Mario; Oberfichtner, Michael; Schnabel, Claus |
| Abstract: | The effects of large minimum wage increases, like those planned in the UK and in some US states, are still unknown. We conduct a survey experiment that randomly assigns increases or decreases in minimum wages to about 6,000 plants in Germany and asks the personnel managers about their expectations concerning employment adjustments. We find that employment reacts asymmetrically to positive and negative changes in minimum wages. The larger the increase in the minimum wage is, the larger the expected reduction in employment. Employment adjustments are more pronounced in those industries and plants which are more strongly affected by the current minimum wage and in those plants that have neither collective agreements nor a works council. In contrast, employment is not found to increase if the minimum wage is reduced by about 10 percent. This mainly reflects that plants with works councils and collective agreements would not cut wages. |
| Keywords: | minimum wage,wage cuts,establishment survey,Germany |
| JEL: | J31 J23 D22 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:112018&r=exp |
| By: | Chaudhary, L.; Rubin, J.; Iyer, S.; Shrivastava, A. |
| Abstract: | We conduct a public goods game in three small towns in the Indian state of Rajasthan. Due to historical military conquest, until 1947 these towns were on opposite sides of a colonial border separating British India from the Princely States. Our research design offers a treatment comparison between the towns of (British) Kekri and (Princely) Sarwar, and a control comparison between Princely Sarwar and Shahpura. We find that participants from (British) Kekri are more co-operative in mixed-town groups. The differences are driven by individuals with family ties to the towns, highlighting the enduring effects of colonial rule on co-operation norms. |
| Keywords: | cultural transmission, colonialism, public goods game, natural experiment, lab-in-the- eld experiment, India |
| JEL: | C91 C93 C71 H41 H73 N35 N45 O17 Z1 |
| Date: | 2018–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1855&r=exp |
| By: | You, Sangseok (HEC Paris); Kim, Jeong-Hwan (University of Michigan at Ann Arbor - Department of Civil and Environmental Engineering); Lee, SangHyun (University of Michigan at Ann Arbor - Department of Civil and Environmental Engineering); Kamat, Vineet (University of Michigan at Ann Arbor - Department of Civil and Environmental Engineering); Robert, Lionel (University of Michigan at Ann Arbor - School of Information) |
| Abstract: | Advances in robotics now permit humans to work collaboratively with robots. However, humans often feel unsafe working alongside robots. Our knowledge of how to help humans overcome this issue is limited by two challenges. One, it is difficult, expensive and time-consuming to prototype robots and set up various work situations needed to conduct studies in this area. Two, we lack strong theoretical models to predict and explain perceived safety and its influence on human–robot work collaboration (HRWC). To address these issues, we introduce the Robot Acceptance Safety Model (RASM) and employ immersive virtual environments (IVEs) to examine perceived safety of working on tasks alongside a robot. Results from a between-subjects experiment done in an IVE show that separation of work areas between robots and humans increases perceived safety by promoting team identification and trust in the robot. In addition, the more participants felt it was safe to work with the robot, the more willing they were to work alongside the robot in the future. |
| Keywords: | Human–Robot Work Collaboration (HRWC); Immersive Virtual; Environment (IVE); Robot Acceptance Safety Model (RASM); Masonry; Safety; Trust; Team; Identification; Intention to Work with Robot |
| JEL: | J24 O30 |
| Date: | 2018–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1308&r=exp |
| By: | Emmanuelle Gabillon |
| Abstract: | This paper is a contribution to regret theory, which we generalize in two ways. Since the intensity of regret depends on the information the decision-maker has about the results of the foregone strategies, we build a model of choice which accommodates any feedback structure. We also show that the reference point, which characterizes the regret utility function introduced by Quiggin (1994), does not always represent a feeling of regret. It corresponds to a broader concept, which we call psychological opportunity cost (POC), of which regret is no more than a specific expression. We find behavioral deviations from the predictions of the Expected Utility Theory. We obtain correlation loving, greater reluctance to take on risk and we highlight some harmful effects of information. Our model equally offers a theoretical framework for experimental studies about inaction inertia. |
| Keywords: | choice, correlation loving, emotion, inaction inertia, information, regret. |
| JEL: | D03 D81 D82 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2018-18&r=exp |
| By: | Jie Bai (Harvard Kennedy School, 79 JFK Street, Cambridge, MA 02138); Maggie Chen (George Washington University, Monroe Hall, 2115 G St. NW, Washington, District of Columbia 20052); Daniel Xu (Duke University, 220 Social Sciences Bldg, Box 90097, Durham, NC 27708) |
| Abstract: | Global e-commerce platforms provide a promising avenue that connects sellers and buyers from different parts of the world. In this project, we begin by documenting a few new stylized facts about exporter dynamics on global e-commerce platforms using data from Aliexpress. These facts indicate substantial search and information frictions in this market, due to the large number of market participants and significant ex-ante heterogeneity in quality. These imply that initial demand shocks could have a persistent impact on growth and performance can be quite path-dependent. Motivated by by the empirical facts, we design an experiment where we randomly generate demand and information shocks to a set of small perspective exporters via randomly placed orders and reviews. We follow all sellers for 3 months and collect a rich set of firm performance and quality data to estimate the extent of search and information frictions. Our findings suggest that initial demand shocks significantly boost subsequent sales among the treated sellers. Information on product quality seems to matter more compared to information on shipping quality, suggesting that the former may be the major type of asymmetric information between the two sides of the market. We further explore other potential determinants of growth and heterogeneity in the treatment effect. |
| Keywords: | e-commerce, asymmetric information, search frictions, firm dynamics |
| JEL: | D83 L15 L86 F14 O12 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1817&r=exp |
| By: | Alhassan, Mustapha; Motallebi, Marzieh |
| Keywords: | Resource and Environmental Policy Analysis, Risk and Uncertainty, Experimental Economics |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274405&r=exp |
| By: | Nathaniel T. Wilcox (Economics Science Institute, Chapman University) |
| Abstract: | Experimental and behavioral economists, as well as psychologists, commonly assume conditional independence of choices when constructing likelihood functions for structural estimation. I test this assumption using data from a new experiment designed for this purpose. Within the limits of the experiment’s identifying restriction and designed power to detect deviations from conditional independence, conditional independence is not rejected. In naturally occurring data, concerns about violations of conditional independence are certainly proper and well-taken (for well-known reasons). However, when an experimenter employs contemporary state-of-the-art experimental mechanisms and designs, the current evidence suggests that conditional independence is an acceptable assumption for analyzing data so generated. |
| Keywords: | Alternation, Conditional Independence, Choice Under Risk, Discrete Choice, Persistence, Random Lottery Incentive, Random Lottery Selection, Random Problem Selection, Random Round Payoff |
| JEL: | C22 C25 C91 D81 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:18-08&r=exp |
| By: | Mo Xiao (Eller College of Management, University of Arizona.); Zhe Yuan (Alibaba Group) |
| Abstract: | The U.S. spectrum licenses cover geographically distinct areas and are often complementary to each other. A bidder seeking to acquire multiple licenses is then exposed to risks of winning only isolated patches. To allocate licenses more efficiently, the Federal Communications Commission allowed bidders to bid for (predefined) packages of licenses in Auction 73. We estimate the magnitude of license complementarity by modeling the bidding process as an entry game with interdependent markets and evolving bidder belief. Bidders' decisions on bidding (and not bidding) provide bounds on licenses' stand-alone values and complementarity between licenses. We estimate the total complementarity to be around two thirds of the total bidding ($19 billion) in Auction 73. Complementarity in a 1 MHz nationwide license is worth $918 million to an average large bidder but only $120 million to an average small bidder. Our counterfactual analysis shows that the effects of package bidding on bidders' exposure risks depend on package format and package size. More importantly, mixed package bidding increases FCC revenue substantially at the cost of reducing bidder surplus and increasing license allocation concentration. |
| Keywords: | Spectrum Auctions, Complementarity, Package Bidding, Moment Inequalities |
| JEL: | L5 L8 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1806&r=exp |
| By: | Ziegler, Andreas |
| Abstract: | Based on data from a large-scale computer-based survey among more than 3700 German citizens, this paper empirically examines the determinants of the general change of electricity tariffs and the specific change to green tariffs. Our econometric analysis with binary probit and multinomial logit models reveals a strong relevance of behavioral factors and individual values. For example, patience (which is measured by an incentivized experiment that was included in the survey) is significantly positively correlated with general changes to alternative electricity tariffs. Furthermore, social preferences (also measured by an incentivized experiment) and trust have an even stronger significantly positive effect on the specific change to green electricity tariffs. Our estimation results also imply an important role of political identification, i.e. citizens with a left-wing orientation significantly more often switch an electricity tariff and an ecological political orientation has a strong significantly positive effect on the change to a green electricity tariff. Furthermore, several socio-demographic and socio-economic variables like age, gender, or household income are also relevant. The empirical analysis thus provides new explanation patterns for the phenome-non that only a small number of households regularly change their electricity tariff and specifically to green tariffs, although they have high stated preferences for such changes. Our insights suggest several directions for policy, but also for electricity providers, to in-crease these switching rates. For example, the high importance of trust attitudes for the change to green electricity tariffs suggests a transparency initiative of electricity providers to decrease reservations against green power. |
| Keywords: | Switching electricity tariffs,green electricity,heterogeneous preferences,behavioral factors,artefactual field experiment,individual values,econometric analysis |
| JEL: | C93 D12 Q41 Q42 Q50 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc18:181604&r=exp |
| By: | Kumar, Ashutosh; Rahman, Tauhidur |
| Keywords: | Behavioral & Institutional Economics, Experimental Economics, International Development |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274137&r=exp |
| By: | Slade, Peter; Nolan, James F. |
| Keywords: | Industrial Org./Supply Chain Management, Experimental Economics, Agribusiness Economics and Management |
| Date: | 2018–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea18:274208&r=exp |
| By: | Dimitrios Xefteris (Dept. of Economics, University of Cyprus, Cyprus); Iván Barreda-Tarrazona (LEE & Economics Department, Universitat Jaume I, Castellón-Spain); Aurora García-Gallego (LEE & Economics Department, Universitat Jaume I, Castellón-Spain); Nikolaos Georgantzis (Burgundy School of Wines and Spirits Business, Dijon-France and LEE-Universitat Jaume I, Castellón-Spain) |
| Abstract: | This paper studies a catalog competition game: two competing rms decide at the same time product characteristics and prices in order to maximize pro ts. In the unique symmetric equilibrium of this one-stage Hotelling (1929) game, rms employ mixed strategies which make them produce more often a mainstream product variety than any of the specialized ones and always charge higher prices than their marginal costs (also, prices for mainstream products are found to be lower than prices for specialized products). We experimentally test and con rm the main predictions of the model, and we also compare it to the rst-location-then-pricing original setup. |
| Keywords: | catalog competition; Hotelling; mixed equilibrium; experiment |
| JEL: | C72 C92 D43 D90 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2018/08&r=exp |
| By: | Anna Conte; John D. Hey |
| Abstract: | The Random Utility Model (RUM) and the Random Preference Model (RPM) are important tools in the economist’s toolbox when estimating preference functionals from experimental data. In an important recent paper in this journal, Apesteguia and Ballester (2018) cautioned decision theorists against using the RUM, suggesting that the RPM may be preferable. This short note comments on this paper, and concludes that RUM does not suffer from the drawbacks suggested in their paper. |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:18/12&r=exp |
| By: | Rene Schwaiger; Michael Kirchler; Florian Lindner; Utz Weitzel |
| Abstract: | We investigate determinants of price expectations and satisfaction levels of financial professionals and students. In experiments with 150 professionals and 576 students, we systematically vary price paths according to the final return (positive or negative) and the way the final return is achieved (upswing followed by downswing or vice versa). Professionals show the most optimistic price expectations and are most satisfied if assets fall in price first and then recover. In addition, professionals' price expectations are highest after positive returns. Among students, qualitatively similar patterns emerge, but professionals' price expectations are less prone to framing effects. |
| Keywords: | Investor satisfaction, price expectations, financial professionals, experimental finance, investor behavior |
| JEL: | G02 G11 D03 C93 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2018-17&r=exp |
| By: | Mathieu Bunel (LARJE - Laboratoire de Recherches Juridique et Economique - Université de la Nouvelle-Calédonie, TEPP - Travail, Emploi et Politiques Publiques - CNRS - Centre National de la Recherche Scientifique - UPEM - Université Paris-Est Marne-la-Vallée); Samuel Gorohouna (LARJE - Laboratoire de Recherches Juridique et Economique - Université de la Nouvelle-Calédonie); Yannick L'Horty (TEPP - Travail, Emploi et Politiques Publiques - CNRS - Centre National de la Recherche Scientifique - UPEM - Université Paris-Est Marne-la-Vallée, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Pascale Petit (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, TEPP - Travail, Emploi et Politiques Publiques - CNRS - Centre National de la Recherche Scientifique - UPEM - Université Paris-Est Marne-la-Vallée); Catherine Ris (LARJE - Laboratoire de Recherches Juridique et Economique - Université de la Nouvelle-Calédonie) |
| Date: | 2018–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01879553&r=exp |
| By: | Brice Corgnet (EMLYON Business School); Mark DeSantis (Argyros School of Business and Economics & Economic Science Institute, Chapman University); David Porter (Argyros School of Business and Economics & Economic Science Institute, Chapman University) |
| Abstract: | Apparently contradictory evidence has accumulated regarding the extent to which financial markets are informationally efficient. Shedding new light on this old debate, we show that differences in the distribution of private information may explain why informational efficiency can vary greatly across markets. We find that markets are informationally efficient when complete information is concentrated in the hands of competing insiders whereas they are less efficient when private information is dispersed across traders. A learning model helps to illustrate why inferring others’ private information from prices takes more time when information is more dispersed. We discuss the implications of our findings for understanding the potential consequences of lowering the cost of information on the informational efficiency of markets. |
| Keywords: | Information aggregation, information dispersion, market efficiency, experimental asset markets, learning models, cognitive finance |
| JEL: | C92 G02 G14 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:18-09&r=exp |
| By: | Reddy Sai Shiva (Indian Institute of Management Kozhikode); Kausik Gangopadhyay (Indian Institute of Management Kozhikode) |
| Abstract: | We examined the Set Betweenness axiom, the most crucial assumption in the literature studying Temptation and Self-control starting with the seminal work by Gul and Pessendorfer [1]. This axiom states that presence of a tempting alternative creates a self-control problem for the decision maker who prefers a menu that does not include the tempting alternative over a menu that does. We identified reduced price as a tempting alternative and conducted a quasi-experiment on 288 respondents. The respondents expressed their preference between menus or alternatives that contains a tempting good at a reduced price and/or that good at a non-reduced price. We chose ice cream and shirt as two different choices for goods. Our results demonstrate that that choice that is consistent with Set Betweenness Axiom is the most observed choice. Moreover, people with more familial wealth may have higher preference for commitment. |
| Keywords: | Agricultural Productivity |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:iik:wpaper:268&r=exp |
| By: | Luc Behaghel; Karen Macours; Julie Subervie |
| Abstract: | We illustrate how randomized controlled trials (RCTs) could be used as a learning tool to shed light on various aspects of the Common Agricultural Policy (CAP). RCTs are quasi-absent from the CAP evaluation toolbox, despite their frequent use to evaluate other European Union policies, or agricultural policies in developing countries. We draw upon existing debates on the role of RCTs in policy-making to derive a list of points of attention. We then consider four specific examples of evaluation questions for the CAP, and based on examples drawn from agricultural and social policies in developing and developed countries, argue that the RCT toolbox has the potential to significantly add to existing approaches to evaluating and designing components of the CAP. |
| Keywords: | Common Agricultural Policy, impact evaluation, policy design, field experiments. |
| JEL: | C93 Q18 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpceem:18-20&r=exp |