nep-exp New Economics Papers
on Experimental Economics
Issue of 2018‒10‒29
27 papers chosen by

  1. The cognitive foundations of cooperation By Carlos Alós-Ferrer; Michele Garagnani
  2. Should I default on my mortgage even if I can pay? Experimental evidence By Marina Pavan; Iván Barreda-Tarrazona
  3. Experimental Research on Contests By Sheremeta, Roman
  4. Gender, risk preferences and willingness to compete in a random sample of the Swedish population By Boschini, Anne; Dreber, Anna; von Essen, Emma; Muren, Astri; Ranehill, Eva
  5. Mental Accounting of Public Funds - The Flypaper Effect in the Lab By Hopp, Daniel; Becker, Johannes; Kriebel, Michael
  6. Pricing in Asymmetric Two-Sided Markets: A Laboratory Experiment By Weghake, Jens; Erlei, Mathias; Keser, Claudia; Schmidt, Martin
  7. Does deliberation change individual opinions and hence resolve the intergenerational sustainability dilemma in societies? By Raja Timilsina; Koji Kotani; Yoshinori Nakagawa; Tatsuyoshi Saijo
  8. Under a Magnifying Glass: On the Use of Experiments in Strategy Research By Di Stefano, Giada; Gutierrez, Cédric
  9. Show What You Risk - Norms for Risk Taking By Grimm, Stefan
  10. "The Good News about Bad News": Feedback about Past Organisational Failure Bad ist Impact in Worker Productivity By Vanessa, Mertins; Jeworrek, Sabrina; Vlassopoulos, Michael
  11. On the external validity of experimental inflation forecasts: A comparison with five categories of field expectations By Camille Cornand; Paul Hubert
  12. Teamwork, Leadership and Gender By De Paola, Maria; Gioia, Francesca; Scoppa, Vincenzo
  13. Who gives? - The Roles of Empathy and Impulsiveness By Andreoni, James; Koessler, Ann-Kathrin; Serra-Garcia, Marta
  14. Intentions behind disclosure to promote trust under short-termism: An experimental study By Satoshi Taguchi; Yoshio Kamijo
  15. Leadership in a Dynamic Public Goods Game: An Experimental Study By Eichenseer, Michael; Moser, Johannes
  16. On Booms That Never Bust: Ambiguity in Experimental Asset Markets with Bubbles By Brice Corgnet; Roberto Hernán-González; Praveen Kujal
  17. The Many Faces of Human Sociality: Uncovering the Distribution and Stability of Social Preferences By Bruhin, Adrian; Fehr, Ernst; Schunk, Daniel
  18. Leader Identity and Coordination By Bhalotra, Sonia R.; Clots-Figueras, Irma; Iyer, Lakshmi; Vecci, Joseph
  19. Auction Competitive Dynamics and Guide (List) Prices in a Bubble Market By Paul Ryan; Clare Branigan
  20. Compulsory versus Voluntary Insurance: An Online Experiment By Zhang, Peilu; Palma, Marco A.
  21. Livestock Transfers and Resilience: Evidence from a Randomized Trial in Guatemala By Mullally, Conner C.
  22. Taxes, benefits and labour force participation: A survey of the quasi-experimental literature By Lundberg, Jacob; Norell, John
  23. The Difficulties in Measuring Individual Utilities of Product Attributes: A Choice Based Experiment By Oliver Meixner; Rainer Haas
  24. The Many Faces of Human Sociality: Uncovering the Distribution and Stability of Social Preferences By Adrian Bruhin; Ernst Fehr; Daniel Schunk
  25. Unobserved Heterogeneity in Structural Behavioral Models Using Experimental Data By Giovanni Ponti; Claudio Rossetti
  26. Extreme Weather and Global Agricultural Markets: Experimental Analysis of the Impacts of Heat Waves on Wheat Markets By Thomas Chatzopoulos; Ignacio Pèrez Domínguez; Matteo Zampieri; Andrea Toreti
  27. The Supply Side Determinants of Territory and Conflict By Jordan Adamson; Erik O. Kimbrough

  1. By: Carlos Alós-Ferrer; Michele Garagnani
    Abstract: Why do some individuals cooperate with their fellow human beings while others take advantage of them? The human drive for cooperation and altruism is one of the most powerful forces shaping our society, but there is an enormous behavioral variance in individual behavior. At the same time, whether it is intuitive to behave in a cooperative manner or whether such behaviors are calculated deeds remains an unanswered question. Indeed, recent empirical investigations regarding the spontaneity of human cooperation have found mixed evidence, possibly due to a failure to induce compliance in the behavioral manipulations employed. We conducted a laboratory experiment inducing intuitive and deliberative behavior through gradual economic incentives that ensure compliance. To account for individual heterogeneity, we independently measured social value orientation and aversion to interpersonal (strategic) uncertainty. We find that these measures determine the intrinsic predisposition towards cooperation. Subjects with more altruistic social values or a higher tolerance towards interpersonal uncertainty are more cooperative. Crucially, we find causal evidence that there is no universal default mode of behavior. Rather, intuition enhances intrinsic predispositions, while deliberation moderates them towards socially acceptable behavior. That is, subjects with a higher (resp. lower) predisposition towards cooperation became more (resp. less) cooperative under time pressure compared with time delay.
    Keywords: Cooperation, heterogeneity, time manipulations
    JEL: D01 D81 C9
    Date: 2018–10
  2. By: Marina Pavan (LEE & Economics Department, Universitat Jaume I, Castellón-Spain); Iván Barreda-Tarrazona (LEE & Economics Department, Universitat Jaume I, Castellón-Spain)
    Abstract: We study strategic default in the laboratory, i.e. in a controlled experiment. Subjects are initially endowed with a house and a mortgage (we use neutral wording in the experiment), and must decide at each period in which their mortgage is alive among three options: making the mortgage payment, selling the house, or walking away from their house and defaulting on their mortgage. At each point in time, we can observe whether defaulters can afford to make the mortgage payment, and thus, directly compute the number of strategic defaulters. Subjects default in the right periods and quite fast learn what they should consume. We find experimental support for the “double trigger” hypothesis: individuals faced with low income and low house prices are more likely to default. We observe that subjects default less than optimal, and this decision is significantly affected by social norm concerns in the context of the experiment. Individuals under-consume in the first periods of life: they are “cautious” when indebted. Both introducing a 50% probability of recourse and a Responsible Homeowner Reward are very effective in preventing default in the lab, especially by individuals receiving a bad shock to income.
    Keywords: Strategic Mortgage Default, Negative Equity, Household Indebtedness, Housing, Laboratory Experiment
    JEL: C91 E21
    Date: 2018
  3. By: Sheremeta, Roman
    Abstract: Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants’ efforts are significantly higher than predicted by the standard Nash equilibrium. Despite overbidding, most comparative static predictions, such as the incentive effect, the size effect, the discouragement effect and others are supported in the laboratory. In addition, experimental studies examine various contest structures, including dynamic contests (such as multi-stage races, wars of attrition, tug-of-wars), multi-dimensional contests (such as Colonel Blotto games), and contests between groups. This article provides a short review of such studies.
    Keywords: Contest; All-pay auction; Tournament; Dynamic Contest; Multi-battle Contest; Multi-dimensional Contest; Group Contest; Rent-seeking; Experiment; Overbidding; Over-dissipation; Incentive Effect; Size Effect; Discouragement Effect; Strategic Momentum
    JEL: C7 C9 D4 D7 D9 H4 J4 K4 L2 M5
    Date: 2018–10–03
  4. By: Boschini, Anne (Swedish Institute for Social Research, Stockholm University); Dreber, Anna (Department of Economics); von Essen, Emma (Swedish Institute for Social Research, Stockholm University); Muren, Astri (Department of Economics); Ranehill, Eva (Department of Economics)
    Abstract: Experimental results from student or other non-representative convenience samples often suggest that men, on average, are more risk-taking and competitive than women. Here we explore whether these gender preference gaps also exist in a simple random sample of the Swedish adult population. Our design comprises four different treatments to systematically explore how the experimental context may impact gender gaps; a baseline treatment, a treatment where participants are primed with their own gender, and a treatment where the participants know the gender of their counterpart (man or woman). We look at willingness to compete in two domains: a math task and a verbal task. We find no gender differences in risk preferences or in willingness to compete in the verbal task in this random sample. There is some support for men being more competitive than women in the math task, in particular in the pooled sample. The effect size is however considerably smaller than what is typically found. We further find no consistent impact of treatment on (the absence of) the gender gap in preferences.
    Keywords: Gender differences; competitiveness; risk-taking; experiment; random representativ sample
    JEL: C83 C91 D91
    Date: 2018–10–17
  5. By: Hopp, Daniel; Becker, Johannes; Kriebel, Michael
    Abstract: We report evidence from a series of laboratory experiments that focus on mental accounting of 'public funds'. Groups of three players decide upon how much to redistribute within the group. We measure the preference to redistribute when transfers are made either out of individual accounts (the players' own money) or out of a common account (the group's money). Since the common account is dissolved after each round and paid out to individuals, its size should not affect the decision to redistribute. The experiment is designed to rule out an anchoring effect. We find that the (relative) size of the common account significantly affects redistribution behavior. Specifically, the transfer increases in the relative size of the common account – but only when the transfer is paid out of the common account (and not out of the individual account). We interpret these findings as evidence for a flypaper effect due to mental accounting and discuss implications for tax policy and government spending.
    Keywords: mental accounting,flypaper effect,lab experiments
    JEL: C92 D72 H31
    Date: 2018
  6. By: Weghake, Jens; Erlei, Mathias; Keser, Claudia; Schmidt, Martin
    Abstract: We conducted a laboratory experiment to study the price setting behavior in two-sided markets. We seek to answer two specific research questions: Do participants charge the equilibrium prices that can be derived from a theoretical model? How is the price setting affected by the characteristics of the Nash equilibrium? Our study shows that there are hardly any realizations of the Nash equilibrium. Participants seem to use simple heuristics. The increase in complexity caused by asymmetry has two effects: On the one hand, it makes finding the optimal pricing more difficult so that, on average, we find prices that are further away from optimal prices. On the other hand, higher complexity goes along with stronger signals against non-expedient heuristics so that, on an individual level, the equilibrium is reached in more markets.
    Keywords: two-sided market theory,experiment,duopoly,platform competition
    JEL: C72 C91 D43 L13
    Date: 2018
  7. By: Raja Timilsina (Research Institute for Future Design, Kochi University of Technology); Koji Kotani (School of Economics and Management, Kochi University of Technology); Yoshinori Nakagawa (School of Economics and Management, Kochi University of Technology); Tatsuyoshi Saijo (School of Economics and Management, Kochi University of Technology)
    Abstract: The current generation affects future generations, but the opposite is not true. This oneway nature induces the current generation to take advantage of resources without considering future generations, which we call “intergenerational sustainability dilemma (ISD).†While deliberation is known to bring a change in individual opinions and lead to a better group decision in some settings, little is known about whether it resolves ISD. We examine how deliberation changes individual opinions and then can be a resolution for ISD in societies. To this end, an ISD game (ISDG) along with interviews and questionnaires are instituted in rural and urban areas of Nepalese societies. In ISDG, a sequence of six generations, each of which consists of three people, is organized, and each generation chooses either to maintain intergenerational sustainability (sustainable option) or to maximize her own generation’s payoff by irreversibly imposing a cost on future generations (unsustainable option) under “deliberative†process. Our result demonstrates that urban subjects have a wider variety of individual initial opinions and support an unsustainable option more often than do rural subjects. It also shows that individual opinions change through deliberation when subjects in a generation do not share the same initial opinion, reflecting that more urban subjects change opinions. However, we identify that such changes do not work in the direction to enhance intergenerational sustainability and thus urban generations remain to choose an unsustainable option. Our experiment demonstrates that deliberation is not a resolution for ISD.
    Keywords: Intergenerational sustainability dilemma, deliberative process, opinion change
    Date: 2018–10
  8. By: Di Stefano, Giada (HEC Paris); Gutierrez, Cédric (Bocconi University - Department of Management and Technology)
    Abstract: The rate at which experimental studies are published in the field of strategy has steadily increased over the past few years. Still, experimental papers account for only a small fraction of strategy papers. This may not come as a surprise given the skepticism surrounding the experimental method, which is often seen as uninterested in establishing external validity, and too “micro” for a field in which the level of analysis is primarily organizational and inter-organizational. Is this skepticism founded? To what extent can experiments be a useful tool for strategy research? To answer this question, we start by examining experimental strategy papers published between 1980 and 2016. Results from the analysis alleviate doubts about the suitability of experimental methods for the study of questions of strategic interest to firms. We next discuss the main advantages associated with the use of experiments and why they make strategy an exciting field in which to be an experimentalist today.
    Keywords: Causal Inference; Experiments; Decision Making; Behavioral Strategy; Apophenia; Microfoundations
    JEL: L10
    Date: 2018–09–10
  9. By: Grimm, Stefan (LMU Munich)
    Abstract: Most economic decisions are embedded in a specific social context. In many such contexts, individual choices are influenced by their observability due to underlying social norms and social image concerns. This study investigates the impact of choices being observed, compared to anonymity of choices, on risk taking in a laboratory experiment. I relate participants\' investments in a risky asset directly to social norms for risk taking that are elicited in an incentivized procedure. I find that risk taking is not affected by the choice being observed by a matched participant. Nor do investments follow elicited norms for risk taking more closely when observed. This holds when considering males and females separately. However, I provide strong evidence for gender-specific norms in risk taking. While these explain part of the existing gender gap in risk taking, males still \"overshoot\" by investing more than the norm dictates. This is particularly true for males being matched with a female participant.
    Keywords: risk taking; observability; social image; norms; gender;
    JEL: C91 D01 D81 D91 G11
    Date: 2018–10–11
  10. By: Vanessa, Mertins; Jeworrek, Sabrina; Vlassopoulos, Michael
    Abstract: Failure in organisations is a very common phenomenon. Little is known about whether past failure affects workers’ subsequent performance. We conduct a field experiment in which we follow up a failed mail campaign to attract new volunteers with a phone campaign pursuing the same goal. We recruit temporary workers to carry out the phone campaign and randomly assign them to either receive or not receive information about the previous failure and measure their performance. We find that informed workers perform better – in terms of both numbers dialed (about 14% improvement) and completed interviews (about 20% improvement) – regardless of whether they had previously worked on the failed mail campaign. Evidence from a second experiment with student volunteers asked to support a campaign to reduce food waste suggests that the mechanism behind our finding relates to contextual inference: Informing workers/volunteers that they are pursuing a goal that is hard to attain seems to add meaning to the work involved, leading them to exert more effort.
    Keywords: contextual inference,feedback,failure,field experiment,meaning of work
    JEL: C93 J22 M50
    Date: 2018
  11. By: Camille Cornand (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); Paul Hubert (OFCE - OFCE - Sciences Po, IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris)
    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
    Date: 2018
  12. By: De Paola, Maria (University of Calabria); Gioia, Francesca (University of Edinburgh); Scoppa, Vincenzo (University of Calabria)
    Abstract: We ran a field experiment to investigate whether individual performance in teams depends on the gender of the leader. About 430 students from an Italian University took an intermediate exam that was partly evaluated on the basis of teamwork. Students were randomly matched in teams of three and in each team we randomly chose a leader with the task of coordinating the work of the team. We find a positive and significant effect of female leadership on team performance. This effect is driven by the higher performance of team members in female led teams rather than due to an improvement in the leader’s performance. We also find that, in spite of the higher performance of female led teams, male members tend to evaluate female leaders as less effective, whereas female members are more sympathetic towards them.
    Keywords: team, leadership, gender, stereotypes, randomized experiment
    JEL: J16 M12 M54 C93
    Date: 2018–09
  13. By: Andreoni, James; Koessler, Ann-Kathrin; Serra-Garcia, Marta
    Abstract: We investigate the impact of empathy and impulsiveness on charitable giving using a real donation experiment. We confirm that greater empathy predicts greater charitable giving. Contrary to recent literature, however, we find a significant negative relationship between impulsiveness and donation behavior. Specifically, when financial resources are scarce, donations are more often made by decisionmakers who are able to suppress an intuitively egoistic response.
    Keywords: Charitable Giving,Donation,Empathy,Impulsiveness
    JEL: C91 D64 H40
    Date: 2018
  14. By: Satoshi Taguchi (Doshisha University); Yoshio Kamijo (School of Economics and Management, Kochi University of Technology)
    Abstract: We experimentally examine the impact of varying intentions behind information disclosures on trust and reciprocity between an investor and a manager during short-term transactions where reputations cannot be established. To do so, we use a trust game with asymmetric information and conduct lab experiments, comparing one unintentional disclosure condition and two intentional disclosure conditions. The results reveal that information disclosure promotes investments and returns under all three conditions, even in short-term transactions. Further, compared with unintentional disclosure, intentional disclosure fosters greater trust and reciprocity between managers and investors. We also suggest that mutual trust can be developed even before reputation and a long-term relationship are formed. Our study sheds light on the merits of intentional disclosures from a short-term perspective and in particular, the practical importance of institutional design for investors to acquire information.
    Keywords: Disclosure, Short-termism, Experimental economics, Trust game, Gift exchange
    Date: 2018–10
  15. By: Eichenseer, Michael; Moser, Johannes
    Abstract: We examine how leadership affects a dynamic public goods game. Using a setting where cooperation gains can be reinvested, our findings suggest that leadership has a positive impact on final wealth. Somewhat surprisingly, leadership also has a positive impact on reducing inequality within groups as measured by the Gini index. Based on a sequential prisoner's dilemma, we elicit types for conditional cooperation. Our results indicate that groups work best when led by cooperatively inclined individuals. Furthermore, early contributions by the leader are crucial and yield a high return.
    Keywords: Leadership,Public Goods Game,Conditional Cooperation,Inequality,Growth,Lab Experiment
    JEL: C72 C92 H41 D63 C72 C92 H41 D63
    Date: 2018
  16. By: Brice Corgnet (Univ. Lyon, EM Lyon, GATE UMR 5824, F-69130 Ecully, France); Roberto Hernán-González (Univ. Bourgogne Franche Comté, Burgundy School of Business-CEREN (EA 7477), 29 rue Sambin, 21000 Dijon, France); Praveen Kujal (Department of Economics, Middlesex University Business School, London, U.K.)
    Abstract: We study the effect of ambiguity on the formation of bubbles and on the occurrence of crashes in experimental asset markets à la Smith, Suchanek, and Williams (1988). We extend their framework to an environment where the fundamental value of the asset is ambiguous. We show that, when the fundamental value is ambiguous, asset prices tend to be lower than when it is risky although bubbles form in both the ambiguous and the risky environments. Additionally, bubbles do not crash in the ambiguous case whereas they do so in the risky one. These findings regarding depressed prices and the absence of crashes in the presence of ambiguity are in line with recent theoretical work stressing the crucial role of ambiguity to account for surprisingly low equity prices (high returns) as well as herding in asset markets.
    Keywords: Experimental asset markets, bubbles, ambiguity
    JEL: C92 D84 G14
    Date: 2018
  17. By: Bruhin, Adrian (University of Lausanne); Fehr, Ernst (University of Zurich); Schunk, Daniel (University of Mainz)
    Abstract: There is vast heterogeneity in the human willingness to weigh others' interests in decision making. This heterogeneity concerns the motivational intricacies as well as the strength of other-regarding behaviors, and raises the question how one can parsimoniously model and characterize heterogeneity across several dimensions of social preferences while still being able to predict behavior over time and across situations. We tackle this task with an experiment and a structural model of preferences that allows us to simultaneously estimate outcome-based and reciprocity-based social preferences. We find that non-selfish preferences are the rule rather than the exception. Neither at the level of the representative agent nor when we allow for several preference types do purely selfish types emerge in our sample. Instead, three temporally stable and qualitatively different other-regarding types emerge endogenously, i.e., without pre-specifying assumptions about the characteristics of types. When ahead, all three types value others' payoffs significantly more than when behind. The first type, which we denote as strongly altruistic type, is characterized by a relatively large weight on others' payoffs – even when behind – and moderate levels of reciprocity. The second type, denoted as moderately altruistic type, also puts positive weight on others' payoff, yet at a considerable lower level, and displays no positive reciprocity, while the third type is behindness averse, i.e., puts a large negative weight on others' payoffs when behind and behaves selfishly otherwise. We also find that there is an unambiguous and temporally stable assignment of individuals to types. In addition, we show that individual-specific estimates of preferences offer only very modest improvements in out-of-sample predictions compared to our three-type model. Thus, a parsimonious model with only three types captures the bulk of the information about subjects' social preferences.
    Keywords: social preferences, heterogeneity, stability, finite mixture models
    JEL: C49 C91 D03
    Date: 2018–09
  18. By: Bhalotra, Sonia R. (University of Essex); Clots-Figueras, Irma (Universidad Carlos III de Madrid); Iyer, Lakshmi (University of Notre Dame); Vecci, Joseph (University of Gothenburg)
    Abstract: This paper examines the effectiveness of leaders in addressing coordination failure in societies with ethnic or religious diversity. We experimentally vary leader identity in a coordination game and implement it in the field across 44 towns in India. We find that religious minority leaders (Muslims) improve coordination, while majority leaders (Hindus) do not. We test the effectiveness of intergroup contact and affirmative action, two commonly used policies to improve the well-being of minorities. Intergroup contact improves coordination irrespective of leader identity, but affirmative action leads to deterioration in coordination in Muslim-led groups alongside an increase in coordination in Hindu-led groups. We find that both policies are less effective for Muslim-led groups in towns with a recent history of religious conflict. Our findings contribute novel evidence to research on coordination failure, leader identity, policy alternatives for promoting integration of minorities, and conflict.
    Keywords: coordination failure, leader identity, leader effectiveness, religion, affirmative action, intergroup contact, conflict, India
    JEL: P16 D70 D91 J78
    Date: 2018–09
  19. By: Paul Ryan; Clare Branigan
    Abstract: The auction literature finds competition drives price outcomes and has both rational and psychological components. In bubble markets psychological factors are likely to be heightened impacting on the dynamics of competitive behavior (Shiller, 2014). We find, in a real estate bubble, guide prices have no influence in generating greater auction competition. In addition, our findings are supportive of the strength of the guide price in acting as an anchor on price outcomes. Thus we find no evidence that auction fever (e.g. Adam et al, 2015) occludes any assimilative role for the guide as an anchor.Interestingly, however, we find evidence consistent with real estate agents systematically setting low guide prices relative to fundamentals, in an apparent belief in the reversal- of- the- anchoring effect (Ku et al, 2006), suggesting their actions in setting guide prices may have, in fact, paradoxically, dampened the effect of the bubble rather than amplifying it.
    Keywords: Anchoring; Auction Fever; Auctions; Competition; Guide Prices
    JEL: R3
    Date: 2018–01–01
  20. By: Zhang, Peilu; Palma, Marco A.
    Keywords: Experimental Economics, Risk and Uncertainty, Behavioral & Institutional Economics
    Date: 2018–06–20
  21. By: Mullally, Conner C.
    Keywords: International Development, Food and Agricultural Policy Analysis, Household and Labor Economics
    Date: 2018–06–20
  22. By: Lundberg, Jacob (Timbro); Norell, John (Timbro)
    Abstract: We review the literature that uses quasi-experimental methods to estimate the elasticity of labour force participation with respect to the financial gain from work. We find a wide range of elasticities, with an average of 0.38. 26 out of 31 papers find elasticities larger than 0.1, providing strong evidence that individuals respond to incentives on the extensive margin of labour supply. Elasticities are larger for women and older workers, and have declined over time.
    Keywords: participation elasticity; quasi-experimental methods; labour supply; extensive margin
    JEL: H24 J22
    Date: 2018–10–19
  23. By: Oliver Meixner; Rainer Haas
    Keywords: Agribusiness
    Date: 2017–09–01
  24. By: Adrian Bruhin (University of Lausanne); Ernst Fehr (Universität Zürich); Daniel Schunk (Johanes Gutenberg - Universität Mainz)
    Abstract: We uncover heterogeneity in social preferences with a structural model that accounts for outcome-based and reciprocity-based social preferences and assigns individuals to endogenously determined preferences types. We find that neither at the aggregate level nor when we allow for several distinct preference types do purely selfish types emerge, suggesting that other-regarding preferences are the rule and not the exemption. There are three temporally stable other-regarding types. When ahead, all types value others' payoffs more than when behind. The first, strongly altruistic type puts a large weight on others' payoffs even when behind and displays moderate levels of reciprocity. The second, moderately altruistic type also puts positive weight on others’ payoff, yet at a lower level, and displays no positive reciprocity. The third, behindness averse type puts a large negative weight on others’ payoffs when behind and is selfish otherwise. In addition, we show that individual-specific estimates of preferences offer only very modest improvements in out-of-sample predictions compared to our three-type model. Thus, a parsimonious model with three types captures the bulk of the information about subjects' social preferences.
    Keywords: social preferences, heterogeneity, Stability, finite mixture models
    JEL: C49 C91 D03
    Date: 2018–10
  25. By: Giovanni Ponti (Universidad de Alicante, University of Chicago, LUISS Guido Carli Roma); Claudio Rossetti (Università di Napoli Federico II and CSEF)
    Abstract: In this paper we compare a mixed logit model (MLM) and a latent class model (LCM) in the context of behavioral structural estimation using experimental data. By providing an instrument to deal with the intrinsic unobserved heterogeneity that characterizes experimental data, these alternative models have clear advantages compared with a multinomial logit model (MNL) typically used in structural estimation of behavioral models. We carry out our exercise by using experimental data that allows us estimation of distributional parameters related to risk and social preferences. Somehow coherently with the economic theory, the LCM identifies three classes of subjects (risk/ineq. lovers, risk/ineq. neutral, risk/ineq. averse). Moreover, estimates from both MLM and LCM somehow confirm the findings from a MNL model, that under the veil of ignorance (VOI) subjects’ variance aversion mostly reflects risk, rather than distributional concerns. By taking unobserved heterogeneity adequately into account in the estimation of our structural behavioral model, also provides new insights into individual behavior on the interplay between risk and inequality concerns. For example, we find that there is much more variability in individual behavior when subjects face pure inequality than under VOI. Moreover, in the case of pure inequality subjects are also more likely to be inequality lovers than under VOI.
    Keywords: Unobserved heterogeneity, Structural behavioral models, Social preferences, Risk preferences.
    JEL: D86 C25
    Date: 2018–10–18
  26. By: Thomas Chatzopoulos; Ignacio Pèrez Domínguez; Matteo Zampieri; Andrea Toreti
    Keywords: Agribusiness
    Date: 2017–09–01
  27. By: Jordan Adamson (Smith Institute for Political Economy and Philosophy, Chapman University); Erik O. Kimbrough (Smith Institute for Political Economy and Philosophy, Chapman University, and Department of Economics, Simon Fraser University)
    Abstract: What determines the geographic extent of territory? We microfound and extend Boulding’s “Loss of Strength Gradient” to predict the extensive and intensive margins of conflict across space. We show how economies of scale in the production of violence and varying costs of projecting violence at a distance combine to affect the geographic distribution of conflict and territory. We test and probe the boundaries of this model in an experiment varying the fixed costs of conflict entry. As predicted, higher fixed costs increase the probability of exclusive territories; median behavior closely tracks equilibrium predictions in all treatments.
    Keywords: conflict, territory, experiments
    JEL: D74 C9 P48
    Date: 2018

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