nep-exp New Economics Papers
on Experimental Economics
Issue of 2018‒12‒24
38 papers chosen by

  1. What's behind image? towards a better understanding of image-driven behavior By Tobias Regner
  2. Lying and Reciprocity By Simon Dato; Eberhard Feess; Petra Nieken
  3. Behavioral Economic Phenomena in Decision-Making for Others By Ifcher, John; Zarghamee, Homa
  4. Strategic Reasoning in Persuasion Games: An Experiment By Burkhard Schipper; Ying Xue Li
  5. How Do Nascent Social Entrepreneurs Respond to Rewards? A Field Experiment on Motivations in a Grant Competition By Ina Ganguli; Marieke Huysentruyt; Chloe Le Coq
  6. Habits as Adaptations: An Experimental Study By Matyskova, Ludmila; Rogers, Brian; Steiner, Jakub; Sun, Keh-Kuan
  7. Embezzlement and Guilt Aversion By Attanasi, Giuseppe; Rimbaud, Claire; Villeval, Marie Claire
  8. Informing Employees in Small and Medium Sized Firms about Training: Results of a Randomized Field Experiment By van den Berg, Gerard J.; Dauth, Christine; Homrighausen, Pia; Stephan, Gesine
  9. Anti-Social Behavior in Groups By Bauer, Michal; Cahlíková, Jana; Celik Katreniak, Dagmara; Chytilová, Julie; Cingl, Lubomir; Želinský, Tomáš
  10. Does Exposure to Unawareness Affect Risk Preferences? A Preliminary Result By Burkhard Schipper; Wenjun Ma
  11. Laboratory Evidence on the Effects of Sponsorship on the Competitive Preferences of Men and Women By Katherine Coffman; Nancy Baldiga
  12. A Pigouvian Approach to Congestion in Matching Markets By He, Yinghua; Magnac, Thierry
  13. My Peers are Watching me - Audience and Peer Effects in a Pay-What-You-Want Context By Elisa Hofmann; Michael E. Fiagbenu; Asri Özgümüs; Amir M. Tahamtan; Tobias Regner
  14. Who’s Minding the Kids? Experimental Evidence on the Demand for Child Care Quality By James Gordon; Chris M. Herbst; Erdal Tekin
  15. Giving once, giving twice: A two-period field experiment on intertemporal crowding in charitable giving By Adena, Maja; Huck, Steffen
  16. Economic Behavior of Children and Adolescents - A First Survey of Experimental Economics Results By Sutter, Matthias; Zoller, Claudia; Glätzle-Rützler, Daniela
  17. Differential Performance in High vs. Low Stakes Tests: Evidence from the GRE Test By Attali, Yigal; Neeman, Zvika; Schlosser, Analia
  18. Using Response Times to Measure Ability on a Cognitive Task By Aleksandr Alekseev
  19. Do Children Benefit from Internet Access? Experimental Evidence from Peru By Ofer Malamud; Santiago Cueto; Julian Cristia; Diether W. Beuermann
  20. The Heterogeneous Effect of Affirmative Action on Performance By Anat Bracha; Alma Cohen; Lynn Conell-Price
  21. Are Economic Preferences Shaped by the Family Context? The Impact of Birth Order and Siblings' Sex Composition on Economic Preferences By Detlefsen, Lena; Friedl, Andreas; Lima de Miranda, Katharina; Schmidt, Ulrich; Sutter, Matthias
  22. Are Economic Preferences Shaped by the Family Context? The Impact of Birth Order and Siblings' Sex Composition on Economic Preferences By Lena Detlefsen; Andreas Friedl; Katharina Lima de Miranda; Ulrich Schmidt; Matthias Sutter
  23. The Intergenerational Behavioural Consequences of a Socio-Political Upheaval By Booth, Alison L; Fan, Elliott; Meng, Xin; Zhang, Dandan
  24. Leveraging Patients' Social Networks to Overcome Tuberculosis Underdetection: A Field Experiment in India By Goldberg, Jessica; Macis, Mario; Chintagunta, Pradeep
  25. Biased Policy Professionals By DERCON, Stefan; BANURI, Sheheryar; GAURI, Varun
  26. Effects of timing and reference frame of feedback: Evidence from a field experiment By Fischer, Mira; Wagner, Valentin
  27. The differential effect of narratives By Adrian Hillenbrand; Eugenio Verrina
  28. Are the poor so present-biased? By Rachel Cassidy
  29. Social emotional learning in the classroom: Study protocol for a randomized controlled trial of PERSPEKT 2.0 By Ninja Ritter Klejnstrup; Anna Folke Larsen; Helene Bie Lilleør; Marianne Simonsen
  30. Civicness drain By Casari, Marco; Depaola, Maria; Ichino, Andrea; Marandola, Ginevra; Michaeli, Moti; Scoppa, Vincenzo
  31. Information Costs and Sequential Information Sampling By Benjamin Hébert; Michael Woodford
  32. Gender, Social Value Orientation, and Tax Compliance By John D'Attoma; Clara Volintiru; Antoine Malezieux
  33. Gain-Loss Framing in Interdependent Choice By Susann Fiedler; Adrian Hillenbrand
  34. Behavioral Aspects of the Regulator's Actions By Pavlova, Natalia (Павлова, Наталья); Shastitko, Anastasia (Шаститко, Анастасия)
  35. Expectations-Based Loss Aversion in Common-Value Auctions: Extensive vs. Intensive Risk By Benjamin Balzer; Antonio Rosato
  36. Civicness Drain By Casari, Marco; Ichino, Andrea; Michaeli, Moti; De Paola, Maria; Marandola, Ginevra; Scoppa, Vincenzo
  37. Some unpleasant consequences of testing at length By Brunello, Giorgio; Crema, Angela; Rocco, Lorenzo
  38. Treatment Effects with Multiple Outcomes By John Mullahy

  1. By: Tobias Regner (FSU Jena)
    Abstract: Our experimental design systematically varies image concerns in a dictator/trust game. In comparison to the baseline, we either decrease the role of self-image concerns (by providing an excuse for selfish behavior) or increase the role of social-image concerns (by conveying the transfer choice to a third person). In this set up, we analyze the underlying processes that motivate subjects to give less/more. Controlling for distributional preferences and expectations, our results indicate that moral emotions (guilt and shame) are a significant determinant of pro-social behavior. The disposition to guilt explains giving in the baseline, while it does not when an excuse for selfish behavior exists. Subjects' disposition to shame is correlated to giving when their choice is public and they can be identified.
    Keywords: social preferences, pro-social behavior, experiments, guilt aversion, reciprocity, self-image concerns, social-image concerns, trust game
    JEL: C72 C91 D03 D80
    Date: 2018–12–21
  2. By: Simon Dato; Eberhard Feess; Petra Nieken
    Abstract: Recent literature has shown that lying behavior in the laboratory can well be explained by a combination of lying costs and reputation concerns. We extend the literature on lying behavior to strategic interactions. As reciprocal behavior is important in many interactions, we study a theoretical model on reciprocity where a player's altruism depends on her perception of the other player’s altruism towards herself. We analyze a sequential two-player contest and vary the second mover’s information on the first movers lying behavior. This allows us to derive predictions on the second mover’s behavior which we test empirically in a large scale online experiment and in the laboratory. In both experiments, the second mover’s lying propensity does not depend on whether the first mover has (possibly) lied or not. This robust behavioral pattern provides strong evidence that reciprocity does not play a role for lying behavior in our setting.
    Keywords: private information, lying, reciprocity
    JEL: C90 D82 D91
    Date: 2018
  3. By: Ifcher, John (Santa Clara University); Zarghamee, Homa (Barnard College)
    Abstract: We examine whether biases identified in the behavioral-economics literature apply in decision-making for others (DMfO). We conduct a laboratory experiment in which subjects make decision on behalf of themselves and others in eighteen tasks that measure the following biases: present-bias in time preferences, reflection effect in risk preferences, ambiguity aversion, decoy effect, anchoring bias, endowment effect, and identifiable-victim bias. In our experiment, DMfO is DMfO simpliciter: unincentivized decisions made by one individual on behalf of another - the individual making decisions faces no direct costs or benefits when engaging in DMfO (as they would in a principal-agent framework or with bequest motives), and DMfO is not framed as giving advice or guessing behavior. We identify the following self-other discrepancies: (i) willingness to pay is higher in DMfO than in decisions for oneself in tasks associated with the anchoring bias, endowment effect, and identifiable-victim bias; and (ii) the propensity to give uninterpretable responses is higher in DMfO than in decisions for oneself. We also find order effects, with DMfO more similar to decisions for oneself when it follows them. Lastly, in response to open-ended items soliciting self-reports of their DMfO, most subjects report having followed some version of the "Golden Rule" (e.g., deciding for others as they would for themselves) or having tried to maximize the other subject's payment or utility; very few subjects report motivations that can be construed as rivalrous.
    Keywords: decisions making for others, laboratory experiments, social preferences, anchoring bias, endowment effect, identifiable-victim bias
    JEL: D90
    Date: 2018–11
  4. By: Burkhard Schipper; Ying Xue Li (Department of Economics, University of California Davis)
    Abstract: We study experimentally persuasion games in which a sender (e.g., a seller) with private information provides verifiable but potentially vague information (e.g., about the quality of a product) to a receiver (e.g., a buyer). Various theoretical solution concepts such as sequential equilibrium or iterated admissibility predict unraveling of information. Iterative admissibility also provides predictions for every finite level of reasoning about rationality. Overall we observe behavior consistent with relatively high levels of reasoning. While iterative admissibility implies that the level of reasoning required for unraveling is increasing in the number of quality levels, we find only insignificantly more unraveling in a game with two quality levels compared to a game with four quality levels. There is weak evidence for learning higher-level reasoning in later rounds of the experiments. Participants display difficulties in transferring learning to unravel in a game with two quality levels to a game with four quality levels. Finally, participants who score higher on cognitive abilities in Raven's progressive matrices test also display significantly higher levels of reasoning in our persuasion games although the effect-size is small.
    Keywords: Persuasion games, verifiable information, communication, disclosure, unraveling, iterated admissibility, prudent rationalizability, common strong cautious belief in rationality, level-k reasoning, experiments, cognitive ability.
    JEL: C72 C92 D82 D83
    Date: 2018–02–19
  5. By: Ina Ganguli (Department of Economics, University of Massachusetts Amherst and Stockholm School of Economics (SITE)); Marieke Huysentruyt (HEC Paris and Stockholm School of Economics (SITE)); Chloe Le Coq (Stockholm School of Economics (SITE))
    Abstract: We conducted a field experiment to identify the causal effects of extrinsic incentive cues on the sorting and performance of nascent social entrepreneurs. The experiment, carried out with one of the United Kingdom’s largest support agencies for social entrepreneurs, encouraged 431 nascent social entrepreneurs to submit a full application for a grant competition that provides cash and in-kind mentorship support through a onetime mailing sent by the agency. The applicants were randomly assigned to one of three groups: one group received a standard mailing that emphasized the intrinsic incentives of the program, or the opportunity to do good (Social treatment), and the other two groups received a mailing that instead emphasized the extrinsic incentives - either the financial rewards (Cash treatment) or the in-kind rewards (Support treatment). Our results show that an emphasis on extrinsic incentives strongly affects who applies for the grant and consequently the type of submissions received. The extrinsic reward cues “crowded out” the more prosocial candidates, leading fewer candidates to apply and fewer applicants targeting disadvantaged groups. Importantly, while the full applications submitted by candidates in the extrinsic incentives groups were more successful in receiving the grant, their social enterprises were less likely to be successful at the end of the one-year grant period. Our results highlight the critical role of intrinsic motives to the selection and performance of social enterprises and suggest that using extrinsic incentives to promote the development of successful social enterprises may backfire in the longer run.
    Keywords: social entrepreneurship, field experiment, incentives, motivations, grants
    JEL: C93 J24 L31
    Date: 2018
  6. By: Matyskova, Ludmila; Rogers, Brian; Steiner, Jakub; Sun, Keh-Kuan
    Abstract: Psychologists emphasize two aspects of habit formation: (i) habits arise when the history of a decision process correlates with optimal continuation actions, and (ii) habits alleviate cognition costs. We ask whether serial correlation of optimal actions alone induces habits or if, instead, habits form as optimal adaptations. We compare lab treatments that differ in the information provided to subjects, holding fixed the serial correlation of optimal actions. We find that past actions affect behavior only in the treatment in which this habit is useful. The result suggests that caution is warranted when modeling habits via a fixed utility over action sequences.
    Keywords: Habit formation; rational inattention
    JEL: C91 D8 D9
    Date: 2018–11
  7. By: Attanasi, Giuseppe (University of Nice Sophia-Antipolis); Rimbaud, Claire (University of Lyon 2); Villeval, Marie Claire (CNRS, GATE)
    Abstract: Psychological game theory can contribute to renew the analysis of unethical behavior by providing insights on the nature of the moral costs of dishonesty. We investigate the moral costs of embezzlement in situations where donors need intermediaries to transfer their donations to recipients and where donations can be embezzled before they reach the recipients. We design a novel three-player Embezzlement Mini-Game to study whether intermediaries in the laboratory suffer from guilt aversion and whether guilt aversion affects the decision to embezzle. We show that the proportion of guilt-averse intermediaries is the same irrespective of the direction of guilt and guilt aversion reduces embezzlement. Structural estimates indicate no difference in the effect of guilt aversion toward the donor and toward the recipient on intermediaries' behavior. This is striking as embezzlement affects the earnings of the recipient but not those of the donor. It shows that guilt aversion matters even when decisions have no direct monetary consequences.
    Keywords: embezzlement, dishonesty, guilt aversion, psychological game theory, experiment
    JEL: C91
    Date: 2018–11
  8. By: van den Berg, Gerard J. (University of Bristol); Dauth, Christine (Institute for Employment Research (IAB), Nuremberg); Homrighausen, Pia; Stephan, Gesine (Institute for Employment Research (IAB), Nuremberg)
    Abstract: We analyze a German labor market program that subsidizes skill-upgrading occupational training for workers employed in small and medium sized enterprises. This WeGebAU program reimburses training costs but take-up has been low. In an experimental setup, we mailed 10,000 brochures to potentially eligible workers, informing them about the importance of skill-upgrading occupational training in general and about WeGebAU in particular. Using combined survey and register data, we analyze the impact of receiving the brochure on workers' awareness of the program, on take-up of WeGebAU and other training, and on job characteristics. The survey data reveal that the brochure more than doubled workers' awareness of the program. We do not find effects on WeGebAU program take-up or short-run labor market outcomes in the register data. However, the information treatment positively affected participation in other (unsubsidized) training among employees under 45 years.
    Keywords: information treatment, wages, skills, employment, randomized controlled trial
    JEL: J24 J65
    Date: 2018–11
  9. By: Bauer, Michal (Charles University, Prague); Cahlíková, Jana (Max Planck Institute for Tax Law and Public Finance); Celik Katreniak, Dagmara (National Research University); Chytilová, Julie (Charles University, Prague); Cingl, Lubomir (University of Economics Prague); Želinský, Tomáš (Technical University of Košice)
    Abstract: This paper provides strong evidence supporting the long-standing speculation that decision-making in groups has a dark side, by magnifying the prevalence of anti-social behavior towards outsiders. A large-scale experiment implemented in Slovakia and Uganda (N=2,309) reveals that deciding in a group with randomly assigned peers increases the prevalence of anti-social behavior that reduces everyone’s but which improves the relative position of own group. The effects are driven by the influence of a group context on individual behavior, rather than by group deliberation. The observed patterns are strikingly similar on both continents.
    Keywords: group membership, aggressive competitiveness, antisocial behavior, group decision-making, group conflict
    JEL: C92 C93 D01 D64 D74 D91
    Date: 2018–11
  10. By: Burkhard Schipper; Wenjun Ma (Department of Economics, University of California Davis)
    Abstract: One fundamental assumption often made in the literature on unawareness is that risk preferences are invariant to changes of awareness. We study how exposure to unawareness affects choices under risk. Participants in our experiment choose repeatedly between varying sure outcomes and a lottery in 3 phases. All treatments are exactly identical in phase 1 and phase 3, but differ in phase 2. There are five different treatments pertaining to the lottery faced in phase 2: The control treatment (i.e., a standard lottery), the treatment with awareness of unawareness of lottery outcomes but known number of outcomes, the treatment with awareness of unawareness of outcomes but with unknown number of outcomes, the treatment with unawareness of unawareness of some outcomes, and the treatment with an ambiguous lottery. We study both whether behavior differs in phase 3 across treatments (between subjects effect) and whether differences of subjects' behavior between phases 1 and phase 3 differs across treatments (within subject effects). We observe no significant treatment effects.
    Keywords: Unawareness, Awareness of unawareness, Risk aversion, Experiments
    JEL: C91 C92 D81 D87
    Date: 2017–05–01
  11. By: Katherine Coffman (Department of Business Administration, Harvard Business School); Nancy Baldiga (Department of Economics and Accounting, College of the Holy Cross)
    Abstract: Sponsorship programs have been proposed as one way to promote female advancement in competitive career fields. A sponsor is someone who advocates for a protégé, and in doing so, takes a stake in her success. We use a laboratory experiment to explore two channels through which sponsorship has been posited to increase advancement in a competitive workplace. In our setting, being sponsored provides a vote of confidence and/or creates a link between the protégé’s and sponsor’s payoffs. We find that both features of sponsorship significantly increase willingness to compete among men on average, while neither of these channels significantly increases willingness to compete among women on average. As a result, sponsorship does not close the gender gap in competitiveness or earnings. We discuss how these insights from the laboratory could help to inform the design of sponsorship programs in the field.
    JEL: O18 R53
    Date: 2018–12
  12. By: He, Yinghua (Toulouse School of Economics); Magnac, Thierry (University of Toulouse I)
    Abstract: Recruiting agents, or "programs" costly screen “applicants” in matching processes, and congestion in a market increases with the number of applicants to be screened. To combat this externality that applicants impose on programs, application costs can be used as a Pigouvian tax. Higher costs reduce congestion by discouraging applicants from applying to certain programs; however, they may harm match quality. In a multiple-elicitation experiment conducted in a real-life matching market, we implement variants of the Gale-Shapley Deferred-Acceptance mechanism with different application costs. Our experimental and structural estimates show that a (low) application cost effectively reduces congestion without harming match quality.
    Keywords: Gale-Shapley Deferred Acceptance Mechanism, costly preference formation, screening, stable matching, congestion, matching market place
    JEL: D78 D50 D61 I21
    Date: 2018–11
  13. By: Elisa Hofmann (Friedrich Schiller University Jena); Michael E. Fiagbenu (Friedrich Schiller University Jena); Asri Özgümüs (Georg-August University Göttingen); Amir M. Tahamtan (Sharif University of Technology, Teheran); Tobias Regner (Friedrich Schiller University Jena)
    Abstract: We experimentally investigate two relevant drivers of payments in voluntary settings: the ef- fects of audience and peers. Our 2×2 between-subjects design varies the interpersonal closeness of buyers (Strangers vs. Peers) and the observability of their payments to other buyers (Anonymous vs. Public). This allows us to enrich the research on both drivers and identify whether payment observability (audience effect), the presence of known others (peer effect), or the combination of both affects voluntary payments. Payments are, on average, higher if they are made public and if buyers feel close to each other. While the effect of audience and peers on payments is additive in total, we do not find an interaction effect, if payments are observed by peers.
    Keywords: social preferences, experiments, social image concerns, Pay-What-You-Want, interpersonal closeness
    JEL: C91 D03 L11
    Date: 2018–12–21
  14. By: James Gordon; Chris M. Herbst; Erdal Tekin
    Abstract: Despite the well-documented benefits of high-quality child care, many preschool-age children in the U.S. attend low-quality programs. Accordingly, improving the quality of child care is increasingly an explicit goal of government policy. However, accomplishing this goal requires a thorough understanding of the factors that influence parents’ child care decisions. This paper provides the first credible evidence on the demand for child care characteristics in the market for home-based care. Using a randomized audit design, we study three dimensions of caregiving: affordability (i.e., the hourly price of child care), quality (i.e., caregiver education and experience), and convenience (i.e., caregiver car ownership and availability). We find that while parents are extremely sensitive to the cost of child care, they also have strong preferences for quality, particularly caregivers’ educational attainment. Furthermore, we obtain mixed results on the convenience dimensions of child care, with parents valuing those owning a car but not those with more availability. Finally, we find significant heterogeneity in child care preferences according to families’ age of youngest child, race and ethnicity, and willingness-to-pay. Our findings suggest that the child care market’s quality problems may be driven by parents’ inability to afford high-quality care or their lack of informational resources on how to identify such programs, rather than an unwillingness to pay for them.
    JEL: J13 J2 J23 J24 J3
    Date: 2018–12
  15. By: Adena, Maja; Huck, Steffen
    Abstract: We study intertemporal crowding between two fundraising campaigns for the same charitable organization by manipulating donors’ beliefs about the likelihood of future campaigns in two subsequent field experiments. The data shows that initial giving is decreasing in the likelihood of a future campaign while subse-quent giving increases in initial giving. While this refutes the predictions of a simple expected utility model, the pattern is in line with a model that allows for (anticipated or unanticipated) habit formation provided that donations in the two periods are substitutes.
    Keywords: Charitable giving,field experiments,intertemporal crowding
    JEL: C93 D64 D12
    Date: 2018
  16. By: Sutter, Matthias (Max Planck Institute for Research on Collective Goods); Zoller, Claudia (University of Cologne); Glätzle-Rützler, Daniela (University of Innsbruck)
    Abstract: About 15 years ago, economic experiments with children and adolescents were considered as an extravagant niche of economic research. Since then, this type of research has exploded in scope and depth. It has become clear that studying the development of economic behavior and its determinants is important to understand economic behavior of adults and to provide a basis for potential policy interventions with respect to economic behavior in childhood and adolescence. Given the huge increase of papers, we provide the first overview of economic experiments with children and adolescents. We focus on the following aspects: rationality of choices, risk preferences, time preferences, social preferences, cooperation, and competitiveness. All of these aspects are analyzed with respect to the influence of age and gender, and we also consider the role of socio-economic status or interventions.
    Keywords: competitiveness, risk preferences, time preferences, social preferences, survey, experiment, children, gender, age
    JEL: C91 D01
    Date: 2018–12
  17. By: Attali, Yigal; Neeman, Zvika; Schlosser, Analia
    Abstract: We study how different demographic groups respond to incentives by comparing their performance in "high" and "low" stakes situations. The high stakes situation is the GRE examination and the low stakes situation is a voluntary experimental section of the GRE. We find that Males exhibit a larger drop in performance between the high and low stakes examinations than females, and Whites exhibit a larger drop in performance compared to minorities. Differences between high and low stakes tests are partly explained by the fact that males and whites exert lower effort in low stakes tests compared to females and minorities.
    Keywords: Experiment; Gender Gap; GRE; high stakes; incentives; low stakes; Performance; race gap
    JEL: C93 I23 I24 J15 J16 J24
    Date: 2018–12
  18. By: Aleksandr Alekseev (Economic Science Institute, Chapman University)
    Abstract: I show how using response times as a proxy for effort coupled with an explicit process-based model can address a long-standing issue of how to separate the effect of cognitive ability on performance from the effect of motivation. My method is based on a dynamic stochastic model of optimal effort choice in which ability and motivation are the structural parameters. I show how to estimate these parameters from the data on outcomes and response times in a cognitive task. In a laboratory experiment, I find that performance on a Digit-Symbol test is a noisy and biased measure of cognitive ability. Ranking subjects by their performance leads to an incorrect ranking by their ability in a substantial number of cases. These results suggest that interpreting performance on a cognitive task as ability may be misleading.
    Keywords: cognitive ability, test scores, response times, drift-diffusion model, choice-process data
    JEL: C24 C41 C91 D91 J24
    Date: 2018
  19. By: Ofer Malamud; Santiago Cueto; Julian Cristia; Diether W. Beuermann
    Abstract: This paper provides experimental evidence for the impact of home internet access on a broad range of child outcomes in Peru. We compare children who were randomly chosen to receive laptops with high-speed internet access to (i) those who did not receive laptops and (ii) those who only received laptops without internet. We find that providing free internet access led to improved computer and internet proficiency relative to those without laptops and improved internet proficiency compared to those with laptops only. However, there were no significant effects of internet access on math and reading achievement, cognitive skills, self-esteem, teacher perceptions, or school grades when compared to either group. We explore reasons for the absence of impacts on these key outcomes with survey questions, time-diaries, and computer logs.
    JEL: C93 I21 I25
    Date: 2018–11
  20. By: Anat Bracha; Alma Cohen; Lynn Conell-Price
    Abstract: This paper experimentally investigates the effect of gender-based affirmative action (AA) on performance in the lab, focusing on a tournament environment. The tournament is based on GRE math questions commonly used in graduate school admission, and at which women are known to perform worse on average than men. We find heterogeneous effect of AA on female participants: AA lowers the performance of high-ability women and increases the performance of low-ability women. Our results are consistent with two possible mechanisms—one is that AA changes incentives differentially for low- and high-ability women, and the second is that AA triggers stereotype threat.
    JEL: C91 I28 J16 J78 K19 K31
    Date: 2018–12
  21. By: Detlefsen, Lena (University of Kiel); Friedl, Andreas (University of Erlangen-Nuremberg); Lima de Miranda, Katharina (Kiel Institute for the World Economy); Schmidt, Ulrich; Sutter, Matthias (Max Planck Institute for Research on Collective Goods)
    Abstract: The formation of economic preferences in childhood and adolescence has long-term consequences for life-time outcomes. We study in an experiment with 525 teenagers how both birth order and siblings’ sex composition affect risk, time and social preferences. We find that second born children are typically less patient, less risk averse, and more trusting. However, siblings' sex composition interacts importantly with birth order effects. Second born children are more risk taking only with same-sex siblings. For trust and trustworthiness, birth order effects are larger with mixed-sex siblings than in the single-sex case. Only for patience, siblings’ sex composition does not matter.
    Keywords: birth order, siblings' sex composition, economic preferences, experiment
    JEL: C93 D10 D90 J12
    Date: 2018–11
  22. By: Lena Detlefsen; Andreas Friedl; Katharina Lima de Miranda; Ulrich Schmidt; Matthias Sutter
    Abstract: The formation of economic preferences in childhood and adolescence has long-term consequences for life-time outcomes. We study in an experiment with 525 teenagers how both birth order and siblings’ sex composition affect risk, time and social preferences. We find that second born children are typically less patient, less risk averse, and more trusting. However, siblings’ sex composition interacts importantly with birth order effects. Second born children are more risk taking only with same-sex siblings. For trust and trustworthiness, birth order effects are larger with mixed-sex siblings than in the single-sex case. Only for patience, siblings’ sex composition does not matter.
    Keywords: birth order, siblings’ sex composition, economic preferences, experiment
    JEL: C93 D10 D90 J12
    Date: 2018
  23. By: Booth, Alison L; Fan, Elliott; Meng, Xin; Zhang, Dandan
    Abstract: Social scientists have long been interested in the effects of social-political upheavals on a society subsequently. A priori, we would expect that, when traumas are brought about by outsiders, within-group behaviour would become more collaborative, as society unites against the common foe. Conversely, we would expect the reverse when the conflict is generated within-group. In our paper we are looking at this second form of upheaval, and our measure of within-group conflict is the 1966-1976 Cultural Revolution (CR) that seriously disrupted many aspects of Chinese society. In particular, we explore how individuals' behavioural preferences are affected by within-group traumatic events experienced by their parents or grandparents. Using data from a laboratory experiment in conjunction with survey data, we find that individuals with parents or grandparents affected by the CR are less trusting, less trustworthy, and less likely to choose to compete than their counterparts whose predecessors were not direct victims of the CR.
    Keywords: behavioural economics; Cultural Revolution; preferences
    JEL: C91 N4
    Date: 2018–12
  24. By: Goldberg, Jessica (University of Maryland); Macis, Mario (Johns Hopkins University); Chintagunta, Pradeep (University of Chicago)
    Abstract: Peer referrals are a common strategy for addressing asymmetric information in contexts such as the labor market. They could be especially valuable for increasing testing and treatment of infectious diseases, where peers may have advantages over health workers in both identifying new patients and providing them credible information, but they are rare in that context. In an experiment with 3,182 patients at 128 tuberculosis (TB) treatment centers in India, we find peers are indeed more effective than health workers in bringing in new suspects for testing, and low-cost incentives of about $US 3 per referral considerably increase the probability that current patients make referrals that result in the testing of new symptomatics and the identification of new TB cases. Peer outreach identifies new TB cases at 25%-35% of the cost of outreach by health workers and can be a valuable tool in combating infectious disease.
    Keywords: tuberculosis, referrals, social networks, case finding, incentives, India, health
    JEL: O1 I1
    Date: 2018–11
  25. By: DERCON, Stefan; BANURI, Sheheryar; GAURI, Varun
    Abstract: Although the decisions of policy professionals are often more consequential than those of individuals in their private capacity, there is a dearth of studies on the biases of policy professionals: those who prepare and implement policy on behalf of elected politicians. Experiments conducted on a novel subject pool of development policy professionals (public servants of the World Bank and the Department for International Development in the UK) show that policy professionals are indeed subject to decision making traps, including the effects of framing outcomes as losses or gains, and most strikingly, confirmation bias driven by ideological predisposition, despite having an explicit mission to promote evidence-informed and impartial decision making. These findings should worry policy professionals and their principals in governments and large organizations, as well as citizens themselves. A further experiment, in which policy professionals engage in discussion, shows that deliberation may be able to mitigate the effects of some of these biases.
    Keywords: Biases, deision making, policy professionals, framing, confirmation bias, behavioural economics
    JEL: C90 H83 Z18
    Date: 2018–12
  26. By: Fischer, Mira; Wagner, Valentin
    Abstract: Information about past performance has been found to sometimes improve and sometimes worsen subsequent performance. Two factors may help to explain this puzzle: which aspect of one's past performance the information refers to and when it is revealed. In a field experiment in secondary schools, students received information about their absolute rank in the last math exam (level feedback), their change in ranks between the second-last and the last math exam (change feedback), or no feedback. Feedback was given either 1-3 days (early) or immediately (late) before the final math exam of the semester. Both level feedback and change feedback significantly improve students' grades in the final exam when given early and tend to worsen them when given late. The largest effects are found for negative change feedback and are concentrated on male students, who adjust their ability beliefs downwards in response to feedback.
    Keywords: timing of feedback,change and level feedback,motivation,field experiment
    JEL: I21 M54 D91
    Date: 2018
  27. By: Adrian Hillenbrand (Max Planck Institute for Research on Collective Goods); Eugenio Verrina (Max Planck Institute for Research on Collective Goods)
    Abstract: Narratives pervade almost any aspect of our life and play a particularly important role in moral and prosocial decision-making. We study how positive (stories in favor of a prosocial action) and negative (stories in favor of a selfish action) narratives influence prosocial behavior. Our main findings are that positive narratives increase giving substantially, especially for selfish types, compared to a baseline with no narratives. Negative narratives, on the other hand, have a differential effect. Prosocial types decrease their giving, while selfish types give more than in the baseline. We also find that positive narratives lead to a binary response (comply or not comply), while negative narratives induce a more gradual trade-off.
    Date: 2018–12
  28. By: Rachel Cassidy
    Abstract: Estimates of “present-bias” among the poor may be exaggerated if poor individuals are credit-constrained and expect to have greater liquidity in the future. I conduct an experiment in rural Pakistan which provides causal evidence of this e?ect. I use windfalls to generate fully exogenous variation in subjects’ liquidity constraints. I show that ?uctuating liquidity has a signi?cant and sizeable e?ect on measures of time-inconsistency, which does not operate via cognitive functioning. Importantly, I establish that the causation runs from tighter liquidity constraints to appearing “present-biased” — rather than truly present-biased individuals making choices which lead to tighter liquidity constraints.
    Date: 2018
  29. By: Ninja Ritter Klejnstrup (University of Copenhagen); Anna Folke Larsen (The Rockwool Foundation); Helene Bie Lilleør (The Rockwool Foundation); Marianne Simonsen (Department of Economics and Business Economics, Aarhus University, Denmark)
    Abstract: Social emotional learning programs have been found to lead to immediate improvements in cognitive, social and emotional competences. Meanwhile, most evidence to date refers to the United States, and most other countries lack locally tailored teaching materials for socio-emotional learning. Further, there is a lack of knowledge about which subgroups benefit more. Such knowledge is important, because it could provide evidence relevant for both explaining and addressing inequality in educational achieving across subgroups of pupils. Knowledge about longer-term impacts on academic achievement is also called for. This protocol describes an experimental evaluation of a recently developed social emotional learning program implemented in Denmark. The evaluation combines survey data with register-based data, where the latter source allows for tracking of participant outcomes with minimal risk of attrition.
    Keywords: Social emotional learning, well-being, academic achievement, problem behavior, subgroups, longer-term follow up
    JEL: I2 I31
    Date: 2018–12–04
  30. By: Casari, Marco; Depaola, Maria; Ichino, Andrea; Marandola, Ginevra; Michaeli, Moti; Scoppa, Vincenzo
    Abstract: Migration may cause not only a brain drain but also a civicness drain, leading to an uncivicness trap. We study this possibility using college choices of southern-Italian students classified as Civic if not cheating in a die-roll experiment. Local civicness is the fraction of Civic in their high-school class. A civicness drain is observed at high and low local civicness. We explain this finding in a model in which Civic and Uncivic types balance hope vs. fear of migration outcomes, taking into account economic gains, risk preferences, and their beliefs about being considered Civic in the place of destination.
    Keywords: Experiments; Honesty game; Italy; migration; social capital
    Date: 2018–11
  31. By: Benjamin Hébert; Michael Woodford
    Abstract: We propose a new approach to modeling the cost of information structures in rational inattention problems, the "neighborhood-based" cost functions. These cost functions have two properties that we view as desirable: they summarize the results of a sequential evidence accumulation problem, and they capture notions of "perceptual distance." The first of these properties is connected to an extensive literature in psychology and neuroscience, and the second ensures that neighborhood-based cost functions, unlike mutual information, make accurate predictions about behavior in perceptual experiments. We compare the implications of our neighborhood-based cost functions with those of a mutual-information cost function in a series of applications: security design, global games, modeling perceptual judgments, and a linear-quadratic-Gaussian tracking problem.
    JEL: D83
    Date: 2018–11
  32. By: John D'Attoma; Clara Volintiru; Antoine Malezieux
    Abstract: This paper brings an important empirical contribution to the academic literature by examining whether gender differences in tax compliance are due to higher prosociality among women. We conducted a large cross-national tax compliance experiment carried out in Italy, U.K., U.S., Sweden, and Romania, and assessed tax compliance as reported income as a percentage of total earned income in the experiment. We uncover that women declare a significantly higher percentage of their income than men in all five countries. While some scholars have argued that differences in honesty between men and women is actually being mediated by the fact that women are more prosocial than men, we find that women are not more prosocial than men in all countries. Furthermore, though overall women tend to be more prosocial on average than men, SVO has no mediation effect between gender and tax compliance. We conclude then that although differences in prosociality between men and women seem to be context dependent, differences in tax compliance are indeed much more consistent.
    Keywords: behavioral economics, tax compliance, gender
    JEL: A10 C90 C92 D64 H26 H30 H41
    Date: 2018
  33. By: Susann Fiedler (Max Planck Institute for Research on Collective Goods); Adrian Hillenbrand (Max Planck Institute for Research on Collective Goods)
    Abstract: Framing influences choice. However, little is known about the underlying mechanisms behind framing effects. We study gain-loss framing in binary modified dictator games. Subjects choose the selfish option more often in the loss frame compared to the gain frame. Recording visual fixations with eye-tracking, we find that dictators focus more on their own outcomes when facing losses. This suggests that losses to the own outcome are weighted more than losses to another player.
    Date: 2018–12
  34. By: Pavlova, Natalia (Павлова, Наталья) (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Shastitko, Anastasia (Шаститко, Анастасия) (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The findings of many studies in behavioral economics led to a wide dissemination of an opinion that the problem of the effects of limited rationality in the markets can be solved through the proper development of menu of options available to the consumer. The development of such a menu is the obligation of regulators. However, the question arises: to what extent regulators, in turn, are limitedly rational, and are motivated to create optimal methods that ensure the maximum level of welfare, given that their development is costly. This paper systematizes the main forms of limited rationality that can influence the adoption of Decisions by regulators. Based on the analysis, an attempt has been made to answer the two Questions: 1) is there a need and an opportunity to take into account the limited rationality of civil servants in modeling the actions of the regulator and 2) whether development of Special practical measuresis is required for leveling the revealed effects.
    Keywords: Behavioral economics, cognitive errors, state regulation, incentives of civil servants
    Date: 2017–05
  35. By: Benjamin Balzer (Economics Discipline Group, University of Technology Sydney); Antonio Rosato (Economics Discipline Group, University of Technology Sydney)
    Abstract: We analyze the behavior of expectations-based loss-averse bidders in frist-price and second-price common-value auctions. Highlighting the distinction between the uncertainty bidders face over whether they win the auction (extensive risk) and that over the value of the prize conditional on winning (intensive risk), we show that loss-averse bidders react differently to these different kinds of risk. In particular, the intensive risk pushes bidders to behave less aggressively in a common-value environment compared to one with private values. Yet, despite this "precautionary biddinging" effect, in equilibrium bidders can be exposed to the "winner's curse". We consider two alternative specifcations for how bidders assess outcomes as either gains or losses. Under narrow bracketing, bidders experience gains and losses separately over whether they receive the prize and how much they pay. Under broad bracketing, instead, bidders assess gains and losses over their net surplus. With narrow bracketing, first-price auctions expose bidders to less intensive risk and yield a higher expected revenue than second-price auctions, while the opposite result might hold with broad bracketing.
    Keywords: Reference-Dependent Preferences; Loss Aversion; Common-Value Auctions; Winner?s Curse
    JEL: D03 D44 D81 D82
    Date: 2018–10–18
  36. By: Casari, Marco (University of Bologna); Ichino, Andrea (European University Institute); Michaeli, Moti (University of Haifa); De Paola, Maria (University of Calabria); Marandola, Ginevra (University of Bologna); Scoppa, Vincenzo (University of Calabria)
    Abstract: Migration may cause not only a brain drain but also a civicness drain, leading to an uncivicness trap. We study this possibility using college choices of southern-Italian students classified as Civic if not cheating in a die-roll experiment. Local civicness is the fraction of Civic in their high-school class. A civicness drain is observed at high and low local civicness. We explain this finding in a model in which Civic and Uncivic types balance hope vs. fear of migration outcomes, taking into account economic gains, risk preferences, and their beliefs about being considered Civic in the place of destination.
    Keywords: migration, Italy, honesty game, experiments, social capital
    JEL: H J6
    Date: 2018–11
  37. By: Brunello, Giorgio; Crema, Angela; Rocco, Lorenzo
    Abstract: Using Italian data on standardized test scores, we show that the performance decline associated with question position is heterogeneous across students. This fact implies that the rank of individuals and classes depends on the length of the test. Longer tests may also exhibit larger gaps between the variance of test scores and the variance of underlying ability. The performance decline is correlated with both cognitive and non-cognitive abilities and there is also evidence that those with better parental background experience a smaller decline than those with poorer background. Therefore, the gap between the two groups widens in longer tests.
    Keywords: low stake tests,position of questions,cognitive and non-cognitive skills,Italy
    JEL: I21
    Date: 2018
  38. By: John Mullahy
    Abstract: This paper proposes strategies for defining, identifying, and estimating features of treatment-effect distributions in contexts where multiple outcomes are of interest. After describing existing empirical approaches used in such settings, the paper develops a notion of treatment preference that is shown to be a feature of standard treatment-effect analysis in the single-outcome case. Focusing largely on binary outcomes, treatment-preference probability treatment effects (PTEs) are defined and are seen to correspond to familiar average treatment effects in the single-outcome case. The paper suggests seven possible characterizations of treatment preference appropriate to multiple-outcome contexts. Under standard assumptions about unconfoundedness of treatment assignment, the PTEs are shown to be point identified for three of the seven characterizations and set identified for the other four. Probability bounds are derived and empirical approaches to estimating the bounds—or the PTEs themselves in the point-identified cases—are suggested. These empirical approaches are straightforward, involving in most instances little more than estimation of binary-outcome probability models of what are commonly known as composite outcomes. The results are illustrated with simulated data and in analyses of two microdata samples. Finally, the main results are extended to situations where the component outcomes are ordered or categorical.
    JEL: C18 D04 I1
    Date: 2018–11

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