nep-exp New Economics Papers
on Experimental Economics
Issue of 2019‒01‒28
29 papers chosen by
Daniel Houser
George Mason University

  1. Does sequential decision-making trigger collective investment in automobile R&D? Experimental evidence By Buchmann, Tobias; Haering, Alexander; Kudic, Muhamed; Rothgang, Michael
  2. Experience Does not Eliminate Bubbles: Experimental Evidence By Anita Kopanyi-Peuker; Matthias Weber; ;
  3. Individual versus Group Choices of Repeated Game Strategies: A Strategy Method Approach By Timothy N. Cason; Vai-Lam Mui
  4. Does information break the political resource curse? Experimental evidence from Mozambique By Alex Armand; Alexander Coutts; Pedro C. Vicente; Inês Vilela
  5. The Dozen Things Experimental Economists Should Do (More of) By Eszter Czibor; David Jimenez-Gomez; John A. List
  6. The Pivotal Mechanism Versus the Voluntary Contribution Mechanism: An Experimental Comparison By Tatsuki Homma; Junyi Shen; Takuma Wakayama; Hirofumi Yamamura
  7. Endogenous Timing and Income Inequality in the Voluntary Provision of Public Goods: Theory and Experiment By Jun-ichi Itaya; Atsue Mizushima; Kengo Kurosaka
  8. Culture and Colonial Legacy: Evidence from Public Goods Games By Latika Chaudhary; Jared Rubin; Sriya Iyer; Anand Shrivastava
  9. Communication and Hidden Action: Evidence from a Person-to-Person Lending Experiment By Martin Brown; Jan Schmitz; Christian Zehnder;
  10. Choosing Who You Are: The Structure and Behavioral Effects of Revealed Identiffication Preferences By Florian Hett; Markus Kröll; Mario Mechtel
  11. Do Sharing Economy Platforms Foster Trust in Others? Evidence from a Survey Experiment By Godefroy DangNguyen; Sylvain Dejean; Thierry Pénard
  12. Understanding willingness to migrate illegally: Evidence from a lab in the field experiment By Tijan L. Bah; Cátia Batista
  13. Measuring costly effect using the slide task By David Gill; Victoria Prowse
  14. Partners or Strangers? Cooperation, Monetary Trade, and the Choice of Scale of Interaction By Maria Bigoni; Gabriele Camera; Marco Casari
  15. Infringing Use as a Path to Legal Consumption: Evidence from a Field Experiment By Hong Luo; Julie Holland Mortimer
  16. Other-regarding preferences and giving decision in risky environments: experimental evidence By Mickaël Beaud; Mathieu Lefebvre; Julie Rosaz
  17. Money Is More Than Memory By Maria Bigoni; Gabriele Camera; Marco Casari
  18. Dynamic effects of enforcement on cooperation By Roberto Galbiati; Emeric Henry; Nicolas Jacquemet
  19. A dual process in memory: how to make an evaluation from complex and complete information? — An experimental study By Isamaël Rafaï; Sébastien Duchêne; Eric Guerci; Ariane Lambert-Mogiliansky; Fabien Mathy
  20. What did you do before? Moral (in)consistency in pro-environmental choice By Sophie Clot; Gilles Grolleau; Lisette Ibanez
  21. On Booms That Never Bust: Ambiguity in Experimental Asset Markets with Bubbles By Brice Corgnet; Roberto Hernán-González; Praveen Kujal
  22. Effects of Timing and Reference Frame of Feedback: Evidence from a Field Experiment By Fischer, Mira; Wagner, Valentin
  23. Buyer-Optimal Robust Information Structures By Stefan Terstiege; Cédric Wasser
  24. Expectations of Reciprocity and Feedback when Competitors Share Information: Experimental Evidence By Bernhard Ganglmair; Alex Holcomb; Noah Myung
  25. Peers and productivity: Evidence from an experimental factory By Reyniers, Diane
  26. The (in)elasticity of moral ignorance By Serra-Garcia, Marta; Szech, Nora
  27. How natural field experiments have enhanced our understanding of unemployment By Omar Al-Ubaydli; John List
  28. Does Pre-Play Social Interaction Improve Negotiation Outcomes? By Pablo Brañas-Garza; Antonio Cabrales; Guillermo Mateu; Angel Sanchez; Angela Sutan
  29. The Cliometric Model of Glutting: An Experimental Analysis By Claude Diebolt; Magali Jaoul-Grammare

  1. By: Buchmann, Tobias; Haering, Alexander; Kudic, Muhamed; Rothgang, Michael
    Abstract: We conduct a framed laboratory experiment to gain in-depth insights on factors that drive collective research and development efforts among firms located along the automotive value chain. In particular, we employ a public goods experiment and analyze the influence of sequential decision-making on the willingness to engage in cooperation and on economic welfare. By using a linear value chain setting with three suppliers and one OEM, we analyze vertical R&D cooperation. Our results reveal that contributions increase in situations with sequential decision-making and that sequential decisions increase the overall welfare, even in case of unequally distributed R&D budgets.
    Keywords: public goods experiment,collective innovation,automobile industry,value chain,innovation barriers,sequential decision making
    JEL: C92 D79 O31
    Date: 2018
  2. By: Anita Kopanyi-Peuker; Matthias Weber; ;
    Abstract: We study the role of experience in the formation of asset price bubbles. Therefore, we conduct two related experiments. One is a call market experiment in which participants trade assets with each other. The other is a learning-to-forecast experiment in which participants only forecast future prices, while the trade, which is based on these forecasts, is computerized. Each experiment comprises three treatments that vary the amount of information about the fundamental value that participants receive. Each market is repeated three times. In both experiments and in all treatments, we observe sizable bubbles. These bubbles do not disappear with experience. Our findings in the call market experiment stand in contrast to the literature. Our findings in the learningto-forecast experiment are novel. Interestingly, the shape of the bubbles is different between the two experiments. We observe flat bubbles in the call market experiment and boom-and-bust cycles in the learning-to-forecast experiment.
    Keywords: Experimental finance, asset market experiment, asset pricing, behavioral finance, bubbles, experience
    JEL: C92 D53 D90
    Date: 2018–11
  3. By: Timothy N. Cason; Vai-Lam Mui
    Abstract: We study experimentally the indefinitely repeated noisy prisoner’s dilemma, in which random events can change an intended action to its opposite. We investigate whether groups choose Always Defect less and use lenient or forgiving strategies more than individuals,and how decision-makers experiment with different strategies by letting them choose from an extensive list of repeated game strategies. We find that groups use forgiving and tit-for-tat strategies more than individuals. Always Defect, however, is the most popular strategy for both groups and individuals. Groups and individuals cooperate at similar rates overall, and they seldom experiment with different strategies in later supergames. Classification-JEL C73, C92
    Keywords: Laboratory experiments, Cooperation, Repeated Games, Strategy
    Date: 2018–12
  4. By: Alex Armand; Alexander Coutts; Pedro C. Vicente; Inês Vilela
    Abstract: The political resource curse is the idea that natural resources can lead to the deterioration of public policies through corruption and rent-seeking by those closest to political power. One prominent consequence is the emergence of conflict. This paper takes this theory to the data for the case of Mozambique, where a substantial discovery of natural gas recently took place. Focusing on the anticipation of a resource boom and the behavior of local political structures and communities, a large-scale field experiment was designed and implemented to follow the dissemination of information about the newly-discovered resources. Two types of treatments provided variation in the degree of dissemination: one with information targeting only local political leaders, the other with information and deliberation activities targeting communities at large. A wide variety of theory-driven outcomes is measured through surveys, behavioral activities, lab-in-the-field experiments, and georeferenced administrative data about local conflict. Information given only to leaders increases elite capture and rent-seeking, while information and deliberation targeted at citizens increases mobilization and accountability-related outcomes, and decreases violence. While the political resource curse is likely to be in play, the dissemination of information to communities at large has a countervailing effect.
    Keywords: Natural Resources, Curse, Natural Gas, Information, Deliberation, Rent-seeking, Mozambique
    Date: 2019
  5. By: Eszter Czibor; David Jimenez-Gomez; John A. List
    Abstract: What was once broadly viewed as an impossibility – learning from experimental data in economics – has now become commonplace. Governmental bodies, think tanks, and corporations around the world employ teams of experimental researchers to answer their most pressing questions. For their part, in the past two decades academics have begun to more actively partner with organizations to generate data via field experimentation. While this revolution in evidence-based approaches has served to deepen the economic science, recently a credibility crisis has caused even the most ardent experimental proponents to pause. This study takes a step back from the burgeoning experimental literature and introduces 12 actions that might help to alleviate this credibility crisis and raise experimental economics to an even higher level. In this way, we view our “12 action wish list” as discussion points to enrich the field.
    JEL: C9 C90 C91 C92 C93 D03
    Date: 2019–01
  6. By: Tatsuki Homma (Graduate School of Decision Science and Technology, Tokyo Institute of Technology, Japan); Junyi Shen (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Takuma Wakayama (Faculty of Economics, Ryukoku University, Japan); Hirofumi Yamamura (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)
    Abstract: We conduct an experimental comparison of two well-known mechanisms for undertaking a binary public project: the pivotal mechanism and the voluntary contribution mechanism. We compare the two mechanisms under complete information in which each subject knows the other subjects'payoffs. We then observe that the voluntary contribution mechanism works better than the pivotal mechanism from the perspectives of Pareto efficiency and individual rationality. On the other hand, we observe that the pivotal mechanism works better than the voluntary contribution mechanism in light of decision efficiency. These results suggest that whenever we insist on either Pareto efficiency or individual rationality, the voluntary contribution mechanism is more favorable than the pivotal mechanism in practical applications.
    Keywords: Laboratory experiment, Pivotal mechanism, Voluntary contributionmechanism
    JEL: C92 D71 D78 H41
    Date: 2018–11
  7. By: Jun-ichi Itaya; Atsue Mizushima; Kengo Kurosaka
    Abstract: This paper investigates how the heterogenous incomes and preferences of potential donors affect the timing of contribution decisions when it is endogenously determined by contributors themselves. More specifically, we use a simple setting with two donors, Cobb-Douglas preferences, and complete information to investigate how income inequality affects the endogenous choices of contribution timing and the level of the voluntary supplied public goods. This paper obtains the following results. First, when income is extremely unequal, potential contributors are indifferent between the timing choices of simultaneous and sequential moves, even if they have different preferences towards a public good. Second, as income inequality decreases, the simultaneous move-game is increasingly likely to emerge, because all potential contributors prefer to act as a leader. Third, in the presence of multiple public goods, contributors with higher valuations for one public good tend to be first contributors to that one. Fourth, these theoretical predictions regarding the timing decisions of individuals are not supported by the laboratory experiment, although those regarding individuals’ contribution decisions are consistent with the experimental results.
    Keywords: Nash equilibrium, Stackelberg equilibrium, public good, endogenous timing, voluntary provision, income distribution
    JEL: D31 H41 H42
    Date: 2018
  8. By: Latika Chaudhary (Naval Postgraduate School); Jared Rubin (Chapman University); Sriya Iyer (University of Cambridge); Anand Shrivastava (Azim Premji University)
    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 (barely) 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 (Princely) Shahpura. We find no significant difference in contributions to home town groups, but a significant difference in contributions to mixed town groups. Participants in (British) Kekri are more co-operative (i.e., contribute more) in mixed town groups compared to those in (Princely) Sarwar. We find the differences are driven by individuals with family ties to the towns, and we find no differences in the control comparison. Our results highlight the enduring effects of colonial rule on social norms of co-operation
    Keywords: cultural transmission, colonialism, public goods game, natural experiment, lab-in-the-field experiment, India
    JEL: C91 C93 C71 H41 H73 N35 N45 O17 Z1
    Date: 2018
  9. By: Martin Brown; Jan Schmitz; Christian Zehnder;
    Abstract: We conduct a laboratory experiment to study whether pre-play communication mitigates opportunistic behavior in a person-to-person lending context. We implement a trust game in which the investment income of the borrower (second-mover) is uncertain and not revealed to the lender (first mover). In this "hidden action" condition lenders cannot distinguish strategic defaults from forced defaults. We compare a treatment in which the borrower can send pre-play text messages to the lender to a treatment without such communication. We find that communication does not have a significant positive effect on credit volumes or repayment rates in this hidden action condition. We compare these findings to the effect of communication in a baseline condition in which borrower income is deterministic and strategic defaults cannot be hidden from lenders. In this baseline condition, communication leads to higher credit volumes and repayment rates implying higher payoffs for both lenders and borrowers. Comparing borrower communication and behavior in the hidden action condition to the baseline condition we find that borrowers are much more likely to renege on promises to repay in the hidden action treatment.
    Keywords: Strategic Default, Communication, Trust Game, Relationship Lending
    JEL: G01 G02 C91
    Date: 2018–08
  10. By: Florian Hett (Johannes Gutenberg University Mainz); Markus Kröll (Goethe University Frankfurt); Mario Mechtel (Leuphana University Lüneburg)
    Abstract: Social identity is an important driver of behavior. But where do differences in social identity come from? We use a novel laboratory experiment to measure individual identification preferences as a potential source of behavioral heterogeneity. Facing a trade-off between monetary payments and belonging to different groups, individuals are willing to forego significant earnings to avoid certain groups and thereby reveal their identification preferences. We then show that these identification preferences are systematically related to behavioral heterogeneity in groupspecific social preferences. These results illustrate the importance of identification as a choice and its relevance for explaining individual behavior.
    Keywords: Social Identity, Identification Preferences, Social Preferences, Outgroup Discrimination, Behavioral Heterogeneity
    JEL: C91 C92 D03 D91
    Date: 2019–01–10
  11. By: Godefroy DangNguyen (EA LEGO,IMT Atlantique, Gis M@rsouin); Sylvain Dejean (CEREGE, University of La Rochelle); Thierry Pénard (Univ Rennes, CNRS, CREM - UMR 6211, F-35000 Rennes, France)
    Abstract: The rise of digital platforms in which peers can share goods or services has drawn attention to the ability of these platforms to foster trust amongst their members. Combining experimental methods with an online survey of 2,000 representative Internet users in France, we investigate whether users of sharing economy platforms are more likely to cooperate in the context of a trust game. We focus our attention on the carsharing platform, Blablacar. Our main findings show that neither trust nor trustworthiness increase with the use of BlaBlaCar or other similar sharing platforms. Moreover, cooperation is not fostered if the trust game is played by two members of BlaBlaCar, suggesting that digital platforms do not create interpersonal trust that is transferable outside of these platforms.
    Keywords: Trust, Sharing economy, Platforms
    Date: 2018–12
  12. By: Tijan L. Bah; Cátia Batista
    Abstract: Illegal migration to Europe through the sea, though risky, remains one of the most popular migration options for many Sub-Saharan Africans. This study aims at improving our understanding of the determinants of the willingness to migrate illegally from West Africa to Europe. We implemented an incentivized lab-in-the field experiment in rural Gambia, the country with the highest rate of illegal migration to Europe in the region. Sampled male youths aged 15 to 25 were given hypothetical scenarios regarding the probability of dying en route to Europe, and of obtaining asylum or legal residence status after successful arrival. According to our data, potential migrants overestimate both the risk of dying en route to Europe, and the probability of obtaining legal residency status. The experimental results suggest that the willingness to migrate illegally is affected by information on the chances of dying en route and of obtaining a legal residence permit. Our estimates show that providing potential migrants with official numbers on the probability of obtaining a legal residence permit decreases their likelihood of migration by 2.88 percentage points (pp), while information on the risk of migrating increases their likelihood of migration by 2.29pp – although the official risk information provided may be regarded as a lower bound to actual mortality. Follow up data collected one year after the experiment show that the migration decisions reported in the lab experiment correlate well with actual migration decisions and intentions. Overall, our study indicates that the migration decisions of potential migrants are likely to actively respond to relevant information.
    Keywords: International migration; Information; Expectations; Illegal migration; Willingness to migrate; Lab-in-the-Field Experiment; The Gambia
    Date: 2018
  13. By: David Gill; Victoria Prowse
    Abstract: Using real effort to implement costly activities increases the likelihood that the motivations that drive effort provision in real life carry over to the laboratory. However, unobserved differences between subjects in the cost of real effort make quantitative prediction problematic. In this paper we present the slider task, which was designed by us to overcome the drawbacks of real-effort tasks. The slider task allows the researcher to collect precise and repeated observations of effort provision from the same subjects in a short time frame. The resulting high-quality panel data allow sophisticated statistical analysis. We illustrate these advantages in two ways. First, we show how to use panel data from the slider task to improve precision by controlling for persistent unobserved heterogeneity. Second, we show how to estimate effort costs at the subject level by exploiting within-subject variation in incentives across repetitions of the slider task. We also provide z-Tree code and practical guidance to help researchers implement the slider task.
    Keywords: Experimental methodology; real effort; effort provision; cost of effort; slider task; design of laboratory experiments; unobserved heterogeneity
    JEL: C91 C13
    Date: 2018–12
  14. By: Maria Bigoni (University of Bologna and IZA); Gabriele Camera (Economic Science Institute, Chapman University and University of Bologna); Marco Casari (University of Bologna and IZA)
    Abstract: We show that monetary exchange facilitates the transition from small to large-scale economic interactions. In an experiment, subjects chose to play an Òintertemporal cooperation gameÓ either in partnerships or in groups of strangers where payoffs could be higher. Theoretically, a norm of mutual support is sufficient to maximize efficiency through large-scale cooperation. Empirically, absent a monetary system, participants were reluctant to interact on a large scale; and when they did, efficiency plummeted compared to partnerships because cooperation collapsed. This failure was reversed only when a stable monetary system endogenously emerged: the institution of money mitigated strategic uncertainty problems.
    Keywords: Coordination, endogenous institutions, repeated games
    JEL: C70 C90 D03 E02 E40
    Date: 2018
  15. By: Hong Luo; Julie Holland Mortimer
    Abstract: Copyright infringement may result from frictions preventing legal consumption, but may also reveal demand. Motivated by this fact, we run a field experiment in which we contact firms that are caught infringing on expensive digital images. Emails to all firms include a link to the licensing page of the infringed image; for treated firms, we add links to a significantly cheaper licensing site. Making infringers aware of the cheaper option leads to a fourteen-fold increase in the ex-post licensing rate. Two additional experimental interventions are designed to reduce search costs for (i) price and (ii) product information. Both interventions-immediate price comparison and recommendation of images similar to those infringed-have large positive effects. Our results highlight the importance of mitigating user costs in small-value transactions.
    JEL: O3 O33 O34
    Date: 2019–01
  16. By: Mickaël Beaud (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Mathieu Lefebvre (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique); Julie Rosaz (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper investigates if and how other-regarding preferences governing giving decisions in dictator games are affected in risky environments in which the payoff of the recipient is random. We demonstrate that, whenever the risk is actuarially neutral, the donation of dictators with a purely ex post view of fairness should, in general, be affected by the riskyness of the recipient's payoff, while dictators with a purely ex ante view should not be. Our experimental data show no statistically significant impact of the recipient's risk exposure on dictators' giving decisions and, therefore, give weak empirical support to the purely ex post view of fairness. This result appears to be robust to both the experimental design (within or between subjects) and to the origin of the recipient's risk exposure (chosen by the recipient or imposed to the recipient).
    Keywords: inequality aversion,impure altruism,background risk,ex ante and ex post views of fairness,laboratory experiments dictator games,otherregarding preferences
    Date: 2018
  17. By: Maria Bigoni (University of Bologna & IZA); Gabriele Camera (Chapman University & University of Bologna); Marco Casari (University of Bologna & IZA)
    Abstract: Impersonal exchange is the hallmark of an advanced society and money is one key institution that supports it. Economic theory regards money as a crude arrangement for monitoring counterparts’ past conduct. If so, then a public record of past actions—or memory—should supersede the function performed by money. This intriguing theoretical postulate remains untested. In an experiment, we show that the suggested functional equivalence between money and memory does not translate into an empirical equivalence: money removed the incentives to free ride, while memory did not. Monetary systems performed a richer set of functions than just revealing past behaviors.
    Keywords: Cooperation, intertemporal trade, experiments, institutions, social norms.
    JEL: C70 C90 D03 E40
    Date: 2018
  18. By: Roberto Galbiati (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Emeric Henry (ECON - Département d'économie - Sciences Po); Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In situations where social payoffs are not aligned with private incentives, enforcement with fines can be a way to sustain cooperation. In this paper we show, by the means of a lab experiment , that past fines can have an effect on current behavior even when no longer in force. We document two mechanisms: a) past fines affect directly individuals' future propensity to cooperate; b) when fines for non cooperation are in place in the past, individuals experience higher levels of cooperation from partners and, consistent with indirect reciprocity motives, are in turn nicer towards others once these fines have been removed. This second mechanism is empirically prevalent and, in contrast with the first, induces a snowball effect of past enforcement. Our results can inform the design of costly enforcement policies.
    Keywords: experiments,Laws,social values,cooperation,learning,spillovers,persistence of institutions,repeated games
    Date: 2018
  19. By: Isamaël Rafaï (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique); Sébastien Duchêne (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Eric Guerci (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique); Ariane Lambert-Mogiliansky (PSE - Paris School of Economics); Fabien Mathy (BCL, équipe Langage et Cognition - BCL - Bases, Corpus, Langage (UMR 7320 - UNS / CNRS) - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this paper, we will put forward an original experiment to reveal empirical "anomalies" in the process of acquisition, elaboration and retrieval of information in the context of reading economic related content. Our results support the existence of the memory dual process suggested in the Fuzzy Trace Theory: acquisition of information leads to the formation of a gist representation which may be incompatible with the exact verbatim information stored in memory. We give to subjects complex and complete information and evaluate their cognitive ability. To answer some specific questions, individuals used this gist representation rather than processing verbatim information appropriately.
    Keywords: Fuzzy Trace Theory,memory,Bounded rationality,Dual Process,Cognitive reflection test
    Date: 2018
  20. By: Sophie Clot (UOR - University of Reading); Gilles Grolleau (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, CEREN - Centre de Recherche sur l'ENtreprise [Dijon] - BSB - Burgundy School of Business (BSB) - Ecole Supérieure de Commerce de Dijon Bourgogne (ESC)); Lisette Ibanez (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)
    Abstract: Rather than just examining moral licensing and cleansing at an aggregate level, we investigate experimentally the moral dynamics at an individual level. We also propose a formal definition of moral consistency or inconsistency (i.e., moral licensing and/or moral cleansing). We found that half our sample present inconsistent pro-environmental behaviour, independently of the way behavior is elicited (positive or negative framing). Men seem to behave more consistently over time, but when they compensate, they license (respectively cleanse) in a higher (respectively lesser) extent than women. We suggest that policies can improve their performances by avoiding a ‘one size fits all approach' and take into account this heterogeneity of moral dynamics.
    Keywords: moral in(consistency,licensing,cleansing,dictator game,taking game.
    Date: 2019–01–07
  21. By: Brice Corgnet (EM LYON Business School); Roberto Hernán-González (Burgundy School of Business); Praveen Kujal (Middlesex University Business School, London and Economic Science Institute, Chapman University)
    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
    Date: 2018
  22. By: Fischer, Mira; Wagner, Valentin (University of Mainz)
    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: 2018–11
  23. By: Stefan Terstiege; Cédric Wasser
    Abstract: We study buyer-optimal information structures under monopoly pricing. The information structure determines how well the buyer learns his valuation and affects, via the induced distribution of posterior valuations, the price charged by the seller. Motivated by the regulation of product information, we assume that the seller can disclose more if the learning is imperfect. Robust information structures prevent such disclosure, which is a constraint in the design problem. Our main result identifies a two-parameter class of information structures that implements every implementable buyer payoff. An upper bound on the buyer payoff where the social surplus is maximized and the seller obtains just her perfect-information payoff is attainable with some, but not all priors. When this bound is not attainable, optimal information structures can result in an inefficient allocation.
    Keywords: information design, monopoly, regulation
    JEL: D42 D82 D83 L51
    Date: 2018–07
  24. By: Bernhard Ganglmair; Alex Holcomb; Noah Myung
    Abstract: Informal know-how trading and exchange of information among competitors has been well-documented for a variety of industries, including in science and R&D, and an individual’s expectations of reciprocity is understood to be a key determinant of such flow of information. We establish a feedback loop (as a representation of information trading) in the laboratory and show that an individual’s expectations of the recipient’s intentions to reciprocate matter more than a recipient’s ability to do so. This implies that reducing strategic uncertainty about competitors’ behavior has a bigger effect on the flow of information than reducing environmental uncertainty (about their ability to generate new information). We also show that the formation of beliefs about a recipient’s intentions to reciprocate are heavily influenced by past experience, where prior experience lingers and can have negative effects on the sustainability of productive and fruitful information exchange.
    Keywords: knowledge diffusion; information sharing; reciprocity; collective innovation; R&D; conversation; experimental economics; centipede game
    JEL: O33 D8 C72 C91
    Date: 2018–09
  25. By: Reyniers, Diane
    Abstract: Workplace peer effects are well documented, but why they arise remains a puzzle. This paper investigates the issue experimentally. Subjects are brought together to perform a real-effort task in a simulated factory environment. Varying the returns to effort by altering free-riding incentives or piece rates does not affect productivity but psychological factors do matter. Even though there are no technological complementarities, co-workers’ productivity levels are highly correlated. Three psychological mechanisms which can generate these correlations are examined: (a) workers’ desire to conform to a work norm, (b) inequity aversion and (c) concern about relative performance. Subjects’ enjoyment of the task depends on their relative performance and not on how close their productivity is to the norm or on the inequity of outcomes. This finding suggests that peer effects arise because of intrinsic competitiveness. Subjects hate to do worse than their co-workers and love to do better.
    Keywords: Peer Effects, Job satisfaction, Relative Performance Concerns, Social Norms
    JEL: C9 C91 C92 D23 J24
    Date: 2018–11
  26. By: Serra-Garcia, Marta; Szech, Nora
    Abstract: We investigate the elasticity of preferences for moral ignorance with respect to monetary incentives and social norm information. We propose a model where uncertainty differentially decreases the moral costs of unethical behavior, and benchmark the demand curve for moral ignorance against a morally neutral context. In line with the model, selfishness is a main determinant of moral ignorance, and the demand curve for moral ignorance is highly elastic when information shifts from being costly to incentivized. Moral ignorance is considered morally inappropriate. Providing this information increases moral behavior but does not shift the demand curve for ignorance.
    Keywords: information avoidance,morality,unethical behavior,social norms
    JEL: D83 D91 C91
    Date: 2018
  27. By: Omar Al-Ubaydli; John List
    Abstract: Natural field experiments investigating key labour market phenomena such as unemployment have only been used since the early 2000s. This paper reviews the literature and draws three primary conclusions that deepen our understanding of unemployment. First, the inability to monitor workers perfectly in many occupations complicates the hiring decision in a way that contributes to unemployment. Second, the inability to determine a worker's attributes precisely at the time of hiring leads to discrimination on the basis of factors such as race, gender, age and ethnicity. This can lead to systematically high and persistent levels of unemployment for groups that face discrimination. Third, the importance of social and personal dynamics in the workplace can lead to short-term unemployment. Much of the knowledge necessary for these conclusions could only be obtained using natural field experiments due to their ability to combine randomized control with an absence of experimenter demand effects.
    Date: 2019
  28. By: Pablo Brañas-Garza; Antonio Cabrales; Guillermo Mateu; Angel Sanchez; Angela Sutan
    Abstract: We study experimentally the impact of pre-play social interactions on negotiations. These interactions are often complex. Thus, we attempt to isolate the impact of several of its more common components: conversations, food, and beverages, which could be alcoholic or nonalcoholic. To do this, our subjects take part in a standardized negotiation (complex and simple) under six conditions: without interaction, interaction only, and interactions with water, wine, water and food and wine and food. We find that none of the treatments improve the outcomes over the treatment without interactions. We also study trust and reciprocity in the same context. For all-male groups, we find the same lack of superiority of interaction treatments over no interaction. For all-female groups, some very simple social interactions have a positive impact on trust.
    Keywords: negotiation, trust, business meals, social interactions, alcohol
    JEL: C91 M11 I18
    Date: 2018
  29. By: Claude Diebolt (BETA, University of Strasbourg Strasbourg, France); Magali Jaoul-Grammare (BETA, University of Strasbourg Strasbourg, France)
    Date: 2019

This nep-exp issue is ©2019 by Daniel Houser. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.