nep-exp New Economics Papers
on Experimental Economics
Issue of 2019‒02‒11
twenty papers chosen by

  1. Crumbling morals? An experimental study on how a social framing can affect embezzlement By Nina Lucia Stephan
  2. It Pays to be Nice: The Benefits of Cooperating in Markets By Serdarevic, Nina; Strømland, Eirik; Tjøtta, Sigve
  3. Social Influence and Position Effects By Marisa Hidalgo-Hidalgo; Natalia Jiménez; Dunia López-Pintado
  4. The Effects of Status Mobility and Group Identity on Trust By Suchon, Rémi; Villeval, Marie Claire
  5. Take-up of joint and individual liability loans: an analysis with laboratory experiments By Susmita Baulia
  6. Delegation and coordination with multiple threshold public goods: experimental evidence By Luca Corazzini; Christopher Cotton; Tommaso Reggiani
  7. Sincere voting, strategic voting A laboratory experiment using alternative proportional systems By Isabelle Lebon; Antoinette Baujard; Frédéric Gavrel; Herrade Igersheim; Jean-François Laslier
  8. Learning about One's Self By Yves Le Yaouanq; Peter Schwardmann
  9. Do planning prompts increase educational success? Evidence from randomized controlled trials in MOOCs By Andor, Mark A.; Fels, Katja M.; Renz, Jan; Rzepka, Sylvi
  10. On the Impact of Risky Private and Public Returns in the Private Provision of Public Goods - The Case of Social Investments By Jana Freundt; Andreas Lange
  11. Different Strokes for Different Folks: Experimental Evidence on the Effectiveness of Input and Output Incentive Contracts for Health Care Providers with Varying Skills By Manoj Mohanan; Katherine Donato; Grant Miller; Yulya Truskinovsky; Marcos Vera-Hernández
  12. When do populations polarize? An explanation By Jean-Pierre Benoît; Juan Dubra
  13. In search of unanimously preferred income distributions. Evidence from a choice experiment By Sophie Cetre; Max Lobeck; Claudia Senik; Thierry Verdier
  14. Eliciting Choice Correspondences A General Method and an Experimental Implementation By Elias Bouacida
  15. Employer discrimination and the immutability of ethnic hierarchies By Vernby, Kåre; Dancygier, Rafaela
  16. School spending and extension of the youth voting franchise: Evidence from an experiment in Norway By Ole Henning Nyhus; Bjarne Strøm
  17. Rac(g)e Against the Machine? Social Incentives When Humans Meet Robots By Brice Corgnet; Roberto Hernán-Gonzalez; Ricardo Mateo
  18. The Effects of Staff-rotation in Public Administration on the Decision to Bribe or be Bribed By Miloš Fišar; Ondřej Krčál; Rostislav Staněk; Jiří Špalek
  19. How everyday ethics becomes a moral economy, and vice versa By Keane, Webb

  1. By: Nina Lucia Stephan (Paderborn University)
    Abstract: With data from a laboratory experiment we show that the interpersonal experience can either encourage or reduce subsequent immoral decision-making; in this case the immoral decision to engage in embezzlement. In the experiment, subjects first received initial endowments, either as a share from a previous dictator (social framing treatment) or by random determination (neutral framing treatment). Next, subjects could increase their payoff by embezzling, i.e. taking away part of a donation that they are entrusted with, before forwarding the rest. We find that after receiving a less-than-half share in the social framing treatment, in comparison to receiving an equally large amount in the neutral framing treatment, subjects are significantly more likely to embezzle. Thus, depending on the height of endowment, the social framing encourages forfeiting moral behavior. We argue that this effect is driven by self-deception: observing the dictator's decision to share less than half facilitates excusing one's own immoral choice. We conclude that socially framing a moral decision situation, even though this may remind individuals of what is socially acceptable, does not have an unanimously beneficial effect on the moral decision to embezzle.
    Keywords: social framing, donations, immoral behavior, embezzlement, experimental economics
    JEL: C91 D91 D63
    Date: 2019–01
  2. By: Serdarevic, Nina (University of Bergen, Department of Economics); Strømland, Eirik (University of Bergen, Department of Economics); Tjøtta, Sigve (University of Bergen, Department of Economics)
    Abstract: This paper contributes to the experimental literature by examining the causal effect of partnerchoice opportunities on the earnings of different cooperative types. We first elicit cooperative types and then randomly assign subjects to a repeated prisoner’s dilemma game with either mutual partner choice or random matching. In each round, the individual who fails to attain a partner is excluded from the group. This design allows us to study the causal effect of partner choice on earnings and exclusion. The results from two experiments show that partner choice allows cooperators to outperform free riders, cooperators earn more than free riders, and cooperators are less frequently excluded.
    Keywords: cooperation; commitment; partner choice; punishment
    JEL: C91 C92 D02
    Date: 2018–09–13
  3. By: Marisa Hidalgo-Hidalgo (Universidad Pablo de Olavide); Natalia Jiménez (Universidad Pablo de Olavide & Middlesex University); Dunia López-Pintado (Universidad Pablo de Olavide)
    Abstract: Online search companies use a default ranking to present alternatives to consumers. The salience of an alternative can be described by its position in the presentation order and its popularity, derived from the opinion of others. We perform a lab experiment to study social influence and position effects in a stylized and controlled environment where alternatives have an objective value, common to all participants. Nevertheless, due to time constraints, finding the optimal choice is complex. We consider three different settings: (i) social influence is not present, (ii) social influence and the presentation order go in the same direction and, (iii) social influence is not aligned with the presentation order. We find that, although position effects are stronger than social influence (or popularity) effects for the searching behavior, social influence effects are more relevant for predicting the actual choice. We also find strong evidence of nonlinearity regarding both social influence and position effects. From an individual perspective, we obtain that those subjects who recognize their own errors or come from less wealthy families have a higher sensibility to social influence when it is reinforced by position, whereas overconfident and reflexive individuals are more influenceable when position and social influence are confronted. Interestingly, we do not find any gender effects.
    Keywords: social influence, ranking, online searching, lab experiments.
    JEL: C91 D03 D81
    Date: 2019–01
  4. By: Suchon, Rémi (University of Lyon 2); Villeval, Marie Claire (CNRS, GATE)
    Abstract: In a laboratory experiment we test the interaction effects of status and group identity on interpersonal trust. Natural group identity is generated by school affiliation. Status (expert or agent) is awarded based on relative performance in a math quiz that is ex ante less favorable to the subjects from one group. We find that "promoted" trustors (individuals from the disadvantaged group that nevertheless achieve the status of expert) trust less both in-group and out-group trustees, compared to the other members of their group. Rather than playing against the effects of natural group identity, status promotion singles-out individuals. In contrast, trustworthiness is not affected by status and there is no evidence that interacting with promoted individuals impacts trust or trustworthiness.
    Keywords: trust, status, group identity, social mobility, experiment
    JEL: C92 D91 J62
    Date: 2019–01
  5. By: Susmita Baulia (University of Turku; University of Turku)
    Abstract: This paper reports a study on decision-making by borrowers regarding take-up of different loan types in a laboratory microfinance experiment setting. I hypothesize that when borrowers are offered a flexible choice of different loan types (here, individual liability (IL) and joint liability (JL)), then they are able to self-select their desirable loan and this could lead to higher overall take-up of loans. I find evidence that loan take-up rate is significantly higher when the choice-set becomes more flexible with additional provision of a second loan type. Further evidence shows that in a setting where moral hazard and free-riding can be eliminated, JL type is more popular among borrowers when both loans are available in the choice-set; this indicates that when borrowers can make sure that partners would not be able to cheat, then JL type could excel in take-up rate. On controlling for risk and selfishness, results suggest that highly risk-averse borrowers mostly stay away from any loan type and prefer safer and unprofitable outside income options. Less selfish borrowers show signs of higher inclination in taking up JL loan, compared to others. Investigating the interaction between discount rate and selfishness, I find that JL is either desirable by those who are selfish yet patient enough to reap the long run benefits of JL loan through its dynamic incentives that reduces the risk of repayment, or by those who are impatient but are less selfish. The results collectively imply that microloan types need to be customized according to the heterogeneous preferences of the borrowers; also, there needs to be enough flexibility in the offered choice-set for better self-selection.
    Keywords: Microloan, Laboratory experiment, Loan take-up, Development policy
    JEL: C90 D81 G21 I38 O21
    Date: 2017–09
  6. By: Luca Corazzini (University of Venice); Christopher Cotton (Queen's University); Tommaso Reggiani (Masaryk University)
    Abstract: When multiple charities, social programs and community projects simultaneously vie for funding, donors risk miscoordinating their contributions leading to an inefficient distribution of funding across projects. Community chests and other intermediary organizations facilitate coordination among donors and reduce such risks. We explore such considerations by extending the threshold public goods framework to allow donors to contribute to an intermediary rather than directly to the public goods. We experimentally study the effects of the intermediary on contributions and successful public good funding. Results show that delegation increases overall contributions and public good success, but only when the intermediary is formally committed to direct funding received from donors to socially beneficial goods. Without such a restriction, the presence of an intermediary is detrimental, resulting in lower contributions, a higher probability of miscoordination, and lower payoffs.
    Keywords: Delegation, threshold public goods, public goods experiment, fundraising, charitable giving, donor strategy
    JEL: C91 C92 H40 H41 L31
    Date: 2019–02
  7. By: Isabelle Lebon (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Antoinette Baujard (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); Frédéric Gavrel (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Herrade Igersheim (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); Jean-François Laslier (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In two laboratory surveys run in France during the 2014 European Elections, we asked the participants to provide their personal evaluations of the parties in terms of ideological proximity, and asked how they would vote under three proportional, closed-list voting rules : the (official) single-vote rule, a split-my-vote rule, and a list-approval rule. The paper analyzes the relation between opinions and vote, under the three systems. Compared to multi-vote rules, the single-vote system leads to voters' decisions that are more often strategic but also more often sincere. Sincere voting and strategic voting therefore appear to be more consistent than contradictory. Multi-vote rules allow the voter to express complex behavior, and the concepts of "sincere" and "strategic" voting are not always sufficient to render this complexity.
    Keywords: Laboratory experiment,Proportional systems,Contextualized experiment,Approval voting,Cumulative voting,Strategic voting
    Date: 2018
  8. By: Yves Le Yaouanq; Peter Schwardmann
    Abstract: How can naiveté about present bias persist despite experience? To answer this question, our experiment investigates participants’ ability to learn from their own behavior. Participants decide how much to work on a real effort task on two predetermined dates. In the week preceding each work date, they state their commitment preferences and predictions of future effort. While we find that participants are present biased and initially naive about their bias, our methodology enables us to establish that they are Bayesian in how they learn from their experience at the first work date. A treatment in which we vary the nature of the task at the second date further shows that learning is unencumbered by a change in environment. Our results suggest that persistent naiveté cannot be explained by a fundamental inferential bias. At the same time, we find that participants initially underestimate the information that their experience will provide - a bias that may lead to underinvestment in experimentation and a failure to activate self-regulation mechanisms.
    Keywords: naiveté, present bias, learning
    JEL: D83
    Date: 2019
  9. By: Andor, Mark A.; Fels, Katja M.; Renz, Jan; Rzepka, Sylvi
    Abstract: Massive Open Online Courses are a promising educational innovation. Yet, they suffer from high drop-out rates. As a remedy, we propose a planning prompt and test its effect on course completion and further outcomes such as course engagement and satisfaction in four large-scale randomized controlled trials. The results reveal an overall null effect on the completion rate, ruling out effect sizes beyond the [-7%, 3%] interval. However, this overall effect masks heterogeneity across and within courses: In one course the planning prompt increases course completion by 19%, highlighting the importance of replications in slightly different contexts. Using random causal forests, we also reveal tendencies for differential effects by subgroups. Better targeting could hence improve the effectiveness of planning prompts in online learning.
    Keywords: massive open online courses,planning prompt,behavioral economics,natural field experiment
    JEL: I21 I29 C93
    Date: 2018
  10. By: Jana Freundt; Andreas Lange
    Abstract: We use a laboratory experiment to identify the impact of risk in the private and public dimensions of social investments. In variants of a public good game, we separate the return a subject’s investment generates for herself vs. the return to others. We find a detrimental effect of risk on public good provision when returns in both dimensions are risky and positively correlated or independent. A negative correlation limits the downside risk and leads to more stable social investments. Disentangling the impact of risk in the two dimensions, we find that investments particularly respond to the risk in the public return dimension.
    Keywords: social investments, public goods, giving under risk, correlated risks
    JEL: C91 D64 D81 H41
    Date: 2019
  11. By: Manoj Mohanan; Katherine Donato; Grant Miller; Yulya Truskinovsky; Marcos Vera-Hernández
    Abstract: A central issue in designing performance incentive contracts is whether to reward the production of outputs versus use of inputs: the former rewards efficiency and innovation in production, while the latter imposes less risk on agents. Agents with varying levels of skill may perform better under different contracts as well – more skilled workers may be better able to innovate, for example. We study these issues empirically through an experiment enabling us to observe and verify outputs (health outcomes) and inputs (adherence to recommended medical treatment) in Indian maternity care. We find that both output and input incentive contracts achieved comparable reductions in post-partum hemorrhage rates, the dimension of maternity care most sensitive to provider behavior and the largest cause of maternal mortality. Interestingly, and in line with theory, providers with advanced qualifications performed better and used new strategies under output incentives, while under input incentives, providers with and without advanced qualifications performed equally.
    JEL: D86 J41 O15
    Date: 2019–01
  12. By: Jean-Pierre Benoît; Juan Dubra
    Abstract: Numerous experiments demonstrate attitude polarization. For instance, Lord, Ross & Lepper presented subjects with the same mixed evidence on the deterrent effect of the death penalty. Both believers and skeptics of its deterrent effect became more convinced of their views; that is, the population polarized. However, not all experiments find this attitude polarization. We propose a theory of rational updating that accounts for both the positive and negative experimental findings. This is in contrast to existing theories, which predict either too much or too little polarization
    Keywords: Attitude Polarization; Confirmation Bias; Bayesian Decision Making
    JEL: D11 D12 D81 D82 D83
    Date: 2018
  13. By: Sophie Cetre (IEP Paris - Sciences Po Paris - Institut d'études politiques de Paris); Max Lobeck (PSE - Paris School of Economics); Claudia Senik (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, UP4 - Université Paris-Sorbonne); Thierry Verdier (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Using a choice-experiment in the lab, we look at preferences over pairs of income distributions within small groups in a firm-like setting. Is one type of distribution capable of attracting votes unanimously? It turns out that Pareto-dominance is the most important choice criterion: in binary choices over two distributions, all subjects prefer larger inequality when it makes everyone weakly better off. This is true,no matter whether income distribution is based on merit or luck. Unanimity only breaks once subjects' positions within the income distribution are fixed and known ex-ante. However, even then, 75% subjects prefer Pareto-dominant distributions. This suggests that efficiency motives are of primary importance, more so than the origin of inequality.
    Keywords: Distributive preferences,Inequality,Choice experiment
    Date: 2018–08
  14. By: Elias Bouacida (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: I introduce a general method for identifying choice correspondences experimentally, i.e., the sets of best alternatives of decision makers in each choice sets. Most of the revealed preference literature assumes that decision makers can choose sets. In contrast, most experiments force the choice of a single alternative in each choice set. In this paper, I allow decision makers to choose several alternatives, provide a small incentive for each alternative chosen, and then randomly select one for payment. I derive the conditions under which the method at least partially identifies the choice correspondence, by obtaining supersets and subsets for each choice set. I illustrate the method with an experiment, in which subjects chose between four paid tasks. I can retrieve the full choice correspondence for 26% of subjects and bind it for another 46%. Subjects chose sets of size 2 or larger 60% of the time, whereas only 3% of them always chose singletons. I then show that 46% of all observed choices can be rationalized by complete, reflexive and transitive preferences in my experiment, i.e., satisfy the Weak Axiom of Revealed Preferences – WARP hereafter. Weakening the classical model, incomplete preferences or just-noticeable difference preferences do not rationalize more choice correspondences. Going beyond WARP, however, I show that complete, reflexive and transitive preferences with menu-dependent choices rationalize 93% of observed choices. Having elicited choice correspondences allows me to conclude that indifference is widespread in the experiment. These results pave the way for exploring various behavioral models with a unified method.
    Keywords: choice correspondences,revealed preferences,welfare,indifference,WARP,justnoticeable preferences,aggregation of preferences
    Date: 2019–01
  15. By: Vernby, Kåre (Stockholms universitet); Dancygier, Rafaela (Princeton university)
    Abstract: How pervasive is labor market discrimination against immigrants and what options do policymakers and migrants have to reduce it? To answer these questions, we conducted a field experiment on employer discrimination in Sweden. Going beyond existing work, we test for a large range of applicant characteristics using a factorial design. We examine whether migrants can affect their employment chances – by adopting citizenship, acquiring work experience, or signaling religious practice – or whether fixed traits such as country of birth or gender are more consequential. We find no evidence that immigrants can affect their employment chances by any of the tested means. Rather, ethnic hierarchies are critical: callback rates decline precipitously with the degree of ethno-cultural distance, leaving Iraqis and Somalis, especially if they are male, with much reduced employment chances. These findings highlight that immigrants have few tools at their disposal to escape ethnic penalties and that efforts to reduce discrimination must address employer prejudice.
    Keywords: country of birth; citizenship; gender; work-experience; religion; discrimination; field experiment; labor market
    JEL: J23 J71
    Date: 2018–11–07
  16. By: Ole Henning Nyhus (Department of Economics, Norwegian University of Science and Technology); Bjarne Strøm (Department of Economics, Norwegian University of Science and Technology)
    Abstract: Changes in population age composition is challenging in modern welfare states. Intergenerational conflicts may have important consequences for provision of services directed towards specific age groups as schooling and care for elderly. A relevant question is to what extent the supply side responds to changes in the age composition of the electorate in terms of actual spending policies. This paper exploits a novel experiment that took place in Norway in the 2011 local elections to estimate the causal relationship between local government school spending and the age composition of the electorate. We exploit that the voting age was reduced from 18 to 16 years in local elections in selected local governments (experimental governments), while voting age was kept at 18 in the rest (control governments). Using a difference in differences strategy, we find that compulsory school spending decreased by approximately 2% in the experimental governments. The results are robust across a number of econometric specifications and robustness checks. Since all the newly enfranchised voters had just finished compulsory school and receive no direct benefits from local government school spending, the result is consistent with selfish voter behavior.
    Keywords: Youth voting franchise; Compulsory school spending; Local governments
    JEL: D72 H10 H70
    Date: 2019–01–12
  17. By: Brice Corgnet (emlyon business school, 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); Roberto Hernán-Gonzalez (UBFC - Université Bourgogne Franche-Comté [COMUE]); Ricardo Mateo (UNAV - Universidad de Navarra [Pamplona])
    Abstract: Because work is most often performed in a social context, social incentives are key to understand incentive setting in firms. We assess the strength of social incentives, which critically depend on the extent of social preferences and social pressure at work, by assessing the difference in human performance when people complete a sequential task with either other humans or robots. We find evidence that, despite maintaining monetary incentives intact, humans who work with robots underperform those who work with other humans, especially under team pay. The lack of altruism toward robots and the lack of social pressure exerted by robots are key to explain this negative effect under team pay. Under piece rate, the lack of envy toward robots plays a crucial role. Regardless of the payment scheme, our findings show that social incentives are powerful. Accounting for the weakening of social incentives when assessing the cost-efficiency of replacing humans with robots is thus critical.
    Keywords: Incentives,social pressure,social preferences,personnel economics,organizational behavior,automation
    Date: 2019–01–25
  18. By: Miloš Fišar (Masaryk University); Ondřej Krčál (Masaryk University); Rostislav Staněk (Masaryk University); Jiří Špalek (Masaryk University)
    Abstract: Periodic rotation of staff in public administration may lead to lower corruption, as it disrupts long-term relationships between public officials and potential bribers. This paper proposes an~experimental design that tests the~anti-corruption effect of staff rotation in situations where public officials have committed to reciprocating bribes. We find that staff rotation does not influence the~proportion of firms offering bribes but does reduce the~share of bribe acceptance and inefficient decisions owing to bribery. The~outcome of the~staff-rotation treatment, in which firms offered bribes even though they were rarely accepted by officials, is consistent with the~game having a~quantal response equilibrium
    Keywords: bribery, economic experiment, anti-corruption, staff rotation, corruption
    JEL: D73 D81
    Date: 2019–01
  19. By: Keane, Webb
    Abstract: Unrealistic assumptions underlying neo-classical economic theory have been challenged by both behavioral economics and studies of moral economy. But both challengers share certain features with neo-classical theory. Complementing them, recent work in the anthropology of ethics shows that economic behavior is not reducible to either individual psychology or collective norms. This approach is illustrated with studies of transactions taking place at the borders between market rationality and relationships among persons - organ donation and sex work. The paper argues that the inherent value accorded to social relations tends to resist instrumentalization and that the biases that dealing with other people introduce into reasoning are not flaws but part of the core functions of rationality.
    Keywords: ethics,moral economy,behavioral economics,organ donation,sex work,gifts,social interaction,rationality
    JEL: A10 D01 D63 D91 Z13
    Date: 2019
  20. By: John List
    Date: 2019

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