nep-exp New Economics Papers
on Experimental Economics
Issue of 2019‒04‒15
twenty-six papers chosen by

  1. Risk-averse and self-interested shifts in groups in both median and random rules By Yoshio Kamijo; Teruyuki Tamura
  2. Promoting Breast Cancer Screening Take-Ups with Zero Cost: Evidence from an Experiment on Formatting Invitation Letters in Italy By Bertoni, Marco; Corazzini, Luca; Robone, Silvana
  3. Incentives, Search Engines, and the Elicitation of Subjective Beliefs: Evidence from Representative Online Survey Experiments By Grewenig, Elisabeth; Lergetporer, Philipp; Werner, Katharina; Woessmann, Ludger
  4. Judgments of length in the economics laboratory: Are there brains in choice? By Duffy, Sean; Gussman, Steven; Smith, John
  5. Do Economic Inequalities Affect Long-Run Cooperation & Prosperity? By Gabriele Camera; Cary Deck; David Porter
  6. Learning to cooperate in the shadow of the law By Roberto Galbiati; Emeric Henry; Nicolas Jacquemet
  7. Learning to cooperate in the shadow of the law By Roberto Galbiati; Emeric Henry; Nicolas Jacquemet
  8. “What is Good for the Goose is Good for the Gander? How gender-specific conceptual frames affect financial participation and decision-making” By Cecilia Boggio; Flavia Coda Moscarola; Andrea Gallice
  9. Cognitive stress and learning Economic Order Quantity (EOQ) inventory management: An experimental investigation By Pan, Jinrui; Shachat, Jason; Wei, Sijia
  10. Motivating Bureaucrats through Social Recognition: External Validity — A Tale of Two States By Gauri, Varun; Jamison, Julian C.; Mazar, Nina; Ozier, Owen
  11. Ethnic Discrimination in Contacts with Public Authorities: A Correspondence Test Among Swedish Municipalities By Ahmed, Ali; Hammarstedt, Mats
  12. Strategic Ethics: Altruism without the Other-regarding Confound By Giuseppe Attanasi; Kene Boun My; Nikolaos Georgantzís; Miguel Ginés
  13. Partial norms By Giovanna D'Adda; Martin Dufwenberg; Francesco Passarelli; Guido Tabellini
  14. Can Simple Psychological Interventions Increase Preventive Health Investment? By Johannes Haushofer; Anett John; Kate Orkin
  15. Individual and social preferences under risk: laboratory evidence on the group size effect By Morone, Andrea; Caferra, Rocco
  16. In-group favouritism and out-group discrimination in naturally occurring groups By Kalus Abbink; Donna Harris
  17. The Pied Piper: Prizes, Incentives, and Motivation Crowding-In By Bruni, Luigino; Pelligra, Vittorio; Reggiani, Tommaso G.; Rizzolli, Matteo
  18. Risk Preferences of Children and Adolescents in Relation to Gender, Cognitive Skills, Soft Skills, and Executive Functions By James Andreoni; Amalia Di Girolamo; John A. List; Claire Mackevicius; Anya Samek
  19. Beliefs and Endogenous Cognitive Levels: An Experimental Study By Marina Agranov; Elizabeth Potamites; Andrew Schotter; Chloe Tergiman
  20. Helping under a Combination of Team and Tournament Incentives By Danilov, Anastasia; Irlenbusch, Bernd; Harbring, Christine
  21. Self-Confidence and Reactions to Subjective Performance Evaluations By Bellemare, Charles; Sebald, Alexander
  22. Obviousness Around the Clock By Breitmoser, Yves; Schweighofer-Kodritsch, Sebastian
  23. The Impact of a Pre-Opening Session on Subsequent Trading: an Experimental Analysis By Caferra, Rocco; Morone, Andrea; Nuzzo, Simone
  24. Inefficient water pricing and incentives for conservation By Ujjayant Chakravorty; Manzoor H. Dar; Kyle Emerick
  25. Do Firms Redline Workers? By Ana María Díaz; Luz Magdalena Salas; Luz Magdalena Salas
  26. Accountability as a resolution for intergenerational sustainability dilemma By Raja Rajendra Timilsima; Koji Kotani; Yoshinori Nakagawa; Tatsuyoshi Saijo

  1. By: Yoshio Kamijo (School of Economics and Management, Kochi University of Technology); Teruyuki Tamura (Department of Management, Kyoto College of Economics)
    Abstract: This study examines whether attitudes toward risk and altruism are affected by being in a group or being alone. Differing from previous economic studies of group decision-making, we attempt to exclude the effects of group informal discussion, which are thought to be a black box when individuals make decisions in a group. Subjects in our experiment were requested only to show their faces to other members without any further communication. Moreover, we adopted two collective decision rules—namely, the median rule and the random rule—which provide the truth-telling mechanism. In experiments of both anonymous investments and donations, we found that subjects who made decisions in a group offered significantly lower amounts than individuals who made decisions alone, even controlling for individuals’ risk and altruistic preferences. Our results indicate that people are more risk averse and self-interested when they are in a group regardless of which collective decision rules are adopted.
    Keywords: Group decision, Individual decision, Altruism, Decision under risk
    JEL: C91 C92 D81
    Date: 2019–04
  2. By: Bertoni, Marco (University of Padova); Corazzini, Luca (Ca' Foscari University of Venice); Robone, Silvana (University of Insubria)
    Abstract: We ran a randomized field experiment to ascertain whether a costless manipulation of the informational content (restricted or enhanced information) and the framing (gain or loss framing) of the invitation letter to the breast cancer screening program in Messina, Italy, affects the take-up rate. We show that giving enhanced loss-framed information about the risks of not having a mammography increases the take-up. This manipulation is especially effective among subjects with lower baseline take-ups – those living farther away from the screening site, residing in municipalities with low education, or with no recent screening experience – contributing to reduce socio-economic inequalities in screening. When we investigate the mechanisms behind our findings, we show that subjects exposed to our proposed manipulation are also less likely to postpone the appointment, signaling enhanced awareness about the risks related with delayed participation.
    Keywords: breast cancer screening, framing, information provision, randomized field experiment
    JEL: C93 H51 I11 I18
    Date: 2019–03
  3. By: Grewenig, Elisabeth (Ifo Institute for Economic Research); Lergetporer, Philipp (Ifo Institute for Economic Research); Werner, Katharina (Ifo Institute for Economic Research); Woessmann, Ludger (Ifo Institute for Economic Research)
    Abstract: A large literature studies subjective beliefs about economic facts using unincentivized survey questions. We devise randomized experiments in a representative online survey to investigate whether incentivizing belief accuracy affects stated beliefs about average earnings by professional degree and average public school spending. Incentive provision does not impact earnings beliefs, but improves school-spending beliefs. Response patterns suggest that the latter effect likely reflects increased online-search activity. Consistently, an experiment that just encourages search-engine usage produces very similar results. Another experiment provides no evidence of experimenter-demand effects. Overall, results suggest that incentive provision does not reduce bias in our survey-based belief measures.
    Keywords: beliefs, incentives, online search, survey experiment
    JEL: D83 C83 C90
    Date: 2019–03
  4. By: Duffy, Sean; Gussman, Steven; Smith, John
    Abstract: We design a choice experiment where the objects are valued according to only a single attribute with a continuous measure and we can observe the true preferences of subjects. However, subjects have an imperfect perception of their own preferences. Subjects are given a choice set involving several lines of various lengths and are told to select one of them. They strive to select the longest line because they are paid an amount that is increasing in the length of their selection. Subjects also make their choices while they are required to remember either a 6-digit number (high cognitive load) or a 1-digit number (low cognitive load). We find that subjects in the high load treatment make inferior line selections and perform worse searches. When we restrict attention to the set of viewed lines, we find evidence that subjects in the high load treatment make worse choices than subjects in the low load treatment. Therefore the low quality searches do not fully explain the low quality choices. Our results suggest that cognition affects choice, even in our idealized choice setting. We also find evidence of choice overload even when the choice set is small and the objects are simple. Further, our experimental design permits a multinomial discrete choice analysis on choice among single-attribute objects with an objective value. The results of our analysis suggest that the errors in our data are better described as having a Gumbel distribution rather than a normal distribution. Finally, we observe the effects of limited cognition, consistent with memory decay and attention.
    Keywords: cognitive load, choice, choice overload, judgment, memory, search
    JEL: C91
    Date: 2019–04–06
  5. By: Gabriele Camera (Economic Science Institute, Chapman University & University of Bologna); Cary Deck (University of Alabama & Chapman University); David Porter (Economic Science Institute, Chapman University)
    Abstract: We explore if fairness and inequality motivations affect cooperation in indefinitely repeated games. Each round, we randomly divided experimental participants into donor-recipient pairs. Donors could make a gift to recipients, and ex-ante earnings are highest when all donors give. Roles were randomly reassigned every period, which induced inequality in ex-post earnings. Theoretically, income-maximizing players do not have to condition on this inequality because it is payoff-irrelevant. Empirically, payoff-irrelevant inequality affected participants’ ability to coordinate on efficient play: donors conditioned gifts on their own past roles and, with inequalities made visible, discriminated against those who were better off.
    Keywords: cooperation, experiments, indefinitely repeated games, social dilemmas
    JEL: C70 C90 D03 E02
    Date: 2019
  6. By: Roberto Galbiati (Département d'économie); Emeric Henry (Département d'économie); Nicolas Jacquemet (Centre d'économie de la Sorbonne (CNRS/UP 1))
    Abstract: How does the exposure to past institutions affect current cooperation? While a growing literature focuses on behavioral channels, we show how cooperation-enforcing institutions affect rational learning about the group’s value. Strong institutions, by inducing members to cooperate, may hinder learning about intrinsic values in the group. We show, using a lab experiment with independent interactions and random rematching, that participants behave in accordance with a learning model, and in particular react differently to actions of past partners whether they were played in an environment with coercive enforcement or not.
    Keywords: Enforcement; Social values; Cooperation; Learning spillovers; Persistence of institutions; Repeated games; Experiments
    JEL: C91 C73 D02 K49 P16 Z1
    Date: 2019–04
  7. By: Roberto Galbiati (Département d'économie); Emeric Henry (Département d'économie); Nicolas Jacquemet (Centre d'économie de la Sorbonne (CNRS/UP 1))
    Abstract: How does the exposure to past institutions affect current cooperation? While a growing literature focuses on behavioral channels, we show how cooperation-enforcing institutions affect rational learning about the group’s value. Strong institutions, by inducing members to cooperate, may hinder learning about intrinsic values in the group. We show, using a lab experiment with independent interactions and random rematching, that participants behave in accordance with a learning model, and in particular react differently to actions of past partners whether they were played in an environment with coercive enforcement or not.
    Keywords: Enforcement; Social values; Cooperation; Learning spillovers; Persistence of institutions; Repeated games; Experiments
    JEL: C91 C73 D02 K49 P16 Z1
    Date: 2019–04
  8. By: Cecilia Boggio (University of Turin); Flavia Coda Moscarola (University of Turin); Andrea Gallice (Collegio Carlo Alberto)
    Abstract: The gender gap in financial participation and decision-making has been extensively documented in the economic and sociological literature. We conduct a field experiment with elementary school children to go to the roots of this gender gap. We compare the effects of two different treatments (the language treatment and the MdR treatment) designed to boost the attention span of the participants on a basic financial task aiming at eliciting their time preferences. We find that the use of gender-specific conceptual frames (competitiveness vs. cooperation) in the description of the task: 1) improves girls’ understanding of it and is effective in increasing the number of coherent answers; 2) makes the MdR workshop on the utility of savings more effective in improving the consistency of the answers of girls; 3) increases the children’s level of patience. This evidence supports the idea that a more gender-specific conceptual frame --one women can identify more with-- could play a role in narrowing the gender gap in financial market participation and decision-making.
    Date: 2019–01
  9. By: Pan, Jinrui; Shachat, Jason; Wei, Sijia
    Abstract: We use laboratory experiments to evaluate the effects of cognitive stress on inventory management decisions in a finite horizon Economic Order Quantity (EOQ) model. We manipulate two sources of cognitive stress. First, we vary participants' ability to order inventory from any decision period to only when inventory is depleted. This reduces cognitive stress by restricting the policy choice set. Second we vary participants' participation in a competing pin memorization. This increases cognitive load. Participants complete a sequence of five ``annual'' inventory management tasks, with monthly ordering decisions. Both sources of cognitive stress negatively impact earnings, with the bulk of these impacts occurring in the first year. Participants' choices in all treatments exhibit trends to near optimal policy adoption. But only in the most favorable treatment do the majority of choices reach the optimal policy. We estimate the learning dynamics of monthly order decisions using a Markov switching model. Estimates suggest increased cognitive load reduces the probability of switching to more profitable policies, and that more complex policy choice sets leads to a greater policy lock-in. Our results suggests that inexperienced individuals will perform more poorly when called upon to make inventory management situations in cognitively stressfully environments, and that the benefits of providing support and task simplicity is greatest when the task is first assigned.
    Keywords: Economic Order Quantity, Cognitive load, Choice set complexity, Learning
    JEL: C92 D83 M11
    Date: 2018–04–15
  10. By: Gauri, Varun (World Bank); Jamison, Julian C. (University of Exeter); Mazar, Nina (Boston University); Ozier, Owen (World Bank)
    Abstract: Bureaucratic performance is a crucial determinant of economic growth, but little real-world evidence exists on how to improve it, especially in resource-constrained settings. We conducted a field experiment of a social recognition intervention to improve record keeping in health facilities in two Nigerian states, replicating the intervention - implemented by a single organization - on bureaucrats performing identical tasks. Social recognition improved performance in one state but had no effect in the other, highlighting both the potential benefits and also the sometimes-limited generalizability of behavioral interventions. Furthermore, differences in facility-level observables did not explain cross-state differences in impacts, suggesting that it may often be difficult to predict external validity.
    Keywords: RCT, external validity, bureaucracy, behavioral insights, nudges, healthcare
    JEL: C93 D73 D91 I18 L38
    Date: 2019–03
  11. By: Ahmed, Ali (Department of Management and Engineering); Hammarstedt, Mats (Linnaeus University Centre for Discrimination and Integration Studies)
    Abstract: We present a field experiment conducted in order to explore the existence of ethnic discrimination in contact with public authorities. Two fictitious parents, one with a Swedish-sounding name and one with an Arabic-sounding name, sent email inquiries to all Swedish municipalities asking for information about preschool admission for their children. Results show that the parents were treated differently by the municipalities since the individual with the Swedish-sounding name received significantly more responses that answered the question in the inquiry than the individual with the Arabic-sounding name. Also, the individual with the Swedish-sounding name received more warm answers than the individual with the Arabic-sounding name in the sense that the answer from the municipality started with a personal salutation. We conclude that ethnic discrimination is prevalent in public sector contacts and that this discrimination has implications for the integration of immigrants and their children.
    Keywords: Discrimination; Subtle discrimination; Authorities; Field experiment
    JEL: C93 H83 J15
    Date: 2019–04–05
  12. By: Giuseppe Attanasi (Université Côte d'Azur, CNRS, GREDEG, France); Kene Boun My (BETA, Université de Strasbourg); Nikolaos Georgantzís (Burgundy School of Business & Economics Department, Universitat Jaume I); Miguel Ginés (Economics Department, Universitat Jaume I)
    Abstract: In a two-stage investment-effort game, we model altruistic investment in another agent's capacity to benefit from synergies between the two agents' efforts. Contrary to most models in the literature on altruism, we assume that agents who invest in others have no direct utility from their giving behavior, ruling out any genuinely altruistic component in their utility function, i.e., stemming from other-regarding preferences. Furthermore, we disentangle this strategic ethics" from reputational e ects yielding incentives for a more pro-social action in the present in order to favor Pareto-superior outcomes in the future. Isolated consumption of one's own bene ts from own efforts is the worst equilibrium, which is globally stable and is shown to exist independently of the investment cost. However, for a low enough investment cost, there exist two alternative equilibria: an unstable intermediate equilibrium in which both agents make positive complementarity-building investments, and a stable one in which both agents invest all they can to complementarity building. Both equilibria Pareto-dominate the aforementioned no-investment equilibrium. Results of a laboratory experiment con rm our behavioral prediction that, for a low enough investment cost, subjects coordinate on positive complementarity-building investment, which in turn boosts their effort in the second stage. The latter increases in both own and others' complementarity-building investment, as predicted by our model. All this holds independently of subjects' risk and inequity aversion. The latter suggests that complementarity-building investment is not motivated by altruism. Rather, it is purely strategic.
    Keywords: Complementarity-building Investment, Strategic Complementarities, Altruism, Fairness, Risk Aversion
    JEL: C72 C73 C91 D64
    Date: 2019–04
  13. By: Giovanna D'Adda; Martin Dufwenberg; Francesco Passarelli; Guido Tabellini
    Abstract: We consider an expanded notion of social norms that renders them belief-dependent and partial, formulate a series of related testable predictions, and design an experiment based on a variant of the dictator game that tests for empirical relevance. Main results: Normative beliefs influence generosity, as predicted. Degree of partiality leads to more dispersion in giving behavior, as predicted.
    Keywords: social norms, partial norms, normative expectations, consensus, experiment
    JEL: C91 D91
    Date: 2019
  14. By: Johannes Haushofer; Anett John; Kate Orkin
    Abstract: Behavioral constraints may explain part of low demand for preventive health products. We test the effects of two light-touch psychological interventions on water chlorination and related health and economic outcomes using a randomized controlled trial among 3750 women in rural Kenya. One intervention encourages participants to visualize alternative realizations of the future; one builds participants' ability to make concrete plans to achieve goals. Both interventions include information on health benefits of chlorination. After twelve weeks, both interventions increase the share of households who chlorinate drinking water and reduce child diarrhea episodes. Analysis of mechanisms suggests both interventions increase self-efficacy – beliefs about one's ability to achieve desired outcomes – as well as the salience of chlorination. They do not differentially affect beliefs and knowledge about chlorination (compared to a group who receive only information), nor affect lab measures of time preferences or planning ability. Results suggest simple psychological interventions can increase use of preventive health technologies.
    JEL: D91 I12 O12
    Date: 2019–04
  15. By: Morone, Andrea; Caferra, Rocco
    Abstract: In this paper we investigated group size impact on social risk aversion when a majority rule is applied. We used the well-known Holt and Laury's (2002) mechanism to elicit individuals and social risk attitudes. We observed a risk shift in small group and a vanishing of such effect as group size increase.
    Keywords: Preferences; Group; Risk Attitude; Majority Rule; Laboratory
    JEL: C9
    Date: 2019–03–19
  16. By: Kalus Abbink; Donna Harris
    Abstract: We study in-group favouritism and out-group discrimination in a novel multiplayer dictator game in a naturally occuring setting. An allocator divides a large sum of money among three groups of around 20 recipients each and to Self. The groups are supporters of two rival political movements in Thailand and politically neutral subjects. The non-rival out-group as a reference point allows us to measure in-group favouritism and out-group discrimination. A treatment with artificial groups serves as a control. We find both in-group favouritism and out-group discrimination among the naturally occurring groups. In artificial groups, favouritism is observed, but not discrimination. Our results suggest that the two behaviours are not driven by the same motive, and only when groups are in conflict out-group discrimination is likely to occur.
    Date: 2019
  17. By: Bruni, Luigino (LUMSA University); Pelligra, Vittorio (University of Cagliari); Reggiani, Tommaso G. (Masaryk University); Rizzolli, Matteo (LUMSA University)
    Abstract: In mainstream business and economics, prizes such as the Presidential Medal of Freedom are understood as special types of incentives, with the peculiar features of being awarded in public, and of having largely symbolic value. Informed by both historical considerations and philosophical instances, our study defines fundamental theoretical differences between incentives and prizes. The conceptual factors highlighted by our analytical framework are then tested through a laboratory experiment. The experimental exercise aims to analyze how prizes and incentives impact actual individuals' behavior differently. Our results show that both incentives (monetary and contingent) and prizes (non-monetary and discretional rewards) boost motivation to perform if awarded publicly, but only prizes crowd-in motivation promoting virtuous attitude.
    Keywords: incentives, prizes, awards, crowding-in, meaning, intrinsic motivation
    JEL: B1 D03 J33
    Date: 2019–03
  18. By: James Andreoni; Amalia Di Girolamo; John A. List; Claire Mackevicius; Anya Samek
    Abstract: We conduct experiments eliciting risk preferences with over 1,400 children and adolescents aged 3-15 years old. We complement our data with an assessment of cognitive and executive function skills. First, we find that adolescent girls display significantly greater risk aversion than adolescent boys. This pattern is not observed among young children, suggesting that the gender gap in risk preferences emerges in early adolescence. Second, we find that at all ages in our study, cognitive skills (specifically math ability) are positively associated with risk taking. Executive functions among children, and soft skills among adolescents, are negatively associated with risk taking. Third, we find that greater risk-tolerance is associated with higher likelihood of disciplinary referrals, which provides evidence that our task is equipped to measure a relevant behavioral outcome. For academics, our research provides a deeper understanding of the developmental origins of risk preferences and highlights the important role of cognitive and executive function skills to better understand the association between risk preferences and cognitive abilities over the studied age range.
    JEL: C72 C91 C93
    Date: 2019–04
  19. By: Marina Agranov; Elizabeth Potamites; Andrew Schotter; Chloe Tergiman
    Abstract: Uses a laboratory setting to manipulate our subjectsʼ beliefs about the cognitive levels of the players they are playing against. We show that in the context of the 2/3 guessing game, individual choices crucially depend on their beliefs about the level of others.
    Keywords: Guessing game , Beliefs , Level-k theory
    JEL: I
  20. By: Danilov, Anastasia (University of Cologne); Irlenbusch, Bernd (University of Cologne); Harbring, Christine (RWTH Aachen University)
    Abstract: We study how help can be fostered by means of a team bonus in the presence of rank-order tournaments. In a simple model we combine elements of relative rewards and a team bonus and study their effect on effort, help and sabotage. Quite intuitively the theoretical analysis suggests that team members help less as relative rewards increase. This problem is mitigated by a team bonus that is proportional to the output of the whole team. We compare different parameter constellations of the theoretical benchmark with behavior observed in a one-shot experiment.
    Keywords: help, relative rewards, team incentives, experiment
    JEL: M52 J33 J41 L23 C72 C91
    Date: 2019–03
  21. By: Bellemare, Charles (Université Laval); Sebald, Alexander (University of Copenhagen)
    Abstract: Subjective performance evaluations are commonly used to provide feedback and incentives to workers. However, such evaluations can generate significant disagreements and conflicts, the severity of which may be driven by many factors. In this paper we show that a workers' level of self-confidence plays a central role in shaping reactions to subjective evaluations - overconfident agents engage in costly punishment when they receive evaluations below their own, but provide limited rewards to principals when evaluations exceed their own. In contrast, underconfident agents do not significantly react to evaluations below their own, but reward significantly evaluations exceeding their own. Our analysis exploits data from a principal-agent experiment run with a large sample of the Danish working age population, varying the financial consequences associated with the evaluations workers receive. In contrast to existing economic models of reciprocal behavior, reactions to evaluations are weakly related to the financial consequences of the evaluations. These results point towards a behavioral model of reciprocity that intertwines the desire to protect self-perceptions with over-/underconfidence.
    Keywords: subjective performance evaluations, self-confidence, reciprocity
    JEL: D01 D02 D82 D86 J41
    Date: 2019–03
  22. By: Breitmoser, Yves (Bielefeld University); Schweighofer-Kodritsch, Sebastian (HU Berlin and WZB Berlin)
    Abstract: Li (2017) supports his theoretical notion of obviousness of a dominant strategy with experimental evidence that bidding is closer to dominance in the dynamic ascending-clock than the static second-price auction (private values). We replicate his experimental study and add three intermediate auction formats to decompose this behavioral improvement into cumulative effects of (1) seeing an ascending-price clock (after bid submission), (2) bidding dynamically on the clock and (3) getting drop-out information. Li\'s theory predicts dominance to become obvious through (2) dynamic bidding. We find no significant behavioral effect of (2). However, both (1) and (3) are highly significant.
    Keywords: ;
    Date: 2019–04–08
  23. By: Caferra, Rocco; Morone, Andrea; Nuzzo, Simone
    Abstract: The purpose of this paper is to examine the market structure at the opening and its influence on subsequent trading. In particular, we measure the market effciency of a pre-opening call market (CM) followed by a continuous double auction (CDA) focusing on the role of information. Aimed by Weigelt (1991), Theissen (2000) and Hinterleitner at al. (2015) we check whether the introduction of a call market leads to underreaction among agents' bids, improving market efficiency. Results evidence a positive correlation between pre-opening price and subsequent prices traded and a lower price-dividend deviation in case of high quality information.
    Keywords: Experimental Asset Market; Market Efficiency; Double Auction; Clearing House; Pre-Opening
    JEL: C9
    Date: 2019–03–19
  24. By: Ujjayant Chakravorty; Manzoor H. Dar; Kyle Emerick
    Abstract: We use two randomized controlled trials in Bangladesh to study a simple water conservation technology for rice production called “Alternate Wetting and Drying (AWD)”. Despite proven results in agronomic trials, our first experiment shows that AWD only saves water and increases profits in villages where farmers pay a marginal price for water, but not when they pay fixed seasonal charges. The second RCT randomly distributed debit cards that can be used to pay volumetric prices for irrigation water. This low-cost, scalable intervention causes farmers to place more value on the water-saving technology. Demand for the technology becomes less price-sensitive.
    Date: 2019
  25. By: Ana María Díaz; Luz Magdalena Salas; Luz Magdalena Salas
    Abstract: Firms statistically discriminate (redline) against job candidates based on where they live. We conducted a correspondence test by sending three identical fictitious resumes to every non professional job offer posted in two main job vacancy newspapers in Bogota. The only difference between the resumes was the residential address in which the applicants lived. Two of the three resumes sent in each trio were located at the same commuting time (and geographical distance) from the job, but one resided in a low-crime neighborhood and the other in a high-crime neighborhood. The third resume was for a fictitious individual located in a low-crime neighborhood that is further away (longer commuting time and greater distance). Our experimental design allows us to explore whether employers discriminate against potential employees based on where they live, and if they do, which mechanisms are behind their discriminatory preferences. Building on the urban economics literature, we test two potential mechanisms: statistical discrimination due to negative signaling neighborhood effects and statistical discrimination based on commuting time to work. If any of these hold, we would expect employers to offer interviews to job applicants who reside in deprived or distant neighborhoods less often. We find that employers statistically discriminate (redline) based on commuting time to work. In particular, living one hour away from the vacancy reduces the callback rate by 32 percent while holding the attributes of the place of residence constant. We did not find evidence that employers respond to negative signaling effects or engages in taste based-discrimination.
    Keywords: statistical discrimination, productivity, employment, experiment, neighborhoods effects, spatial mismatch, correspondence test.
    JEL: C93 D22 J21 J23 J71 R23
    Date: 2019–02–25
  26. By: Raja Rajendra Timilsima (Research Institute for Future Design, Kochi University of Technology); Koji Kotani (School of Economics and Management, Kochi University of Technology); Yoshinori Nakagawa (School of Economics and Management, Kochi University of Technology); Tatsuyoshi Saijo (Research Institute for Humanity and Nature)
    Abstract: “Intergenerational sustainability dilemma (ISD)†is a situation where the current generation chooses actions to her benefit without considering future generations under current economic and political systems, compromising intergenerational sustainability (Kamijo et al., 2017, Shahrier et al., 2017). We institute a new mechanism to improve intergenerational sustainability called “intergenerational accountability (IA)†and examine its effectiveness through field experiments consisting of ISD games (ISDGs). In Baseline ISDG, a sequence of six generations, each composed of three members, is organized, and each generation is asked to choose whether to maintain intergenerational sustainability (sustainable option) or maximize their payoff by irreversibly imposing costs on future generations (unsustainable option) within a 10-minute deliberation. With IA, each generation is asked to provide the reasons of her decision as well as her advice to future generations that are passed to subsequent generations. Our results show that generations under IA choose a sustainable option much more often than under Baseline ISDG, giving positive reasons and advice for sustainable options to subsequent generations. Overall, one-way communication of reasons and advice in IA is identified to function as a social device to not only transfer a common image but also decrease social distance over generations for intergenerational sustainability.
    Keywords: Intergenerational sustainability dilemma, intergenerational accountability, field experiments
    Date: 2019–04

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