|
on Experimental Economics |
| By: | Yusuke Narita (Massachusetts Institute of Technology) |
| Abstract: | Randomized Controlled Trials (RCTs) enroll hundreds of millions of subjects and involve many human lives. To improve subjects’ welfare, I propose a design of RCTs that I call Experiment-as-Market (EXAM). EXAM produces a Pareto efficient allocation of treatment assignment probabilities, is asymptotically incentive compatible for preference elicitation, and unbiasedly estimates any causal effect estimable with standard RCTs. I quantify these properties by applying EXAM to a water cleaning experiment in Kenya (Kremer et al., 2011). In this empirical setting, compared to standard RCTs, EXAM substantially improves subjects’ predicted well-being while reaching similar treatment effect estimates with similar precision. |
| Keywords: | clinical trial, social experiments, A/B test, market design, competitive equilibrium from equal income, Pareto efficiency, causal inference, development economics |
| JEL: | C93 O15 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2019-025&r=all |
| By: | Christian A. Vossler (Department of Economics, University of Tennessee); Dong Yan (Department of Economics, University of Tennessee) |
| Abstract: | We formulate new hypotheses that take advantage of information updating in order to discriminate between the two major specifications of multi-prior ambiguity models: ``kinked'' and ``smooth''. In particular, across comparable decision settings, we examine the effects of adding or trimming out certain priors, updating the weight on particular beliefs, changing the payoff for a single potential state, and modifying the distribution within certain priors. Our results show that the kinked specification does well in consistently predicting choices from 68% of participants, and the smooth specification predicts well for just 10%. We find evidence that people may use a compound lottery as one of their priors, subjects are insensitive to information that the best prior is more likely, and people place lower values on ambiguous lotteries that are relatively more complex. Our experimental methods are likely to be useful in other contexts, as they allow for simple tests of decision-making under ambiguity without placing restrictions on the weights participants place on priors, or reliance on comparisons to decision-making under risk. |
| Keywords: | uncertainty; ambiguity; updating; multiple priors models; alpha-maxmin expected utility; recursive expected utility; lab experiment; self-protection; subjective expected utility |
| JEL: | C91 D81 D83 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ten:wpaper:2019-02&r=all |
| By: | Barron, Kai; Stüber, Robert; van Veldhuizen, Roel |
| Abstract: | A large body of evidence suggests that people are willing to sacrifice personal material gain in order to adhere to a moral motive such as fairness or truth-telling. Yet less is known about what happens when moral motives are in conflict. We hypothesize that in such situations, individuals engage in what we term ‘motivated motive selection’, choosing to adhere to the motive that most closely aligns with their personal interest. We test this hypothesis using a laboratory experiment that induces in subjects a conflict between two of the most-studied moral motives: fairness and truth-telling. Our experimental design has the attractive features of being both parsimonious and closely related to both the classic dictator and lying games, implying comparability with a wealth of benchmark evidence. In line with our hypothesis, our results suggest that participants are more likely to adhere to the motive that is more in line with their self-interest. |
| Keywords: | Motivated reasoning,dictator game,lying game,motives,moral dilemma |
| JEL: | C91 D01 D63 D90 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2019303&r=all |
| By: | Dave, Chetan (University of Alberta, Department of Economics); Hamre, Sjur (Duke University); Kephart, Curtis (R-Studio); Reuben, Alicja (New York University Abu Dhabi) |
| Abstract: | We compare standard (laboratory) and non-standard (field) subject pool behavior in an extensive form public goods game with random punishment. Our experimental investigation is motivated by real-world ‘Activists’ encouraging public goods provision by firms; an activity known as corporate social responsibility. We find that relative to laboratory subjects, activists in Mumbai are more willing to settle at the Nash equilibrium of the game (which entails increased provision of public goods) and are more willing to punish non-cooperative firm behavior even if such punishments hurt their own payoffs. |
| Keywords: | Public goods; punishment; non-standard subject pool |
| JEL: | C92 C93 D64 |
| Date: | 2019–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2019_006&r=all |
| By: | Moussa P. Blimpo (World Bank); Pedro Carneiro (University College London); Pamela Jervis (Institute for Fiscal Studies); Todd Pugatch (Oregon State University) |
| Abstract: | This paper studies two experiments of early childhood development programs in The Gambia: one increasing access to services, and another improving service quality. In the first experiment, new community-based early childhood development (ECD) centers were introduced to randomly chosen villages that had no pre-existing structured ECD services. In the second experiment, a randomly assigned subset of existing ECD centers received intensive provider training. We find no evidence that either intervention improved average levels of child development. Exploratory analysis suggests that, in fact, the first experiment, which increased access to relatively low quality ECD services, led to declines in child development among children from less disadvantaged households. Evidence supports that these households may have been steered away from better quality early childhood settings in their homes. |
| Keywords: | early childhood development, cognitive stimulation, teacher training, The Gambia, randomized control trials, Malawi Developmental Assessment Tool |
| JEL: | I25 I38 O15 O22 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2019-023&r=all |
| By: | Bøg, Martin (IFAU - Institute for Evaluation of Labour Market and Education Policy); Dietrichson, Jens (IFAU - Institute for Evaluation of Labour Market and Education Policy); Aldenius Isaksson, Anna (IFAU - Institute for Evaluation of Labour Market and Education Policy) |
| Abstract: | Although reading is a fundamental skill, many students leave school without being proficient readers. We examine a literacy program targeting students most at-risk of reading difficulties in kindergarten and first grade. The program includes multi-sensory learning methods, which focus on phonological awareness and phonics and are delivered in a one-to-one or one-to-two tutoring setting. Using a randomized field experiment with 161 students in 12 Swedish schools, we find large positive effects on our two primary outcomes measures: a standardized test of decoding and a standardized test of letter knowledge. We also find positive effects on measures of phonological awareness and self-efficacy and small and statistically insignificant effects on measures of enjoyment and motivation. The program compares favorably to similar programs in terms of cost-effectiveness. |
| Keywords: | phonological awareness; phonics; tutoring; multi-sensory; kindergarten; first grade; Sweden |
| JEL: | I00 I20 I24 J24 Z18 |
| Date: | 2019–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2019_007&r=all |
| By: | Götte, Lorenz; Stutzer, Alois |
| Abstract: | There is a longstanding concern that material incentives might undermine pro-social motivation, leading to a decrease in blood donations rather than an increase. This paper provides an empirical test of how material incentives affect blood donations in a large-scale field experiment spanning three months and involving more than 10,000 previous donors. We examine two types of rewards: a lottery ticket and a free cholesterol test. Lottery tickets significantly increase donations during the experiment, in particular among less motivated donors. Moreover, no reduction in donations is observed after the experiment. The free cholesterol test leads to no discernable impact on blood donations during and after the experiment. |
| Keywords: | blood donations; field experiment; material incentives; motivation crowding effect; pro-social behavior |
| JEL: | C93 D64 H41 I18 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13677&r=all |
| By: | Blattman, Christopher; Fiala, Nathan; Martinez, Sebastian |
| Abstract: | In 2008, Uganda granted hundreds of small groups $400/person to help members start individual skilled trades. Four years on, an experimental evaluation found grants raised earnings by 38% (Blattman, Fiala, Martinez 2014). We return after 9 years to find these start-up grants raised earnings and consumption temporarily only. Grantees' investment leveled off; controls eventually increased their incomes through business and casual labor; and so both groups converged in employment, earnings, and consumption. Grants had lasting impacts on assets, skilled work, and possibly child health, but had little effect on mortality, fertility, health or education. |
| Keywords: | employment,poverty,entrepreneurship,cash transfers,occupational choice,Uganda,field experiment,labor market programs,health,education |
| JEL: | J24 O12 D13 C93 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:802&r=all |
| By: | Aristidou, Andreas (university of southern california); Coricelli, Giorgio (university of southern california); Vostroknutov, Alexander (General Economics 1 (Micro)) |
| Abstract: | There are two theoretically parallel ways in which principals can manipulate agents’ choices: with monetary incentives (mechanism design) or Bayesian persuasion (information design). We are interested in whether incentives or persuasion is a better strategy for principals. We conduct an experiment that investigates the behavioral side of the theoretical parallelism between these approaches. We find that principals are more successful when persuading than when incentivizing. Agents appear to be more demanding in mechanism design than in information design. Our analysis also identifies many features that make mechanism and information design behaviorally distinct in practice. |
| Keywords: | persuasion, mechanism design, information design, experiments |
| JEL: | C91 C92 D91 |
| Date: | 2019–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2019012&r=all |
| By: | Paul Gortner (Bundesbank); Joël van der Weele (University of Amsterdam) |
| Abstract: | We investigate the effect of introducing information about peer portfolios in an experimental Arrow-Debreu economy. Confirming the prediction of a general equilibrium model with inequality averse preferences, we find that peer information leads to reduced variation in payoffs within peer groups. Information also improves risk sharing, as the data suggests that experiencing earnings deviations from peers induces a shift to more balanced portfolios. In a treatment where we highlight the highest earner, we observe a reduction in risk sharing, while highlighting the lowest earner has no effects compared to providing neutral information. Our results indicate that the presence of social information and its framing is an important determinant of equilibrium in financial markets. |
| Keywords: | peer effects, laboratory experiments, risk taking, asset markets |
| JEL: | C92 D53 G11 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20190027&r=all |
| By: | Romero, Miriam; Wollni, Meike; Rudolf, Katrin; Asnawi, Rosyani; Irawan, Bambang |
| Abstract: | This study evaluates the effects of two environmental policy instruments on the adoption of native tree planting in oil palm plantations. The first instrument is an information campaign on tree planting in oil palm. The second instrument combines the information campaign with a structural intervention that provides native tree seedlings for free. We implemented a randomized controlled trial in oil palm growing villages in Jambi, Indonesia. Our study addresses the underlying mechanisms of behavioral change, by investigating how the policy instruments shape farmers' perceptions, intentions and actual adoption decisions. The results show that information campaigns and structural interventions can motivate tree planting among smallholder oil palm farmers in Indonesia. While both treatments have a positive and significant effect, the intervention combining information with seedling provision leads to significantly higher adoption rates, indicating that overcoming structural barriers is critical. While changes in perceptions and intentions fully mediate the effect of the information campaign on adoption, they can only partially explain the effect of the combined intervention. Thus, to promote a transition towards more sustainable development pathways, facilitating easy access to critical inputs may be key to motivate adoption among large numbers of potential users. |
| Keywords: | tree-planting,oil palm,intentions,mediation,Asia |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:crc990:25&r=all |
| By: | Becker, Sascha O.; Fernandes, Ana; Weichselbaumer, Doris |
| Abstract: | Due to conventional gender norms, women are more likely to be in charge of childcare than men. From an employer's perspective, in their fertile age they are also at "risk" of pregnancy. Both factors potentially affect hiring practices of firms. We conduct a large-scale correspondence test in Germany, Switzerland, and Austria, sending out approx. 9,000 job applications, varying job candidate's personal characteristics such as marital status and age of children. We find evidence that, for part-time jobs, married women with older kids, who likely finished their childbearing cycle and have more projectable childcare chores than women with very young kids, are at a significant advantage vis-aÌ?-vis other groups of women. At the same time, married, but childless applicants, who have a higher likelihood to become pregnant, are at a disadvantage compared to single, but childless applicants to part-time jobs. Such effects are not present for full-time jobs, presumably, because by applying to these in contrast to part-time jobs, women signal that they have arranged for external childcare. |
| Keywords: | discrimination; Experimental economics; Fertility |
| JEL: | C93 J16 J71 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13685&r=all |
| By: | Sascha O. Becker, Sascha O. (Department of Economics, University of Warwick); Fernandes, Ana (Bern University of Applied Sciences); Weichselbaumer, Doris (Johannes Kepler University Linz) |
| Abstract: | Due to conventional gender norms, women are more likely to be in charge of childcare than men. From an employer’s perspective, in their fertile age they are also at “risk” of pregnancy. Both factors potentially affect hiring practices of firms. We conduct a largescale correspondence test in Germany, Switzerland, and Austria, sending out approx. 9,000 job applications, varying job candidate’s personal characteristics such as marital status and age of children. We find evidence that, for part-time jobs, married women with older kids, who likely finished their childbearing cycle and have more projectable childcare chores than women with very young kids, are at a significant advantage vis-àvis other groups of women. At the same time, married, but childless applicants, who have a higher likelihood to become pregnant, are at a disadvantage compared to single, but childless applicants to part-time jobs. Such effects are not present for full-time jobs, presumably, because by applying to these in contrast to part-time jobs, women signal that they have arranged for external childcare. |
| Keywords: | Fertility ; Discrimination ; Experimental economics |
| JEL: | C93 J16 J71 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1193&r=all |
| By: | Grohmann, Antonia (DIW Berlin); Menkhoff, Lukas (DIW and HU Berlin); Merkle, Christoph (Kühne Logistics University); Schmacker, Renke (DIW Berlin) |
| Abstract: | This paper examines whether biased income expectations due to overconfidence lead to higher levels of debt-taking. In a lab experiment, participants can purchase goods by borrowing against their future income. We exogenously manipulate income expectations by letting income depend on relative performance in hard and easy quiz tasks. We successfully generate biased income expectations and show that participants with higher income expectations initially borrow more. Overconfident participants scale back their consumption after feedback. However, at the end of the experiment they remain with higher debt levels, which represent real financial losses. To assess the external validity, we nd further evidence for the link between overcondence and borrowing behavior in a representative survey (GSOEP-IS). |
| Keywords: | consumption; borrowing; overcondence; income expectations; |
| JEL: | D14 D84 |
| Date: | 2019–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:152&r=all |
| By: | Panizza, Folco (university of trento); Vostroknutov, Alexander (General Economics 1 (Micro)); Coricelli, Giorgio (university of southern california) |
| Abstract: | Knowing that some action is possible in principle, even if not available, could affect behaviour. This may happen because a game is perceived as part of a larger game or ‘metacontext’ that includes its outcomes as a proper subset. In an experiment we test the effects of meta-context and specific choice sets on pro-social behaviour in a series of binary mini-Dictator games by eliciting participants’ normative evaluations, fitting a norm-dependent utility, and analysing the residuals. We find that participants’ normative evaluations in mini-Dictator games derive from the meta-context (a standard Dictator game) and explain a sizeable portion of variance in choices. Restricted choice sets of mini-Dictator games also influence participants’ decisions: they take into account dictator’s losses and recipient’s gains from choosing the prosocial action as fractions of their respective maximum payoffs. This choice-set effect correlates with individual measures of rule-following propensity supporting the idea that it is also normative. Thus, there are two types of normative reasoning that contribute to pro-social behaviour: a meta-context and a choice-set effect. |
| Keywords: | mini-Dictator games, meta-context, choice-set effects, norms, norm-dependent utility |
| JEL: | C91 C92 D91 |
| Date: | 2019–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2019010&r=all |
| By: | Gürdal, Mehmet Y. (bogazici university, istanbul); Torul, Orhan (bogazici university, istanbul); Vostroknutov, Alexander (General Economics 1 (Micro)) |
| Abstract: | We study the incentives that drive behavior in redistributive institutions with various levels of enforcement. We are interested in how the opportunistic incentive to use a redistributive institution for personal gain and the desire to follow the rules of a regulated community, populated by similarly obedient individuals, interact and determine the success or failure of an institution. In the experiment, subjects can repeatedly join one of three groups, which are defined by explicitly stated injunctive norms that require to put all, half, or any amount of income to a common pool for redistribution. The treatments differ in the level of enforcement of these norms. We find that contributions are sustained only in the case of full enforcement. However, a sizeable number of subjects persist in following the norms of redistribution even after experiencing many periods of losses due to free riding. We find that subjects with strong propensity to follow norms perceive the same level of income inequality as fairer, when it was achieved without breaking the norm, and favor redistributive mechanisms with more stringent rules. This suggests that well-defined redistributive norms can create a powerful incentive for cooperation as many individuals seem to prefer stable regulated egalitarian institutions to unregulated libertarian ones. Some form of enforcement is, nevertheless, required to protect egalitarian institutions from exploitation by free riders. |
| Keywords: | social norms, taxation, redistribution, egalitarianism, libertarianism, limited enforcement |
| JEL: | C91 C92 H26 H41 |
| Date: | 2019–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2019011&r=all |
| By: | Lehrer, Steven F.; Pohl, R. Vincent; Song, Kyungchul |
| Abstract: | Economic theory that underlies many empirical microeconomic applications predicts that treatment responses depend on individuals' characteristics and location on the outcome distribution. Using data from a large-scale Pakistani school report card experiment, we consider tests for treatment effect heterogeneity that make corrections for multiple testing to avoid an overestimation of positive treatment effects. These tests uncover evidence of policy-relevant heterogeneous effects from information provision on child test scores. Further, our analysis reinforces the importance of preventing the inflation of false positive conclusions since over 65% of statistically significant quantile treatment effects become insignificant once corrections for multiple testing are applied. |
| Keywords: | information,student performance,accountability,quantile treatment effects,multiple testing,bootstrap tests |
| JEL: | C12 C21 I21 L15 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:799&r=all |
| By: | Carl Singleton (Department of Economics, University of Reading); J. James Reade (Department of Economics, University of Reading); Alasdair Brown (School of Economics, University of East Anglia) |
| Abstract: | We study individuals who each chose to predict the outcome of fixed events in an online competition, namely all football matches during the 2017/18 season of the English Premier League. We ask whether any forecast revisions the individuals chose to make (or not), before the matches began, improved their likelihood of predicting correct scorelines and results. Against what theory might expect, we show how revisions tended towards significantly worse forecasting performance, suggesting that individuals should have stuck with their initial judgements, or their 'gut instincts'. This result is robust to both differences in the average forecasting ability of individuals and the predictability of matches. We find evidence that this is because revisions to the forecast number of goals scored in football matches are generally excessive, especially when these forecasts were increased rather than decreased. |
| Keywords: | Judgement revision, Prediction making, Forecasting behaviour, Expectations |
| JEL: | C53 C23 D84 |
| Date: | 2019–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2019-05&r=all |
| By: | Sophie Clot (Department of Economics, University of reading); Marina Della Giusta (Department of Economics, University of Reading); Amalia Di Girolamo (Department of Economics, University of Birmingham) |
| Abstract: | We investigate endurance, the capacity to maintain levels of performance through internal rather than external motivation in non-rewarding tasks and over sequences of tasks, through a lab experiment. The significant driver of performance is payment scheme order for women and payment schemes for men. Both women and men respond to social cues, through increased intrinsic motivation (ambition) for women and through extrinsic motivation (competition) for men. We suggest implications for reward schemes in the workplace and for selection into executive positions. |
| Keywords: | gender, intrinsic motivation, endurance, monetary incentives, biased beliefs |
| JEL: | J16 J71 M12 M51 |
| Date: | 2019–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2018-03&r=all |
| By: | Serra-Garcia, Marta; Szech, Nora |
| Abstract: | We investigate the elasticity of moral ignorance with respect to monetary incentives and social norm information. We propose that individuals suffer from higher moral costs when rejecting a certain donation, and thus pay for moral ignorance. Consistent with our model, we find significant willingness to pay for ignorance, which we calibrate against morally neutral benchmark treatments. We show that the demand curve for moral ignorance exhibits a sharp kink, of about 50 percent, when moving from small negative to small positive monetary incentives. By contrast, while social norms strongly favor information acquisition, they have little impact on curbing moral ignorance. |
| Keywords: | Information avoidance,morality,unethical behavior,social norms |
| JEL: | D83 D91 C91 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2019302&r=all |
| By: | Becher, Michael; Brouard, Sylvain |
| Abstract: | While executives in many democracies have constitutional powers to circumvent the majoritarian legislative process to make policy, political scientists know relatively little about whether and when ordinary people hold executives accountable for the process they use. To study this issue beyond the American presidency, we conduct three large survey experiments in France, where the institution of the confidence procedure puts the government in a strong position relative to parliament. Our experiments highlight that public evaluations of the executive reflect a fundamental trade-off between policy and process. If they face significant opposition in the legislative process, executives either have to accept policy failure or risk punishment for the use of procedural force. People dislike both results, and the average popularity gain of using the confidence procedure over not delivering the policy is modest. Moreover, in some contexts executives are strictly better off not legislating rather than applying force. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:tse:iastwp:122915&r=all |
| By: | Johan de Jong (University of Amsterdam); Joep Sonnemans (University of Amsterdam); Jan Tuinstra (University of Amsterdam) |
| Abstract: | Do futures markets have a stabilizing or destabilizing effect on commodity prices? Empirical evidence is inconclusive. We try to resolve this question by means of a learning-to-forecast experiment in which a futures market and a spot market are coupled. The spot market exhibits negative feedback between forecasts and prices, while the futures market is of the positive feedback type, which makes it susceptible to bubbles and crashes. We show that the effect of a futures market on spot price stability changes non-monotonically with the strength of the coupling between the spot and futures markets. This coupling depends positively on the number of speculators on the futures market and negatively on storage costs, speculator risk aversion, and the volatility of futures prices. In the end we observe a stabilizing effect on spot prices for weakly coupled markets and a destabilizing effect when the coupling with the futures market is strong. |
| Keywords: | Price stability, expectations feedback, commodity futures markets, experimental economics |
| JEL: | D84 G13 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20190028&r=all |
| By: | Advani, Arun (University of Warwick); Kitagawa, Toru (Bern University of Applied Sciences); Słoczyński, Tymon (Johannes Kepler University Linz) |
| Abstract: | We consider two recent suggestions for how to perform an empirically motivated Monte Carlo study to help select a treatment effect estimator under unconfoundedness. We show theoretically that neither is likely to be informative except under restrictive conditions that are unlikely to be satisfied in many contexts. To test empirical relevance, we also apply the approaches to a real-world setting where estimator performance is known. Both approaches are worse than random at selecting estimators which minimise absolute bias. They are better when selecting estimators that minimise mean squared error. However, using a simple bootstrap is at least as good and often better. For now researchers would be best advised to use a range of estimators and compare estimates for robustness. |
| Keywords: | Fertility ; Discrimination ; Experimental economics |
| JEL: | C93 J16 J71 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1192&r=all |
| By: | Booth, Alison L; Hayashi, Ryohei; Yamamura, Eiji |
| Abstract: | We investigate the evolution over time of gender differences in single-sex and mixed-sex tournaments, using field data from the Japanese Speedboat Racing Association (JSRA). The JSRA randomly assigned individuals into single-sex and mixed-sex races, enabling us to model learning in different environments. Our dataset comprises over one million person-race observations of men and women making their speedboat racing debut between 1997 and 2012. We find that the average debut-woman's performance (measured by lane-changing and place-in-race) improves faster than debut-men's in single-sex races, but more slowly than debut-men's in mixed-sex races. For the average male racer, the opposite is true. |
| Keywords: | Competition; experience; Gender; mixed-sex; peer effects; random assignment; single-sex; tournaments |
| JEL: | J16 L83 M5 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13681&r=all |
| By: | Raffaello Seri; Samuele Centorrino; Michele Bernasconi |
| Abstract: | The goal of this paper is to provide some statistical tools for nonparametric estimation and inference in psychological and economic experiments. We consider a framework in which a quantity of interest depends on some primitives through an unknown function $f$. An estimator of this unknown function can be obtained from a controlled experiment in which $n$ subjects are gathered, and a vector of stimuli is administered to each subject who provides a set of $T$ responses. We propose to estimate $f$ nonparametrically using the method of sieves. We provide conditions for consistency of this estimator when either $n$ or $T$ or both diverge to infinity, and when the answers of each subject are correlated and this correlation differs across subjects. We further demonstrate that the rate of convergence depends upon the covariance structure of the error term taken across individuals. A convergence rate is also obtained for derivatives. These results allow us to derive the optimal divergence rate of the dimension of the sieve basis with both $n$ and $T$ and thus provide guidance about the optimal balance between the number of subjects and the number of questions in a laboratory experiment. We argue that in general a large value of $n$ is better than a large value of $T$. Conditions for asymptotic normality of linear and nonlinear functionals of the estimated function of interest are derived. These results are further applied to obtain the asymptotic distribution of the Wald test when the number of constraints under the null is finite and when it diverges to infinity along with other asymptotic parameters. Lastly, we investigate the properties of the previous test when the conditional covariance matrix is replaced by a consistent estimator. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1904.11156&r=all |