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on Experimental Economics |
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Issue of 2019‒06‒24
34 papers chosen by |
| By: | Elif Incekara-Hafalir (University of Technology Sydney); Grace HY Lee (Monash University (Malaysia)); Audrey KL Siah (Monash University (Malaysia)); Erte Xiao (Monash University) |
| Abstract: | Achieving success often requires persistent efforts. We study the effectiveness of two reward mechanisms, all-or-nothing and piece-rate, to incentivize full completion of repeated tasks over a period of time. Data from two randomized controlled trials show that the full completion rate under the all-or-nothing mechanism does not differ from that under the regular piece-rate mechanism. However, when given the choice between the all-or-nothing and piece-rate mechanisms in a third (self-select) treatment, a significant number of participants chose the all-or-nothing mechanism despite the risk. The overall full completion rate is significantly higher in the selfselect treatment than the piece-rate treatment. Our results highlight the importance of choice in incentivising persistent efforts. |
| Keywords: | Perseverance; incentives; self-control; field experiments |
| JEL: | C93 D91 |
| Date: | 2019–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:uts:ecowps:2019/06&r=all |
| By: | Heckman, James J. (University of Chicago); Karapakula, Ganesh (University of Chicago) |
| Abstract: | This paper presents the first analysis of the life course outcomes through late midlife (around age 55) for the participants of the iconic Perry Preschool Project, an experimental high-quality preschool program for disadvantaged African-American children in the 1960s. We discuss the design of the experiment, compromises in and adjustments to the randomization protocol, and the extent of knowledge about departures from the initial random assignment. We account for these factors in developing conservative small-sample hypothesis tests that use approximate worst-case (least favorable) randomization null distributions. We examine how our new methods compare with standard inferential methods, which ignore essential features of the experimental setup. Widely used procedures produce misleading inferences about treatment effects. Our design-specific inferential approach can be applied to analyze a variety of compromised social and economic experiments, including those using re-randomization designs. Despite the conservative nature of our statistical tests, we find long-term treatment effects on crime, employment, health, cognitive and non-cognitive skills, and other outcomes of the Perry participants. Treatment effects are especially strong for males. Improvements in childhood home environments and parental attachment appear to be an important source of the long-term benefits of the program. |
| Keywords: | randomized controlled trial, early childhood interventions, life cycle treatment effects, randomization tests, re-randomization, worst-case inference, least favorable null distributions, partial identification, small-sample hypothesis testing |
| JEL: | C1 C4 I21 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12362&r=all |
| By: | Guillermo Alves (CAF, Banco de Desarrollo de América Latina); Pablo Blanchard (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Gabriel Burdín (The University of Leeds); Mariana Chávez (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Andrés Dean (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | A growing body of research has been investigating the role of management practices and managerial behaviour in conventional private firms and public sector organizations. However, little is known about managers’ behavioural profile in noninvestor-owned firms. This paper aims to fill this gap by providing a comprehensive behavioural characterization of managers employed in cooperatives. We gathered incentive-compatible measures of risk preferences, time preferences, reciprocity, altruism, and trust from 196 Uruguayan managers (half of them employed in worker cooperatives) and 92 first-year undergraduate students. To do this, we conducted a high-stakes lab-in-the-field experiment in which participants played a series of online experimental games and made incentivised decisions. The average payoff in the experiment was approximately 2.5 times higher than the average local managerial wage in the private sector. Our key findings are that (1) the fraction of risk loving subjects is lower among co-op managers compared to conventional managers, and (2) co-op managers appear to be more altruistic than their conventional counterparts. Interestingly, we do not observe significant differences between the two groups across other preference domains, such as impatience, trust, and reciprocity. |
| Keywords: | risk-aversion, time preferences, altruism, reciprocity, trust, lab-in-the-field experiment, managers, cooperatives |
| JEL: | C90 D81 J54 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-08-19&r=all |
| By: | James J. Heckman; Ganesh Karapakula |
| Abstract: | This paper presents the first analysis of the life course outcomes through late midlife (around age 55) for the participants of the iconic Perry Preschool Project, an experimental high-quality preschool program for disadvantaged African-American children in the 1960s. We discuss the design of the experiment, compromises in and adjustments to the randomization protocol, and the extent of knowledge about departures from the initial random assignment. We account for these factors in developing conservative small-sample hypothesis tests that use approximate worst-case (least favorable) randomization null distributions. We examine how our new methods compare with standard inferential methods, which ignore essential features of the experimental setup. Widely used procedures produce misleading inferences about treatment effects. Our design-specific inferential approach can be applied to analyze a variety of compromised social and economic experiments, including those using re-randomization designs. Despite the conservative nature of our statistical tests, we find long-term treatment effects on crime, employment, health, cognitive and non-cognitive skills, and other outcomes of the Perry participants. Treatment effects are especially strong for males. Improvements in childhood home environments and parental attachment appear to be an important source of the long-term benefits of the program. |
| JEL: | C01 C4 I21 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25888&r=all |
| By: | Jonas Hjort; Diana Moreira; Gautam Rao; Juan Francisco Santini |
| Abstract: | This paper investigates if research findings change political leaders’ beliefs and cause policy change. Collaborating with the National Confederation of Municipalities in Brazil, we work with 2,150 municipalities and the mayors who control their policies. We use experiments to measure mayors’ demand for research information and their response to learning research findings. In one experiment, we find that mayors and other municipal officials are willing to pay to learn the results of impact evaluations, and update their beliefs when informed of the findings. They value larger-sample studies more, while not distinguishing on average between studies conducted in rich and poor countries. In a second experiment, we find that informing mayors about research on a simple and effective policy (reminder letters for taxpayers) increases the probability that their municipality implements the policy by 10 percentage points. In sum, we provide direct evidence that providing research information to political leaders can lead to policy change. Information frictions may thus help explain failures to adopt effective policies. |
| JEL: | A11 D03 D04 D8 D9 H11 O2 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25941&r=all |
| By: | Miura, Takahiro (Kansai University); Inukai, Kengo (Meiji Gakuin University); Sasaki, Masaru (Osaka University) |
| Abstract: | Our paper conducts laboratory experiments with the sequential search model to test whether participants engage in search activities in line with theoretical predictions derived from the expected utility model or the reference-dependent model, without assuming any specific formulation rule for a reference point. Our experimental results showed that the participants' search behavior did not align with the reference-dependent model. In addition, the correlation between individual preferences and search behavior reinforced our experimental results; that is, loss aversions were not significantly correlated with search behavior. |
| Keywords: | risk preference, loss aversion, sequential search |
| JEL: | D81 D83 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12378&r=all |
| By: | Isaac Mbiti; Mauricio Romero; Youdi Schipper |
| Abstract: | We use a field experiment in Tanzania to compare the effectiveness on learning of two teacher performance pay systems. The first is a Pay for Percentile system (a rank-order tournament). The second rewards teachers based on multiple proficiency thresholds. Pay for Percentile can (under certain conditions) induce optimal effort among teachers, but our threshold system is easier to implement and provides teachers with clearer goals and targets. Both systems improved student test scores. However, the multiple-thresholds system was more effective in boosting student learning and is less costly. |
| JEL: | C93 H52 I21 M52 O15 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25903&r=all |
| By: | Ariane Lambert-Mogiliansky (PJSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris, PSE - Paris School of Economics); André Calmettes (SSSUP - Scuola Universitaria Superiore Sant'Anna - Istituto di Tecnologie della Comunicazione, dell'Informazione e della Percezione (Istituto TeCIP)) |
| Abstract: | Quantum-like decision theory is by now a theoretically well-developed field (see e.g., Danilov et al. 2018A). We here test the predictions of an application of this approach to persuasion. One remarkable result entails that in contrast to Bayesian persuasion, distraction rather than relevant information has a powerful potential to influence decision-making. We first provide a quantum decision model for a choice between two uncertain alternatives. We derive the impact of persuasion by means of distractive questions and contrast them with the predictions of the Bayesian model. Next, we conduct an experiment where respondents choose between supporting either one of two projects to save endangered species. We test the impact of persuasion in the form of questions related to different aspects of the uncertain value of the two projects. The experiment involves 900 respondents divided into three groups: a control group, a first treatment group and the distraction treatment group. Our main result is that, in accordance with the predictions of quantum persuasion but in violation with the Bayesian model, distraction significantly affects decision-making. Population variables play no role. Some significant variations between subgroups are exhibited and discussed. The results of the experiment provide support for the hypothesis that the manipulability of people's decision-making can be explained by the quantum indeterminacy of their subjective representations of reality. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-02146862&r=all |
| By: | Balafoutas, Loukas (University of Innsbruck); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | Tournament incentives prevail in labor markets. Yet, the number of tournament winners is often unclear to competitors. While it is hard to measure how this uncertainty affects work performance and willingness to compete in the field, it can be studied in a controlled lab experiment. We present a novel experiment where subjects can compete against each other, but the number of winners is either uncertain (but with known probabilities) or ambiguous (with unknown probabilities for different numbers of winners). We compare these two conditions to a control treatment with a known number of winners. We find that ambiguity induces a significant increase in the performance of men who choose to compete, while we observe no change for women. Men also increase their willingness to enter competition in the presence of ambiguity. Overall, both effects contribute to men winning the tournament significantly more often than women under uncertainty and ambiguity. These findings suggest that management should make tournament conditions transparent and information available in order to prevent gender disparities from increasing under uncertainty and ambiguity. |
| Keywords: | gender, competition, uncertainty, ambiguity, experiment |
| JEL: | C91 D03 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12348&r=all |
| By: | Gary Charness; Francesco Feri; Miguel A. Meléndez-Jiménez; Matthias Sutter |
| Abstract: | The effectiveness of social interaction depends strongly on an ability to coordinate actions efficiently. In large networks, such coordination may be very difficult to achieve and may depend on the communication technology and the network structure. We examine how pre-play communication and clustering within networks affect coordination in a challenging experimental game on eight-person networks. Free-form chat is enormously effective in achieving the non-equilibrium efficient outcome in our game, but restricted communication (where subjects can only indicate their intended action) is almost entirely ineffective. We can rationalize this result with a novel model about the credibility of cheap-talk messages. This credibility is much larger with freeform message communication than with restricted communication. We are the first to model this credibility and show, both theoretically and experimentally, an interaction effect of network structure and communication technologies. We also provide a model of message diffusion, which indeed predicts that diffusion will be more rapid without clustering and is consistent with our data. |
| Keywords: | networks, clustering, communication, credibility, cheap talk, experiment |
| JEL: | C71 C91 D03 D85 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7659&r=all |
| By: | Qin, Botao |
| Abstract: | This paper explores whether a truth-telling promise can work to reduce the hypothetical bias in preference elicitation. Using an induced value experiment in China with a random nthprice auction, the author finds: 1) Hypothetical bias exists in a random nth-price auction with induced values and making a truth-telling promise can reduce the hypothetical bias. 2) All treatments are demand-revealing except for the hypothetical baseline. |
| Keywords: | hypothetical bias,oath,random nth-price auction,induced value experiment |
| JEL: | C90 D44 Q51 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201938&r=all |
| By: | Näslund-Hadley, Emma; Bando, Rosangela; Gertler, Paul |
| Abstract: | We analyze evidence from 10 at-scale field experiments in four countries on the effect of inquiry- and problem-based pedagogy (IPP) on students’ math and science test scores. IPP creates active problem solving opportunities in settings that derive meaning to the child. Students learn by collaboratively solving real life authentic problems, developing explanations, and communicating ideas. We find that IPP increased math test scores by 0.18 standard deviations and science test scores by 0.16 standard deviations after 7 months. Moreover, the results are robust across a wide set of geographic, socio-economic, and cultural, age/grade, and teacher background contexts. |
| JEL: | I25 I38 C93 O15 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:47&r=all |
| By: | Matthias Weber (University of St. Gallen); John Duffy (UC Irvine); Arthur Schram (University of Amsterdam) |
| Abstract: | Credit default swaps (CDS) played an important role in the financial crisis of 2008. While CDS can be used to hedge risks, they can also be used for speculative purposes (as occurred during the financial crisis) and regulations have been proposed to limit such speculative use. Here, we provide the first controlled experiment analyzing the pricing of credit default swaps in a bond market subject to default risk. We further use the laboratory as a testbed to analyze CDS regulation. Our results show that the regulation achieves the goal of increasing the use of CDS for hedging purposes while reducing the use of CDS for speculation. This success does not come at the expense of lower bond IPO revenues and does not negatively affect CDS prices or bond prices in the secondary market. |
| Keywords: | Experimental finance, asset market experiment, CDS, financial regulation, behavioral finance |
| JEL: | D53 C92 |
| Date: | 2019–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20190039&r=all |
| By: | Afridi, Farzana (Indian Statistical Institute, Delhi); Dhillon, Amrita (King’s College London); Li, Sherry Xin (University of Arkansas); Sharma, Swati (Indian Statistical Institute, Delhi) |
| Abstract: | Production processes are often organized in teams, yet there is limited evidence on whether and how social connections and financial incentives affect productivity in tasks that require coordination among workers. We simulate assembly line production in a lab-in-the-field experiment in which workers exert real effort in a minimum-effort game in teams whose members are either socially connected or unconnected and are paid according to the group output. We find that group output increases by 18% and coordination improves by 30-39% when workers are socially connected with their co-workers. Connected groups also coordinate better when we introduce a lump sum bonus, suggesting that financial and social incentives can be complementary in this setting. These findings can plausibly be explained by trust between co-workers in socially connected teams. |
| Keywords: | caste-based networks, social incentives, financial incentives, minimum effort game, coordination, trust JEL Classification: C93, D20, D22, D24, J33 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:417&r=all |
| By: | van de Ven, Niels (Tilburg University, School of Economics and Management); Blanken, Irene (Tilburg University, School of Economics and Management); Zeelenberg, Marcel (Tilburg University, School of Economics and Management) |
| Abstract: | Building on theories of motivated reasoning and reason-based choice, we propose that people interpret reasons for indulgence in a different light depending on how tempting behavior is. Experiments 1a and 1b find that the more tempting the behavior is, the more people think a given reason ("it is a Tuesday") is an acceptable reason to indulge. Furthermore, we find that both recalled prior good behavior (Experiment 2a) and recalled prior frustrations (Experiment 2b) are interpreted as good reasons to indulge when confronted with tempting behavior. Finally, Experiment 3 replicates that people see a prior good deed (taking part in the studies) as a better reason for indulgence when the indulgence is more tempting, which makes them more likely to actually choose an unhealthy food option. This process of temptation-based reasoning sheds new light on existing theories on how people deal with temptations, notably those on self-licensing, comfort buying, and comfort eating. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:2d4ef71e-a23b-47ee-828d-9c3ba1053b66&r=all |
| By: | Jordi Brandts (Institute for Economic Analysis, CSIC, Barcelona); Klarita Gërxhani (European University Institute); Arthur Schram (University of Amsterdam) |
| Abstract: | Competition involves two dimensions, rivalry for resources and social-status ranking. In our experiment we exclude the first dimension and investigate gender differences in the preference for status ranking. Participants perform a task under non-rivalry incentives. Before doing so, individuals indicate whether they prefer to do the task in an environment with social-status ranking or one without, knowing whether or not the choice will be imposed upon the whole group (as opposed to being personal) and whether the ranking will be done by a man or a woman. We find no gender difference in mean status-ranking aversion when the ranking is personal. When the ranking is imposed, there are still no gender differences in the preferences for social ranking when the ranker is a women, and women are not affected by the ranker’s gender. With a male ranker, however, men have a much stronger desire to be ranked than with a female ranker. |
| Keywords: | status ranking, competition, gender |
| JEL: | C91 J16 |
| Date: | 2019–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20190041&r=all |
| By: | Jan-Emmanuel De Neve; Clement Imbert; Maarten Luts; Johannes Spinnewijn; Teodora Tsankova |
| Abstract: | We study the impact of deterrence, tax morale, and simplifying information on tax compliance. We ran _ve experiments spanning the tax process which varied the communication of the tax administration with all income taxpayers in Belgium. A consistent picture emerges across experiments: (i) simplifying communication increases compliance, (ii) deterrence messages have an additional positive effect, (iii) invoking tax morale is not effective. Even tax morale messages that improve knowledge and appreciation of public services do not raise compliance. In fact, heterogeneity analysis with causal forests shows that tax morale treatments backfire for most taxpayers. In contrast, simplification has large positive effects on compliance, which diminish over time due to follow-up enforcement. A discontinuity in enforcement intensity, combined with the experimental variation, allows us to compare simplification with standard enforcement measures. Simplification is far more cost-effective, allowing for substantial savings on enforcement costs, and also improves compliance in the next tax cycle. |
| Keywords: | tax compliance, field experiments, simplification, enforcement |
| JEL: | C93 D91 H20 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1621&r=all |
| By: | Fiala, Nathan; Premand, Patrick |
| Abstract: | Corruption and mismanagement of public resources can affect the quality of government services and undermine growth. Can citizens in poor communities be empowered to demand better-quality public investments? We look at whether providing social accountability training and information on project performance can lead to improvements in local development projects. The program we study is unique in its size and integration in a national program. We find that offering communities a combination of training and information on project quality leads to significant improvements in household welfare. However, providing either social accountability training or project quality information by itself has no welfare effect. These results are concentrated in areas that are reported by local officials as more corrupt or mismanaged, suggesting local agents have significant information about where corruption and mismanagement is worse. We show evidence that the impacts come in part from community members increasing their monitoring of local projects, making more complaints to local and central officials and increasing cooperation. We also find modest improvements in people’s trust in the central government. The results suggest that government-led, large-scale social accountability programs can strengthen communities’ ability to address corruption and mismanagement as well as improve services. |
| Keywords: | Agricultural and Food Policy, Public Economics |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ucozwp:290137&r=all |
| By: | Benjamin M. Marx; Lesley J. Turner |
| Abstract: | What influences college student borrowing? In a field experiment with a large community college, we send emails about federal student loans to students who have received information about financial aid but have not made a borrowing decision. A treatment reminding students that they need not borrow the maximum amount of available loan aid does not affect borrowing. Treatments referencing amounts borrowed by recent graduates shift students from borrowing the maximum amount to not borrowing. Consistent with the hypothesis that students experience choice overload when observing multiple dollar amounts, the response is largest among low-performing students and arises from inaction. |
| JEL: | D12 D14 D91 H31 I22 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25905&r=all |
| By: | Bensch, Gunther; Peters, Jörg |
| Abstract: | Free technology distribution can be an effective development policy instrument if market-driven adoption is socially inefficient and hampered by affordability constraints. Yet, policy makers often oppose free distribution, arguing that reference dependence lowers the willingness to pay (WTP) and thus market potentials in the long run. For improved cookstoves, this paper studies the WTP six years after a randomized one-time free distribution in 2009. We demonstrate that the cookstoves were intensely used by the treatment group households in the years after randomization until they reached their designated lifetime. Using a real-purchase offer, we find that both treatment and control households reveal a remarkably high WTP in 2015. The estimated confidence interval suggests that we can exclude a substantial negative effect on the treatment group. The policy implication is that one-time free distribution does not necessarily undermine future market establishment and thus can be an effective policy instrument if rapid dissemination is the objective. |
| Keywords: | energy access, real-purchase offer, reference dependence, supply chains, technology adoption, willingness to pay |
| JEL: | D03 D12 O12 O13 Q41 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94211&r=all |
| By: | David Bruner; Caleb Cox; David M. McEvoy; Brock Stoddard |
| Abstract: | We examine motives for over-bidding in contests using both individual and team contests. In team contests, subject pairs send suggested bids and messages to their teammates. Content analysis of the messages provides insight into an individual’s bidding motives. In addition, we elicit measures of preferences, beliefs, and impulsiveness. We ?nd that beliefs about others’ bids and messages that emphasize winning (i.e., utility of winning) are the most robust predictors of over-bidding. Our results suggest that analyzing communication provides a rich window into an individual’s thought process when making decisions, and can complement insights from elicited values from common decision tasks. Key Words: Tullock contest, lottery contest, winner-take-all, two-headed contest, team contest, strategic thinking, communication, overbidding |
| JEL: | C92 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:19-08&r=all |
| By: | Alessandro, Martín; Cardinale Lagomarsino, Bruno; Scartascini, Carlos; Torrealday, Jerónimo |
| Abstract: | Does providing information improve citizens’ perception about government transparency? Does all information matter the same for shaping perceptions about the government? This paper addresses these questions in the context of an online randomized survey experiment conducted in Argentina. Results show that providing information to citizens matters for shaping perceptions about transparency, and the content of the information matters for affecting the evaluation people make about the government. Those who received a “positive” treatment (showing that the government was over-performing on its promises) increased their trust in the government more than those who received a “negative” treatment (showing that the government was underperforming). The evidence highlights that the channel between transparency and trust may be mediated by the performance of the government. |
| JEL: | C83 H11 D83 H40 C38 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:9496&r=all |
| By: | Viswanathan, Madhu; Li, Xiaolin; John, George; Narasimhan, Om |
| Abstract: | The pervasive use of merchandise (i.e., non-cash) incentives in sales compensation plans is an empirical and theoretical puzzle given the supposed superiority of cash incentives in the standard theory (i.e., principal-agent models) and the scant, and contradictory empirical evidence. We conducted a large scale field intervention that switched 580 salespeople at a large frozen food manufacturer away from their cash plus “ merchandise points” bonus to a commensurate all-cash bonus. After controlling for salesperson, seasonality, year, and target effects, we estimated that sales, on average, dropped by 4.36%. Further, we estimated individual-level sales changes and effort changes to validate our incentive-effort-sales causal chain. Our results show that the top salespeople experienced the largest drops. A post-intervention survey of social and individual difference variables reveals that salespeople from households with more discretionary financial resources, and those who think more abstractly about the uses of cash income exhibited smaller reductions in effort and sales. While the absence of a control group prevents us from making strong causal inferences, this set of results nevertheless provides descriptive and suggestive evidence for separate mental accounts as the most promising explanation for the greater utility provided by merchandise incentives. |
| Keywords: | Incentives; non-monetary compensation; field experiments; salesforce; mental accounting |
| JEL: | J50 |
| Date: | 2018–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:87158&r=all |
| By: | Prada, María Fernanda; Rucci, Graciana; Urzúa, Sergio |
| Abstract: | Understanding the causal association between skills and productivity is essential for designing effective training programs. This paper evaluates an intervention aimed at boosting leadership and communication skills among store managers and sales associates from a large Latin American retailer. The empirical analysis is carried out using longitudinal information gathered by the firm and through two skills surveys. The Identification exploits the experimental design in the context of a difference-in-difference strategy. The results indicate large positive effects of the training program on store-level productivity. We further link these Findings to individual-level performance measures. In particular, we document positive effects on total sales and numbers of transactions for all workers. Regarding the mechanisms, we provide evidence suggesting that the intervention was more effective in boosting leadership skills than communication skills. Spillovers from trained managers to untrained sales representatives also contribute to the main effects. Our findings point towards the possibility of increasing productivity through training programs targeting critical skills. |
| JEL: | J24 C93 O15 M53 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:9647&r=all |
| By: | Parlasca, Martin C.; Hermann, Daniel; Mubhoff, Oliver |
| Abstract: | Trust is an essential part of economic interactions. Nearly all activities involving the exchange of goods or services require at least some degree of mutual confidence. Until today some of the lowest levels of social trust are found in sub-Saharan Africa, especially among pastoral communities. However, there is still high uncertainty about extend and drivers of trust in pastoral populations. In this study we analyze trust of 402 semi-nomadic pastoralists living in Turkana County, Northern Kenya using both incentivized experiments and survey trust questions. In particular, we measure the degree in which trust diminishes as interactive social distance increases by playing a trust game and randomly pairing respondents with a fellow villager, a pastoralist from a neighboring village, or a city dweller from the county’s capital. We find that trust towards fellow villagers is statistically significantly larger than trust towards city dwellers from the county capital. Survey responses also indicate that pastoralists place more trust in their fellow villagers than in pastoralists from neighboring villages, while behavior in the experiment does not show any statistically significant differences between these two groups. To overcome the trust barriers identified in this study, we suggest policy makers and practitioners that offer extension services for pastoralists to involve locally respected and trusted agents. |
| Keywords: | Public Economics |
| Date: | 2019–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc19:289669&r=all |
| By: | Banuri, Sheheryar; Keefer, Philip; Walque, Damien de |
| Abstract: | A booming literature has argued that mission-based motives are a central feature of mission-oriented labor markets. This paper shifts the focus to task-based motivation and finds that it yields significantly more effort than mission-based motivation. Moreover, in the presence of significant task motivation, mission motivation has no additional effect on effort. The evidence emerges from experiments with nearly 250 medical and nursing students in Burkina Faso. The students exert effort in three tasks, from boring to interesting. In addition, for half of the students, mission motivation is present: their effort on the task generates benefits for a charity. Two strong results emerge. First, task motivation has an economically important effect on effort. Second, mission motivation increases effort, but only for mundane tasks and not when the task is interesting. Moreover, even for mundane tasks, the effects of mission motivation appear to be less than those of task motivation. |
| JEL: | H83 J45 C91 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:63&r=all |
| By: | Martinez, Sebastian; Bernal, Pedro |
| Abstract: | Maintaining high standards of care from doctors, nurses and other health professionals is of critical importance for an effective and efficient health system. Yet deficient levels of health worker performance, including low effort, absenteeism, and lack of compliance with clinical guidelines, have been documented across numerous countries and contexts. In response, various pay-for-performance interventions that reward providers based on measures of quality of care and health outcomes have been tested, with mixed results. This study experimentally evaluates the effects of team in-kind incentives on health worker performance in El Salvador. Thirty-eight out of 75 community health teams were randomly assigned to receive in-kind incentives linked to performance over a 12-month period. All 75 teams received monitoring, performance feedback and recognition for their achievements, allowing us to isolate the impacts of the incentive. While both treatment and control groups exhibit improvements in performance measures over time, the in-kind incentives generated significant improvements in community outreach, quality of care, timeliness of care, and utilization of services after 12 months. Contrary to conventional knowledge, gains are largest for health teams at the bottom and top of the baseline performance distribution. These results suggest that even small in-kind incentives can be a powerful tool to improve health worker performance and may be a viable alternative to monetary incentives in certain contexts. |
| JEL: | I12 C93 I18 I15 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:45&r=all |
| By: | Julien Grenet (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); Yinghua He (Rice University [Houston], TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales); Dorothea Kübler (WZB - Social Science Research Center Berlin - Social Science Research Center Berlin, Technical University Berlin) |
| Abstract: | The matching literature commonly assumes that every agent's preferences are time-invariant and known to herself at the outset. Consequently, market centralization is preferred. We find counterevidence from a quasi-experiment in Germany's university admissions---a clearinghouse that implements the early stages of the deferred-acceptance mechanism in real time, resembling a decentralized market with continuous offers, rejections, and acceptances. We show that early offers are accepted more often than later ones, despite not being more desirable. These results and survey evidence imply that it is costly for students to learn about universities. We propose a hybrid, welfare-improving mechanism that balances centralization and decentralization. |
| Keywords: | Centralized Matching Market,Gale-Shapley Deferred Acceptance,Mechanism,University Admissions,Early Offers,Information Acquisition |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-02146792&r=all |
| By: | Douadia Bougherara (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Sandrine Costa (UMR MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Gilles Grolleau (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, UMR LAMETA - Montpellier SupAgro - Institut National d'Etudes Supérieures Agronomiques de Montpellier); Lisette Ibanez (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - INRA Montpellier - Institut national de la recherche agronomique [Montpellier] - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier) |
| Abstract: | We examine conditions for which positional preferences for voluntary contribution to a public good can be welfare enhancing in a one-shot public good game, where individuals may also enjoy a return from their contribution ranking. We show that positional preferences are welfare-increasing only under certain conditions. We find that when agents' positional preferences are homogeneous, they overinvest in the public good compared to equilibrium with no positional preferences, resulting in a zero-sum positional race with a higher public good provision. When agents have heterogeneous positional preferences, the overall impact on social welfare is positive when endowments are homogeneous. |
| Keywords: | behavioral economics,public goods,économie comportementale,bien public,préférence |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02154557&r=all |
| By: | Jan-Emmanuel De Neve; Daisy Fancourt; Christian Krekel; Richard Layard |
| Abstract: | Although correlates of mental wellbeing have been extensively studied, little is known about how to effectively raise mental wellbeing in local communities. We conduct a randomised controlled trial of the "Exploring What Matters" course, a scalable social-psychological intervention aimed at raising general adult population mental wellbeing and pro-sociality. The course is run by volunteers in their local communities, and is currently conducted in more than nineteen countries around the world. We find that it has strong positive causal effects on participants' self-reported subjective wellbeing and pro-social behaviour while reducing measures of mental ill health. Impacts seem to be sustained two months post-treatment. Biomarkers are noisy and mostly insignificant. However, there is some evidence that, for certain individuals, effects on self-reported outcomes may be accompanied by positive changes in biomarker outcomes, in particular reduced levels of pro-inflammatory cytokine IL-6. |
| Keywords: | wellbeing, pro-social behaviour, communities, intervention, RCT |
| JEL: | C93 I12 I31 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1630&r=all |
| By: | Heckman, James J. (University of Chicago); Karapakula, Ganesh (University of Chicago) |
| Abstract: | This paper examines the impact of the iconic Perry Preschool Project on the children and siblings of the original participants. The children of treated participants have fewer school suspensions, higher levels of education and employment, and lower levels of participation in crime, compared with the children of untreated participants. Impacts are especially pronounced for the children of male participants. These treatment effects are associated with improved childhood home environments. The intergenerational effects arise despite the fact that families of treated subjects live in similar or worse neighborhoods than the control families. We also find substantial positive effects of the Perry program on the siblings of participants who did not directly participate in the program, especially for male siblings. |
| Keywords: | externalities, early childhood interventions, spillover effects, intergenerational treatment effects, intragenerational treatment effects |
| JEL: | C4 I21 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12363&r=all |
| By: | Van Belle, Eva; Caers, Ralf; Cuypers, Laure; De Couck, Marijke; Neyt, Brecht; Van Borm, Hannah; Baert, Stijn |
| Abstract: | Due to the prevalence and important consequences of student work, the topic has seen an increased interest in the literature. However, to date the focus has been solely on measuring the effect of student employment on later labour market outcomes, relying on signalling theory to explain the observed effects. In the current study, we go beyond measuring the effect of student work and we examine for the first time what exactly is being signalled by student employment. We do this by means of a vignette experiment in which we ask 242 human resource professionals to evaluate a set of five fictitious profiles. Whereas all types of student work signal a better work attitude, a larger social network, a greater sense of responsibility, an increased motivation, and more maturity, only student employment in line with a job candidate’s field of study is a signal of increased human capital and increased trainability. |
| Keywords: | Student employment,signalling,hiring chances,vignette study |
| JEL: | C91 I21 J22 J24 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:356&r=all |
| By: | Santiago Burone (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Martín Leites (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | The aim of this paper is to contribute evidence on the empirical relevance of two notions of inequality aversion that has been explored by the Economic literature: self-centered and nonself-centered inequality aversion. We used a more flexible model and designed an experimental survey which allowed us to distinguish these two notions of aversion to inequality. The strategy was carried out on a sample of first-year University students (Facultad de Ciencias Económicas y de Administration, Uruguay). To the best of our knowledge, there are no previous papers that have jointly addressed both of those notions of inequality aversion and contributed evidence on the empirical relevance of that distinction. The present paper contributes original evidence for a developing country, which confirms the relevance of both notions of aversion to inequality. Most participants present non-self-centered inequality aversion, and a minority appear to be inequality-lovers. For most individuals, the magnitude associated with this notion of aversion to inequality is very sensitive to the individual's position in the income distribution. The selfcentered notion summarizes various effects, which is manifested in the fact that the magnitude of the parameters is more heterogeneous. In a minority, the effect on non-self-centered aversion dominates, with individuals being more willing to pay to reduce inequality. Finally, not considering both notions together can induce a bias in the measurement of inequality aversion. |
| Keywords: | Self-centered inequality aversion, or non-self-centered inequality aversion, relative income, social preferences, experimental survey |
| JEL: | D63 D64 C91 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-06-19&r=all |
| By: | Harris, Mark; Novarese, Marco; Wilson, Chris |
| Abstract: | This paper uses a natural field experiment to better understand why individuals tend to select items at the top of lists. After randomizing the order in which new economics research papers are presented in email alerts and measuring the subsequent downloads, we provide robust evidence of position effects. Moreover, our novel user-level data offers two key findings: i) most users exhibit both top and bottom position effects, and ii) distinct groups of users consider the listed items in different orders. These results allow us to conclude that the causes of top position effects are complex and heterogeneous across individuals, but are most consistent with a version of choice fatigue where users consider the listed items in a non-monotonic order. |
| Keywords: | Position Effects; Order Effects; Choice Fatigue; Prominence; Lists |
| JEL: | D01 D83 L00 |
| Date: | 2019–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94072&r=all |