nep-exp New Economics Papers
on Experimental Economics
Issue of 2019‒08‒12
thirty-two papers chosen by

  1. Competition with Indivisibilities and Few Traders By Cesar Martinelli; Jianxin Wang; Weiwei Zheng
  2. Crime-related Exposure to Violence and Social Preferences: Experimental Evidence from Bogotá By Francesco Bogliacino; Camilo Gómez; Gianluca Grimalda
  3. Voluntary Disclosure of Information and Cooperation in Simultaneous-Move Economic Interactions By Kenju Kamei
  4. Trust and reciprocity in youth labor markets. An experimental approach to analyzing the impact of labour market experiences on young people By Niall O'Higgins; Marco Stimolo
  5. Experimental Asset Markets with An Indefinite Horizon By John Duffy; Janet Hua Jiang; Huan Xie
  6. Managerial Payoff and Gift-Exchange in the Field By Englmaier, Florian; Leider, Steve
  7. Strategic ignorance in repeated prisoners’ dilemma experiments and its effects on the dynamics of voluntary cooperation By Lisa Bruttel; Simon Felgendreher; Werner Güth; Ralph Hertwig
  8. Experimental Auctions versus Real Choice Experiment: An empirical application using homegrown and induced value experiments By Lagoudakis, Angelos; Caputo, Vincenzina; Shupp, Robert S.
  9. Enumerating Rights: More is Not Always Better By Ball, Sheryl; Dave, Chetan; Dodds, Stefan
  10. Are Long-Horizon Expectations (De-)Stabilizing? Theory and Experiments By George Evans; Cars Hommes; Bruce McGough; Isabelle Salle
  11. Information Redundancy Neglect versus Overconfidence: A Social Learning Experiment By Marco Angrisani; Antonio Guarino; Philippe Jehiel; Toru Kitagawa
  12. Investment behaviour when agents f in?uence on the success probability is hard to detect: An experiment By Alistair Munro; Ben D fExelle; Arjan Verschoor
  13. The Effect of Social Information in the Dictator Game with a Taking Option By Tanya O’Garra; Valerio Capraro; Praveen Kujal
  14. Changing Preferences: An Experiment and Estimation of Market-Incentive E§ects on Altruism By Undral Byambadalai; Ching-to Albert Ma; Daniel Wiesen
  15. Labor supply, taxation and the use of the tax revenues: A real-effort experiment in Canada, France, and Germany By Keser, Claudia; Masclet, David; Montmarquette, Claude
  16. Beauty and Job Accessibility: New Evidence from a Field Experiment By Deng, Weiguang; Li, Dayang; Zhou, Dong
  17. The differential effects of Jesus and God on distributive behaviour By Tom Lane
  18. Complementary Consumer Responsibility - The Limits to Immoral Delegation in Markets By Mario Scharfbillig
  19. Incentivized Peer Referrals for Tuberculosis Screening: Evidence from India By J. Goldberg; M. Macis; P. Chintagunta
  20. Paying for Kidneys? A Randomized Survey and Choice Experiment By J. J. Elías; N. Lacetera; M. Macis
  21. Strength of preference and decision making under risk By Carlos Alós-Ferrer; Michele Garagnani
  22. Can gender quotas prevent risky choice shifts? The effect of gender composition on group decisions under risk By Lima de Miranda, Katharina; Detlefsen, Lena; Schmidt, Ulrich
  23. Multiple behavioral rules in Cournot oligopolies By Carlos Alós-Ferrer; Alexander Ritschel
  24. Risk and refugee migration By Géraldine Bocqueho; Marc Deschamps; Jenny Helstroffer; Julien Jacob; Majlinda Joxhe
  25. Why do we lie? Distinguishing between competing lying theories? By Paul Clist; Ying-yi Hong
  26. Effectiveness of Scaling up Bio-fortified Crops: Evidence from a Field Experiment in Rwanda By Maredia, Mywish K.; Porter, Maria; Jin, Songqing; Farris, Jarrad G.
  27. Do agricultural interventions influence network formation? Insights from a randomized experiment in Kenya By Jäckering, Lisa; Gödecke, Theda; Wollni, Meike
  28. Does stakeholder engagement improve groundwater management? A lab experiment analysis By De Figueiredo Silva, Felipe; Perrin, Richard K.; Fulginiti, Lilyan E.
  29. The influence of wine awards and sustainability labels on consumers’ WTP: An experimental study at the example of German “Riesling” By Klink-Lehmann, Jeanette Leila; Yeh, Ching-Hua; Hartmann, Monika
  30. Do early-ending conditional cash transfer programs crowd out school enrollment? By Martin Wiegand
  31. Cooperation and the provision of local public goods in remote rural communities By Ward, Patrick S.; Alvi, Muzna F.; Makhija, Simrin; Spielman, David J.
  32. Interactive social distance and trust: Different measuring approaches among semi-nomadic pastoralists in Northern Kenya By Parlasca, Martin C.; Hermann, Daniel; Musshoff, Oliver

  1. By: Cesar Martinelli (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Jianxin Wang (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Weiwei Zheng (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: We study minimal conditions for competitive behavior with few agents. We adapt the strategic market game of Dubey (1982), Simon (1984) and Benassy (1986) to an indivisible good environment. We show that all Nash equilibrium outcomes with active trading are competitive if and only if there are at least two intramarginal traders in each side of the market. Unlike previous formulations, this condition can be verified directly by checking the set of competitive equilibria. In laboratory experiments, the condition we provide turns out to be enough to induce competitive results. Moreover, the performance of a sealed-bid auction following the rules of the strategic market game approaches that of its dynamic counterpart, the double auction, over time.
    Date: 2019–07
  2. By: Francesco Bogliacino; Camilo Gómez; Gianluca Grimalda
    Abstract: In this paper, we study the relationship between exposure to violence (ETV) and pro-social behavior using two artefactual field experiments in Bogotá, Colombia. We focus on two dimensions of ETV: trauma and negative economic shock. In our first experiment, after manipulating a recall of ETV, we collate a number of decisions from a trust game and a dictator game. Using a design inspired by Falk and Zehnder (2013), we compare the measures of in-group bias at the district level. In our companion experiment, we use a similar design, which includes a Prisoners’ Dilemma, and we introduce a 2-by-2 design where we attempt to disentangle the effect of trauma and a negative wealth shock. Our results suggest that there is a positive relationship between ETV and pro-social behavior, driven by both trauma and shock. Finally, there is evidence of in-group bias at the district level in Bogotá, but this is task specific. When we explore possible mediating variables proposed by the literature, we find that only beliefs seem to be affected, however the result is not robust. On the other hand, evidence is consistent with a generalized explanation based on either the dual system theory or the role of negative emotions. *** En este artículo estudiamos la relación entre exposición a violencia (ETV) y comportamiento prosocial usando dos experimentos de campo artefactuales en Bogotá (Colombia). Nos centramos en dos dimensiones de ETV: trauma y choque económico negativo. En el primer experimento, recolectamos una serie de decisiones a partir de un juego de confianza y un juego del dictador, después de manipular un recuerdo de exposición a violencia. Usando un diseño inspirado por Falk y Zehnder (2013), recolectamos medidas de sesgo intra-grupo a nivel de localidad. En el experimento complementario usamos un diseño similar, pero incluimos un dilema del prisionero y un diseño 2x2 donde intentamos separar los efectos del trauma y de un choque negativo de riqueza. Nuestros resultados sugieren una relación positiva entre ETV y comportamiento prosocial, guiado tanto por el trauma como por el shock. Finalmente, hay evidencia de un sesgo intragrupo a nivel de localidad en Bogotá, sin embargo, es específico a la tarea. Cuando exploramos posibles variables mediadoras propuestas por la literatura, encontramos que solo las creencias parecen ser afectadas, pero este resultado no es robusto, mientras que la evidencia es consistente con una explicación generalizada basada en la teoría del sistema dual o en el papel de las emociones negativas.
    Keywords: discrimination; trust; trustworthiness; cooperation; violence; third party punishment, social heuristics hypothesis
    JEL: D63 D64 D91 C91
    Date: 2019–07–23
  3. By: Kenju Kamei (Durham University Business School)
    Abstract: This paper studies individuals’ voluntary disclosure of past behaviors and its effects in simultaneous-move dilemma interactions. Using a laboratory experiment with a finitely repeated two-player public goods game, I found that voluntary information disclosure strengthens cooperation under certain conditions, although a non-negligible fraction of individuals do not disclose information about the past and proceed to behave opportunistically. On closer inspection, the data revealed that the material incentives of disclosure acts differ according to the matching protocol. Specifically, disclosers receive higher payoffs than non-disclosers if the disclosers are assured to be matched with like-minded disclosers; conversely, disclosers are vulnerable to exploitation by others under random matching. A direct consequence of the presence of non-disclosers (and the required payment in costly disclosure treatments) is that individuals can achieve higher efficiency where disclosure is mandatory rather than voluntary. This result suggests that the elimination of an option to hide past behaviors helps enhance economic efficiency if individuals’ opportunistic behaviors are liable to precipitate a collapse in the community norms.
    Keywords: experiment, information disclosure, cooperation, dilemma, repeated games, reputation
    JEL: C92 D74 D83
    Date: 2019–04
  4. By: Niall O'Higgins; Marco Stimolo
    Abstract: In this experiment, we study whether individuals' labour market state (i.e. employed, student or NEET) affect their trusting and trustworthy behavior. To identify both the effect of labour market state and the effect of information on others' labour market state over one's behavior, we implement an experiment with two one-shot trust games with random and anonymous matching: in the first game, subjects receive no information on the counterpart; in the second one, the labour market state of both players is common knowledge. We find that, amongst the different sub-categories of NEETs, the status of unemployed has a markedly negative effect on trust and trustworthiness. Furthermore, precariousness in the labour market results to be as damaging as unemployment for trust and trustworthiness.
    Keywords: Trust game; Reciprocity; Youth labor market.
    Date: 2019–07–27
  5. By: John Duffy; Janet Hua Jiang; Huan Xie
    Abstract: We study the trade of indefinitely-lived assets in experimental markets. The traded prices of these assets are on average more than 40% below the risk-neutral fundamental value under the expected utility assumption. We examine the effects of three interrelated factors for the traded price, payoff uncertainty about the asset’s dividend payments, horizon uncertainty about the duration of trade, and the expected utility assumption. Our results suggest that horizon uncertainty does not significantly affect the traded price. Incorporating risk aversion into non-expected utility models with recursive preferences and probability weighting can rationalize the low prices observed in our indefinite-horizon asset markets.
    Keywords: Asset Pricing,Behavioral Finance,Experiments,Indefinite Horizon,Random Termination,Risk and Uncertainty,Expected Utility,Epstein-Zin Recursive Preferences,Probability Weighting,
    JEL: C91 C92 D81 G12
    Date: 2019–07–29
  6. By: Englmaier, Florian (LMU Munich); Leider, Steve (University of Michigan)
    Abstract: We conduct a field experiment where we vary both the presence of a gift-exchange wage and the effect of the worker\'s effort on the manager\'s payoff. Results indicate a strong complementarity between the initial wage-gift and the agent\'s ability to \"repay the gift\". We control for differences in ability and reciprocal inclination and show that gift-exchange is more effective with more reciprocal agents. We present a principal-agent model with reciprocal subjects that motivates our findings. Our results help to reconcile the conflicting evidence on the efficacy of gift-exchange outside the lab.
    Keywords: incentives; field experiments; gift-exchange; reciprocity;
    JEL: C91 J33 M52
    Date: 2019–08–07
  7. By: Lisa Bruttel (University of Potsdam); Simon Felgendreher (University of Gothenburg); Werner Güth (LUISS Università Guido Carli); Ralph Hertwig (Max Planck Institute for Human Development)
    Abstract: Being ignorant of key aspects of a strategic interaction can represent an advantage rather than a handicap. We study one particular context in which ignorance can be beneficial: iterated strategic interactions in which voluntary cooperation may be sustained into the final round if players voluntarily forego knowledge about the time horizon. We experimentally examine this option to remain ignorant about the time horizon in a finitely repeated two-person prisoners’ dilemma game. We confirm that pairs without horizon knowledge avoid the drop in cooperation that otherwise occurs toward the end of the game. However, this effect is superposed by cooperation declining more rapidly in pairs without horizon knowledge during the middle phase of the game, especially if players do not know that the other player also wanted to remain ignorant of the time horizon.
    Keywords: cooperation, experiment, prisoners' dilemma, strategic ignorance
    JEL: C91 D83 D89
    Date: 2019–08
  8. By: Lagoudakis, Angelos; Caputo, Vincenzina; Shupp, Robert S.
    Keywords: Research and Development/Tech Change/Emerging Technologies
    Date: 2019–06–25
  9. By: Ball, Sheryl (Virginia Tech University); Dave, Chetan (University of Alberta, Department of Economics); Dodds, Stefan (University of Winnipeg)
    Abstract: Policy debates increasingly employ the language of ‘rights’: how they are assigned and what entitlements individuals in a society are due. In designing present day constitutions for transitional democracies, framers face the issue of whether to formally codify rights or not. We design and implement a novel experiment to test whether social cooperation depends on the assignment of individual rights, by framing the right of subjects to take a particular action either positively or negatively. We find that when rights are framed positively, there exists an ‘entitlement effect’ that reduces social cooperation levels and crowds-out the tendency of individuals to act pro-socially.
    Keywords: Constitutional Design; Coase Theorem; Framing; Preferences; Rights; Battle of the Sexes
    JEL: D71 P48
    Date: 2019–07–30
  10. By: George Evans; Cars Hommes; Bruce McGough; Isabelle Salle
    Abstract: Most models in finance assume that agents make trading plans over the infinite future. We consider instead that they are boundedly rational and may only form forecasts over a limited horizon. We explore how participants in financial markets trading over finite horizons affect the level and the volatility of the price. In our theoretical model, agents with different planning horizons may hold different expectations over those horizons and trade the asset accordingly. We derive testable implications in the lab under various theories of expectation formation over those horizons. Then we design a laboratory experiment to test these theoretical implications against human behaviour. Our experiment confirms most of our theoretical hypotheses. Short-horizon trading favors deviations of the asset price from fundamentals. By contrast, a modest share of long-horizon traders is enough for the price to stabilize around its fundamental value. This is because short-horizon traders tend to coordinate their price forecasts using non-fundamental factors, such as recent price trends, in choosing their trading strategies. Long-horizon traders hold more heterogeneous views about future price developments, which prevents such trend-chasing behaviour.
    Keywords: Asset Pricing; Central bank research; Economic models; Financial markets
    JEL: C92 D84
    Date: 2019–08
  11. By: Marco Angrisani (USC - University of Southern California); Antonio Guarino (UCL - University College of London [London]); Philippe Jehiel (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, PSE - Paris School of Economics, UCL - University College of London [London]); Toru Kitagawa (UCL - University College of London [London])
    Abstract: We study social learning in a continuous action space experiment. Subjects, acting in sequence, state their belief about the value of a good, after observing their predecessors' statements and a private signal. We compare the behavior in the laboratory with the Perfect Bayesian Equilibrium prediction and the predictions of bounded rationality models of decision making: the redundancy of information neglect model and the overconfidence model. The results of our experiment are in line with the predictions of the overconfidence model and at odds with the others'.
    Date: 2019–07
  12. By: Alistair Munro (National Graduate Institute for Policy Studies, Tokyo, Japan); Ben D fExelle (University of East Anglia, U.K.); Arjan Verschoor (University of East Anglia, U.K.)
    Abstract: In the context of investment decisions, gcontingency h refers to the in?uence agents may exert over the probability distribution of returns on investment. Often, contingency is di?cult to detect and investment decisions are in?uenced by recent experience of (non-)contingency. To investigate the behavioural in?uence of prior (non-)contingency on investment decisions, we conduct an economic experiment in rural Uganda. Subjects are asked to invest any amount they wish of their endowment, with success dependent on whether they are correct in detecting the heavier of two objects. In one task, there is contingency: trying hard to detect the weight di?erence should in?uence the success probability. In another version, there is noncontingency: the weight di?erence is below the di?erential that humans are able to perceive. To investigate the e?ect of prior experience of (non-)contingency we experimentally vary the priming of (non-)contingency with a guessing game organised before the investment tasks. Our main ?nding is that priming contingency raises investment in the contingency condition. We ?nd in addition that stated perceptions of con?dence are also a?ected by priming contingency. In both cases, the e?ect is mediated by individuals f risk aversion. Individuals who are less risk averse respond more positively to priming contingency. We conclude that alertness to contingency matters for investment decisions, the more so the less risk averse people are.
    Date: 2019–07
  13. By: Tanya O’Garra (Middlesex University London); Valerio Capraro (Middlesex University London); Praveen Kujal (Middlesex University London and Economic Science Institute, Chapman University)
    Abstract: We experimentally study how redistribution choices are affected by positive and negative information regarding the behaviour of a previous participant in a dictator game with a taking option. We use the strategy method to identify behavioural ‘types’, and thus distinguish ‘conformists’ from ‘counter-conformists’, and unconditional choosers. Unconditional choosers make up the greatest proportion of types (about 80%) while only about 20% of subjects condition their responses to social information. We find that both conformity and counter-conformity are driven by a desire to be seen as moral (the ‘symbolization’ dimension of moral identity). The main difference is that, conformity is also driven by a sensitivity to what others think (‘attention to social comparison’). Unconditional giving (about 30% of players) on the other hand is mainly driven by the centrality of moral identity to the self (the ‘internalization' dimension of moral identity). Social information thus seems to mainly affect those who care about being seen to be moral. The direction of effect however depends on how sensitive one is to what others think.
    Keywords: dictator game with ‘taking’; social information; conformity; anti-conformity; heterogeneity; redistribution
    JEL: C91 C72 D31 D64 D91
    Date: 2019
  14. By: Undral Byambadalai (Boston University); Ching-to Albert Ma (Boston University); Daniel Wiesen (University of Cologne)
    Abstract: This paper studies how altruistic preferences are changed by markets and incentives. We conduct a laboratory experiment in a within-subject design. Subjects are asked to choose health care qualities for hypothetical patients in monopoly, duopoly, and quadropoly. Prices, costs, and patient benefits are experimental incentive parameters. In monopoly, subjects choose quality to tradeoff between profits and altruistic patient benefits. In duopoly and quadropoly, we model subjects playing a simultaneous-move game. Each subject is uncertain about an opponentÌ s altruism, and competes for patients by choosing qualities. Bayes-Nash equilibria describe subjects' quality decisions as functions of altruism. Using a nonparametric method, we estimate the population altruism distributions from Bayes-Nash equilibrium qualities in di§erent markets and incentive conÖgurations. Markets tend to reduce altruism, although duopoly and quadropoly equilibrium qualities are much higher than those in monopoly. Although markets crowd out altruism, the disciplinary powers of market competition are stronger. Counterfactuals confirm markets change preferences.
    Keywords: preferences, altruism, markets, incentives
    JEL: C14 C72
    Date: 2019–07
  15. By: Keser, Claudia; Masclet, David; Montmarquette, Claude
    Abstract: Is the labor supply of individuals influenced by their perception of how their income taxes will reflow to them or be wasted in administrative expenditures? We examine this issue experimentally by comparing three different treatments of a real-effort game that vary in the degree of redistribution. At one extreme, the Leviathan scenario, where no tax revenue is redistributed to the taxpayers, is compared to the situation where public expenditures are direct transfer payments. In-between, we investigate a situation where tax revenue is used to finance a public good that provides neither direct nor immediate monetary benefits to the taxpayers. We ran this experiment in three different countries, Canada, France, and Germany, to test whether there may exist any country differences in attitude toward taxation and redistribution. We find that effort is significantly higher in the redistribution treatment than the Leviathan treatment. Tax revenue is the highest in the redistribution treatment, followed by the global public good and the Leviathan treatment. On average, the effort is higher in France than in Canada and Germany.
    Keywords: Real-effort experiment,Taxation,Redistribution,Labor supply,Laffer curve
    JEL: D31 H23 H53
    Date: 2019
  16. By: Deng, Weiguang; Li, Dayang; Zhou, Dong
    Abstract: This study uses a field experiment to resolve the difficulties of quantifying personal appearance and identify a direct causal relationship between appearance and employment in China. The experiment reveals that taste-based pure appearance discrimination exists at the pre-interview stage. There are significant gender-specific heterogeneous effects of education on appearance discrimination: having better educational credentials reduces appearance discrimination among men but not among women. Moreover, attributes of the labor market, companies, and vacancies matter. Beauty premiums are larger in big cities with higher concentrations of women and in male-focused research positions. Similarly, the beauty premium is larger for vacancies with higher remuneration.
    Keywords: appearance discrimination,beauty premium,pre-interview stage,field experiment
    JEL: C93 I21 J71
    Date: 2019
  17. By: Tom Lane (University of Nottingham, Ningbo)
    Abstract: This study shows that different belief concepts within the same religion can have different effects on distributive behaviour. A dictator game experiment measures the causal effects of the concepts of God and Jesus on both the pro-sociality of Christians and their propensity to discriminate against LGBTQ people. The concept of Jesus significantly raises the amounts Christians donate, but the concept of God does not. Christians are found, at borderline significance, to discriminate against LGBTQ people, but this discrimination is not significantly increased by the concepts of Jesus or God. Neither concept significantly affects the behaviour of a non-Christian sample.
    Keywords: Christianity; Dictator Game; Pro-sociality; Discrimination; LGBTQ
    Date: 2019–05
  18. By: Mario Scharfbillig (Johannes Gutenberg University Mainz)
    Abstract: Delegation has been shown to facilitate individual immoral behavior. It is however unclear, if these findings extend to markets, where consumers may punish firms who delegate immoral production decisions. I address this question by employing an experimental market paradigm, involving an unfair product, containing a negative externality, and a fair product without externality. Passive delegation of the production decision, with random matching between an owner and a seller, leads to a lower share of the fair product being traded, consistent with the findings on responsibility diffusion. Active delegation in contrast, where owners have a choice over sellers first, increases the share of the fair product relative to passive delegation. Responsibility norm beliefs support a mechanism of complementary consumer responsibility, which assigns more responsibility to consumers when owners have a choice over sellers and, therefore, over the product type offered. Consumers' buying decisions may therefore limit the possibility for delegating immoral behavior, depending on the specific design of the delegation.
    Keywords: Social responsibility, market game, corporate social responsibility, consumer social responsibility, responsibility diffusion
    JEL: C92 D62 M14 D63
    Date: 2019–07–30
  19. By: J. Goldberg; M. Macis; P. Chintagunta
    Abstract: We use a field experiment with 3,176 patients at 122 tuberculosis treatment clinics in India to test whether peer referrals increase screening and identification of patients with an infectious disease. Low-cost financial incentives considerably raise the probability that current patients refer prospective patients for screening and testing, resulting in the cost-effective identification of new tuberculosis cases. Incentivized referrals operate through two mechanisms - peers have private information about individuals in their social networks (beyond their immediate families) to target for outreach, and peers are more effective than traditional contact tracing by paid health workers in inducing these individuals to get tested.
    Keywords: tuberculosis;referrals;social networks;case finding;incentives;India;health
    Date: 2019
  20. By: J. J. Elías; N. Lacetera; M. Macis
    Abstract: We conducted a randomized survey with 2,666 US residents to study preferences for legalizing payments to kidney donors. We found strong polarization, with many participants supporting or opposing payments regardless of potential transplant gains. However, about 18 percent of respondents would switch to favoring payments for sufficiently large increases in transplants. Preferences for compensation have strong moral foundations; participants especially reject direct payments by patients, which they find would violate principles of fairness. We corroborate the interpretation of our findings with a choice experiment of a costly decision to donate money to a foundation that supports donor compensation.
    Keywords: repugnant transactions;morality;markets;Preferences;kidney donation
    Date: 2019
  21. By: Carlos Alós-Ferrer; Michele Garagnani
    Abstract: Overwhelming evidence from the cognitive sciences shows that, in simple discrimination tasks (determining what is louder, longer, brighter, or even which number is larger) humans make more mistakes and decide more slowly when the stimuli are closer along the relevant scale. We investigate to what extent these effects are relevant for economic decisions. Strikingly, we find that even when there is an objectively correct answer independently of attitudes toward risk, the same effects obtain as expected values become closer. Contrary to pure discrimination tasks, however, differences in payoff-independent numerical magnitudes play a minor role. When correct answers depend on subjective attitudes toward risk, differences in expected values fail to explain error rates. The gradual effects on error rates and response times subsist but are instead explained by cardinal differences in independently-estimated subjective utilities (“strength of preference”). This is in agreement with assumptions typically made (but seldom validated) in random utility models. We conclude that the gradual effects on choice found in cognitive discrimination paradigms are very much present in economic choices, but depend on purely economic variables. An implication is that even if correct economic choices can be seen as ordinal, actual economic choices carry a cardinal component.
    Keywords: Strength of preference, choice difficulty, stochastic choice, risk attitude
    JEL: D9 D01 D81
    Date: 2019–07
  22. By: Lima de Miranda, Katharina; Detlefsen, Lena; Schmidt, Ulrich
    Abstract: This study contributes to the public debate on gender quotas and the literature on gender and risk taking by analysing how the level of risk taking within a group is influenced by its gender composition. In particular we look at the shift of risk taking between group and individual decisions and analyse to which extent this shift depends on the gender composition. We derive a gender-specific polarization hypothesis which states that compared to individual preferences, male dominated groups will shift towards higher risk taking than female dominated ones. Our experimental tests reveal a systematic impact of gender composition on group shifts which supports our hypothesis and points into the direction that a higher share of females may prevent excessive risk taking.
    Keywords: risky shift,risk taking,group decisions,gender,monetary incentives
    Date: 2019
  23. By: Carlos Alós-Ferrer; Alexander Ritschel
    Abstract: We show that economic decisions in strategic settings are co-determined by multiple behavioral rules. A simple model of intra-individual behavioral heterogeneity predicts testable differences depending on whether rules share a common prescription (alignment) or not (conflict), a classification which is ex ante observable. The predictions include non-trivial response time interactions reflecting the nature of the underlying processes, hence the model is not an as if explanation. In a laboratory experiment and two replications on Cournot oligopolies, we find direct evidence showing that decisions arise from the interaction between a deliberative myopic best reply rule and a more intuitive imitative rule.
    Keywords: Multiple behavioral rules, Cournot oligopoly, best reply, imitation, reinforcement
    JEL: C72 C92 D03
    Date: 2019–07
  24. By: Géraldine Bocqueho (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique); Marc Deschamps (UBFC - Université Bourgogne Franche-Comté [COMUE]); Jenny Helstroffer (UL - Université de Lorraine); Julien Jacob (UL - Université de Lorraine); Majlinda Joxhe (University of Luxembourg)
    Abstract: This paper uses the experimental setup of Tanaka et al. (2010) to measure refugees' risk preferences. A sample of 206 asylum seekers was interviewed in 2017-18 in Luxembourg. Contrary to studies which focus on risk aversion in general, we analyze its components using a cumulative prospect theory (CPT) frame-work. We show that refugees exhibit particularly low levels of risk aversion compared to other populations and that CPT provides a better fit for modelling risk attitudes. Moreover, we include randomised temporary treatments provoking emotions and find a small significant impact on probability distortion. Robustness of the Tanaka et al. (2010) experimental framework is confirmed by including treatments regarding the embedding effect. Finally, we propose a theoretical model of refugee migration that integrates the insights from our experimental outcomes regarding the functional form of refugees' decision under risk and the estimated parameter values. The model is then simulated using the data from our study.
    Keywords: refugee migration,risk preferences,experimental economics,cumulative prospect theory,psychological priming
    Date: 2018
  25. By: Paul Clist (University of East Anglia); Ying-yi Hong (Chinese University of Hong Kong)
    Abstract: Lying is an important human behaviour that has received unprecedented empirical attention in recent years due to a new experimental paradigm in which subjects are incentivised to misreport a die roll for financial gain. Amongst theoretical attempts to explain results, Justified Dishonesty (JD) is a theory with impressive support and a plausible psychological foundation. JD predicts subjects will swap a paid and unpaid roll of a die whenever financially beneficial, as this feels less like lying. However, JD's predictions are virtually identical to a competing economic model. In Dufwenberg & Dufwenberg's (DD) subjects have perceived cheating aversion, incurring a cost of lying that is in proportion to the amount they are perceived to cheat. Current evidence is unable to distinguish between these two distinct mechanisms. Here we show that JD often makes accurate predictions, but is a poor expla- nation. We perform a placebo test, finding that JD is more accurate when it should be irrelevant. Furthermore, we elicit the second (unpaid) roll, strongly rejecting a direct corollary of JD. Our results demonstrate that the role of justifications and desired counterfactuals have been overstated. The simple idea that subjects dislike others perceiving them as liars in proportion to the size of the lie is sufficient to explain patterns of lying behaviour.
    Keywords: Dishonesty, Dice, Justification, Counterfactual, Perceived Lying Aversion
    JEL: D82 C72 D91
    Date: 2019–07
  26. By: Maredia, Mywish K.; Porter, Maria; Jin, Songqing; Farris, Jarrad G.
    Keywords: International Development
    Date: 2019–06–25
  27. By: Jäckering, Lisa; Gödecke, Theda; Wollni, Meike
    Keywords: Teaching/Communication/Extension/Profession
    Date: 2019–06–25
  28. By: De Figueiredo Silva, Felipe; Perrin, Richard K.; Fulginiti, Lilyan E.
    Keywords: Research and Development/Tech Change/Emerging Technologies
    Date: 2019–06–25
  29. By: Klink-Lehmann, Jeanette Leila; Yeh, Ching-Hua; Hartmann, Monika
    Keywords: Marketing
    Date: 2019–06–25
  30. By: Martin Wiegand (Vrije Universiteit Amsterdam)
    Abstract: This paper explores how a conditional cash transfer program influences students’ schooling decisions when program payments stop in the middle of the school career. To that end, I examine Mexico’s Progresa, which covered students only until the end of middle school (at age 15) in its early years. The experimental setup permits to study the program’s impact on the probability to continue with high school after middle school. Despite initial randomization, the program itself has likely rendered the respective samples of middle school graduates in the treatment and the control group incomparable. To account for this, I employ a newly developed semiparametric technique that uses a combination of machine learning methods in conjunction with doubly-robust estimation. I find that exposure to Progresa during middle school reduced the probability to transfer to high school by 10 to 14 percentage points. Possible explanations for this effect include parents’ loss aversion, motivation crowding, anchoring, and classroom peer effects.
    Keywords: education, conditional cash transfer, Progresa, machine learning, doubly-robust estimation, loss aversion, motivation crowding, anchoring, classroom peer effects, Mexico
    JEL: I22 I25 O15 J24 D04 D91 C52
    Date: 2019–07–31
  31. By: Ward, Patrick S.; Alvi, Muzna F.; Makhija, Simrin; Spielman, David J.
    Keywords: International Development
    Date: 2019–06–25
  32. By: Parlasca, Martin C.; Hermann, Daniel; Musshoff, Oliver
    Keywords: Research and Development/Tech Change/Emerging Technologies
    Date: 2019–06–25

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.