nep-exp New Economics Papers
on Experimental Economics
Issue of 2019‒08‒19
35 papers chosen by
Daniel Houser
George Mason University

  1. Exploration in Teams and the Encouragement Effect: Theory and Evidence By Emma von Essen; Marieke Huysentruyt; Topi Miettinen
  2. Improving Children Health and Cognition: Evidence from School-Based Nutrition Intervention in India By Marion Krämer; Santosh Kumar; Sebastian Vollmer
  3. Belief Updating: Does the \'Good-News, Bad-News\' Asymmetry Extend to Purely Financial Domains? By Barron, Kai
  4. One Step at a Time: Does Gradualism Build Coordination? By Ye, Maoliang; Zheng, Jie; Nikolov, Plamen; Asher, Samuel
  5. Bringing together “old” and “new” ways of solving social dilemmas? The case of Spanish Gitanos By Espín, Antonio M.; Brañas-Garza, Pablo; Gamella, Juan; Herrmann, Benedikt; Martin, Jesus
  6. On the Malleability of Implicit Attitudes Towards Women Empowerment: Evidence from Tunisia By Nillesen, Eleonora; Grimm, Michael; Goedhuys, Micheline; Reitmann, Ann-Kristin; Meysonnat, Aline
  7. Living with the Neighbors: Demand-Driven Youth Training Programs: Experimental Evidence from Mongolia By Maria Laura Alzúa; Soyolmaa Batbekh; Altantsetseg Batchuluun; Bayarmaa Dalkhjavd; José Galdo
  8. Instruction Time, Information, and Student Achievement: Evidence from a Field Experiment By Simon Calmar Andersen; Thorbjørn Sejr Guul; Maria Knoth Humlum
  9. Decisions on Extending Group Membership: Evidence from a Public Good Experiment By Grund, Christian; Harbring, Christine; Thommes, Kirsten; Tilkes, Katja Rebecca
  10. The Standard Portfolio Choice Problem in Germany By Breunig, Christoph; Huck, Steffen; Schmidt, Tobias; Weizsäcker, Georg
  11. Dual-Credit Courses and the Road to College: Experimental Evidence from Tennessee By Hemelt, Steven W.; Schwartz, Nathaniel L.; Dynarski, Susan
  12. What Explains the Uptake of Development Interventions? By Lennart Kaplan; Jana Kuhnt; Katharina Richert; Sebastian Vollmer
  13. Risk Aversion and Information Aggregation in Asset Markets By Antonio, Filippin; Marco, Mantovani
  14. Habits as Adaptations: An Experimental Study By Ludmila Matysková; Brian Rogers; Jakub Steiner; Keh-Kuan Sun
  15. Tax-Sheltered Retirement Accounts: Can Financial Education Improve Decisions? By M. Martin Boyer; Philippe d'Astous; Pierre-Carl Michaud
  16. Smokers’ Rational Lexicographic Preferences for Cigarette Package Warnings: A Discrete Choice Experiment with Eye Tracking By Jeffrey E. Harris; Mariana Gerstenblüth; Patricia Triunfo
  17. Mean-Field Leader-Follower Games with Terminal State Constraint By Fu, Guanxing; Horst, Ulrich
  18. Can Agricultural Extension and Input Support Be Discontinued? Evidence from a Randomized Phaseout in Uganda By Fishman, Ram; Smith, Stephen C.; Bobic, Vida; Sulaiman, Munshi
  19. Multiplayer Bandit Learning, from Competition to Cooperation By Simina Br\^anzei; Yuval Peres
  20. Analyzing Grouped Administrative Data for RCTs Using Design-Based Methods By Peter Z. Schochet
  21. Many Balls in the Air Makes Time Fly: The Effect of Multitasking on Time Perception and Time Preferences By Hardardottir, Hjördis
  22. Witnessing wrongdoing: the effects of observer power on incivility intervention in the workplace By Hershcovis, M.S; Neville, L; Reich, Tara C.; Christie, A; Cortina, L.M; Shan, V
  23. Effects of Housing Transfer Taxes on Household Mobility By Essi Eerola; Oskari Harjunen; Teemu Lyytikäinen; Tuukka Saarimaa
  24. Buying Supermajorities in the Lab By Fehrler, Sebastian; Schneider, Maik T.
  25. The Formation of House Price Expectations in Canada: Evidence from a Randomized Information Experiment By Marc-André Gosselin; Mikael Khan; Matthieu Verstraete
  26. The Effects of Access to Credit on Productivity: Separating Technological Changes from Changes in Technical Efficiency By Jimi, Nusrat Abedin; Nikolov, Plamen; Malek, Mohammad Abdul; Kumbhakar, Subal C.
  27. Parental Beliefs, Investments, and Child Development: Evidence from a Large-Scale Experiment By Carneiro, Pedro; Galasso, Emanuela; Lopez Garcia, Italo; Bedregal, Paula; Cordero, Miguel
  28. Preference Discovery By Jason Delaney; Sarah Jacobson; Thorsten Moenig
  29. Credit Building or Credit Crumbling? A Credit Builder Loan’s Effects on Consumer Behavior, Credit Scores and Their Predictive Power By Jeremy Burke; Julian Jamison; Dean Karlan; Kata Mihaly; Jonathan Zinman
  30. Scarcity, Consumption, and Satiation: Results from a Controlled Experiment By Rajbhandari Thapa, Janani; Sevilla, Julio; Nayga, Rodolfo M.
  31. Feasibility of a cluster randomized controlled trial of a psychosocial intervention to improve late life depression in socioeconomically deprived areas of São Paulo, Brazil (PROACTIVE) By Marcia Scazufca; Paula Pereda
  32. Animal welfare attributes in dairy production in Europe: Lessons learned from a German discrete choice experiment By Koik, Yascha Lena; Thiele, Holger D.; Enneking, Ullrich
  33. Multi-state choices with aggregate feedback on unfamiliar alternatives By Philippe Jehiel; Juni Singh
  34. Does Change in Respondents’ Attention Matter in Estimating Willingness to Pay from Choice Experiments? By Hildebrand, Kayla; Chung, Chanjin; Boyer, Tracy A.
  35. Detecting the Hot Hand: Tests of Randomness Against Streaky Alternatives in Bernoulli Sequences By David M. Ritzwoller; Joseph P. Romano

  1. By: Emma von Essen (Department of Economics and Business Economics, Aarhus University); Marieke Huysentruyt (Strategy and Business Policy, HEC Paris, and SITE, Stockholm School of Economics); Topi Miettinen (Department of Economics, Hanken School of Economics, Helsinki, and SITE, Stockholm School of Economics)
    Abstract: This paper analyzes a two-person, two-stage model of sequential exploration, where both information and payoff externalities exist, and tests the derived hypotheses in the laboratory. We theoretically show that even when agents are self-interested and perfectly rational, the information externality induces an encouragement effect: a positive effect of first-player exploration on the optimality of the second-player exploring as well. When agents have other-regarding preferences and imperfectly optimize, the encouragement effect is strongest. The explorative nature of the game raises the expected surplus compared to a payoff equivalent public goods game. We empirically confirm our main theoretical predictions using a novel experimental paradigm. Our findings are relevant for motivating and managing groups and teams innovating not only for private but also, and especially so, for public goods.
    Keywords: Economics: Behavior and Behavioral Decision Making, Economics: Game Theory and Bargaining Theory, Economics: Microeconomic Behavior, Industrial Organization: Firm Objectives, Organization and Behavior, Decision analysis: Sequential
    JEL: C72 C91 D03 D83 O31
    Date: 2019–08–14
  2. By: Marion Krämer; Santosh Kumar; Sebastian Vollmer
    Abstract: We present experimental evidence on the impact of delivering double-fortified salt (DFS), salt fortified with iron and iodine, through the Indian school-feeding program called “midday meal” on anemia, cognition and math and reading outcomes of primary school children. We conducted a field experiment that randomly provided one-year supply of DFS at a subsidized price to public primary schools in one of the poorest regions of India. The DFS treatment had significantly positive impacts on hemoglobin levels and reduced the prevalence of any form of anemia by 9.3 percentage points (or about 20 percent) but these health gains did not translate into statistically significant impacts on cognition and test scores. While exploring the heterogeneity in effects, we find that treatment had statistically significant gains in anemia and test scores among children with higher treatment compliance. We further estimate that the intervention was very cost effective and can potentially be scaled up rather easily.
    Keywords: Double-fortified salt; education; anemia; school feeding; India and randomized controlled trial
    Date: 2018–03–12
  3. By: Barron, Kai (WZB Berlin)
    Abstract: Bayes\' statistical rule remains the status quo for modeling belief updating in both normative and descriptive models of behavior under uncertainty. Some recent research has questioned the use of Bayes\' rule in descriptive models of behavior, presenting evidence that people overweight \'good news\' relative to \'bad news\' when updating ego-relevant beliefs. In this paper, we present experimental evidence testing whether this \'good-news, bad-news\' effect is present in a financial decision making context (i.e. a domain that is important for understanding much economic decision making). We find no evidence of asymmetric updating in this domain. In contrast, in our experiment, belief updating is close to the Bayesian benchmark on average. However, we show that this average behavior masks substantial heterogeneity in individual updating. We find no evidence in support of a sizeable subgroup of asymmetric updators.
    Keywords: economic experiments; bayes\' rule; belief updating; belief measurement; proper scoring rules; motivated beliefs;
    JEL: C11 C91 D83
    Date: 2019–07–30
  4. By: Ye, Maoliang (Xiamen University); Zheng, Jie (Tsinghua University); Nikolov, Plamen (State University of New York); Asher, Samuel (World Bank)
    Abstract: This study investigates a potential mechanism to promote coordination. With theoretical guidance using a belief-based learning model, we conduct a multi-period, binary-choice, and weakest-link laboratory coordination experiment to study the effect of gradualism – increasing the required levels (stakes) of contributions slowly over time rather than requiring a high level of contribution immediately – on group coordination performance. We randomly assign subjects to three treatments: starting and continuing at a high stake, starting at a low stake but jumping to a high stake after a few periods, and starting at a low stake while gradually increasing the stakes over time (the Gradualism treatment). We find that relative to the other two treatments, groups coordinate most successfully at high stakes in the Gradualism treatment. We also find evidence that supports the belief-based learning model. These findings point to a simple mechanism for promoting successful voluntary coordination.
    Keywords: gradualism, coordination, laboratory experiment, belief-based learning
    JEL: C91 C92 D03 D71 D81 H41
    Date: 2019–07
  5. By: Espín, Antonio M.; Brañas-Garza, Pablo; Gamella, Juan; Herrmann, Benedikt; Martin, Jesus
    Abstract: Humans often punish non-cooperators in one-shot interactions among genetically-unrelated individuals. So-called altruistic punishment poses an evolutionary puzzle because it enforces a cooperation norm that benefits the whole group, but is costly for the punisher. Under the “big mistake” (or “mismatch”) hypothesis, social behavior such as punishment evolved by individual selection at a time when repeated interactions with kin prevailed. It then misfired in modern humans, who “mistakenly” apply it in sporadic interactions with unrelated individuals. In contrast, cultural group selection theories emphasize cultural differences in normative behavior and the role of intergroup competition and punishment for the emergence of large-scale cooperation in the absence of genetic relatedness. We conducted a series of multilateral-cooperation economic experiments with a sample of Spanish Romani people (Gitanos), who represent a unique cultural group to test the predictions of the two accounts: Gitano communities rely heavily on close kin-based networks, maintain high consanguinity rates and display a particularly strong sense of ethnic identity. A total of 320 Gitano and non-Gitano (i.e., the majority Spanish population) participants played a one-shot public goods game with punishment in either ethnically homogeneous or ethnically mixed (half Gitano and half non-Gitano) four-person groups. In the homogeneous groups, punishment was commonly used by non-Gitanos but virtually inexistent among Gitanos. In the mixed groups, however, Gitanos who did not cooperate were severely punished by other Gitanos, but also by non-Gitanos (particularly males in both cases). The results are more consistent with cultural group selection and also qualify some of its predictions.
    Keywords: cooperation, punishment, Gypsy/Roma, ethnicity, culture, evolution
    JEL: C93 H41 J71 Z13
    Date: 2019–07–31
  6. By: Nillesen, Eleonora (UNU-MERIT); Grimm, Michael (University of Passau); Goedhuys, Micheline (UNU-MERIT); Reitmann, Ann-Kristin (University of Passau); Meysonnat, Aline (UNU-MERIT)
    Abstract: We use an implicit association test (IAT) to measure implicit gender attitudes and examine the malleability of these attitudes using a randomized field experiment and quasi-experimental data from Tunisia. Women that appear most conservative respond to a randomized video treatment by reducing their implicit gender bias. Also, female interviewers invite more conservative responses to the IAT, especially among the male subsample. Perceived religiosity of the interviewer affects self-reported gender attitudes, but not IAT measures, suggesting social desirability may be at work. We discuss the implications of our findings for the use of implicit measures in development research.
    Keywords: women empowerment, implicit association test, interviewer effects, Middle East and North Africa
    JEL: C83 D91 O12
    Date: 2019–07
  7. By: Maria Laura Alzúa (CEDLAS-Facultad de Ciencias Económicas-Universidad Nacional de La Plata, Conicet, PEP); Soyolmaa Batbekh (National university of Mongolia); Altantsetseg Batchuluun (National university of Mongolia); Bayarmaa Dalkhjavd (School of Economic Studies- National university of Mongolia); José Galdo (SPPA and Department of Economics -Carleton University)
    Abstract: Because of its high incidence and potential threat to social cohesion, youth unemployment is a global concern. This study uses a randomized controlled trial to analyze the effectiveness of a demand-driven vocational training program for disadvantaged youth in Mongolia. Mongolia, a transitional country whose economic structure shifted from a communist, centrally planned economy to a free-market economy over a relatively short period, offers a new setting in which to test the effectiveness of standard active labor market policies. This study reports positive and statistically significant short-term effects of vocational training on monthly earnings, skills matching, and self-employment. Substantial heterogeneity emerges as relatively older, richer, and better-educated individuals drive these positive effects. A second intervention that randomly assigns participants to receive repetitive weekly newsletters with information on market returns to vocational training shows positive impacts on the length of exposure to and successful completion of the program. These positive effects, however, are only observed at the intensive margin and do not lead to higher employment or earnings outcomes.
    JEL: J18 J08 J24 J38 C93
    Date: 2019–08
  8. By: Simon Calmar Andersen (Aarhus University); Thorbjørn Sejr Guul (Aarhus University); Maria Knoth Humlum (Aarhus University)
    Abstract: Prior research has shown that time spent in school does not close the achievement gap between students with low and high socioeconomic status (SES). We examine the effect of combining increased instruction time with information to teachers about their students' reading achievements by using a randomized controlled trial. We find that the teachers' baseline beliefs are more important for low-SES students' academic performance, that the intervention makes the teachers update these beliefs, andnot leastthat the intervention improves the reading skills of low-SES students and thereby reduces the achievement gap between high- and low-SES students. The results are consistent with a model in which the teachers' beliefs about the students' reading skills are more important to low- than high-SES students, while at the same time, the teachers' beliefs are subject to information friction and Bayesian learning.
    Keywords: information, learning, field experiment
    JEL: I24 I28 D83
    Date: 2019–08
  9. By: Grund, Christian (RWTH Aachen University); Harbring, Christine (RWTH Aachen University); Thommes, Kirsten (University of Paderborn); Tilkes, Katja Rebecca (RWTH Aachen University)
    Abstract: We experimentally analyze whether the opportunity to receive a permanent contract motivates temporary group members in a public good setting and how this affects the other group members. We compare an exogenous and an endogenous decision mechanism to extend the temporary agent's group membership. The exogenous mechanism to extend the contract is modeled by a random draw. In the endogenous setting, one other group member decides about the temporary agent's future group membership. Our results reveal that both — the decision to extend a contract and the decision mechanism itself — affect not only the temporary group member's effort but also the efforts of the permanent group members and, ultimately, also cooperation within the group after the decision has been made.
    Keywords: cooperation, experiments, groups, public good games, teams, temporary employment
    JEL: C9 M5
    Date: 2019–07
  10. By: Breunig, Christoph (HU Berlin); Huck, Steffen (WZB Berlin and UCL); Schmidt, Tobias (QuantCo); Weizsäcker, Georg (HU Berlin and DIW Berlin)
    Abstract: We study an investment experiment with a representative sample of German households. Respondents invest in a safe asset and a risky asset whose return is tied to the German stock market. Experimental investments correlate with beliefs about stock market returns and exhibit desirable external validity at least in one respect: they predict real-life stock market participation. But many households are unresponsive to an exogenous increase in the risky asset\'s return. The data analysis and a series of additional laboratory experiments suggest that task complexity decreases the responsiveness to incentives. Modifying the safe asset\'s return has a larger effect on behaviour than modifying the risky asset\'s return.
    Keywords: stock market expectations; stock market participation; portfolio choice; financial literacy; complexity;
    JEL: D01 D14 D84 G11
    Date: 2019–07–30
  11. By: Hemelt, Steven W. (University of North Carolina, Chapel Hill); Schwartz, Nathaniel L. (Tennessee Department of Education); Dynarski, Susan (University of Michigan)
    Abstract: Dual-credit courses expose high school students to college-level content and provide the opportunity to earn college credits, in part to smooth the transition to college. With the Tennessee Department of Education, we conduct the first randomized controlled trial of the effects of dual-credit math coursework on a range of high school and college outcomes. We find that the dual-credit advanced algebra course alters students' subsequent high school math course-taking, reducing enrollment in remedial math and boosting enrollment in precalculus and Advanced Placement math courses. We fail to detect an effect of the dual-credit math course on overall rates of college enrollment. However, the course induces some students to choose four-year universities instead of two-year colleges, particularly for those in the middle of the math achievement distribution and those first exposed to the opportunity to take the course in 11th rather than 12th grade. We see limited evidence of improvements in early math performance during college.
    Keywords: dual-credit courses, college enrollment, college choices, math coursework
    JEL: I21 I23 I24 I28
    Date: 2019–07
  12. By: Lennart Kaplan; Jana Kuhnt; Katharina Richert; Sebastian Vollmer
    Abstract: A crucial prerequisite for the success of development interventions is their uptake in the targeted population. We use the setup of an intervention conducted in Indonesia and Pakistan to investigate dis-/incentivizing factors for program’s uptake and support. Making use of a framework grounded in psychological theory, “The Theory of Planned Behaviour,” we consider three determinants for intervention uptake: personal attitudes, the social influence of important others and the perceived ease of intervention use. As most development interventions are characterized by a cooperation among local and international agents, we investigate further a potentially important dis-/incentivizing factor: the salience of the implementer’s background. Our findings show that attitudes, important others and ease of intervention use are indeed associated with increased uptake in our two culturally different settings. Conducting a framed field experiment in Indonesia we show further that the study population in the Acehnese context exhibits higher levels of support for the project if the participation of international actors is highlighted. We find that previous experience with the respective actor is pivotal. To strengthen supportive behaviour by the target population for locally led projects, it is essential to strengthen local capabilities to create positive experiences. Hence, our results encourage development research and cooperation, first, to consider personal attitudes, the social influence of important others and the perceived ease of intervention use in the design of interventions in order to increase uptake. Second, depending on the country context, implementers should consider the previous experience with and attitude towards partners – either local or international – when aiming to achieve behavioural change.
    Keywords: Theory of Planned Behaviour; Framed Field Experiment; Implementation Research; Public Health
  13. By: Antonio, Filippin; Marco, Mantovani
    Abstract: The paper investigates the relation between the risk preferences of traders and the information-aggregation properties of an experimental call market. We find evidence inconsistent with the prediction that market-clearing prices are closer to full revelation of the state when traders are more risk-averse. The observed pattern of prices is close to the risk-neutral benchmark, while individuals are risk averse both in a risk elicitation task and when estimating their risk aversion from their market activity. This purported conflict is explained by an attitude to exploit only part of the information possessed that we label operational conservatism. We show that operational conservatism represents an additional, although suboptimal, way to express one’s risk aversion. A remarkably consistent picture of measured risk preferences emerges then in our data. Independently-elicited risk attitudes retain the footprint of both the standard and the suboptimal facet of risk aversion estimated from subjects’ market activity.
    JEL: C81 C91 D81
    Date: 2019–04
  14. By: Ludmila Matysková; Brian Rogers; Jakub Steiner; Keh-Kuan Sun
    Abstract: Psychologists emphasize two aspects of habit formation: (i) habits arise when the history of a decision process correlates with optimal continuation actions, and (ii) habits alleviate cognition costs. We ask whether serial correlation of optimal actions alone induces habits or if habits form as optimal adaptations. We compare lab treatments that differ in the information provided to subjects, holding fixed the serial correlation of optimal actions. We find that past actions affect behavior only in the treatment in which this habit is useful. The result suggests that caution is warranted when modeling habits via a fixed utility over action sequences.
    Keywords: habit formation, rational inattention
    JEL: C91 D8 D9
    Date: 2019–07
  15. By: M. Martin Boyer; Philippe d'Astous; Pierre-Carl Michaud
    Abstract: We conduct a stated-choice experiment to analyze the decision to contribute to front- or back-loaded tax-sheltered savings accounts. Our experimental design includes a randomized financial education treatment that provides information on these accounts. We assess whether respondents learn about the tax implications of these accounts and make contribution choices that increase after-tax income when exposed to the intervention. We find that our intervention improves both the understanding of the tax implications of the savings accounts (an increase of 6 to 15 percent) and contribution decisions. We find effects on after-tax lifetime-income for respondents by up to $1,900 per scenario presented.
    JEL: D14 G11 H31
    Date: 2019–07
  16. By: Jeffrey E. Harris (Department of Economics, Massachusetts Institute of Technology); Mariana Gerstenblüth (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Patricia Triunfo (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: We asked 97 cigarette smokers to make a series of 12 binary choices between experimental cigarette packages with varying warnings and background colors. Each smoker had to decide which of the two packages contained cigarettes less risky for his health. We tested whether the smokers, confronted with warnings that were repugnant and threatening to many of them, could still make choices that adhered to the standard axioms of rational choice. We supplemented our observations on smokers’ choices with data on their eye movements. We find that participants universally made choices consistent with a complete, transitive preference ordering. We find little evidence of inconsistent choices violating the weak axiom of revealed preference. In a majority of smokers, we find strong evidence of the use of a lexicographic decision rule to assess the riskiness of a cigarette package. These smokers first ranked the two packages solely on the basis of their warnings. Only when the two packages had the same warning did they rankthe packages on the basis of their color. The data on eye tracking strongly confirmed the lexicographic nature of the underlying decision rule. Our studyrepresentsan entirely different angle of inquiry into thequestion of rational addiction.
    Keywords: addiction, cigarettes, smoking, health warnings, rationality, discrete choice experiment, eye tracking, transitivity, additive utility, lexicographic preferences, context-dependent preferences, response time, drift diffusion model, Schelling-Thaler-Shefrin dual-self model
    JEL: D12 D83 D87 D91 I12 M31
    Date: 2018–09
  17. By: Fu, Guanxing (HU Berlin); Horst, Ulrich (HU Berlin)
    Abstract: We analyze linear McKean-Vlasov forward-backward SDEs arising in leader-follower games with mean-field type control and terminal state constraints on the state process. We establish an existence and uniqueness of solutions result for such systems in time-weighted spaces as well as a (convergence) result of the solutions with respect to certain perturbations of the drivers of both the forward and the backward component. The general results are used to solve a novel single-player model of portfolio liquidation under market impact with expectations feedback as well as a novel Stackelberg game of optimal portfolio liquidation with asymmetrically informed players.
    Keywords: mean-field control; stackelberg game; mean-field game with a major player; McKean-Vlasov FBSDE; portfolio liquidation; singular terminal constraint;
    Date: 2019–07–30
  18. By: Fishman, Ram (Tel Aviv University); Smith, Stephen C. (George Washington University); Bobic, Vida (George Washington University); Sulaiman, Munshi (Save the Children)
    Abstract: Many development programs are short-term interventions, either because of external funding constraints or an assumption of impact sustainability. Using a novel randomized phaseout research method, we provide experimental tests of phaseout effects of an extension program designed for women smallholder farmers in Uganda. We find that program phaseout does not diminish demand for improved seeds, as farmers shift purchases from NGO-sponsored village supply networks to market sources, indicating persistent learning effects. We find no evidence of declines in improved cultivation practices taught by the program. These results have implications for both efficient program design and for models of technology adoption.
    Keywords: agricultural extension, agricultural technology adoption, food security, supply chain, subsidies, randomized phaseout, high-yielding varieties, randomized controlled trial, Uganda
    JEL: O13 O33 I32 Q12
    Date: 2019–07
  19. By: Simina Br\^anzei; Yuval Peres
    Abstract: The stochastic multi-armed bandit problem is a classic model illustrating the tradeoff between exploration and exploitation. We study the effects of competition and cooperation on this tradeoff. Suppose there are $k$ arms and two players, Alice and Bob. In every round, each player pulls an arm, receives the resulting reward, and observes the choice of the other player but not their reward. Alice's utility is $\Gamma_A + \lambda \Gamma_B$ (and similarly for Bob), where $\Gamma_A$ is Alice's total reward and $\lambda \in [-1,1]$ is a cooperation parameter. At $\lambda = -1$ the players are competing in a zero-sum game, at $\lambda = 1$, they are fully cooperating, and at $\lambda = 0$, they are neutral: each player's utility is their own reward. The model is related to the economics literature on strategic experimentation, where usually the players observe each other's rewards. In the discounted setting, the Gittins index reduces the one-player problem to the comparison between a risky arm, with a prior $\mu$, and a predictable arm with success probability $p$. The value of $p$ where the player is indifferent between the arms is the Gittins index $g(\mu,\beta) > m$, where $m$ is the mean of the risky arm and $\beta$ the discount factor. We show that competing players explore less than a single player: there is $p^* \in (m, g(\mu, \beta))$ so that for all $p > p^*$, the players stay at the predictable arm. However, the players are not completely myopic: they still explore for some $p > m$. On the other hand, cooperating players explore more than a single player. Finally, we show that neutral players learn from each other, receiving strictly higher total rewards than they would playing alone, for all $ p\in (p^*, g(\mu,\beta))$, where $p^*$ is the threshold above which competing players do not explore. We show similar phenomena in the finite horizon setting.
    Date: 2019–08
  20. By: Peter Z. Schochet
    Abstract: This article discusses estimation of average treatment effects for randomized controlled trials (RCTs) using grouped administrative data to help improve data access.
    Keywords: administrative data, randomized controlled trials, data aggregation, design-based estimators, clustered designs, blocked designs, ecological inference
  21. By: Hardardottir, Hjördis (Department of Economics, Lund University)
    Abstract: In this paper, we study how increasing the cognitive demands of multitasking affects time preferences. The novelty of this paper is that it studied how time perception mediates the effect of multitasking on time preferences. Results from experimental psychology have demonstrated that people tend to experience the passage of time as quicker when they are busy with cognitively-demanding tasks. If time is experienced as passing faster, the future should be experienced as being closer, and patience should increase. However, a standard prediction from behavioral economics is that being cognitively loaded leads to less patient decisions. Our hypothesis is that increases in patience, driven by the speeding up of time, and decreases in patience, driven by decreased cognitive capacity, added together explain the total effect of increasing the cognitive demands of multitasking on time preferences. We also shed light on whether the observed relationship between time preferences and time perception within subjects is mirrored when comparing between subjects.
    Keywords: Time preferences; Multitasking; Cognitive load; Time perception; Foundations of preferences
    JEL: C91 D91
    Date: 2019–08–09
  22. By: Hershcovis, M.S; Neville, L; Reich, Tara C.; Christie, A; Cortina, L.M; Shan, V
    Abstract: Research often paints a dark portrait of power. Previous work underscores the links between power and self-interested, antisocial behavior. In this paper, we identify a potential bright side to power—namely, that the powerful are more likely to intervene when they witness workplace incivility. In experimental (Studies 1 and 3) and field (Study 2) settings, we find evidence suggesting that power can shape how, why, and when the powerful respond to observed incivility against others. We begin by drawing on research linking power and action orientation. In Study 1, we demonstrate that the powerful respond with agency to witnessed incivility. They are more likely to directly confront perpetrators, and less likely to avoid the perpetrator and offer social support to targets. We explain the motivation that leads the powerful to act by integrating theory on responsibility construals of power and hierarchy maintenance. Study 2 shows that felt responsibility mediates the effect of power on increased confrontation and decreased avoidance. Study 3 demonstrates that incivility leads the powerful to perceive a status challenge, which then triggers feelings of responsibility. In Studies 2 and 3, we also reveal an interesting nuance to the effect of power on supporting the target. While the powerful support targets less as a direct effect, we reveal countervailing indirect effects: To the extent that incivility is seen as a status challenge and triggers felt responsibility, power indirectly increases support toward the target. Together, these results enrich the literature on third-party intervention and incivility, showing how power may free bystanders to intervene in response to observed incivility.
    Keywords: workplace incivility; observers; power; status threat; witnesses
    JEL: R14 J01 J50
    Date: 2017–09–01
  23. By: Essi Eerola; Oskari Harjunen; Teemu Lyytikäinen; Tuukka Saarimaa
    Abstract: Housing transfer taxes are fiscally important in many countries despite evidence of substantial welfare losses found in several quasi-experimental studies. Research designs used in this prior literature are prone to attenuation bias due to spillovers from mobility or trading across control and treatment groups. We account for these spillovers by combining quasi-experimental empirical analysis with a one-sided housing market model where households act as both buyers and sellers. Using a Finnish tax reform and total population register data, we find that an increase in the transfer tax has a significant negative effect on household mobility. We calibrate our theoretical model to match the mobility rates in our data and our quasi-experimental estimate. In our setting, relying only on the quasi-experiment and ignoring the spillovers would lead to a 20% underestimation of the effect. We argue that the welfare costs of transfer taxes are larger than previously thought.
    Keywords: household mobility, spillover, transfer tax, welfare cost
    JEL: H21 R21 R23
    Date: 2019
  24. By: Fehrler, Sebastian (University of Konstanz); Schneider, Maik T. (University of Bath)
    Abstract: Many decisions taken in legislatures or committees are subject to lobbying efforts. A seminal contribution to the literature on vote-buying is the legislative lobbying model pioneered by Groseclose and Snyder (1996), which predicts that lobbies will optimally form supermajorities in many cases. Providing the first empirical assessment of this prominent model, we test its central predictions in the laboratory. While the model assumes sequential moves, we relax this assumption in additional treatments with simultaneous moves. We find that lobbies buy supermajorities as predicted by the theory. Our results also provide supporting evidence for most comparative statics predictions of the legislative lobbying model with respect to lobbies’ willingness to pay and legislators’ preferences. Most of these results carry over to the simultaneous-move set-up but the predictive power of the model declines.
    Keywords: legislative lobbying, vote-buying, Colonel Blotto, multi-battleeld contests, experimental political economy
    JEL: C92 D72
    Date: 2019–07
  25. By: Marc-André Gosselin; Mikael Khan; Matthieu Verstraete
    Abstract: We conduct a randomized information experiment leveraging the Canadian Survey of Consumer Expectations. We provide causal evidence that respondents revise both their short and medium term expectations of future house price growth in a way that is consistent with observed short-term momentum in house prices. However, empirically, house price growth tends to revert to its mean in the medium term.
    Keywords: Financial stability; Housing
    JEL: C9 D84 R21
    Date: 2019–08
  26. By: Jimi, Nusrat Abedin (State University of New York); Nikolov, Plamen (State University of New York); Malek, Mohammad Abdul (Kyoto University); Kumbhakar, Subal C. (Binghamton University, New York)
    Abstract: Improving productivity among microenterprises is important, especially in low-income countries where market imperfections are pervasive, and resources are scarce. Relaxing credit constraints can increase the productivity of microenterprises. Using a field experiment involving agricultural microenterprises in Bangladesh, we estimated the impact of access to credit on the overall productivity of rice farmers and disentangled the total effect into technological change (frontier shift) and technical efficiency changes. We found that relative to the baseline rice output per decimal, access to credit resulted in, on average, approximately a 14 percent increase in yield, holding all other inputs constant. After decomposing the total effect into the frontier shift and efficiency improvement, we found that, on average, around 11 percent of the increase in output came from changes in technology, or frontier shift, while the remaining 3 percent was attributed to improvements in technical efficiency. The efficiency gain was higher for modern hybrid rice varieties, and almost zero for traditional rice varieties. Within the treatment group, the effect was greater among pure tenant and mixed-tenant microenterprise households compared with microenterprises that only cultivated their own land.
    Keywords: field experiment, microfinance, credit, efficiency, productivity, farmers, South Asia
    JEL: E22 H81 Q12 D2 O12 O16
    Date: 2019–07
  27. By: Carneiro, Pedro (University College London); Galasso, Emanuela (World Bank); Lopez Garcia, Italo (RAND); Bedregal, Paula (Pontificia Universidad Catolica de Chile); Cordero, Miguel (University of Bristol)
    Abstract: This paper experimentally estimates medium term impacts of a large-scale and low-cost parenting program targeting poor families in Chile. Households in 162 public health centers were randomly assigned to three groups: a control group, a second group that was offered eight weekly group parenting sessions, and a third group that was offered the same eight group sessions plus two sessions of guided interactions between parents and children focused on responsive play and dialogic reading. In spite of its short duration and intensity, three years after the end of the intervention, the receptive vocabulary and the socio-emotional development of children of families participating in either of the treatment arms improved (by 0.43 and 0.54 standard deviation, respectively) relative to children of nonparticipating families. The treatments also led to improvements in home environments and parenting behaviors of comparable magnitudes, which far outlasted the short duration of the intervention.
    Keywords: parenting, early childhood development
    JEL: H43 I10 I20 I38
    Date: 2019–07
  28. By: Jason Delaney (Georgia Gwinnett College); Sarah Jacobson (Williams College); Thorsten Moenig (Temple University)
    Abstract: Is the assumption that people automatically know their own preferences innocuous? We present a theory and an experiment that study the limits of preference discovery. If tastes must be learned through experience, preferences for some goods may never be learned because it is costly to try new things, and thus non-learned preferences may cause wel- fare loss. We conduct an online experiment in which finite-lived par- ticipants have an induced utility function over fictitious goods about whose marginal utilities they have initial guesses. Subjects learn most, but not all, of their preferences eventually. Choice reversals occur, but primarily in early rounds. Subjects slow their sampling of new goods over time, supporting our conjecture that incomplete learning can persist. Incomplete learning is more common for goods that are rare, have low initial value guesses, or appear in choice sets alongside goods that appear attractive. It is also more common for people with lower incomes or shorter lifetimes. More noise in initial value guesses has opposite effects for low-value and high-value goods because it affects the perceived likelihood that the good is worth trying. Over time, sub- jects develop a pessimistic bias in beliefs about goods’ values, since optimistic errors are more likely to be corrected. Overall, our results show that if people need to learn their preferences through consump- tion experience, that learning process will cause choice reversals, and even when a person has completed sampling the goods she is willing to try, she may continue to lose welfare because of suboptimal choices that arise from non-learned preferences.
    Keywords: discovered preferences, preference stability, learning
    JEL: D81 D83 D01 D03
    Date: 2019–07
  29. By: Jeremy Burke; Julian Jamison; Dean Karlan; Kata Mihaly; Jonathan Zinman
    Abstract: There is little evidence on how the large market for credit score improvement products affects consumers or credit market efficiency. A randomized encouragement design on a standard credit builder loan (CBL) identifies null average effects on whether consumers have a credit score and the score itself, with important heterogeneity: those with loans outstanding at baseline fare worse, those without fare better. Selection, treatment effect, and prediction models indicate the CBL reveals valuable information to markets, inducing positive selection and making credit histories more precise, while keeping credit scores’ predictive power intact. With modest targeting changes, CBLs could work as intended.
    JEL: D12 G14 G21
    Date: 2019–07
  30. By: Rajbhandari Thapa, Janani; Sevilla, Julio; Nayga, Rodolfo M.
    Keywords: Research and Development/Tech Change/Emerging Technologies
    Date: 2019–06–25
  31. By: Marcia Scazufca; Paula Pereda
    Abstract: Background: Depression is a common and recurrent condition among older adults and is associated with poor quality of life and increased health care utilization and costs. The purpose of this study was to assess the feasibility of delivering a psychosocial intervention targeting depression, and to develop the procedures to conduct a cluster randomized controlled trial (RCT) among older adults registered with primary care clinics in poor neighbourhoods of São Paulo, Brazil. Methods: We conducted a pilot study of a two-arm cluster RCT using a protocol developed previously (see accompanying paper). Two primary care clinics adhering to the Family Health Strategy were allocated to either the intervention or the control arm. In the control arm, patients received enhanced usual care consisting of staff training for improved recognition and management of depression. In the intervention arm, alongside the enhanced usual care, patients received a 17-week psychosocial intervention delivered by health workers assisted with an application installed in a tablet. Results: We randomly selected 579 of 2020 older adults registered in the intervention clinic to participate in the study. Among these individuals, 353 were assessed for depression and 40 (11.0%) scored at least 10 on the PHQ-9 and were therefore invited to participate. The consent rate was 33/40 (82%) with a resulting yield of 33/579 (5.7%). In the control arm, we randomly selected 320 older adults among 1482 registered in the clinic, 223 were assessed for depression and 28 (12.6%) scored 10 or above on the PHQ-9. The consent rate was 25/28 (89%), with a resulting yield of 25/320 (7.8%). Of the 33 who consented in the intervention arm, 19 (59.4%) completed all sessions. The mean PHQ-9 at follow-up (approximately 30 weeks after inclusion) was 12.3 (SD=3.7) and 3.8 (SD=3.9) in the control and intervention arms respectively. Follow-up rates were 92% and 94% in control and intervention arms, respectively. Conclusions: Identification and engagement of clinics, random selection and recruitment of individuals, baseline and follow-up assessment all proved to be feasible in primary care clinics in São Paulo, Brazil. Results support the development of a definitive cluster RCT.
    Keywords: older adults; depression; pilot controlled trial; primary care; collaborative care intervention.
    JEL: I18 I10 C93 C90
    Date: 2019–07–29
  32. By: Koik, Yascha Lena; Thiele, Holger D.; Enneking, Ullrich
    Keywords: Demand and Price Analysis
    Date: 2019–06–25
  33. By: 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]); Juni Singh (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)
    Keywords: Ambiguity,Bounded Rationality,Experiment,Learning,Coarse feedback,Valuation equilibrium
    Date: 2019–07
  34. By: Hildebrand, Kayla; Chung, Chanjin; Boyer, Tracy A.
    Keywords: Research Methods/ Statistical Methods
    Date: 2019–06–25
  35. By: David M. Ritzwoller; Joseph P. Romano
    Abstract: We consider the problem of testing for randomness against streaky alternatives in Bernoulli sequences. In particular, we study tests of randomness (i.e., that trials are i.i.d.) which choose as test statistics (i) the difference between the proportions of successes that directly follow k consecutive successes and k consecutive failures or (ii) the difference between the proportion of successes following k consecutive successes and the proportion of successes. The asymptotic distributions of these test statistics and their permutation distributions are derived under randomness and under general models of streakiness, which allows us to evaluate their local asymptotic power. The results are applied to revisit tests of the "hot hand fallacy" implemented on data from a basketball shooting experiment, whose conclusions are disputed by Gilovich, Vallone, and Tversky (1985) and Miller and Sanjurjo (2018a). While multiple testing procedures reveal that one shooter can be inferred to exhibit shooting significantly inconsistent with randomness, supporting the existence of positive dependence in basketball shooting, we find that participants in a survey of basketball players over-estimate an average player's streakiness, corroborating the empirical support for the hot hand fallacy.
    Date: 2019–08

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