nep-exp New Economics Papers
on Experimental Economics
Issue of 2019‒09‒02
33 papers chosen by

  1. Using Survey Questions to Measure Preferences: Lessons from an Experimental Validation in Kenya By Bauer, Michal; Chytilova, Julie; Miguel, Edward
  2. Hidden Action and Outcome Contractibility: An Experimental Test of Moral Hazard Theory By Hoppe, Eva I.; Schmitz, Patrick W.
  3. Do People Bundle Sequences of Choices? An Experimental Investigation By George Ainslie; Glenn W. Harrison; Morten I. Lau; Don Ross; Alexander Schuhr; J. Todd Swarthout
  4. Gift-exchange in society and the social integration of refugees: Evidence from a field, a laboratory, and a survey experiment By Jeworrek, Sabrina; Leisen, Bernd Josef; Mertins, Vanessa
  5. Runoff Elections in the Laboratory By Bouton, Laurent; Gallego, Jorge; Llorente-Saguer, Aniol; Morton, Rebecca
  6. An Experimental Investigation of Charity Rebates By Enrique Fatas; Joo Young Jeon; Paloma Ubeda
  7. The Entertaining Way to Behavioral Change: Fighting HIV with MTV By Abhijit Banerjee; Eliana La Ferrara; Victor H. Orozco-Olvera
  8. Motivational Goal Bracketing: An Experiment By Koch, Alexander K; Nafziger, Julia
  9. Choice of Microfinance Contracts and Repayment Rates under Individual Lending: An Artefactual Field Experiment from Pakistan By Shahid Razzaque
  10. Market timing under public and private information By Jean Paul Rabanal; Aleksei Chernulich; John Horowitz; Olga A. Rud; Manizha Sharifova
  11. Empirical evidence on repeated sequential games By Ghidoni, Riccardo; Suetens, Sigrid
  12. Can APPealing and more informative bills "nudge" individuals into conserving electricity? By Meub, Lukas; Runst, Petrik; von der Leyen, Kaja
  13. Blackwell dominance in large samples By Xiaosheng Mu; Luciano Pomatto; Philipp Strack; Omer Tamuz
  14. A Social Norm Nudge to Save More: A Field Experiment at a Retail Bank By Robert Dur; Dimitry Fleming; Marten van Garderen; Max van Lent
  15. Nudging at Scale: Experimental Evidence from FAFSA Completion Campaigns By Kelli A. Bird; Benjamin L. Castleman; Jeffrey T. Denning; Joshua Goodman; Cait Lamberton; Kelly Ochs Rosinger
  16. An Experimental Investigation of Income, Insurance, and Investments in Health over the Life Course By J. Dustin Tracy,; Hillard Kaplan; Kevin A. James; Stephen J. Rassenti
  17. The Role of Behavioral Frictions in Health Insurance Marketplace Enrollment and Risk: Evidence from a Field Experiment By Richard Domurat; Isaac Menashe; Wesley Yin
  18. How to Improve the Accuracy of Project Schedules? The Effect of Project Specification and Historical Information on Duration Estimates By Lorko, Matej; Servátka, Maroš; Zhang, Le
  19. Neighborhoods, Social Class, and Reciprocity: Evidence Using Representative Artefactual Data from Latin America By Arlette Beltrán; Alberto Chong; Mariano Montoya
  20. Using Vignettes to Improve Understanding of Social Security and Annuities By Anya Samek; Arie Kapteyn; Andre Gray
  21. Inaccurate Statistical Discrimination By Bohren, Aislinn; Haggag, Kareem; Imas, Alex; Pope, Devin G.
  22. Smoking and Intertemporal Risk Attitudes By Glenn W. Harrison; Andre Hofmeyr; Harold Kincaid; Don Ross; J. Todd Swarthout
  23. Parental Beliefs, Investments, and Child Development: Evidence from a Large-Scale Experiment By Pedro Carneiro; Emanuela Galasso; Italo Lopez Garcia; Paula Bedregal; Miguel Cordero
  24. Does Vocational Education Work? Evidence from a Randomized Experiment in Mongolia By Erica M. Field; Leigh L. Linden; Ofer Malamud; Daniel Rubenson; Shing-Yi Wang
  25. Gender Differences in Giving and the Anticipation-about-giving in Dictator Games By Subhasish M. Chowdhury; Philip J. Grossman; Joo Young Jeon
  26. Achieving spatial connectivity for threshold public goods through payments for ecosystem services – Evidence from a framed field experiment with oil palm farmers in Indonesia. By Rudolf, Katrin
  27. Maximizing experimental power through dynamic treatment assignment By Morgan, Stephen N.; Kassas, Bachir
  28. Identification with Latent Choice Sets By Kamat, Vishal
  29. The Effects of Access to Credit on Productivity: Separating Technological Changes from Changes in Technical Efficiency By Nusrat Abedin Jimi; Plamen Nikolov; Mohammad Abdul Malek; Subal Kumbhakar
  30. Ethics of Randomized Controlled Trials: Should Economists Care about Equipoise? By Michel Abramowicz; Ariane Szafarz
  31. Resolving Failed Banks: Uncertainty, Multiple Bidding & Auction Design By Jason Allen; Robert Clark; Brent Hickman; Eric Richert
  32. An Experiment in Candidate Selection By Katherine Casey; Abou Bakarr Kamara; Niccoló Meriggi
  33. The Attack and Defense Games By Sheremeta, Roman

  1. By: Bauer, Michal; Chytilova, Julie; Miguel, Edward
    Abstract: Can a short survey instrument reliably measure a range of fundamental economic preferences across diverse settings? We focus on survey questions that systematically predict behavior in incentivized experimental tasks among German university students (Becker et al. 2016) and were implemented among representative samples across the globe (Falk et al. 2018). This paper presents results of an experimental validation conducted among low-income individuals in Nairobi, Kenya. We find that quantitative survey measures -- hypothetical versions of experimental tasks -- of time preference, attitude to risk and altruism are good predictors of choices in incentivized experiments, suggesting these measures are broadly experimentally valid. At the same time, we find that qualitative questions -- self-assessments -- do not correlate with the experimental measures of preferences in the Kenyan sample. Thus, caution is needed before treating self-assessments as proxies of preferences in new contexts.
    Keywords: Experiment; preference measurement; survey; validation
    JEL: C83 D90
    Date: 2019–06
  2. By: Hoppe, Eva I.; Schmitz, Patrick W.
    Abstract: In a laboratory experiment with 754 participants, we study the canonical one-shot moral hazard problem, comparing treatments with unobservable effort to benchmark treatments with verifiable effort. In our experiment, the players endogenously negotiate contracts. In line with contract theory, the contractibility of the outcome plays a crucial role when effort is a hidden action. If the outcome is contractible, most players overcome the hidden action problem by agreeing on incentive-compatible contracts. Communication is helpful, since it may reduce strategic uncertainty. If the outcome is non-contractible, in most cases low effort is chosen whenever effort is a hidden action. However, communication leads the players to agree on larger wages and substantially mitigates the underprovision of effort.
    Keywords: Moral hazard; Hidden action; Contract theory; Incentive theory; Laboratory experiments
    JEL: D82 D86
    Date: 2018
  3. By: George Ainslie; Glenn W. Harrison; Morten I. Lau; Don Ross; Alexander Schuhr; J. Todd Swarthout
    Abstract: Economists and psychologists have sought to model and explain both impulsive behavior and the costly but often successful mechanisms by which people control it. Ainslie [1975][1992][2001] suggests that self-control is often achieved on account of a phenomenon he calls "choice bundling." This refers to re-framing of series of discrete choices as single choices over whole series. Whereas other core elements of Ainslie's account of self-regulation, such as hyperbolic discounting and intrapersonal bargaining among temporally distinguished selves have been subject to extensive modeling by economists, choice bundling has been absent from the economic literature because it has never been empirically isolated in a controlled setting that meets the methodological requirements of the discipline. We report a laboratory experiment that fills this gap. Subjects made choices between smaller, sooner and larger, later real monetary rewards under experimental treatments that allowed us to discriminate between choice bundling, reliance on pre-commitment, and possible magnitude effects on intertemporal discounting. Risk preference measures were used to obtain accurate discounting estimates, based on estimation of mixture models that incorporate exponential, hyperbolic and quasi-hyperbolic discounting functions. We use structural econometric procedures which are well established in the literature on binary choice and find strong support for the hypothesis that subjects bundled choices when conditions allowed them to do so, and consequently exhibited different discounting behavior in these conditions.
    JEL: D03 D83 D90
    Date: 2018–12
  4. By: Jeworrek, Sabrina; Leisen, Bernd Josef; Mertins, Vanessa
    Abstract: Refugee integration needs broad support from society, but only a minority is actively engaged. Given that most individuals reciprocate kind behaviour, we examine the idea that the proportion of supporters is increasing as a reciprocal response to refugees' contributions to society through volunteering. Our nationwide survey experiment shows that the intentions to contribute time and money rise significantly when citizens learn about refugees' pro-social activities. Importantly, this result holds for individuals who have not been in contact to refugees so far. We complement this investigation by experiments in the lab and the field - which confirm our findings for actual behaviour.
    Keywords: gift-exchange,reciprocity,refugees,integration,field experiment,laboratory experiment
    JEL: C93 D63 D91 J15
    Date: 2019
  5. By: Bouton, Laurent; Gallego, Jorge; Llorente-Saguer, Aniol; Morton, Rebecca
    Abstract: We study experimentally the properties of the majority runoff system and compare them to the ones of plurality rule, in the setup of a divided majority. Our focus is on Duverger's famous predictions that the plurality rule leads to a higher coordination of votes on a limited number of candidates than the majority runoff rule. Our experiments show that, in contradiction with Duverger's predictions, coordination forces are strong in majority runoff elections. We indeed observe similar levels of coordination under both rules, even when sincere voting is an equilibrium only under majority runoff. Our results suggest that the apparent desire to coordinate, and not vote sincerely, under the majority runoff rule is to some extent not rational. Finally, we find insignificant differences between runoff and plurality systems in terms of both electoral outcomes and welfare. This is so exactly because coordination forces are strong under both rules. But, this does not mean that the two rules are equally socially desirable. Majority runoff rule entails an additional cost: second rounds that take place frequently.
    Keywords: Laboratory experiments; Majority Runoff; Multicandidate Elections; Plurality
    JEL: C92 D70
    Date: 2019–06
  6. By: Enrique Fatas (School of Business and Economics, Loughborough University); Joo Young Jeon (Department of Economics, University of Reading); Paloma Ubeda (School of Economics and Business, Universidad Nacional de Educación a Distancia)
    Abstract: We investigate experimentally the effects of various sources of rebates on charity donation. Subjects first play a repeated public good game (PGG) with either a low or a high endowment and then have an option to donate to a charity. They may receive a rebate on their donation either exogenously (from the experimenter) or endogenously (from the public account of the PGG), or a rebate might not be available. When the PGG endowment level is low, the endogenous rebate scheme has a negative effect on charity giving. The exogenous rebate scheme, however, does not have any such effect. If the endowment level is high and the rebate is endogenous, then other-regarding preferences become salient and boost up charity donation. Females donate more than males, but only under the endogenous rebate scheme. These results shed light on the effects of the rebate schemes on different income and demographic factors, and provide with relevant policy implications.
    Keywords: donation; rebate; dictator game; public good game
    JEL: C91 C92 D64
    Date: 2019–08–26
  7. By: Abhijit Banerjee; Eliana La Ferrara; Victor H. Orozco-Olvera
    Abstract: We test the effectiveness of an entertainment education TV series, MTV Shuga, aimed at providing information and changing attitudes and behaviors related to HIV/AIDS. Using a simple model we show that "edutainment" can work through an individual or a social channel. We conducted a randomized controlled trial in urban Nigeria where young viewers were exposed to MTV Shuga or to a placebo TV series. Among those exposed to MTV Shuga, we created additional variation in the social messages they received and in the people with whom they watched the show. We find significant improvements in knowledge and attitudes towards HIV and risky sexual behavior. Treated subjects are twice as likely to get tested for HIV eight months after the intervention. We also find reductions in STDs among women. These effects are stronger for viewers who report being more involved with the narrative, consistent with the psychological underpinnings of edutainment. Our experimental manipulations of the social norm component did not produce significantly different results from the main treatment. The individual effect of edutainment thus seems to have prevailed in the context of our study.
    JEL: D91 I12 O15
    Date: 2019–07
  8. By: Koch, Alexander K; Nafziger, Julia
    Abstract: We study theoretically and experimentally how the bracketing of non-binding goals in a repeated task affects the level of goals that people set for themselves, the actual effort provided, and the pattern of effort over time. In our model, a sophisticated or (partially) naive individual faces a motivational problem because of present-biased preferences. Using an online, real-effort experiment that varied whether subjects set separate daily goals for how much to work over a one-week period or one weekly goal, we find support for the theoretical predictions. Subjects with daily goals set higher goals in aggregate and provided more effort than those with a weekly goal. The higher effort was driven by the higher goals set. Additional treatments complemented internal commitment through goals with an externally enforced minimum work requirement to get started working each day. Here, average performance dropped because of high dropout.
    Keywords: commitment; Goals; narrow bracketing; Online Experiment; Real effort; Self-Control
    JEL: D03 D81 D91
    Date: 2019–06
  9. By: Shahid Razzaque (Pakistan Institute of Development Economics, Islamabad)
    Abstract: An artefactual field experiment in a semi-rural town of district Sialkot, Pakistan was conducted using the randomly drawn subjects from the pool of potential microfinance borrowers in that area. Two different types of contracts were employed including a Non-Interest Based- Profit Sharing (PS) and a Conventional Interest Based (IB) contracts. The subjects were split into two groups where one had the option to choose from the set of available contracts while the other did not. Strong preference for PS contracts over IB contract had been observed, however the repayment rates did not differ significantly across the contracts. The female subjects showed a higher repayment rate than the male subjects. At the same time, the enforcement and penalty treatments and religiosity of the subject had a significant and positive effect on the repayment behaviour.
    Keywords: Microfinance, Individual Lending, Asymmetric Information, Interest-based contracts, Profit Sharing contracts
    JEL: C93 D03 D82 G21 O16
    Date: 2019
  10. By: Jean Paul Rabanal (Monash University); Aleksei Chernulich (NYU Abu Dhabi); John Horowitz (Ball State University); Olga A. Rud (RMIT University); Manizha Sharifova (University of the Pacific)
    Abstract: We design an experiment where subjects must choose between a risky investment, which evolves according to an autoregressive process, and a risk-free investment which has a constant payoff. The treatments vary the information available on the risky investment when players choose the risk-free alternative. We find that in the public information treatment, which captures the information structure of index funds, subjects stay out of the market longer compared to the private information environment, which captures elements of private equity investment. The difference in behavior across treatments can be explained by the demand for information, which appears to overcome risk aversion.
    Keywords: Forecasting experiment, investment decisions, market timing, discrete choice
    JEL: D81 D83 D84 G11 G17 C91
    Date: 2019–08
  11. By: Ghidoni, Riccardo; Suetens, Sigrid
    Abstract: Sequentiality of moves in an infinitely repeated prisoner's dilemma does not change the conditions under which mutual cooperation can be supported in equilibrium as compared to simultaneous decision-making. The nature of the interaction is different, however, given that the second mover in a sequential-move game does not face strategic uncertainty. We study in an experiment whether sequentiality has an effect on cooperation rates. We find that with intermediate incentives to cooperate, sequentiality increases cooperation rates by around 40 percentage points, whereas with very low or high incentives to cooperate, cooperation rates are respectively very low or high in both settings.
    Keywords: Cooperation; Experiment; infinitely repeated game; sequential prisoner's dilemma; Strategic uncertainty
    JEL: C70 C90 D70
    Date: 2019–06
  12. By: Meub, Lukas; Runst, Petrik; von der Leyen, Kaja
    Abstract: We use a field experiment on energy billing in a German region to evaluate the effect of two behavioral nudges (consumption feedback and social comparison) on electricity consumption. Similar experiments have revealed significant treatment effects, yet theindividual variance has proven to be substantial. On grounds of these heterogeneous treatment effects and the possibility of cross-country behavioral differences, additional experiments are warranted. For our German participants with low pre-treatment consumption compared to many other countries, we find no treatment effects. From this, we deduce that the effect of consumption feedback and social comparison is highly context dependent.
    Keywords: Energy consumtion,Electricity,Consumtion feedback
    JEL: K32 Q58
    Date: 2019
  13. By: Xiaosheng Mu; Luciano Pomatto; Philipp Strack; Omer Tamuz
    Abstract: We study repeated independent Blackwell experiments; standard examples include drawing multiple samples from a population, or performing a measurement in different locations. In the baseline setting of a binary state of nature, we compare experiments in terms of their informativeness in large samples. Addressing a question due to Blackwell (1951) we show that generically, an experiment is more informative than another in large samples if and only if it has higher Renyi divergences. As an application of our techniques we in addition provide a novel characterization of k-th order stochastic dominance as second-order stochastic dominance of large i.i.d. sums.
    Date: 2019–06
  14. By: Robert Dur (Erasmus University Rotterdam); Dimitry Fleming (ING Netherlands); Marten van Garderen (ING Netherlands); Max van Lent (Leiden University)
    Abstract: A large fraction of households have very little savings buffer and are therefore vulnerable to financial shocks. We examine whether a social norm nudge can stimulate such households to save more by running a small-scale survey experiment and a large-scale field experiment at a retail bank in the Netherlands. The survey experiment shows that a social norm nudge increases intended savings. In line with this, we find in our field experiment that households who are exposed to the social norm nudge click more often on a link to a personal webpage where they can start or adjust an automatic savings plan. However, analyzing detailed bank data, we find no treatment effect on actual savings, neither in the short run nor in the long run. Our null findings are quite precisely estimated.
    Keywords: household savings, field experiment, nudges, social norms
    JEL: C93 D14
    Date: 2019–08–26
  15. By: Kelli A. Bird; Benjamin L. Castleman; Jeffrey T. Denning; Joshua Goodman; Cait Lamberton; Kelly Ochs Rosinger
    Abstract: Do nudge interventions that have generated positive impacts at a local level maintain efficacy when scaled state or nationwide? What specific mechanisms explain the positive impacts of promising smaller-scale nudges? We investigate, through two randomized controlled trials, the impact of a national and state-level campaign to encourage students to apply for financial aid for college. The campaigns collectively reached over 800,000 students, with multiple treatment arms to investigate different potential mechanisms. We find no impacts on financial aid receipt or college enrollment overall or for any student subgroups. We find no evidence that different approaches to message framing, delivery, or timing, or access to one-on-one advising affected campaign efficacy. We discuss why nudge strategies that work locally may be hard to scale effectively.
    JEL: D9 I23 I24
    Date: 2019–08
  16. By: J. Dustin Tracy, (Economic Science Institute, Chapman University); Hillard Kaplan (Economic Science Institute, Chapman University); Kevin A. James (Economic Science Institute, Chapman University); Stephen J. Rassenti (Economic Science Institute, Chapman University)
    Abstract: We examine the impacts of age, income and insurance plan on behavior in a virtual environment with cash-motivated subjects, who live multi-period lives in which they earn income and spend on enjoyment, insurance, and investments in health. Health shocks increase simulating aging. The 2x2 experimental has high and low income subjects, and offers employer-based or actuarial insurance. We find: 1) subject behavior approximated optimal responses; 2) in all treatments, subjects under-invested in health early in life and over-invested in health late in life; 3) subjects in the employerbased plan purchased insurance at higher rates; 4) the employer-based plan reduced differences due to income and age; 5) subjects in the actuarial plan engaged in more health-promoting behaviors, but still below optimal levels, and did save at the level required, so did realize the full benefits of the plan. Should these results generalize, they have clear implications for the health insurance policy.
    Keywords: Health insurance, Moral Hazard, Inter-generational, Subsidies, Actuarially fair, Employer-based
    JEL: I11 I12 I13 I14
    Date: 2019
  17. By: Richard Domurat; Isaac Menashe; Wesley Yin
    Abstract: We experimentally varied information mailed to 87,000 households in California's health insurance marketplace to study the role of frictions in insurance take-up. Reminders about the enrollment deadline raised enrollment by 1.3 pp (16 percent), in this typically low take-up population. Heterogeneous effects of personalized subsidy information indicate systematic misperceptions about program benefits. Consistent with an adverse selection model with frictional enrollment costs, the intervention lowered average spending risk by 5.1 percent, implying that marginal respondents were 37 percent less costly than inframarginal consumers. We observe the largest positive selection among low income consumers, who exhibit the largest frictions in enrollment. Finally, the intervention raised average consumer WTP for insurance by $25 to $54 per month. These results suggest that frictions may partially explain low measured WTP for marketplace insurance, and that interventions reducing them can improve enrollment and market risk in exchanges.
    JEL: D03 I11 I13
    Date: 2019–08
  18. By: Lorko, Matej; Servátka, Maroš; Zhang, Le
    Abstract: The success of a business project often depends on the accuracy of project estimates. Inaccurate, often overoptimistic schedules can lead to significant project failures. In this paper, we experimentally investigate the effectiveness of two interventions designed to mitigate the pervasive underestimation bias and improve the accuracy of project duration estimates: (1) increasing the quantity of available information prior to estimation by providing historical information regarding the average duration of similar projects in the past and (2) increasing the quality of available information prior to estimation by providing a more detailed project specification. In addition, we also test whether it is more effective to provide historical information together with the project specification or only after the initial beliefs regarding the project duration are formed. We find that increasing both the quantity and quality of project relevant information successfully mitigates the underestimation bias. However, only the provision of historical information is also associated with significant improvement in absolute estimation accuracy. The timing at which such information is disclosed to planners does not seem to influence the effectiveness of the intervention. We also find that subjective confidence in the accuracy of duration estimates does not vary across experimental treatments, suggesting that the confidence in estimates is neither a function of the quantity nor the quality of available information prior to estimation.
    Keywords: project management, project planning, time management, duration estimation, historical information, project specification
    JEL: C91 D83 O21 O22
    Date: 2019–08–15
  19. By: Arlette Beltrán (Universidad del Pacifico, Peru); Alberto Chong (Department of Economics, Georgia State University, USA); Mariano Montoya (Universidad del Pacifico, Peru)
    Abstract: We study if urban class segregation destroys social capital in Latin America using experimental data that are representative for six Latin American cities. In particular, we focus on whether belonging to upper class neighborhoods impacts reciprocity in a standard trust game. While our overall results confirm a negative association between these two variables, we also find that trusting behavior can help counteract the negative impact of class.
    Date: 2019–08
  20. By: Anya Samek; Arie Kapteyn; Andre Gray
    Abstract: Evidence shows that people have difficulty understanding complex aspects of retirement planning, which leads them to under-utilize annuities and claim Social Security benefits earlier than is optimal. To target this problem, we developed vignettes about the consequences of different annuitization and claiming decisions. We evaluated our vignettes using an experiment with a representative online panel of nearly 2,000 Americans. In our experiment, respondents were either assigned to a control group with no vignette, to a written vignette, or to a video vignette. They were then asked to give advice to hypothetical persons on annuitization or Social Security claiming, and were asked factual questions about these concepts. We found evidence that being exposed to vignettes led respondents to give better advice. For example, the gap between advised claim age for a relatively healthy person versus a relatively sick person was larger by nearly a year in the vignette treatments versus the control group. Further, the vignettes increased financial literacy related to these concepts by 10-15 percentage points. Interestingly, the mode of communication did not have a significant impact – the video and written vignettes were equally effective.
    JEL: H3 J26
    Date: 2019–08
  21. By: Bohren, Aislinn; Haggag, Kareem; Imas, Alex; Pope, Devin G.
    Abstract: Discrimination has been widely studied in economics and other disciplines. In addition to identifying evidence of discrimination, economists often categorize the source of discrimination as either taste-based or statistical. Categorizing discrimination in this way can be valuable for policy design and welfare analysis. We argue that a further categorization is important and needed. Specifically, in many situations economic agents may have inaccurate beliefs about the expected productivity or performance of a social group. This motivates our proposed distinction between accurate (based on correct beliefs) and inaccurate (based on incorrect beliefs) statistical discrimination. We do a thorough review of the discrimination literature and argue that this distinction is rarely discussed. Using an online experiment, we illustrate how to identify accurate versus inaccurate statistical discrimination. We show that ignoring this distinction -- as is often the case in the discrimination literature -- can lead to erroneous interpretations of the motives and implications of discriminatory behavior. In particular, when not explicitly accounted for, inaccurate statistical discrimination can be mistaken for taste-based discrimination, accurate statistical discrimination, or a combination of the two.
    Keywords: discrimination; Inaccurate Beliefs
    JEL: D90 J71
    Date: 2019–06
  22. By: Glenn W. Harrison; Andre Hofmeyr; Harold Kincaid; Don Ross; J. Todd Swarthout
    Abstract: Atemporal risk preferences, time preferences, and intertemporal risk preferences are central to economic explanations of addiction, but have received little attention in the experimental economic literature on substance use. We conduct an incentive-compatible experiment designed to elicit the atemporal risk preferences, time preferences, and intertemporal risk preferences of a sample of student (n = 145) and staff (n = 111) smokers, ex-smokers, and non-smokers at the University of Cape Town in 2016-2017. We estimate a structural model of intertemporal risk preferences jointly with a rank-dependent utility model of choice under atemporal risk and a quasi-hyperbolic model of time preferences. We find no substantive differences in atemporal risk preferences according to smoking status, smoking intensity, and smoking severity, but do find that time preferences have an economically significant association with smoking behaviour. Smokers discount at a far higher rate than non-smokers, and ex-smokers discount at a level between these groups. There is also a large, positive relationship between smoking intensity and discounting behaviour that has important implications for treatment. The intertemporal risk preferences of our sample exhibit significant heterogeneity and we find, contrary to the assumption employed by some economic models, that smokers do not exhibit intertemporal risk seeking behaviour. Instead, our sample is characterised by high levels of intertemporal risk aversion which varies by smoking intensity and smoking severity in men, but not in women.
    Date: 2018–12
  23. By: Pedro Carneiro; Emanuela Galasso; Italo Lopez Garcia; Paula Bedregal; Miguel Cordero
    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: 2019–08
  24. By: Erica M. Field; Leigh L. Linden; Ofer Malamud; Daniel Rubenson; Shing-Yi Wang
    Abstract: This paper estimates the impact of admission to formal vocational secondary programs on labor market outcomes in Mongolia. We conducted public lotteries to allocate scarce slots for approximately 8,000 students who applied to oversubscribed trades in 10 vocational schools during 2010, 2011, and 2012. We find that admission to oversubscribed vocational schools in Mongolia led to significantly higher employment, and increased earnings for women. These positive impacts appear to be due to the acquisition of more skills in specific trades, greater work intensity, and increased employment opportunities in high-paying sectors.
    JEL: I25 J24
    Date: 2019–07
  25. By: Subhasish M. Chowdhury (Department of Economics, University of Bath); Philip J. Grossman (Department of Economics, Monash University); Joo Young Jeon (Department of Economics, University of Reading)
    Abstract: Research on altruistic payoffs and the related payoff anticipation and related gender differences is limited. Using data from Chowdhury & Jeon (2014) who vary a common show-up fee and incentivize recipients to anticipate the amount given in a dictator game, we find that the show-up fee has a positive effect on dictator giving for both genders. While female dictators are more generous than males, male recipients anticipate higher amounts than the amount male dictators give. The show-up fee affects the social-type of female dictators, and the anticipation about dictator social-type by the male recipients.
    Keywords: dictator-game; altruism; anticipatory-belief; gender
    JEL: C91 D64 D84 J16
    Date: 2019–08–26
  26. By: Rudolf, Katrin
    Keywords: Resource/ Energy Economics and Policy
    Date: 2019–06–25
  27. By: Morgan, Stephen N.; Kassas, Bachir
    Keywords: Research and Development/Tech Change/Emerging Technologies
    Date: 2019–06–25
  28. By: Kamat, Vishal
    Abstract: In a common experimental format, individuals are randomly assigned to either a treatment group with access to a program or a control group without access. In such experiments, analyzing the average effects of the treatment of program access may be hindered by the problem that some control individuals do not comply with their assigned status and receive program access from outside the experiment. Available tools to account for such a problem typically require the researcher to observe the receipt of program access for every individual. However, in many experiments, this is not the case as data is not collected on where any individual received access. In this paper, I develop a framework to show how data on only each individual's treatment assignment status, program participation decision and outcome can be exploited to learn about the average effects of program access. I propose a nonparametric selection model with latent choice sets to relate where access was received to the treatment assignment status, participation decision and outcome, and a linear programming procedure to compute the identified set for parameters evaluating the average effects of program access in this model. I illustrate the framework by analyzing the average effects of Head Start preschool access using the Head Start Impact Study. I nd that the provision of Head Start access induces parents to enroll their child into Head Start and also positively impacts test scores, and that these effects heterogeneously depend on the availability of access to an alternative preschool.
    Keywords: Program evaluation, latent choice sets, unobserved treatment, program access, multiple treatments, average treatment effect, noncompliance, discrete choice, partial identification, social experiments, head start impact study.
    JEL: C31 C14
    Date: 2019–08
  29. By: Nusrat Abedin Jimi; Plamen Nikolov; Mohammad Abdul Malek; Subal Kumbhakar
    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 D20 H81 O12 O16 Q12
    Date: 2019–08
  30. By: Michel Abramowicz; Ariane Szafarz
    Abstract: Equipoise is defined by Freedman (1987, p.141) as a "state of genuine uncertainty on the part of the clinical investigator regarding the comparative therapeutic merits of each arm in a trial." This principle is grounded in the ethical motivation that any ex-ante preference for a given option would undermine the interests of those who are offered another. Randomized controlled trials (RCTs) in development economics disregard the equipoise requirement by typically disadvantaging the control group. This paper investigates how the equipoise principle is formalized in the medical literature and discusses whether and how it should be taken into consideration by economists. It argues that equipoise is especially relevant when double (or even single) blindness is excluded and when the control group includes already vulnerable individuals. More generally, this paper advocates for developing a vibrant ethics conversation on the design and fairness of RCTs in social sciences.
    Keywords: Equipoise; Fairness; Ethics of RCTs; Control Group; Placebo
    JEL: C93 I14 B41 O16 D63
    Date: 2019–08–26
  31. By: Jason Allen; Robert Clark; Brent Hickman; Eric Richert
    Abstract: Bank resolution is costly. In the United States, the Federal Deposit Insurance Corporation (FDIC) typically resolves failing banks by auction. If a bank is failing, healthy banks are encouraged to compete at auction to buy it. This results in a cash transfer from the FDIC to the buyer; the failing bank then continues under new ownership. The FDIC tries to minimize these transfers by holding competitive auctions. The main feature of these auctions is that they are scoring auctions. First, healthy banks place bids that can differ along multiple dimensions. These are scored based on their estimated costs. Second, to foster competition, bidders are encouraged to submit multiple bids, even though only one bid can win. This paper proposes a methodology for analyzing auction environments where bids are ranked according to multiple attributes but there is uncertainty about the scoring rule used to evaluate them. We use this framework to estimate the cost to the FDIC of having an opaque scoring rule. We find that the FDIC could reduce costs of resolution by around 17 percent by removing uncertainty.
    Keywords: Econometric and statistical methods; Financial Institutions
    JEL: D44 G21
    Date: 2019–08
  32. By: Katherine Casey; Abou Bakarr Kamara; Niccoló Meriggi
    Abstract: Are ordinary citizens or political party leaders better positioned to select candidates? While the direct vote primary system in the United States lets citizens choose, it is exceptional, as the vast majority of democracies rely instead on party officials to appoint or nominate candidates. Theoretically, the consequences of these distinct design choices on the selectivity of the overall electoral system are unclear: while party leaders may be better informed about candidate qualifications, they may value traits—like party loyalty or willingness to pay for the nomination—at odds with identifying the best performer. To make progress on this question, we partnered with both major political parties in Sierra Leone to experimentally vary how much say ordinary voters, as opposed to party officials, have in selecting Parliamentary candidates. We find evidence that more democratic selection procedures increase the likelihood that parties select the candidate most preferred by voters, favor candidates with stronger records of local public goods provision, and alter the allocation of payments from potential candidates to party officials.
    JEL: D72 H1 P16
    Date: 2019–08
  33. By: Sheremeta, Roman
    Abstract: The attack and defense game is a game in which an attacker (a group of attackers) has an incentive to revise the status quo and a defender (a group of defenders) wants to protect it. The asymmetry in objectives creates incompatible interests and results in a mixed-strategy Nash equilibrium. However, this equilibrium could be heavily impacted by behavioral considerations.
    Keywords: contest, attack, defense, experiment
    JEL: C72 C91 D72 D74
    Date: 2018–01

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.