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on Experimental Economics |
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Issue of 2019‒09‒09
forty-five papers chosen by |
| By: | Carlos A. Chávez (Universidad de Talca and Interdisciplinary Center for Aquaculture Research (INCAR)); James J. Murphy (Department of Economics, University of Alaska Anchorage and Economic Science Institute, Chapman University); John K. Stranlund (Department of Resource Economics, University of Massachusetts-Amherst) |
| Abstract: | This work presents the results of framed field experiments designed to study the co-enforcement of access to common pool resources. The experiments were conducted in the field with participants in the territorial use rights in fisheries (TURFs) management scheme that regulates access to nearshore fisheries along the coast of Chile. In the experiments, TURF members not only decided on harvest but also invested in monitoring to deter poaching by outsiders. Treatments varied whether the monitoring investment was an individual decision or determined by a group vote. Per-unit sanctions for poaching were exogenous as if provided by a government authority, and we varied the sanction level. Our results suggest that co-enforcement, in which monitoring for poaching is provided by resource users and sanctions are levied by the government, can reduce poaching levels. Monitoring investments were not high enough to lift the expected marginal penalty for poaching above the marginal gain from poaching when the sanction for poaching was low, but expected marginal penalties were higher than the marginal gain from poaching when the sanction was high. Despite this, poaching levels were not sensitive to changes in monitoring levels and sanctions. While co-enforcement did not eliminate poaching, it did eliminate the gains from poaching in all but one treatment. |
| Keywords: | experimental economics, Common pool resources; enforcement; field experiments; poaching; territorial use rights fisheries; social dilemma; fisheries management; development economics; co-enforcement |
| JEL: | C72 C90 C93 D70 H41 K42 Q22 Q28 Q56 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:19-18&r=all |
| By: | Morten Hedegaard (Department of Economics, University of Copenhagen, Denmark); Rudolf Kerschbamer (University of Innsbruck, Austria); Daniel Müler (University of Innsbruck, Austria); Jean-Robert Tyran (Department of Economics, University of Copenhagen, Denmark) |
| Abstract: | We use a large and heterogeneous sample of the Danish population to investigate the importance of distributional preferences for behavior in a public good game and a trust game. We find robust evidence for the significant explanatory power of distributional preferences. In fact, compared to twenty-one covariates, distributional preferences turn out to be the single most important predictor of behavior. Specifically, subjects who reveal benevolence in the domain of advantageous inequality contribute more to the public good and are more likely to pick the trustworthy action in the trust game than other subjects. Since the experiments were spread out more than one year, our results suggest that there is a component of distributional preferences that is stable across games and over time. |
| Keywords: | Distributional preferences, social preferences, Equality-Equivalence Test, representative online experiment, trust game, public goods game, dictator game |
| JEL: | C72 C91 D64 |
| Date: | 2019–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1906&r=all |
| By: | Islam, Asadul (Monash University); Lee, Wang-Sheng (Deakin University); Nicholas, Aaron (Deakin University) |
| Abstract: | We conduct a randomized field experiment to investigate the benefits of an intensive chess training program undertaken by primary school students in a developing country context. We examine the effects on academic outcomes, and a number of non-cognitive outcomes: risk preferences, patience, creativity and attention/focus. Our main finding is that chess training reduces the level of risk aversion almost a year after the intervention ended. We also find that chess training improves math scores, reduces the incidence of time inconsistency and the incidence of non-monotonic time preferences. However, these (non-risk preference) results are less conclu-sive once we account for multiple hypothesis testing. We do not find any evidence of significant effects of chess training on other academic outcomes, creativity, and attention/focus. |
| Keywords: | chess training, math, non-cognitive outcomes, risk, randomized experiment |
| JEL: | C93 D80 I21 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12550&r=all |
| By: | Abebe, Girum (Policy Studies Institute); Fafchamps, Marcel (Stanford University); Koelle, Michael (University of Oxford); Quinn, Simon (University of Oxford) |
| Abstract: | We place young professionals into established firms to shadow middle managers. Using random assignment into program participation, we find positive average effects on wage employment, but no average effect on the likelihood of self-employment. We match individuals to firms using a deferred-acceptance algorithm, and show how this allows us to identify heterogeneous treatment effects by firm and intern characteristics. We find striking heterogeneity in self-employment effects, and show that some assignment mechanisms can substantially outperform random matching in generating employment and income effects. These results demonstrate the potential for matching algorithms to improve the design of field experiments. |
| Keywords: | propensity score, field experiments, management practices, self-employment, causal inference |
| JEL: | J24 J64 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12572&r=all |
| By: | Ramón Cobo-Reyes (Department of Economics, American University of Sharjah); Gabriel Katz (Department of Politics, University of Exeter); Thomas Markussen (Department of Economics, University of Copenhagen, Denmark); Simone Meraglia (Department of Politics, University of Exeter) |
| Abstract: | We experimentally analyze the eect of endogenous group formation on the type of sanctioning institutions emerging in a society. We allocate subjects to one of two groups. Subjects play a repeated public goods game and vote on the sanctioning system (formal or informal) to be implemented in their group. We compare this environment to one in which subjects are allowed to (i) vote on the sanctioning system and (ii) move between groups. We find that the possibility of moving between groups leads to a larger proportion of subjects voting for formal sanctions. This result is mainly driven by subjects in groups with relatively high initial levels of contribution to the public good, who are more likely to vote for informal sanctions when groups are closed than when they are open. |
| Keywords: | Sanctions, Cooperation, Group Formation, Voting, Experiment |
| JEL: | C73 C91 C92 D72 H41 |
| Date: | 2019–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1907&r=all |
| By: | Cary Deck (Department of Economics, University of Alabama and Economic Science Institute, Chapman University); Roman M. Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University) |
| Abstract: | The tug-of-war is a multi-battle contest often used to describe extended interactions in economics, operations management, political science, and other disciplines. While there has been some theoretical work, to the best of our knowledge, this paper provides the first experimental study of the tug-of-war. The results show notable deviations of behavior from theory derived under standard assumptions. In the first battle of the tug-of-war, subjects often bid less, while in the follow-up battles, they bid more than predicted. Also, contrary to the prediction, bids tend to increase in the duration of the tug-of-war. Finally, extending the margin necessary to win the tug-of-war causes a greater reduction in bidding than either a decrease in the prize or greater impatience despite all three having the same predicted effect. These findings have implications both for theorists and practitioners. |
| Keywords: | tug-of-war, all-pay auction, multi-stage contest, laboratory experiment |
| JEL: | C91 D72 D74 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:18-21&r=all |
| By: | Steven Jacob Bosworth (Department of Economics, University of Reading); Simon Bartke (M. M. Warburg & CO (AG & Co.) KGaA) |
| Abstract: | We study an experimental setting designed to measure non-strategic behavioural spillovers and elucidate their mechanisms. In our setup a principal can observe the individual efforts of two agents in one task but can only observe team effort in another. We vary the availability of piece rate, tournament, team piece rate, and fixed wage contracts for the individually observable task while holding fixed the use of a team pay contract for the task where only team output is observable. We find tournament incentives unexpectedly induce high voluntary effort in the unobservable task, but that this is exclusively driven by cross-task advantageous learning overriding its deleterious effects on pro-social motivation. We therefore see our study as integrating diverse findings into a coherent explanation: Competitive incentives crowd out pro-social motivation, team incentives promote pro-social motivation, but setting a high effort precedent may be more important when employees perceive tasks as related. |
| Keywords: | motivation, learning, multi-tasking, cooperation |
| JEL: | C92 D83 M52 |
| Date: | 2019–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:emxxdp:em-dp2019-15&r=all |
| By: | Giacomo Degli Antoni (University of Parma, Department of Law); Marco Faillo (University of Trento) |
| Abstract: | We provide experimental evidence on the effect of competition among nonprofit organizations on the total and the per capita amount of collected donations. We vary the number of organizations in competition, their type, i.e., nonprofit associations and community foundations, and their charitable purposes, i.e., to help people with economic difficulties or disabilities. We show that the number but not the variety of nonprofit organizations positively affects the total collected donations. Moreover, we find that the latter is inelastic to the increase in the number of organizations in the competition, which increases the total collected donations but reduces the per capita donations. |
| Keywords: | donations; competition; organizational density; nonprofit organizations; community foundations |
| JEL: | C91 D64 L31 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ent:wpaper:wp74&r=all |
| By: | Bigoni, Maria (University of Bologna); Bortolotti, Stefania (Max Planck Institute for Research on Collective Goods); Nas Özen, Efşan (Bilkent University) |
| Abstract: | Economic inequality may fuel frustration, possibly leading to anger and antisocial behavior. We experimentally study a situation where only the rich can reduce inequality while the poor can express their discontent by destroying the wealth of a rich counterpart with whom they had no previous interaction. We test whether the emergence of such forms of antisocial behavior depends only on the level of inequality, or also on the conditions under which inequality occurs. We compare an environment in which the rich can unilaterally reduce inequality with one where generosity makes them vulnerable to exploitation by the poor. We find that the rich are expected to be more generous in the former scenario than in the latter, but in fact this hope is systematically violated. We also observe that the poor engage in forms of antisocial behavior more often when reducing inequality would be safe for the rich. These results cannot be rationalized by inequality aversion alone, while they are in line with recent models that focus on anger as the result of the frustration of expectations. |
| Keywords: | expectations, frustration, inequality aversion, money-burning, punishment |
| JEL: | C91 D63 D83 D84 D91 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12553&r=all |
| By: | Nicolas Jacquemet (Paris School of Economics, Université de Lorraine (BETA)); Alexander James (Department of Economics, University of Alaska Anchorage); Stéphane Luchini (Aix-Marseille University (Aix-Marseille School of Economics), CNRS and EHESS, Centre de la Vielle Charité); James Murphy (Department of Economics, University of Alaska Anchorage and Economic Science Institute, Chapman University); Jason F. Shogren (Department of Economics, University of Wyoming) |
| Abstract: | This study explores whether an oath to honesty can reduce both shirking and lying among crowd-sourced internet workers. Using a classic coin-ip experiment, we rst show that a substantial majority of Mechanical Turk workers both shirk and lie when reporting the number of heads ipped. We then demonstrate lying can be reduced by rst asking each worker to swear voluntarily on his or her honor to tell the truth in subsequent economic decisions. The oath, however, did not reduce shirking as measured by time- at-coin-ip-task, although it did increase the time they spent answering a demographic survey. Conditional on response, MTurk shirkers and liars were less likely to agree to an ex post honesty oath. Our results suggest oaths may help elicit more truthful behavior in on-line crowd-sourced environments. |
| Keywords: | Experimental Economics; Honesty; Intrinsic Costs; Field Experiment; Solemn Oath; Mechanical Turk; MTurk; Lying; Shirking; Labor economics |
| JEL: | D91 C81 C90 C93 D01 D82 J20 J30 J40 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:19-19&r=all |
| By: | M. Bigoni; S. Bortolotti; E. Nas Özen |
| Abstract: | We experimentally study a situation where only the rich can reduce inequality while the poor can express their discontent by destroying the wealth of a rich counterpart with whom they had no previous interaction. We test whether the emergence of such forms of antisocial behavior depends only on the level of inequality, or also on the conditions under which inequality occurs. We compare an environment in which the rich can unilaterally reduce inequality with one where generosity makes them vulnerable to exploitation by the poor. We find that the rich are expected to be more generous in the former scenario than in the latter, but in fact this hope is systematically violated. We also observe that the poor engage in forms of antisocial behavior more often when reducing inequality would be safe for the rich. These results cannot be rationalized by inequality aversion alone, while they are in line with recent models that focus on anger as the result of the frustration of expectations. |
| JEL: | C91 D63 D83 D84 D91 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1133&r=all |
| By: | Andersen, Simon Calmar (Aarhus University); Guul, Thorbjørn Sejr (Aarhus University); Humlum, Maria Knoth (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, and—not least—that 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 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12543&r=all |
| By: | Castleman, Benjamin L. (University of Virginia); Murphy, Francis X. (United States Army); Patterson, Richard (United States Military Academy); Skimmyhorn, William L. (College of William and Mary) |
| Abstract: | The Post-9/11 GI Bill allows service members to transfer generous education benefits to a dependent. We run a large-scale experiment to test whether active choice framing impacts US Army service members' decision to transfer benefits. Individuals who received email messages framing GI Bill use as an active choice between own use and transfer to a family member are more likely to pursue information about the benefit than individuals receiving outreach that does not frame the decision as an active choice. While we find no overall effect of framing on transfer, active choice increases transfer among service members with graduate degrees. |
| Keywords: | active choice, GI Bill, randomized controlled trial |
| JEL: | D91 H52 I24 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12523&r=all |
| By: | Ganglmair, Bernhard; Holcomb, Alex; Myung, Noah |
| Abstract: | Informal exchange of information among competitors has been well-documented in a variety of industries, and one's expectation of reciprocity shown to be a key determinant. We use an indeterminate horizon centipede game to establish a feedback loop in the laboratory and show that an individual's beliefs about the recipient's intentions to reciprocate matter more than a recipient's ability to do so. This implies that reducing strategic uncertainty about a competitor's behavior has a stronger effect on information ows than reducing environmental uncertainty (about the competitor's ability). We further show results on the formation of beliefs and discuss managerial implications. |
| Keywords: | knowledge diffusion,information sharing,reciprocity,conversation,experimental economics,centipede game |
| JEL: | O33 D8 C72 C91 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:19032&r=all |
| By: | Erwin Bulte; John List; Daan van Soest |
| Abstract: | Social scientists have recently explored how framing of gains and losses affects productivity. We conducted a field experiment in peri-urban Uganda, and compared output levels across 1000 workers over isomorphic tasks and incentives, framed as either losses or gains. We find that loss aversion can be leveraged to increase the productivity of labor. The estimated welfare costs of using the loss contract are quite modest -- perhaps because the loss contract is viewed as a (soft) commitment device. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00674&r=all |
| By: | Lotito, Gianna; Migheli, Matteo; Ortona, Guido (University of Turin) |
| Abstract: | Experimental economics uses response times as a tool to evaluate the instinctiveness of choices and behaviours. They have been used to define types of subjects, but never to evaluate the stability of such types. This paper defines stability of types in terms of the variability exhibited by the choices made by an individual in a repeated experiment. The analysis of response times and type stability shows that stability is more instinctive than instability, supporting the idea that types exist and that deviations require cognitive effort. |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:201919&r=all |
| By: | Spears, Dean (University of Texas at Austin) |
| Abstract: | Population ethics is widely considered to be exceptionally important and exceptionally difficult. One key source of difficulty is the conflict between certain moral intuitions and analytical results identifying requirements for rational (in the sense of complete and transitive) social choice over possible populations. One prominent such intuition is the Asymmetry, which jointly proposes that the fact that a possible child's quality of life would be bad is a normative reason not to create the child, but the fact that a child's quality of life would be good is not a reason to create the child. This paper reports a set of questionnaire experiments about the Asymmetry in the spirit of economists' empirical social choice. Few survey respondents show support for the Asymmetry; instead respondents report that expectations of a good quality of life are relevant. Each experiment shows evidence (among at least some participants) of dual-process moral reasoning, in which cognitive reflection is statistically associated with reporting expected good quality of life to be normatively relevant. The paper discusses possible implications of these results for the economics of population-sensitive social welfare and for the conflict between moral mathematics and population intuition. |
| Keywords: | population ethics, experimental social choice, the Asymmetry, dual-process moral reasoning, questionnaire-experimental method |
| JEL: | J10 J13 J18 D63 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12537&r=all |
| By: | Daniel Hedblom; Brent Hickman; John List |
| Abstract: | We develop theory and a tightly-linked field experiment to explore the supply side implications of corporate social responsibility (CSR). Our natural field experiment, in which we created our own firm and hired actual workers, generates a rich data set on worker behavior and responses to both pecuniary and CSR incentives. Making use of a novel identification framework, we use these data to estimate a structural principal-agent model. This approach permits us to compare and contrast treatment and selection effects of both CSR and financial incentives. Using data from more than 110 job seekers, we find strong evidence that when a firm advertises work as socially-oriented, it attracts employees who are more productive, produce higher quality work, and have more highly valued leisure time. In terms of enhancing the labor pool, for example, CSR increases the number of applicants by 25 percent, an impact comparable to the effect of a 36 percent increase in wages. We also find an economically important complementarity between CSR and wage offers, highlighting the import of using both to hire and motivate workers. Beyond lending insights into the supply side of CSR, our research design serves as a framework for causal inference on other forms of non-pecuniary incentives and amenities in the workplace, or any other domain more generally. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00675&r=all |
| By: | Abhijit Banerjee; Amy Finkelstein; Rema Hanna; Benjamin A. Olken; Arianna Ornaghi; Sudarno Sumarto |
| Abstract: | To assess ways to achieve widespread health insurance coverage with financial solvency in developing countries, we designed a randomized experiment involving almost 6,000 households in Indonesia who are subject to a nationally mandated government health insurance program. We assessed several interventions that simple theory and prior evidence suggest could increase coverage and reduce adverse selection: substantial temporary price subsidies (which had to be activated within a limited time window and lasted for only a year), assisted registration, and information. Both temporary subsidies and assisted registration increased initial enrollment. Temporary subsidies attracted lower-cost enrollees, in part by eliminating the practice observed in the no subsidy group of strategically timing coverage for a few months during health emergencies. As a result, while subsidies were in effect, they increased coverage more than eightfold, at no higher unit cost; even after the subsidies ended, coverage remained twice as high, again at no higher unit cost. However, the most intensive (and effective) intervention – assisted registration and a full one-year subsidy – resulted in only a 30 percent initial enrollment rate, underscoring the challenges to achieving widespread coverage. |
| JEL: | I13 O15 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26204&r=all |
| By: | Philipp Külpmann (University of Vienna, Austria); Christoph Kuzmics (University of Graz, Austria) |
| Abstract: | We propose a novel challenge for assessing the predictive power of a theory of one shotplay in games (subjects playing a game exactly once): we test the predictive power of theories in situations for which we do not (yet) have any data. To do so, we consider a variety of such theories and fix their parameter estimates from the recent large scale meta-analysis of Wright and Leyton-Brown (2017). We then compare the predictive power of these theories, measured in terms of log-likelihood, for a series of symmetric hawk-dove games played in the lab. We find that even for such a narrow class of games, no theory is uniformly better than all others across all treatments. Furthermore, the theory that provides the highest overall log-likelihood for our data is Nash equilibrium with risk aversion, with an estimated risk aversion parameter taken from Hey and Orme (1994) and its replication in Harrison and Rutström (2009). In particular, it significantly beats the two theories (based on quantal level k and cognitive hierarchy models) which performed best in Wright and Leyton-Brown’s (2017) standard out-of-sample prediction task. |
| Keywords: | Hawk-dove games; Testing theories; One-shot play; Risk aversion; Nash equilibrium, Quantal response equilibria; Level-k theory; Cognitive hierarchy theory |
| JEL: | C72 C91 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpaper:2019-09&r=all |
| By: | Kenju Kamei (Durham University); Louis Putterman (Brown University); Jean-Robert Tyran (Department of Economics, University of Copenhagen, Denmark) |
| Abstract: | Effective states provide public goods by taxing their citizens and imposing penalties for non-compliance. However, accountable government requires that enough citizens are civically engaged. We study the voluntary cooperative underpinnings of the accountable state by conducting a two-level public goods experiment in which civic engagement can build a sanction scheme to solve the first-order public goods dilemma. We find that civic engagement can be sustained at high levels when costs are low relative to the benefits of public good provision. This cost-to-benefit differential yields what we call a "leverage effect" because it transforms modest willingness to cooperate into the larger social dividend from the power of taxation. In addition, we find that local social interaction among subgroups of participants also boosts cooperation. |
| Keywords: | civic engagement, public goods provision, punishment, experiment, cooperation |
| JEL: | C92 D02 D72 H41 |
| Date: | 2019–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1910&r=all |
| By: | Stefan Wager; Kuang Xu |
| Abstract: | Classical approaches to experimental design assume that intervening on one unit does not affect other units. Recently, however, there has been considerable interest in settings where this non-interference assumption does not hold, e.g., when running experiments on supply-side incentives on a ride-sharing platform or subsidies in an energy marketplace. In this paper, we introduce a new approach to experimental design in large-scale stochastic systems with considerable cross-unit interference, under an assumption that the interference is structured enough that it can be captured using mean-field asymptotics. Our approach enables us to accurately estimate the effect of small changes to system parameters by combining unobstrusive randomization with light-weight modeling, all while remaining in equilibrium. We can then use these estimates to optimize the system by gradient descent. Concretely, we focus on the problem of a platform that seeks to optimize supply-side payments p in a centralized marketplace where different suppliers interact via their effects on the overall supply-demand equilibrium, and show that our approach enables the platform to optimize p based on perturbations whose magnitude can get vanishingly small in large systems. |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1903.02124&r=all |
| By: | Claudia Keser; David Masclet; Claude Montmarquette |
| 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: | 2019–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2019s-19&r=all |
| By: | Virginia Cecchini Manara (University of Trento); Lorenzo Sacconi (University of Milan) |
| Abstract: | The Social Responsibility of Business usually involves self-regulation, which entails spontaneous compliance with social norms or standards that are not imposed by hard law. In this paper we discuss the mechanisms that lead economic agents to comply with socially responsible norms that are not legally enforced, and do not coincide with profit, or self-interest, maximization. Companies exist because individuals need to cooperate and some institutions can facilitate cooperation, but at the same time these institutions may turn into places where unfair distributions are amplified and cooperative behaviours and motivations disrupted. The agents who decide to organize themselves into firms are usually motivated by the need to earn some benefit from mutual cooperation: since they have limited knowledge and bounded rationality, team production can highly improve their results. Therefore the main motivation to enter an organization is to gain from cooperation; but this also brings problems of how to divide the surplus that is generated and we find conflicts on the attribution of benefits among stakeholders, with a particular problem of abuse of authority by those who hold power. One of the drivers of socially responsible behaviour is the quest for reputation, which in turn induces a cooperative response from the stakeholders. This can be described in game-theoretical terms with a repeated Trust Game between a trustor (the stakeholder) and a trustee (the management of the firm). The problem with reputation is that it is compatible with multiple equilibria, included the one in which stakeholders always trust the firm, and the firm often abuses this trust. This leads to consider an alternative mechanism for norm compliance: conformity and reciprocity that derive from an impartial agreement among stakeholders. The present work analyses in depth the role of an agreement on cognitions and motivations, grounding on insights from psychology, game theory and experimental findings. |
| Keywords: | corporate culture, CSR, social contract, agreement, trust game |
| JEL: | C72 M14 L14 D91 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ent:wpaper:wp73&r=all |
| By: | Qin, Botao |
| Abstract: | I used an auction experiment in China and confirmed that there is a WTP-WTA gap. I used the solemn oath commitment device and found that it reduces the gap in the long possession treatment. However, the gap still exists in the short possession treatment. The evidence suggests that taking an oath to tell the truth with an incentive-compatible mechanism could mitigate the WTP-WTA gap. |
| Keywords: | Endowment effect; WTP-WTA gap; Oath |
| JEL: | C91 D46 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95764&r=all |
| By: | Kosfeld, Michael (Goethe University Frankfurt) |
| Abstract: | I discuss recent findings from behavioral economic experiments in the lab and in the field on the role of leaders in human cooperation. Three implications for leadership are derived, which are summarized under the notion CC strategy. Firstly, leaders need to trust to not demotivate the motivated. Secondly, leaders need to punish to motivate the non-motivated. Finally, leaders shall (and can) attract motivated types. The discussion is embedded in a more general attempt to promote and stimulate interdisciplinary exchange of both methods and ideas in leadership research. |
| Keywords: | leadership, cooperation, experiments |
| JEL: | C90 D90 M5 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12540&r=all |
| By: | Buchholz, Matthias; Mußhoff, Oliver; Peth, Denise |
| Abstract: | Pesticides are an important input in modern agriculture. However, intensive use of pesticides is also related to adverse effects on the environment and human health. While implementation of pesticide taxes with the intent to reduce pesticide applications has been widely discussed, green nudges are considered as innovative policy tools to foster environmental friendly behaviour. To date, little is known about the effects of these policy tools at the farm level. With this in mind, we use a business management game to investigate how a pesticide tax and a green nudge affect crop, tillage and pesticide decisions for a ‘virtual’ farm. Results from a sample of German agricultural students reveal that both policies are able to reduce the amount of pesticides applied. However, implementation of the pesticide tax also involves a substantial profit loss. Unlike in the green nudge treatment, participants under pesticide tax adjust their cropping and tillage strategies which could involve unintended ecological effects. |
| Keywords: | Environmental Economics and Policy, Farm Management |
| Date: | 2019–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi19:292279&r=all |
| By: | Swagata Bhattacharjee (Ashoka University) |
| Abstract: | This paper explores a potentially important role of delegation: as a signal to sustain cooperation in coordination games. I consider a static principal-agent model with two tasks, one of which requires cooperation between the principal and the agent. If there is asymmetric information about the agent's type, the principal with a private belief that the agent is a good type can delegate the first task as a signal of his private belief. This equilibrium is supported by the forward induction argument. I conduct laboratory experiments to test these theoretical predictions and to examine the role of information in equilibrium selection. I find that delegation is used only sometimes to facilitate cooperation; however, when the subjects have information about past sessions, there is a statistically significant increase in the use of delegation. This evidence suggests that information matters in equilibrium selection in Bayesian games. |
| Keywords: | Delegation, Forward Induction, Lab Experiment, Information |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ash:wpaper:1026&r=all |
| By: | Giacomo Degli Antoni (University of Parma, Department of Law); Marco Faillo (University of Trento) |
| Abstract: | We analyze repeated interactions occurring between workers, sellers and consumers within the framework of an experimental market. By successfully performing a task, workers allow sellers to offer a good through a market. Sellers set the price of goods and decide the wages of workers. Consumers enter the market sequentially and decide whether to accept one of the offers or to leave the market. Our data show that, especially in the first periods of the experiment, some sellers opt to pay high wages to their workers. However, this behavior is not rewarded by consumers, whose purchasing choices are almost exclusively driven by self- interest. This exposes sellers to a high level of price competition and, period after period, the propensity to act in a socially responsible way towards workers vanishes, creating a market scenario in which workers receive the minimum wage and where consumer surplus is significantly higher than those of workers and sellers. This result does not change when we manipulate the social distance between workers and consumers or when we limit opportunities for consumers to relinquish responsibility by avoiding information on workers’ conditions. |
| Keywords: | social responsibility; experimental market; consumers’ behavior; reciprocity; social distance; information avoidance |
| JEL: | C92 D63 M14 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ent:wpaper:wp70&r=all |
| By: | Anselm Hager; Lukas Hensel; Johannes Hermle; Christopher Roth |
| Abstract: | We study participation in right-wing rallies and counterrallies in Germany to examine strategic interactions in political movements. In the leadup to two right-wing rallies, we exogenously shift potential participants’ beliefs about the turnout at the right-wing rally and left-wing counterrally, and then measure activists’ intentions to protest. For right-wing activists, own participation and participation of peers exhibit strategic substitutability. For left-wing activists, own participation and participation of peers are strategic complements. Both groups do not, however, react to changes in competitor effort. Our evidence highlights substantial heterogeneity in the nature of strategic interactions in political movements. |
| Keywords: | political rallies, field experiment, strategic behavior, beliefs |
| JEL: | D74 D80 P00 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7790&r=all |
| By: | Roman M. Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University) |
| 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, experiment, attack, defense |
| JEL: | C72 C91 D72 D74 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:19-17&r=all |
| By: | Lasky-Fink, Jessica (University of California, Berkeley); Robinson, Carly (Harvard University); Chang, Hedy (Attendance Works); Rogers, Todd (Harvard Kennedy School) |
| Abstract: | Many states mandate districts or schools notify parents when students have missed multiple unexcused days of school. We report a randomized experiment (N = 131,312) evaluating the impact of sending parents truancy notifications modified to target behavioral barriers that can hinder effective parental engagement. Modified truancy notifications that used simplified language, emphasized parental efficacy, and highlighted the negative incremental effects of missing school reduced absences by 0.07 days compared to the standard, legalistic, and punitively-worded notification--an estimated 40% improvement. This work illustrates how behavioral insights and randomized experiments can be used to improve administrative communications in education. |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp19-026&r=all |
| By: | Valerio Capararo (Department of Economics, Middlesex University.); Ismael Rodriguez-Lara (Department of Economic Theory and Economic History, University of Granada.); Maria J. Ruiz Martos (Department of Economic Theory and Economic History, University of Granada.) |
| Abstract: | Recent work highlights that cooperation in the one-shot Prisoner’s dilemma (PD) is primarily driven by moral preferences for doing the right thing, rather than social preferences for equity or efficiency. By contrast, little is known on what motivates cooperation in the Stag-Hunt Game (SHG). Cooperation in the SHG fundamentally differs from cooperation in the PD in that it is not costly, but risky: players have no temptation to deviate from the cooperative outcome, but cooperation only pays off if the other player cooperates. Here, we provide data from a large (N=436), pre-registered, experiment. Contrary to what has been observed for the PD, we find that SHG cooperation is primarily driven by preferences for efficiency, rather than preferences for doing the right thing. |
| Keywords: | morality, cooperation, efficiency, risky choices, stag-hunt game. |
| Date: | 2019–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:gra:wpaper:19/10&r=all |
| By: | Martey, Edward |
| Keywords: | Research and Development/Tech Change/Emerging Technologies |
| Date: | 2019–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea19:290836&r=all |
| By: | Rupert Sausgruber (Vienna University of Economics and Business); Axel Sonntag (University of Vienna and IHS Vienna); Jean-Robert Tyran (Department of Economics, University of Copenhagen, Denmark) |
| Abstract: | We experimentally study the disincentive effect of taxing work and redistributing tax revenues when redistribution is imposed vs. democratically chosen in a vote. We find a "dividend of democracy" in the sense that the disincentive effect is substantially smaller when redistribution is chosen in a vote than when it is imposed. Redistribution seems to be more legitimate, and hence less demotivating, when accepted in a vote. |
| Keywords: | Redistribution, disincentive effect, voting, legitimacy, realeffort task, lab experiment |
| JEL: | C92 D31 D72 H23 |
| Date: | 2019–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:1908&r=all |
| By: | Pfister, Roland; Wirth, Robert; Weller, Lisa; Foerster, Anna; Schwarz, Katharina |
| Abstract: | Deliberate rule violations have typically been addressed from a motivational perspective that asked whether or not agents decide to violate rules based on contextual factors and moral considerations. Here we complement motivational approaches by providing a cognitive perspective on the processes that operate during the act of committing an unsolicited rule violation. Participants were tested in a task that allowed for violating traffic rules by exploiting forbidden shortcuts in a virtual city maze. Results yielded evidence for sustained cognitive conflict that affected performance from right before a violation throughout actually committing the violation. These findings open up a new theoretical perspective on violation behavior that focuses on processes occurring right at the moment a rule violation takes place. |
| Keywords: | Rule breaking Optimizing violations Cognitive conflict Cheating |
| JEL: | C91 D0 D81 |
| Date: | 2018–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95773&r=all |
| By: | Eric V. Edmonds; Caroline B. Theoharides |
| Abstract: | Productive asset grants have become an important tool in efforts to push the very poor out of poverty, but they require labor to convert the asset into income. Using a clustered randomized trial, we work with the Government of the Philippines to evaluate a key component of their child labor elimination program, a $518 productive asset grant directed at families with child laborers. Treatment increases household based economic activity. Household well-being improves, mainly through increases in food security and child welfare. Households achieve these improvements in well-being by drawing upon the labor of household members. Adolescent labor is the most available labor, and we observe increases in employment among adolescents not engaged in child labor at baseline. Households with a family firm or business prior to treatment especially lack available adult labor to work with the asset leading to increases in child labor, including hazardous work, amongst children who were not in child labor at baseline. |
| JEL: | J22 L26 O15 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26190&r=all |
| By: | Boyer, Martin; De Donder, Philippe; Fluet, Claude; Leroux, Marie-Louise; Michaud, Pierre-Carl |
| Abstract: | We conduct a stated-choice experiment where respondents are asked to rate various insurance products aimed to protect against financial risks associated with long-term care needs. Using exogenous variation in prices from the survey design and individual cost estimates, these stated-choice probabilities are used to predict market equilibrium for long-term care insurance. We find that information frictions are pervasive. We measure the welfare losses associated with these three causes in a framework that also allows for selection. We show that information frictions reduce equilibrium take-up and lead to large welfare loss while selection plays little role. |
| Keywords: | Long-term care insurance; adverse selection; stated-preference; health; insurance |
| Date: | 2019–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:123346&r=all |
| By: | Casey, Katherine (Stanford Graduate School of Business and NBER); Kamara, Abou Bakarr (International Growth Centre); Meriggi, Niccolo (International Growth Centre) |
| 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 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 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3810&r=all |
| By: | Reitmann, Ann-Kristin (University of Passau); Goedhuys, Micheline (UNU-MERIT); Grimm, Michael (University of Passau, IZA and RWI); Nillesen, Eleonora E.M. (UNU-MERIT, Maastricht University) |
| Abstract: | Eliciting attitudes on sensitive topics such as women empowerment is subject to a wide range of measurement challenges such as social desirability bias and refusals. Even subtle changes in wording or context can profoundly affect how respondents answer to a question. Using data from two randomised experiments built into a nationwide representative household survey in Tunisia, we analyse the effects of (i) framing and (ii) priming on attitudes towards gender equality and domestic violence in the Arab context. Moreover, we look at impact heterogeneity with respect to the interviewers' gender and perceived religiosity. Our first experiment shows that questions on attitudes towards decision-making power invite stronger responses towards gender inequality when framed in an inequality frame. In our second experiment we find that attitudes towards domestic violence are susceptible to an audio primer. Oral statistical information about the incidence of domestic violence in Tunisia leads to lower support for domestic violence among the male subsample but has no effect on women. Lastly, impacts co-vary with interviewer characteristics. While female interviewers seem to trigger less justification for domestic violence on average, we find the opposite effect for female interviewers wearing a hijab, arguably signalling stronger perceived religiosity and social norms aligned with (more) tolerance of domestic violence. We discuss the implications of our findings for development research on gender attitudes and behaviour in gender-sensitive contexts. |
| Keywords: | gender equality, domestic violence, framing, priming, interviewer effects, survey experiment, MENA region |
| JEL: | C83 C99 D91 O12 |
| Date: | 2019–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019027&r=all |
| By: | Buschmann, Christoph; Röder, Norbert |
| Abstract: | Growing evidence suggests that biodiversity in the agricultural landscape is declining sharply. Farmland birds are particularly affected, the population of the lapwing (Vanellus vanellus) has been decreasing strongly in Germany. Up to now the European Union has tried to tackle the problem of biodiversity loss mainly with voluntary (second pillar) agri-environmental schemes financed by the European Agricultural Fund for Rural Development (EAFRD). However, only a small fraction of the agricultural land is enrolled in such programs. We analyze a potential scheme to protect the lapwing in order to identify drivers and inhibitors of acceptance. The analysis is based on a discrete choice experiment with 270 arable farmers in Germany. Results show that those scheme attributes associated with EAFRD compliance, the type of sanctioning and a minimum participation period of five years, particularly reduce the farmers’ acceptance. Results for other attributes indicate that farmers’ preferences and ecological requirements often contradict each other, so that they constitute an economic-ecological trade-off. Finally, the paper sketches how the identified weak spots of biodiversity protection schemes may be tackled under a different regime of Common Agricultural Policy (CAP). Here, we take up the current CAP reform proposals of the European Commission. |
| Keywords: | Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy |
| Date: | 2019–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi19:292288&r=all |
| By: | Alison Andrew; Orazio Attanasio; Raquel Bernal; Lina Cardona Sosa; Sonya Krutikova; Marta Rubio-Codina |
| Abstract: | Global access to preschool has increased dramatically yet preschool quality is often poor. We use a randomized controlled trial to evaluate two approaches to improving the quality of Colombian preschools. We find that the first, which was rolled out nationwide and provides additional resources for materials and new staff, did not benefit children’s development and, unintentionally, led teachers to reduce their involvement in classroom activities. The second approach additionally trains teachers to improve their pedagogical methods. We find this addition offset the negative effects on teacher behavior, improved the quality of teaching and raised children’s cognition, language and school readiness. |
| JEL: | H43 I10 I20 J13 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26191&r=all |
| By: | Denisova-Schmidt, Elena; Huber, Martin; Prytula, Yaroslav |
| Abstract: | This paper presents the outcomes of an anti-corruption educational intervention among Ukrainian students based on an online experiment. More than 3,000 survey participants were randomly assigned to one of three different videos on corruption and its consequences (treatment groups) or a video on higher education (control group). The data suggest a high level of academic dishonesty and misconduct among young people, but also a negative attitude towards corruption in general, highlighting the ambivalence of corruption in the country. We find that one video, which presented a thrilling story about a victim of corruption related to common bribery in an accessible way, was effective in promoting awareness of the negative consequences of corruption. In contrast, the other two treatment videos, which more closely followed the style of TV news or documentaries on corruption, did not generally promote negative attitudes towards corruption. Presenting corruption issues in a catchy way therefore appears to matter for the effectiveness of such interventions. |
| Keywords: | Anti-Corruption Campaigns; Experiments; Corruption; Academic Integrity; University; Students; Ukraine |
| JEL: | D73 C93 |
| Date: | 2019–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00499&r=all |
| By: | Huber, Martin |
| Abstract: | This chapter covers different approaches to policy evaluation for assessing the causal effect of a treatment or intervention on an outcome of interest. As an introduction to causal inference, the discussion starts with the experimental evaluation of a randomized treatment. It then reviews evaluation methods based on selection on observables (assuming a quasi-random treatment given observed covariates), instrumental variables (inducing a quasi-random shift in the treatment), difference-in-differences and changes-in-changes (exploiting changes in outcomes over time), as well as regression discontinuities and kinks (using changes in the treatment assignment at some threshold of a running variable). The chapter discusses methods particularly suited for data with many observations for a flexible (i.e. semi- or nonparametric) modeling of treatment effects, and/or many (i.e. high dimensional) observed covariates by applying machine learning to select and control for covariates in a data-driven way. This is not only useful for tackling confounding by controlling for instance for factors jointly affecting the treatment and the outcome, but also for learning effect heterogeneities across subgroups defined upon observable covariates and optimally targeting those groups for which the treatment is most effective. |
| Keywords: | Policy evaluation; treatment effects; machine learning; experiment; selection on observables; instrument; difference-indifferences; changes-in-changes; regression discontinuity design; regression kink design |
| JEL: | C21 C26 C29 |
| Date: | 2019–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00504&r=all |
| By: | Cheung, Stephen L. (University of Sydney) |
| Abstract: | This paper examines the effects of alternative assumptions regarding the curvature of utility upon estimated discount rates in experimental data. To do so, it introduces a novel design to elicit time preference building upon a translation of the Holt and Laury method for risk. The results demonstrate that utility elicited directly from choice over time is significantly concave, but far closer to linear than utility elicited under risk. As a result, the effect of adjusting discount rates for this curvature is modest compared to assuming linear utility, and considerably less than when utility from a risk preference task is imposed. |
| Keywords: | time preference, measurement of utility, discounted utility, choice list |
| JEL: | C91 D01 D90 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12535&r=all |