nep-exp New Economics Papers
on Experimental Economics
Issue of 2019‒11‒04
nineteen papers chosen by
Daniel Houser
George Mason University

  1. Selection into Experiments: Evidence from a Population of Students Abstract: This study investigates the selection into lab experiments among university students based on data from two cohorts of a university's first-year students. The analysis combines two experiments: a classroom experiment in which we elicited measures for risk, time, social preferences, confidence, and cognitive skills using standard measures from the experimental literature; and a recruitment experiment that varied information provided in a typical e-mail recruitment procedure for lab participants. In the recruitment experiment, students were randomly assigned to four conditions that highlighted altruistic motives or financial incentives. We find significant treatment effects: mentioning financial incentives boosts the participation rate in lab experiments by 50 percent. In terms of selection, we find that more selfish individuals and individuals with higher cognitive reflection scores are more likely to participate in experiments, but we find little evidence for selection along risk preferences, time preferences, and overconfidence. Although the recruitment conditions affect participation rates, they do not alter the composition of the participant sample in terms of behavioral measures and cognitive skills. By Jonathan Schulz; Uwe Sunde; Petra Thiemann; Christian Thoeni
  2. Personalized fundraising: A field experiment on threshold matching of donations By Adena, Maja; Huck, Steffen
  3. The Effect of Information Provision on Stated and Revealed Preferences:A Field Experiment on the Choice of Power Tariffs Before and After Japanese Retail Electricity Liberalization By Takanori IDA; Takunori ISHIHARA
  4. Rules and Commitment in Communication: an Experimental Analysis By Guillaume R. Fréchette; Alessandro Lizzeri; Jacopo Perego
  5. Complexity and Distributive Fairness Interact in Affecting Compliance Behavior By Charles Bellemare; Marvin Deversi; Florian Englmaier
  6. Make it too Difficult and I’ll Give-Up; Let me Succeed and I’ll Excel: The Interaction between Assigned and Personal Goals By James Fan; Joaquín Gómez-Miñambres; Samuel Smithers
  7. Testing for Attrition Bias in Field Experiments By Sarojini Hirshleifer; Dalia Ghanem; Karen Ortiz-Becerra
  8. Efficiency of Monetary Exchange with Divisible Fiat Money: An Experimental Approach By Kazuya Kamiya; Hajime Kobayashi; Tatsuhiro Shichijo; Takashi Shimizu
  9. Challenging conventional wisdom: Experimental evidence on heterogeneity and coordination in avoiding a collective catastrophic event By Waichman, Israel; Requate, Tilman; Karde, Markus; Milinski, Manfred
  10. Moral licensing and rebound effects in the residential lighting area: An experimental study By Eberling, Elisabeth; Dütschke, Elisabeth; Eckartz, Katharina Marie; Schuler, Johannes
  11. Cheating and Corruption: Evidence from a Household Survey By Olaf Hübler; Melanie Koch; Lukas Menkhoff; Ulrich Schmidt
  12. Delegation Using Forward Induction By Swagata Bhattacharjee
  13. Lying to appear honest By Barron, Kai
  14. Tell the truth or not? The Montero mechanism for emissions control at work By Requate, Tilman; Camacho-Cuena, Eva; Ch'ng, Kean Siang; Waichman, Israel
  15. The Persistence of the Criminal Justice Gender Gap: Evidence from 200 Years of Judicial Decisions By Bindler, Anna; Hjalmarsson, Randi
  16. The impact of discrimination on redistributive preferences and productivity: experimental evidence from the United States By Tetteh-Baah, Samuel Kofi
  17. Microscopic Derivation of Mean Field Game Models By Martin Frank; Michael Herty; Torsten Trimborn
  18. Thompson Sampling: Endogenously Random Behavior in Games and Markets By Mauersberger, Felix
  19. Investment Choice Architecture in Trust Games: When “All-in” Is Not Enough By Joaquín Gómez-Miñambres; Eric Schniter; Timothy W. Shields

  1. By: Jonathan Schulz (George Mason University); Uwe Sunde (University of Munich); Petra Thiemann (Lund University); Christian Thoeni (University of Lausanne)
    Keywords: selection, laboratory experiments
    Date: 2019–09
  2. By: Adena, Maja; Huck, Steffen
    Abstract: While increasing the number of small donors, standard linear matching schemes have been shown to cause considerable crowding out in charitable giving with pronounced effects on large gifts. We propose a form of threshold matching where donations above a certain, potentially personalized, threshold are topped up with a fixed amount. We show theoretically that threshold matching can induce crowd-ing in if appropriately personalized. In a field experiment, we explore how thresholds should be chosen depending on past donations. We find that the opti-mal choice of thresholds is rather bold, approximately 60-75% above past dona-tions. Additionally, we explore how thresholds should be set for new donors as a function of their personal characteristics and demonstrate the benefits of person-alization as opposed to setting general thresholds applying to all recipients of a fundraising call.
    Keywords: charitable giving,field experiments,matching donations
    JEL: C93 D64 D12
    Date: 2019
  3. By: Takanori IDA; Takunori ISHIHARA
    Abstract: We consider the case of choosing an electricity fee plan and examine differences in attitudes toward each plan by providing information on electricity bills, which is either based on test participants’ past electricity consumption or not. We conducted randomized control trial stated preference (SP) and revealed preference (RP) experiments on the choice of electricity rates before and after liberalization. In the SP experiment, we found that providing information that informs the participant of their benefit or loss from switching corrects the tendency toward overconfidence and the evaluation value attached to the potential benefit of switching declines. By analyzing the benefit and loss separately, we further clarified that this drop exemplifies the loss aversion tendency. The evaluation value drops greatly when information about a loss is provided; however, this drop is not proportionate to the magnitude of the loss. The RP experiment differ from the SP experiment results. We found that that the selection was not boosted in both gain and loss cases.
    Keywords: Randomized controlled trial (RCT), Stated preference, Revealed preference, Information provision, Power tariff, Overconfidence.
    JEL: C93 D91 Q49
    Date: 2019–10
  4. By: Guillaume R. Fréchette; Alessandro Lizzeri; Jacopo Perego
    Abstract: We investigate models of cheap talk, information disclosure, and Bayesian persuasion, in a unified experimental framework. Our umbrella design permits the analysis of models that share the same structure regarding preferences and information, but differ in two dimensions: the rules governing communication, which determine whether information is verifiable; and the sender’s commitment power, which determines the extent to which she can commit to her communication strategy. Commitment is predicted to have contrasting effects on information transmission, depending on whether information is verifiable. Our design exploits these variations to explicitly test for the role of rules and commitment in communication. Our experiments provide general support for the strategic rationale behind the role of commitment and, more specifically, for the Bayesian persuasion model. At the same time, we document significant quantitative deviations. Most notably, we find that rules matter in ways that are entirely unpredicted by the theory, suggesting a novel policy role for information verifiability.
    JEL: C92 D7 D8 D9
    Date: 2019–10
  5. By: Charles Bellemare; Marvin Deversi; Florian Englmaier
    Abstract: Filing income tax returns or insurance claims often requires that individuals comply with complex rules to meet their obligations. We present evidence from a laboratory tax experiment suggesting that the effects of complexity on compliance are intrinsically linked to distributive fairness. We find that compliance remains largely unaffected by complexity when income taxes are distributed to a morally justified charity. Conversely, complexity significantly amplifies non-compliance when income taxes appear wasted as they are distributed to a morally dubious charity. Our data further suggest that this non-compliance pattern is facilitated through the ambiguity that evolves from mostly unstrategic filing mistakes.
    Keywords: complexity, compliance, distributive fairness, experiment
    JEL: C91 D01 D91 H26
    Date: 2019
  6. By: James Fan (Naval Postgraduate School, Graduate School of Business and Public Policy); Joaquín Gómez-Miñambres (Lafayette College, Department of Economics; Economic Science Institute, Chapman University); Samuel Smithers (University of Leicester, Department of Economics)
    Abstract: We examine the motivational effects of setting both assigned and personal nonbinding goals on a real effort laboratory experiment. In order to derive conjectures for our experiment, we develop a model with goal-dependent preferences. In line with previous studies, we find that goal setting leads to a higher performance. We also find that goal-setting is most effective if subjects were able to achieve previous goals. Therefore, in goal setting, “success breeds success”. In particular, we observe that when subjects are initially allowed to attain assigned goals, they are better at self-motivating in the future when performing under personal goals.
    JEL: C91 M50 D23
    Date: 2019
  7. By: Sarojini Hirshleifer (Department of Economics, University of California Riverside); Dalia Ghanem (UC Davis); Karen Ortiz-Becerra (UC Davis)
    Abstract: We approach attrition in field experiments with baseline outcome data as an identification problem in a panel model. A systematic review of the literature indicates that there is no consensus on how to test for attrition bias. We establish identifying assumptions for treatment effects for both the respondent subpopulation and the study population. We then derive their sharp testable implications on the baseline outcome distribution and propose randomization procedures to test them. We demonstrate that the most commonly used test does not control size in general when internal validity holds. Simulations and applications illustrate the empirical relevance of our analysis.
    Keywords: attrition, field experiments, randomized experiments, randomized controlled trials, internal validity, Kolmogorov-Smirnov, Cramer-von-Mises, randomization tests
    JEL: C12 C21 C33 C93
    Date: 2019–08
  8. By: Kazuya Kamiya (Research Institute for Economics and Business Administration, Kobe University, Japan); Hajime Kobayashi (Faculty of Economics, Kansai University); Tatsuhiro Shichijo (School of Economics, Osaka Prefecture University); Takashi Shimizu (Graduate School of Economics, Kobe University)
    Abstract: In this paper, we investigate a search model with divisible fiat money in a laboratory setting where transaction prices are endogenously determined. In the model, there exist welfare-ranked multiple stationary monetary equilibria and gift-giving equilibria. We find that endogenizing transaction prices enhanced the coordination of subjects through monetary exchange and deteriorated it through gift-giving. In other words, the subjects endogenously reduced the trade friction of monetary exchanges. We also compare our experimental results with those in search models with exogenously given transaction prices.
  9. By: Waichman, Israel; Requate, Tilman; Karde, Markus; Milinski, Manfred
    Abstract: Avoiding a catastrophic climate change event is a global public good characterized by several dimensions, notably heterogeneity between the parties involved. It is often argued that such heterogeneity between countries is a major obstacle to cooperative climate policy. We challenge this belief by experimentally simulating two important heterogeneities, in wealth and loss, when dangerous climate change occurs. We find that under loss heterogeneity the success rate in achieving sufficient mitigation to prevent catastrophic climate change is higher than with homogeneous parties. We also observe that neither endowment heterogeneity nor the combination of endowment and loss heterogeneities lead to significantly different success rates than with homogeneous parties. Our findings suggest that heterogeneities may facilitate rather than hinder successful international climate policy negotiations.
    Keywords: global public good,change negotiation,collective-risk social dilemma,endowmentheterogeneity,loss heterogeneity,focal point
    JEL: C92 D74 H41 Q54
    Date: 2019
  10. By: Eberling, Elisabeth; Dütschke, Elisabeth; Eckartz, Katharina Marie; Schuler, Johannes
    Abstract: Rebound effects reduce the energy demand reduction from energy efficiency in-creases. Understanding the underlying mechanisms is therefore crucial. A poten-tial driver is moral licensing, a cognitive process by which individuals justify im-moral behaviour (e.g., using more and brighter lights) by having previously en-gaged in moral behaviour (e.g., switching to a more efficient lighting). Since em-pirical research on this topic is rare, we conducted an experimental study: Partic-ipants (n=491) chose between three LEDs, which were all more energy-efficient than their current one. For investigating moral licensing, the perceived environ-mental behaviour of the participants was manipulated by a previous assessment of their own past environmental behaviour: Treatment easy (1) provided the im-pression of highly environmental behaviours, treatment difficult (2) the impression of a less environmentally friendly behaviour. A control group (3) focused on lei-sure time behaviours. Overall, we are able to demonstrate rebound effects in LED choice and find effects of the manipulation on the moral self-perception. However, we do not find significant patterns regarding treatment condition and LED choice. On the contrary, in both treatments, easy (1) and difficult (2), individuals tended to show more environmental friendly choices. These results suggest that bringing environmental behaviours to people's mind could contribute to weakening re-bound effects in general.
    Date: 2019
  11. By: Olaf Hübler; Melanie Koch; Lukas Menkhoff; Ulrich Schmidt
    Abstract: This study tests the prediction that a corrupt government reduces ethical behavior among its citizens. We integrate a standard "cheating" experiment into a broad household survey and find clear support for this prediction: respondents who perceive corruption in state affairs are more likely to cheat. Interestingly, there is a small group of non-conformers. The main relation is robust to consideration of many (largely insignificant) socio-demographic control variables. Attendance of others at the cheating experiment, thus stimulating the reputational concern to be seen as honest, reduces cheating. Again, this does not diminish the predictive role of corruption.
    Keywords: Cheating, Corruption, Individual Characteristics, Lab-in-the-Field Experiment
    JEL: D91 D81 D73
    Date: 2019
  12. 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
  13. By: Barron, Kai
    Abstract: This paper studies individual truth-telling behavior in the presence of multiple lying opportunities with heterogeneous stake sizes. The results show that individuals lie downwards (i.e. forgo money due to their lie) in low-stakes situations in order to signal honesty, and thereby mitigate the image repercussions of upward lying in high-stakes contexts. This constitutes first evidence of systematic downward lying in an unobserved lying game. The observed behavior is consistent with the spirit, but not the letter, of the prominent models of lying behavior. It therefore presents a challenge for these models.
    Keywords: private information,honesty,truth-telling,lying,image,reputation
    JEL: C91 D83 H26 Z13
    Date: 2019
  14. By: Requate, Tilman; Camacho-Cuena, Eva; Ch'ng, Kean Siang; Waichman, Israel
    Abstract: We experimentally test the truth-telling mechanism proposed by Montero (2008) for eliciting firms' abatement costs. We compare this mechanism with two well-known alternative allocation mechanisms, free and costly allocation of permits at the Pigouvian price. Controlling for the number of firms and the firms' maximal emissions, we find that, in line with the theoretical predictions, firms over-report their maximal emissions under free allocation of permits and under-report these under costly allocation of permits. Under Montero's mechanism, by contrast, firms almost always report their maximal emissions truthfully. However, in terms of efficiency, the difference between Montero's mechanism and costly allocation disappears with industries including more than one firm.
    Keywords: mechanism design,environmental policy,permit trading,auctions,experiment
    JEL: C92 D44 L51 Q28
    Date: 2019
  15. By: Bindler, Anna (Department of Economics, School of Business, Economics and Law, Göteborg University); Hjalmarsson, Randi (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We document persistent gender gaps favoring females in jury convictions and judge sentences in nearly 200 years of London trials, which are unexplained by case characteristics. We find that three sharp changes in punishment severity locally affected the size and nature of the gaps, but were generally not strong enough to offset their persistence. These local effects suggest a mechanism of taste-based discrimination (paternalism) where the all-male judiciary protected females from the harshest available punishment.
    Keywords: gender; gender gap; crime; verdict; sentencing; discrimination; history
    JEL: J16 K14 K40 N33
    Date: 2019–10
  16. By: Tetteh-Baah, Samuel Kofi
    JEL: C90
    Date: 2019
  17. By: Martin Frank; Michael Herty; Torsten Trimborn
    Abstract: Mean field game theory studies the behavior of a large number of interacting individuals in a game theoretic setting and has received a lot of attention in the past decade (Lasry and Lions, Japanese journal of mathematics, 2007). In this work, we derive mean field game partial differential equation systems from deterministic microscopic agent dynamics. The dynamics are given by a particular class of ordinary differential equations, for which an optimal strategy can be computed (Bressan, Milan Journal of Mathematics, 2011). We use the concept of Nash equilibria and apply the dynamic programming principle to derive the mean field limit equations and we study the scaling behavior of the system as the number of agents tends to infinity and find several mean field game limits. Especially we avoid in our derivation the notion of measure derivatives. Novel scales are motivated by an example of an agent-based financial market model.
    Date: 2019–10
  18. By: Mauersberger, Felix
    JEL: C91 C92 D84 E37
    Date: 2019
  19. By: Joaquín Gómez-Miñambres (Lafayette College, Department of Economics; Economic Science Institute, Chapman University); Eric Schniter (Economic Science Institute, Chapman University; Argyros School of Business and Economics, Chapman University); Timothy W. Shields (Economic Science Institute, Chapman University; Argyros School of Business and Economics, Chapman University)
    Abstract: While many economic interactions feature “All-or-Nothing” options nudging investors towards going “all-in”, such designs may unintentionally affect reciprocity. We manipulate the investor’s action space in two versions of the “trust game”. In one version investors can invest either “all” their endowment or “nothing”. In the other version, they can invest any amount of the endowment. Consistent with our intentions-based model, we show that "all-or-nothing” designs coax more investment but limit investors’ demonstrability of intended trust. As a result, “all-in” investors are less generously reciprocated than when they can invest any amount, where full investments are a clearer signal of trustworthiness.
    JEL: C72 C90 C91 D63 D64 L51
    Date: 2019

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