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on Experimental Economics |
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Issue of 2019‒12‒23
28 papers chosen by |
| By: | Chulyoung Kim (Yonsei Univ); Youjin Hahn (Yonsei Univ); Sang-Hyun Kim (Yonsei Univ) |
| Abstract: | When parties negotiate over surplus, incumbents, or agenda-setters, tend to spend more resources than challengers to keep their power in making a proposal. This is often attributed to the fact that incumbents usually have better access to resources. We experimentally investigate whether incumbents spend more resources even when they have no advantage. Specifically, we consider a twostage game where in the first stage, players compete to be recognized as a proposer, and in the second stage, they play an ultimatum bargaining game. Our treatment concerns whether one of the subjects is endowed with proposal right (without any material advantage) in the beginning of the game. We find that subjects who were framed to be incumbents spent significantly more resources to keep the proposal right than others. This suggests that even without any resource advantage, the parties who have the power would incur higher costs to keep it, and thus, the allocation of power is likely to persist. Our finding is new in the sense that the endowment effect does not concern “property right†as in previous studies but “proposal right.†|
| Keywords: | Proposal right, endowment effect, framing effect, contest, ultimatum game, laboratory experiment |
| JEL: | C91 D74 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:yon:wpaper:2019rwp-156&r=all |
| By: | Gebretsadik, Kidanemariam Abreha (School of Economics and Business, Norwegian University of Life Sciences) |
| Abstract: | There are debates about climate-led resource scarcity and users’ behavior. Common pool resources (CPRs) are of particular interest in this regard as climate change may increase existing challenges. One reason for this is that CPR users may change their behavior in ways that affect other users. This paper looks at communal irrigation as a CPR in Ethiopia, where reduced availability of water may lead to unfair water allocations. Unfairness could lead to envy, which may pose extra problems for sustainable water management. I therefore conducted a joy-of-destruction game involving 192 randomly selected household heads (players) that mimic burning of another’s possession. Using a random draw, players were grouped into either the scarce water condition or abundant water condition. Within each group I randomly paired two players to play the game. This hypothetical game asks if the player in the group is willing to damage the other group’s irrigation field to maximize his/her own benefit. Both descriptive and econometrics methods of analysis were employed. Surprisingly, I found that players display less envious behavior when there is water scarcity than abundance. This is an astounding result and the possible explanation could be that the participating farmers in the experiment were not fully detached from their real-life perceptions. Both variables, water condition and amount of deduction, significantly influence the players’ decisions. The paper has implications on possible interventions of CPRs management, and suggests the need for further work on methodological aspects to enhance external validity in field games. |
| Keywords: | Climate; Scarcity; Common Pool Resources; Irrigation Water; Envy; Joy-of-Destruction; Tigray; Ethiopia |
| JEL: | C79 C93 D91 Q25 Q54 |
| Date: | 2019–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nlsseb:2019_005&r=all |
| By: | Chulyoung Kim (Yonsei Univ); Miho Hong (Yale Univ); Sang-Hyun Kim (Yonsei Univ); Sangyoon Nam (U of Southern California) |
| Abstract: | Using a modified ultimatum game experiment, we tested the hypothesis that greater “observability†of responders’ actions leads to a higher rejection rate. Our experimental data on participants’ rejection behavior rejected this hypothesis but confirmed the theory of reference-dependent preferences. |
| Keywords: | Ultimatum game experiment, audience effect, signaling, loss aversion |
| JEL: | C91 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:yon:wpaper:2019rwp-155&r=all |
| By: | Gaudeul, A.; Crosetto, P. |
| Abstract: | In this paper we provide choice-process experimental evidence that the attraction effect is a short-term phenomenon, that disappears when individuals are given time and incentives to revise their choices.The attraction (or decoy) effect is the most prominent example of context effects, and it appears when adding a dominated option to a choice set increases the choice share of the now dominant option at the expense of other options. While widely replicated, the attraction effect is usually tested in hypothetical or payoff-irrelevant situations and without following the choice process. We run a laboratory experiment where we incentivize choice, vary the difference in utility between options and track which option participants consider best over time. We find that the effect is a transitory phenomenon that emerges only in the early stages of the choice process to later disappear. Participants are fast then slow: they first choose the dominant option to avoid the dominated decoy and then progressively revise their choices until choice shares come to correspond to price differences only. We expand our analysis by considering differences in utility among options and differences in the presentation of options (numerical or graphical). We also consider differences in the choice processes followed by individuals (intuitive vs. deliberative). This allows us to ascribe more precisely the role of fast and slow cognitive process in the emergence and disappearance of the attraction effect. |
| Keywords: | ASYMMETRIC DOMINANCE;ATTRACTION EFFECT;INDUCED PREFERENCES;CHOICE PROCESS;TIME CONSTRAINT;RATIONALITY;CONTEXT EFFECTS |
| JEL: | C91 D12 D83 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:2019-06&r=all |
| By: | Hermes, Henning (Dept. of Economics, Norwegian School of Economics and Business Administration); Schunk, Daniel (University of Mainz, Chair of Public and Behavioral Economics) |
| Abstract: | We develop a new design for the experimental beauty-contest game (BCG) that is suitable for children in school age and test it with 114 schoolchildren aged 9–11 years. In addition, we collect measures on cognitive skills and perspective-taking abilities to identify determinants of successful performance in the game. Results demonstrate that children can successfully understand and play a BCG. Choices start at a slightly higher level than those of adults but learning over time and depth of reasoning are largely comparable with the results of studies run with adults. Cognitive skills are predictive only of whether children choose weakly dominated strategies, whereas measures of perspective-taking abilities are strongly linked to successful performance in the BCG. These findings emphasize the importance of perspective-taking abilities for strategic interaction and economic decision-making. Our new design for the experimental BCG allows further study of the development of strategic interaction skills starting already in school age. |
| Keywords: | children; experimental beauty-contest game; guessing game; strategic interaction; decision-making; perspective-taking; theory of mind; empathy; noncognitive skills |
| JEL: | C72 C92 |
| Date: | 2019–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2019_023&r=all |
| By: | Miloš Fišar (Masaryk University); Ondřej Krčál (Masaryk University); Jiří Špalek (Masaryk University); Rostislav Staněk (Masaryk University); James Tremewan (University of Auckland) |
| Abstract: | The experimental tax and regulatory compliance literature has shown the effectiveness of competitive audit selection mechanisms (ASMs) based on declarations and a signal of the taxpayers' actual income. However, collecting information about actual income prior to audit selection is costly. In this article, we test the effectiveness of an endogenous ASM based solely on declared income. We show theoretically and in a laboratory experiment that this new endogenous ASM significantly increases compliance in comparison with an ASM where all taxpayers face audit with equal probability. However, a further consequence of conditioning solely on declared income is that poorer taxpayers are audited more frequently, reducing the effectiveness of this ASM in generating revenue and reducing inequality. We further compare the new mechanism with an ASM that also uses a noisy signal of actual income and show that it is a significant improvement over the other two ASMs in terms of compliance, revenue, and inequality. Our results suggest that ASMs that condition only on reported income can increase compliance but should be implemented with caution, and investing in acquiring information before audit selection can have substantial benefits. |
| Keywords: | Tax compliance, Endogenous audit, Heterogeneous income |
| Date: | 2019–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:mub:wpaper:2019-08&r=all |
| By: | Michalis Drouvelis; Adam Isen; Benjamin M. Marx |
| Abstract: | Can social norms affect fundamental patterns of behavior such as income effects? Studies of determinants of giving to charities and other individuals yield a wide range of income-effect estimates. We conduct two experiments to first test whether the effect of income on charitable giving depends on whether the income is earned and then test whether any difference in the effects by income source can be explained by social norms. Our first experiment induces random variation in both earned income and windfall bonuses and shows that only bonuses increases charitable donations. The second experiment uses an incentivized coordination game to investigate whether social norms can explain this donation pattern. Perceptions of what most people would consider a morally appropriate donation depend on the amount of income and whether it is a windfall. The norms elicited in the second experiment match the donation patterns in the first experiment both overall and across subject demographics, pointing to social norms as a key determinant of charitable giving. |
| Keywords: | charitable, donation, warm glow, social preferences, income effect, experiment |
| JEL: | D01 D64 A13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7961&r=all |
| By: | Callen, Mike; Blumenstock, Joshua; Ghani, Tarek |
| Abstract: | We report on an experiment examining why default options impact behavior. Working with one of the largest private firms in Afghanistan, we randomly assigned each of 949 employees to different variants of a new default savings account. Employees assigned a default contribution rate of 5% are 40 percentage points more likely to contribute than employees assigned to a default contribution rate of zero; to achieve this effect through financial incentives alone would require a 50% match from the employer. Our design permits us to rule out several common explanations for default effects, including employer endorsement, employee inattention, and a lack of awareness about how to switch. Instead, we find evidence that the default effect is driven largely by a combination of present-biased preferences and the cognitive cost of calculating alternate savings scenarios. Default assignment also causes employees to develop savings habits that outlive our experiment: they are more likely to believe that savings is important, less likely to report being too financially constrained to save, and more likely to make an active decision to save at the end of our trial. |
| Keywords: | defaults savings; behavioral models; peer effects; digital finance; mobile money |
| JEL: | D14 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:102899&r=all |
| By: | Zhixin Dai (University of East Anglia); Jiwei Zheng (University of East Anglia); Daniel John Zizzo (University of East Anglia) |
| Abstract: | We present a coordination game experiment testing the robustness of the predictive power of level-k reasoning and team reasoning in a sample of Chinese tax administrators. We show how the incidence of coordination game play is virtually identical between Chinese tax administrators and university students, which in turn is comparable with that found in research with a Western university student sample. However, relatively to non-students, students are comparatively more attracted by the focal point under team reasoning when this has equal payoffs and the other outcomes do not. |
| Keywords: | non-student subjects, focal points, team reasoning, level-k, coordination games. |
| JEL: | C72 C78 C91 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:uea:wcbess:19-05&r=all |
| By: | Florian Hett (Johannes Gutenberg-University Mainz); Markus Kroell (Goethe University Frankfurt); Mario Mechtel (Leuphana University Lueneburg) |
| Abstract: | A large body of evidence shows that social identity affects behavior. However, our understanding of the substantial variation of these behavioral effects is still limited. We use a novel laboratory experiment to measure differences in preferences for social identities as a potential source of behavioral heterogeneity. Facing a trade-off between monetary payments and belonging to different groups, individuals are willing to forego significant earnings to avoid belonging to certain groups. We then show that individual differences in these foregone earnings correspond to the differences in discriminatory behavior towards these groups. Our results illustrate the importance of considering individual heterogeneity to fully understand the behavioral effects of social identity. |
| Keywords: | Social Identity, Identiï¬ cation Preferences, Social Preferences, Outgroup Discrimination, Behavioral Heterogeneity, Social Status, Social Distance |
| JEL: | C91 C92 D90 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201903&r=all |
| By: | Benjamin Enke; Thomas Graeber |
| Abstract: | This paper introduces a formal definition and an experimental measurement of the concept of cognitive uncertainty: people's subjective uncertainty about what the optimal action is. This concept allows us to bring together and partially explain a set of behavioral anomalies identified across four distinct domains of decision-making: choice under risk, choice under ambiguity, belief updating, and survey expectations about economic variables. In each of these domains, behavior in experiments and surveys tends to be insensitive to variation in probabilities, as in the classical probability weighting function. Building on existing models of noisy Bayesian cognition, we formally propose that cognitive uncertainty generates these patterns by inducing people to compress probabilities towards a mental default of 50:50. We document experimentally that the responses of individuals with higher cognitive uncertainty indeed exhibit stronger compression of probabilities in choice under risk and ambiguity, belief updating, and survey expectations. Our framework makes predictions that we test using exogenous manipulations of both cognitive uncertainty and the location of the mental default. The results provide causal evidence for the role of cognitive uncertainty in belief formation and choice, which we quantify through structural estimations. |
| JEL: | D01 D03 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26518&r=all |
| By: | Holzmeister, Felix (University of Innsbruck); Stefan, Matthias |
| Abstract: | With the rise of experimental methods in the social sciences, numerous methods to elicit and classify people's risk attitudes in the laboratory have evolved. However, evidence suggests that people's attitudes towards risk may change considerably when measured with different methods. Based on a with-subject design using four widespread risk elicitation methods, we find that different procedures indeed give rise to considerably varying estimates of individual and aggregate level risk preferences. Conducting simulation exercises to obtain benchmarks for subjects' behavior, we find that the observed heterogeneity in risk preference estimates across methods is qualitatively similar to the heterogeneity arising from independent random draws from choices in the experimental tasks. Our study, however, provides evidence that subjects are surprisingly well aware of the variation in the riskiness of their choices. We argue that this calls into question the common interpretation of variation in revealed risk preferences being inconsistent. |
| Date: | 2019–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:pj9u2&r=all |
| By: | Simon Varaine (Pacte, Laboratoire de sciences sociales - UPMF - Université Pierre Mendès France - Grenoble 2 - UJF - Université Joseph Fourier - Grenoble 1 - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Ismaël Benslimane (IPhiG - Institut de Philosophie de Grenoble - UGA - Université Grenoble Alpes); Raul Magni Berton (Pacte, Laboratoire de sciences sociales - UPMF - Université Pierre Mendès France - Grenoble 2 - UJF - Université Joseph Fourier - Grenoble 1 - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Paolo Crosetto (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes) |
| Abstract: | Studies on parochial altruism have insofar focused on the causes leading individuals to attack any out-group on the behalf of one's group. Yet, we have no clue to understand why parochial altruists target specific groups, such as big firms in some contexts and refugees in other contexts. The present paper introduces an experiment to analyse the conditions under which individuals costly attack strong versus weak out-groups. In our study, 300 participants played a repeated Inter-group Prisonner Dilemma (IPD) involving multiple groups and inter-group differences in resources. The results show that individuals have a basic preference for targeting strong out-groups, but that attacks decrease when the inequality in destructive capacity between groups is high. Besides, individuals target weak out-groups when they are threatening their in-group status. Decisions in the game correlate with participants' political ideology and social dominance orientation. Overall, the results give clues to understand historical variations in the targets of political violence. |
| Keywords: | D74,H41,Parochial altruism,Terrorism,Social comparison,Inequality,Ideology,Intergroup conflict,JEL codes : C92 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02391578&r=all |
| By: | Hirschauer, Norbert; Grüner, Sven; Mußhoff, Oliver; Becker, Claudia |
| Abstract: | Replication crisis and debates about p-values have raised doubts about what we can statistically infer from research findings, both in experimental and observational studies. With a view to the present debate on inferential errors, this paper systematizes and discusses experimental designs with regard to the inferences that can and - perhaps more important - that cannot be made from particular designs. |
| Keywords: | economic experiments,ceteris paribus,confounders,control,inference,Internal/external validity,randomization,random sampling,superpopulation |
| JEL: | B41 C18 C90 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201965&r=all |
| By: | Lübbecke, Silvia; Schnedler, Wendelin |
| Abstract: | Do people only reject interference and keep control in order to affect the outcome? We find that 20% of subjects reject unrequired help and insist on their solution to a problem-although doing so is costly and does not change the result. We tease out the motives by varying the information available to the interfering party (paternalist). Subjects do not resist to show to the paternalist that they were able to find the correct solution. Instead, two motives seem to play a role. First, subjects prefer to have produced or `authored' the solution themselves. Second, subjects desire to signal their authorship and hence their independence to the paternalist. |
| Keywords: | self-esteem,image concerns,autonomy,competence,paternalism,self-determination,preference for authorship |
| JEL: | C91 D82 D91 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:208385&r=all |
| By: | Freitag, Andreas (University of Basel); Roux, Catherine (University of Basel); Thöni, Christian |
| Abstract: | We study the role of communication in collusive market sharing. In a series of Cournot oligopoly experiments with multiple markets and repeated interaction, we vary the types of information that firms can exchange. We distinguish between hard information-verifiable information about past conduct-and soft information- unbinding information about future conduct. We find that the effect of communication on the firms' ability to collude depends on the type of information available: market prices increase only slightly when hard information allows perfect monitoring of rivals' past actions, but the price raise due to soft information, however, is substantial. The explicit consent of each cartel member to a common collusive strategy, even if stated only once, drives this strong effect. Our results point to the types and contents of communication that should be of particular concern to antitrust authorities. |
| Keywords: | Collusion ; market sharing ; cournot oligopoly ; information; Cmmunication, experiments |
| JEL: | C91 L13 L41 |
| Date: | 2019–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2019/23&r=all |
| By: | James Andreoni; Marta Serra-Garcia |
| Abstract: | What is the value of pledges if they are often reneged upon? In this paper we show - both theoretically and experimentally - that pledges can be used to screen donors and to better understand their motives for giving. In return, nonprofit managers can use the information they glean from pledges to better target future charitable giving appeals and interventions to donors, such as expressions of gratitude. In an experiment, we find that offering the option to pledge gifts induces self-selection. If expressions of gratitude are then targeted to individuals who select into pledges, reneging can be significantly reduced. Our findings provide an explanation for the potential usefulness of pledges. |
| Keywords: | prosocial behavior, charitable giving, pledging, intertemporal choice |
| JEL: | D64 D90 C91 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7965&r=all |
| By: | Chulyoung Kim (Yonsei Univ); Sang-Hyun Kim (Yonsei Univ) |
| Abstract: | We provide a model of endogenous plea bargaining in which a prosecutor has discretion over her choice of plea bargains in response to a level of exoneree compensation mandated by the state. It is shown that an increase of the compensation may invite a sentence-maximizing prosecutor to offer a higher or lower plea bargain discount, depending on parameter values. We brought this model to the lab, finding that (i) when the exoneration process featured high accuracy, a higher level of exoneree compensation induced no significant change in the average plea bargain discounts but still reduced the number of innocent pleas without affecting the number of guilty individuals pleading guilty, and (ii) when the exoneration process was plagued with low accuracy, a higher level of exoneree compensation increased the average plea bargain discounts but had no significant influence on the number of innocent and guilty individuals pleading guilty. These findings suggest that exoneree compensation could be an effective policy tool in reducing innocent pleas and wrongful convictions when combined with accurate exoneration processes, and that a statute for exoneree compensation could be effective even when one cannot expect coordination between the prosecution office and the state legislative. |
| Keywords: | exoneree compensation, plea bargain, wrongful conviction, exoneration process |
| JEL: | C92 K14 K41 K42 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:yon:wpaper:2019rwp-158&r=all |
| By: | Hermes, Henning (Dept. of Economics, Norwegian School of Economics and Business Administration); Huschens, Martin (2University of Mainz, Information Systems and Business Administration); Rothlauf, Franz (2University of Mainz, Information Systems and Business Administration); Schunk, Daniel (University of Mainz, Public and Behavioral Economics) |
| Abstract: | Relative performance feedback (RPF) has often been shown to improve effort and performance in the workplace and educational settings. Yet, many studies also document substantial negative effects of RPF, in particular for low-achievers. We study a novel type of RPF designed to overcome these negative effects of RPF on low-achievers by scoring individual performance improvements. With a sample of 400 children, we conduct a class-wise randomized-controlled trial using an e-learning software in regular teaching lessons in primary schools. We demonstrate that this type of RPF significantly increases motivation, effort, and performance in math for low-achieving children, without hurting high-achieving children. Among low-achievers, those receiving more points and moving up in the ranking improved strongest on motivation and math performance. In addition, we document substantial gender differences in response to this type of RPF: improvements in motivation and learning are much stronger for girls. We argue that using this new type of RPF could potentially reduce inequalities, especially in educational settings. |
| Keywords: | relative performance feedback; rankings; randomized-controlled trial; education; gender differences |
| JEL: | A10 |
| Date: | 2019–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2019_014&r=all |
| By: | Raja R Timilsina (Research Institute for Future Design, Kochi University of Technology); Koji Kotani (School of Economics and Management, Kochi University of Technology); Yoshinori Nakagawa (School of Economics and Management, Kochi University of Technology); Tatsuyoshi Saijo (Research Institute for Future Design, Kochi University of Technology) |
| Abstract: | Many environmental problems have occurred because the current generation affects future generations, but the opposite is not true. This one-way nature induces the current generation to take advantage of resources without considering future generations, which we call “intergenerational sustainability dilemma (ISD).†While deliberation is known to bring a change in individual opinions and lead to a better decision in some intragenerational problems, little is known about how “intragenerational deliberation†affects individual opinions and collective decisions for “intergenerational problems such as ISD†in societies. To this end, an ISD game (ISDG) along with interviews and questionnaires are instituted in rural and urban areas of Nepalese societies. In ISDG, a sequence of six generations, each of which consists of three people, is organized, and each generation chooses either to maintain intergenerational sustainability (sustainable option) or to maximize her own generation’s payoff by irreversibly imposing a cost on future generations (unsustainable option) under intragenerational “deliberative†process. Our result demonstrates that urban subjects have a wider variety of individual initial opinions and support an unsustainable option more often than do rural subjects. It also shows that individual opinions change through deliberation when subjects in a generation do not share the same initial opinion, reflecting that more urban subjects change opinions; such opinion changes are identified not to work in the direction to enhance intergenerational sustainability for the urban generations. Overall, our experiment suggests that a closely-knit society such as rural areas in Nepal is a hope, and intragenerational deliberation neither effectively affect individual opinions for intergeneration sustainability nor resolve ISD. |
| Keywords: | Intergenerational sustainability dilemma, deliberative process, opinion change |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2019-14&r=all |
| By: | Arouna, Aminou; Michler, Jeffrey D.; Lokossou, Jourdain C. |
| Keywords: | Community/Rural/Urban Development, Farm Management |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaae19:295717&r=all |
| By: | Daron Acemoglu; Ali Cheema; Asim Ijaz Khwaja; James A. Robinson |
| Abstract: | Lack of trust in state institutions, often due to poor service provision, is a pervasive problem in many developing countries. It may also be one of the reasons citizens turn to non-state actors for services. This paper investigates whether information about improved public services can help build trust in state institutions and move people away from non-state actors. We focus on dispute resolution in rural Pakistan. We find that (truthful) information about reduced delays in state courts leads to citizens reporting higher likelihood of using them and to greater allocations to the state in two high-stakes lab-in-the-field games designed to measure belief in the effectiveness of state courts and willingness to contribute resources for others to access them. More interestingly, we find indirect negative effects on non-state actors in the same high-stakes settings. We show that the positive direct and negative indirect effects are both mediated by changes in beliefs about the effectiveness of these actors. Our preferred interpretation explains these behaviors as a response to improved beliefs about state actors which then motivate individuals to interact less with non-state actors and as a result downgrade their beliefs about them. We provide additional checks bolstering this interpretation and alleviating concerns about potential social experimenter effects or mechanical contrasts between the two actors. These results indicate that, despite distrust of the state in Pakistan, credible new information can change beliefs and behavior. |
| Keywords: | dispute resolution, lab-in-the-field games, legitimacy, motivated reasoning, non-state actors, state capacity, trust |
| JEL: | D02 D73 D74 D83 C91 C93 K40 O17 P16 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:369&r=all |
| By: | Meredith Phillips; Sarah J. Reber |
| Abstract: | This paper describes the effects of two variants of a virtual college-counseling intervention designed to reduce informational and social support barriers to college application and enrollment among socioeconomically disadvantaged students. Students who were randomly assigned to the program felt more supported during the college application process and applied more broadly to four-year colleges, but they were not more likely to be accepted or enroll. We show that treatment effects on intermediate outcomes were larger for the types of students we anticipated would most need additional support during the college application process and discuss why the program did not improve college enrollment, while some other similar-seeming programs have improved enrollment. We conclude that low-intensity programs may work for some students, but targeting can be difficult. And many students probably need in-person and more intensive help to increase four-year enrollments. |
| JEL: | I23 I24 J24 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26509&r=all |
| By: | Georgios Gerasimou |
| Abstract: | We propose a general and applicable model of simple preference intensity comparisons. The model encompasses those that belong to the utility-difference class, has transparent behavioural underpinnings and features purely ordinal uniqueness properties. Three applications are analysed. First, the model's empirical content is characterized by an easily testable condition on behavioural data that include choices and additional observables with intensity-revealing potential that are often elicited in experimental/empirical work, such as survey ratings, response times or willingness to pay. Second, a special case of the model is argued to facilitate interpersonal comparisons of (strict) intensity relations without requiring interpersonally comparable utilities. Building on this, the novel notion of intensity efficiency is introduced in a single-profile social choice setting and is shown to be well-defined and to refine Pareto efficiency by discarding allocations that are dominated on intensity-difference grounds. Finally, the house allocation problem in one-sided matching is revisited when agents have intensity relations of this kind, and a simple algorithm is shown to yield an intensity-efficient allocation in every such market. |
| Keywords: | Preference intensity functions; revealed preference intensity; intensity-efficient allocations |
| JEL: | B21 C88 D11 D63 D70 D90 |
| Date: | 2019–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:san:wpecon:1905&r=all |
| By: | Georg F. Camehl; C. Katharina Spieß; Kurt Hahlweg |
| Abstract: | This paper evaluates how a light-touch parenting program for parents of children below school entry age affects maternal well-being. We first analyze data from a randomized controlled trial focusing on more advantaged parents. Second, we use a sample of mothers from deprived neighborhoods, for which we generate a control group using additional data. Overall, results show a relatively large positive effect of the intervention on maternal well-being, with the largest effects appearing three years after treatment for both groups, while less advantaged families also experience a well-being increase directly after treatment. Mechanisms are further explored. |
| Keywords: | Parenting Program, Family Well-being, Instrumental Variables, Triple P |
| JEL: | I31 I26 J13 C21 C26 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1062&r=all |
| By: | Chie Aoyagi; Alistair Munro |
| Abstract: | The quantification of how aspects of a job are valued by employees sheds light on the potential for labor market reform in Japan. Using a nationwide sample of 1,046 working-age adults, we conduct a choice experiment that examines individuals’ willingness to trade wages against job characteristics such as the extent of overtime, job security, the possibility of work transfer and relocation. Our results suggest that: i) workers have high WTP (willingness to pay) to avoid extreme overtime and work transfer, ii) women have higher WTP than men, and iii) higher WTP for women are driven in part by feelings of guilt. |
| Date: | 2019–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/261&r=all |
| By: | Karolis Liaudinskas |
| Abstract: | Can humans achieve rationality, as defined by the expected utility theory, by automating their decision making? We use millisecond-stamped transaction-level data from the Copenhagen Stock Exchange to estimate the disposition effect – the tendency to sell winning but not losing stocks – among algorithmic and human professional day-traders. We find that: (1) the disposition effect is substantial among humans but virtually zero among algorithms; (2) this difference is not fully explained by rational explanations and is, at least partially, attributed to prospect theory, realization utility and beliefs in mean-reversion; (3) the disposition effect harms trading performance, which further deems such behavior irrational. |
| Keywords: | disposition effect, algorithmic trading, financial markets, rationality, automation |
| JEL: | D8 D91 G11 G12 G23 O3 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1133&r=all |
| By: | Sabyasachi Das (Ashoka University) |
| Abstract: | The use of Randomized Control Trials (RCTs) in policy evaluations has revolutionized our approach to designing effective public policies. This essay argues that understanding the politics of policymaking is integral to the discussion of RCTs. The literature on RCTs has not sufficiently engaged with this issue. Examining a recent set of papers, the essay analyzes how the political process of policymaking as well as its political consequences may matter for the overall welfare implications of an intervention, including those involving the experimental method. Additionally, such political concerns with the method may be hard to avoid as both small and large scale RCTs may involve unintended and yet, consequential, political effects. Given the influence that RCTs enjoy within the discipline and in the wider development community, bringing the political economy considerations within the ambit of analyses could make policy evaluations more holistic, better our understanding, and consequently, bring research closer to practice.  |
| Keywords: | RCT, Public Policy |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ash:wpaper:24&r=all |