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on Experimental Economics |
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Issue of 2020‒03‒16
28 papers chosen by |
| By: | Christopher Cotton (Queen's University); Brent R. Hickman (Olin Business School, University of Washington); Joseph P. Price (Brigham Young University) |
| Abstract: | We conduct a field experiment paying students based on relative performance on a mathematics exam and tracking study efforts on a mathematics website to test the incentive effects of Affirmative Action (AA) policies on study effort and math proficiency. AA increases study effort and exam performance for the majority of disadvantaged students targeted by the policy. While the performance of the highest-ability students targeted by the AA policy declines, on average study activity and exam performance rise under AA. Overall, the experimental evidence suggests that AA can promote greater equality of market outcomes while narrowing achievement gaps. |
| Keywords: | affirmative action, large contest, field experiment, all-pay auction, college admissions, human capital, study effort |
| JEL: | J15 J24 C93 D82 D44 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1427&r=all |
| By: | Fišar, Miloš (Masaryk University); Reggiani, Tommaso G. (Cardiff University); Sabatini, Fabio (Sapienza University of Rome); Špalek, Jiří (Masaryk University) |
| Abstract: | We study the impact of media bias on tax compliance. Through a framed laboratory experiment, we assess how the exposure to biased news about government action affects compliance in a repeated taxation game. Subjects treated with positive news are significantly more compliant than the control group. The exposure to negative news, instead, does not prompt any significant reaction in respect to the neutral condition, suggesting that participants perceive the media negativity bias in the selection and tonality of news as the norm rather than the exception. Overall, our results suggest that biased news act as a constant source of psychological priming and play a vital role in taxpayers' compliance decisions. |
| Keywords: | tax compliance, media bias, taxation game, laboratory experiment |
| JEL: | C91 D70 H26 H31 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12938&r=all |
| By: | Alvi, Muzna Fatima; Raghunathan, Kalyani; Sehgal, Mrignyani |
| Abstract: | Group-based interventions are fast gaining traction in developing countries, often bolstering existing government service delivery systems. Such groups provide development programs with a means of extending their reach to households and individuals that might otherwise not seek public goods and services. However, the very reliance on the notion of “community†in these programs can constrain participation to those with a shared identity. In India, shared caste identity remains a central, and often controversial, element in many community-based programs. We explore the salience of caste identity with a field experiment conducted among women’s self-help groups in an eastern state of India. The experiment focused on the provision of information on nutrition, diet, and kitchen gardens. Specifically, we test the interplay between (a) the provision of information to self-help groups and (b) the caste identity of the information provider relative to the group’s caste identity, to assess what matters more –the message or the messenger. We randomize two treatments – an information treatment and ahomophily treatment – and measure the effect of these treatments on two outcomes: group members’willingness to contribute to a group-owned club good (a collectively managed kitchen garden), andindividual members’ retention of the information they received. We find that (1) information is veryimportant, (2) homophily, or shared caste identity with the information provider, is not that important,but (3) higher-caste information providers elicit greater willingness to contribute. These findings haveseveral implications for the design of public programs that rely on community-based organizations andagents as implementing partners and may thus be susceptible to identity issues, such as the exclusionof lower castes from certain occupations, public spaces or public goods. |
| Keywords: | INDIA, SOUTH ASIA, ASIA, women, self-help groups, caste, caste systems, information, gender, households, community organizations, communities, identity, women's groups, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1897&r=all |
| By: | Vincenzo Galasso; Tommaso Nannicini; Salvatore Nunnari |
| Abstract: | Negative advertising is frequent in electoral campaigns, despite its ambiguous effectiveness: negativity may reduce voters’ evaluation of the targeted politician but have a backlash effect for the attacker. We study the effect of negative advertising in electoral races with more than two candidates with a large scale field experiment during an electoral campaign for mayor in Italy and a survey experiment in a fictitious mayoral campaign. In our field experiment, we find a strong, positive spillover effect on the third main candidate (neither the target nor the attacker). This effect is confirmed in our survey experiment, which creates a controlled environment with no ideological components nor strategic voting. The negative ad has no impact on the targeted incumbent, has a sizable backlash effect on the attacker, and largely benefits the idle candidate. The attacker is perceived as less cooperative, less likely to lead a successful government, and more ideologically extreme. |
| Keywords: | electoral campaign, political advertisement, randomized controlled trial, field experiment, survey experiment |
| JEL: | D72 C90 M37 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8055&r=all |
| By: | Eugenio Proto; Aldo Rustichini; Andis Sofianos |
| Abstract: | A large literature in behavioral economics has emphasized in the last decades the role of individual differences in social preferences (such as trust and altruism) and in influencing behavior in strategic environments. Here we emphasize the role of attention and working memory, and show that social interactions among heterogeneous groups are likely to be mediated by differences in cognitive skills. Our design uses a Repeated Prisoner’s Dilemma, and we compare rates of cooperation in groups of subjects grouped according to their IQ, with those in combined groups. While in combined groups we observe higher cooperation rates and profits than in separated groups (with consistent gains among lower IQ subjects and relatively smaller losses for higher IQ subjects), higher IQ subjects become less lenient when they are matched with lower IQ subjects than when they play separately. We argue that this is an instance of a general phenomenon, which we demonstrate in an evolutionary game theory model, where higher IQ among subjects determines - through better working memory - a lower frequency of errors in strategy implementation. In our data, we show that players indeed choose less lenient strategies in environments where subjects have higher error rates. The estimations of errors and strategies from the experimental data are consistent with the hypothesis and the predictions of the model. |
| Keywords: | repeated prisoner’s dilemma, cooperation, intelligence, IQ, strategy, error in transition |
| JEL: | C73 C91 C92 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8068&r=all |
| By: | Apedo-Amah, Marie Christine (Stanford University); Djebbari, Habiba (Aix-Marseille University); Ziparo, Roberta (Aix-Marseille University) |
| Abstract: | Why do farm households inefficiently allocate resources across the plots they cultivate? We explore how these production inefficiencies relate to consumption decisions and information sharing within the household. In a lab-in-the-field experiment, male producers allocate too few inputs to their wife's plot, failing to maximize household aggregate profits. They do transfer more inputs when the returns from that plot are higher. Experimental manipulation of information on these returns triggers heterogenous responses across households. We provide a theoretical framework that rationalizes these findings and further leads to sharp predictions. Joint contribution to a household public good compels spouses to make efficient production decisions. Only households who are in a separate-sphere regime experience inefficiency in farm production and are unable to effectively communicate on returns to avoid extra losses. Consistent with this framework, when we experimentally offer an ex post information verification mechanism, additional losses due to information asymmetries are prevented. |
| Keywords: | farm households, household production and intra-household allocation, non-cooperative game theory, asymmetric and private information, lab-in-the-field experiment |
| JEL: | Q12 C72 D13 D82 C91 C93 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12948&r=all |
| By: | Proto, Eugenio (University of Glasgow); Rustichini, Aldo (University of Minnesota); Sofianos, Andis (Heidelberg University) |
| Abstract: | A large literature in behavioral economics has emphasized in the last decades the role of individual differences in social preferences (such as trust and altruism) and in influencing behavior in strategic environments. Here we emphasize the role of attention and working memory, and show that social interactions among heterogeneous groups are likely to be mediated by differences in cognitive skills. Our design uses a Repeated Prisoner's Dilemma, and we compare rates of cooperation in groups of subjects grouped according to their IQ, with those in combined groups. While in combined groups we observe higher cooperation rates and profits than in separated groups (with consistent gains among lower IQ subjects and relatively smaller losses for higher IQ subjects), higher IQ subjects become less lenient when they are matched with lower IQ subjects than when they play separately. We argue that this is an instance of a general phenomenon, which we demonstrate in an evolutionary game theory model, where higher IQ among subjects determines – through better working memory – a lower frequency of errors in strategy implementation. In our data, we show that players indeed choose less lenient strategies in environments where subjects have higher error rates. The estimations of errors and strategies from the experimental data are consistent with the hypothesis and the predictions of the model. |
| Keywords: | IQ, intelligence, cooperation, repeated Prisoner's Dilemma, strategy, error in transition |
| JEL: | C73 C91 C92 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12925&r=all |
| By: | Gilles Grolleau (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Lisette Ibanez (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Naoufel Mzoughi (ECODEVELOPPEMENT - Unité de recherche d'Écodéveloppement - INRA - Institut National de la Recherche Agronomique) |
| Abstract: | Some experimental and archival studies have found empirical support for the scope-severity paradox (SSP), according to which the perceived harm of the same crime or wrongdoing decreases when the number of victims is greater. In the context of environmental wrongdoing, we investigate whether the SSP applies when the number of perpetrators of a crime or wrongdoing increases. Using a survey experiment with two scenarios and five treatments (variations of the number of perpetrators and the individual and total harms committed), we test whether the perceived severity and punishment recommendation for perpetrators of an environmental wrongdoing decrease as the number of perpetrators increases, independent of the total environmental harm committed. Unlike the studies that look at the SSP phenomenon as regards number of victims, we do not find direct support for the existence of a SSP effect regarding number of perpetrators. We do find, however, that participants evaluating the one-perpetrator treatments are more likely to judge with the highest severity. We also provide some collateral insights such as the insensitiveness of participants to the individual pollution level, once the environmental damage exceeds a certain threshold. Our results extend previous SSP studies in important directions and suggest some policy implications, and avenues for further research. |
| Keywords: | environmental wrongdoing,pollution,punishment,scope-severity paradox |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02445686&r=all |
| By: | Lefebvre, Marianne; Midler, Estelle; Bontems, Philippe |
| Abstract: | Farmers choose to avoid some risks by not engaging into practices with uncertain profits. Yet, they still face background risk beyond their control, such as climate change. The impact of background risk on decisions to adopt risky environment-friendly agricultural practices is analysed through a theoretical model and a public good experiment. We find that background risk discourages adoption, despite the fact that it affects both environmentally-friendly and conventionally farmed land equally. An incentive payment increases adoption but is significantly less efficient in the presence of both foreground and background risks. Results shed light on potential synergies between greening the CAP and supporting risk management. |
| Keywords: | Common Agricultural Policy; Agri-environmental measures; Background risk,;Lab; experiment; Public good game |
| JEL: | C93 D81 Q18 Q12 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:124137&r=all |
| By: | David Rojo-Arjona (The George L Argyros School of Business and Economics, Chapman University.); R. Stefania Sitzia (School of Economics and Centre for Behavioural and Experimental Social Science, University of East Angle, Norwich.); Jiwei Zheng (School of Economics and Centre for Behavioural and Experimental Social Science, University of East Anglia, Norwich) |
| Abstract: | We report an experiment that investigates whether increasing the saliency of the focal point, increases coordination success in tacit coordination and bargaining games. We find unexpectedly high coordination rates not only when the degree of conflict is small but also when it is large. This provides supports to the conjecture that conflict of interests reduces the saliency of the focal point relative to saliency of the payoffs, and because of this, even small payoffs differences lead to significant mis-coordination. Increasing the saliency of the focal point has the effect of drawing attention away from the conflicting payoffs and towards the focal point, restoring its effectiveness as coordination devices. Increased saliency has also the effect of shifting choices from less to more unequal, and sometimes more efficient, outcomes. This results in greater coordination success on the outcome suggested by the payoff-irrelevant cue. Overall coordination success however does not increase. |
| Keywords: | Focal points; Coordination; Conflict of interest; Payoff-irrelevant cues. |
| JEL: | C78 C91 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:uea:wcbess:20-02&r=all |
| By: | Uri Gneezy; Silvia Saccardo; Marta Serra-Garcia; Roel van Veldhuizen |
| Abstract: | Expert advice is often biased in ways that benefit the advisor. We demonstrate how self-deception helps advisors be biased while preserving their self-image as ethical and identify limits to advisors’ ability to self-deceive. In experiments where advisors recommend one of two investments to a client and receive a commission that depends on their recommendation, we vary the timing at which advisors learn about their own incentives. When advisors learn about their incentives before evaluating the available investments, they are more likely to be biased than when they learn about their incentives only after privately evaluating the investments. Consistent with self-deception, learning about the incentive before evaluating the options affects advisors’ beliefs and preferences over the investments. Biased advice persists with minimal justifications but is eliminated when all justifications are removed. These findings show how self-deception can be constrained to improve advice provision. |
| Keywords: | advice, self-deception, self-image, motivated beliefs, laboratory experiment |
| JEL: | D03 D83 C91 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8065&r=all |
| By: | Villeval, Marie Claire |
| Abstract: | This paper reviews studies conducted in naturally-occurring work environments or in the laboratory on the impact of performance feedback provision and peer effects on individuals' performance. First, it discusses to which extent feedback on absolute performance affects individuals' effort for cognitive or motivational reasons, and how evaluations can be distorted strategically. Second, this paper highlights the positive and negative effects of feedback on relative performance and rank on individuals' productivity and persistence, but also on the occurrence of anti-social behavior. Relative feedback stimulates effort by informing on the marginal return or the marginal cost of effort, and by activating behavioral forces even in the absence of monetary incentives. These behavioral mechanisms relate to self-esteem, status concerns, competitive preferences and social learning. Relative feedback sometimes discourages or distorts effort, notably if people collude or are disappointment averse. In addition to incentive schemes and social preferences, the management of self-confidence affects the way relative feedback impacts productivity. Third, the paper addresses the question of the identification of peer effects on employees' performance, their size, their direction and their heterogeneity along the hierarchy. The mechanisms behind peer effects include conformism, social pressure, rivalry, social learning and distributional preferences, depending on the presence of payoff externalities or technological and organizational externalities. |
| Keywords: | Feedback,performance,peer effects |
| JEL: | C9 D91 J3 M5 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:482&r=all |
| By: | Andreas Kotsadam; Espen Villanger; |
| Abstract: | We identify the effects of employment on Intimate Partner Violence (IPV) by collaborating with 27 large companies in Ethiopia to randomly assign jobs to equally qualified female applicants. The job offers increase formal employment, earnings, and earnings shares within couples in the short and medium run but we can reject relatively small effects in any direction on our main outcome, physical IPV. In the short run, job offers reduce emotional abuse and there are indications of heterogeneous effects whereby women with low bargaining power at baseline experience increased risks of abuse if offered a job. |
| Keywords: | employment, gender, RCT, IPV, violence Ethiopia |
| JEL: | J20 O10 Z10 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8108&r=all |
| By: | Marie Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper reviews studies conducted in naturally-occurring work environments or in the laboratory on the impact of performance feedback provision and peer effects on individuals' performance. First, it discusses to which extent feedback on absolute performance affects individuals' effort for cognitive or motivational reasons, and how evaluations can be distorted strategically. Second, this paper highlights the positive and negative effects of feedback on relative performance and rank on individuals' productivity and persistence, but also on the occurrence of antisocial behavior. Relative feedback stimulates effort by informing on the marginal return or the marginal cost of effort, and by activating behavioral forces even in the absence of monetary incentives. These behavioral mechanisms relate to self-esteem, status concerns, competitive preferences and social learning. Relative feedback sometimes discourages or distorts effort, notably if people collude or are disappointment averse. In addition to incentive schemes and social preferences, the management of self-confidence affects the way relative feedback impacts productivity. Third, the paper addresses the question of the identification of peer effects on employees' performance, their size, their direction and their heterogeneity along the hierarchy. The mechanisms behind peer effects include conformism, social pressure, rivalry, social learning and distributional preferences, depending on the presence of payoff externalities or technological and organizational externalities.. |
| Keywords: | Feedback,performance,peer effects |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-02488913&r=all |
| By: | Gary E. Bolton; Eugen Dimant; Ulrich Schmidt |
| Abstract: | Both theory and recent empirical evidence on nudging suggest that observability of behavior acts as an instrument for promoting (discouraging) pro-social (anti-social) behavior. We connect three streams of literature (nudging, social preferences, and social norms) to investigate the universality of these claims. By employing a series of high-powered laboratory and online studies, we report here on an investigation of the questions of when and in what form backfiring occurs, the mechanism behind the backfiring, and how to mitigate it. We find that inequality aversion moderates the effectiveness of such nudges and that increasing the focus on social norms can counteract the backfiring effects of such behavioral interventions. Our results are informative for those who work on nudging and behavioral change, including scholars, company officials, and policy-makers. |
| Keywords: | anti-social behavior, nudge, pro-social behavior, reputation, social norms |
| JEL: | C91 D64 D90 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8070&r=all |
| By: | Wang, Jian (Department of Health Management and Health Economics); Iversen , Tor (Department of Health Management and Health Economics); Hennig-Schmidt , Heike (Department of Economics, University of Bonn); Godager , Geir (Department of Health Management and Health Economics) |
| Abstract: | We quantify patient-regarding preferences by fitting a bounded rationality model to data from an incentivized laboratory experiment, where Chinese medical doctors, German medical students and Chinese medical students decide under different payment schemes. We find a remarkable stability in patient-regarding preferences when comparing subject pools and we cannot reject the hypothesis of equal patient-regarding preferences in the three groups. The results suggest that a health economic experiment can provide knowledge that reach beyond the student subject pool, and that the preferences of decision-makers in one cultural context can be of relevance in a very different cultural context. |
| Keywords: | Laboratory experiment; Bounded rationality; Payment mechanism; Physician behavio |
| JEL: | C92 D82 H40 I11 J33 |
| Date: | 2019–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oslohe:2020_002&r=all |
| By: | Kramer, Berber; Lambrecht, Isabel |
| Abstract: | Many rural development programs aim at improving women’s economic empowerment in agriculture, but as rural income continues to diversify, women may prefer investing in nonfarm activities. In a framed field experiment with 1,527 men and women in Ghana, we elicit preferences for investments in crop farming versus other business activities. We analyze whether gender differences in preferences for non-farm diversification, if any, can be ascribed to differential access to physical and human capital, and to what extent a gender gap is explained by differences in socio-economic characteristics, skills, perceptions and norms. Despite strong beliefs that men and women are more skilled in crop farming and non-farm businesses, respectively, many respondents invest in both farm and non-farm activities and we find only a small gender gap in revealed preferences for non-farm diversification. This gap can be largely explained by gender stereotyping around perceived skills. Increasing access to physical and human capital does not significantly affect preferences. We conclude that both men and women reveal a strong preference for diversified investments, which needs to be reflected in programs and policies aiming to improve women’s economic empowerment. |
| Keywords: | GHANA, WEST AFRICA, AFRICA SOUTH OF SAHARA, AFRICA, non-farm income, diversification, empowerment, gender, women, field experimentation, income diversification, C93 Field Experiments, J24 Human Capital, Skills, Occupational Choice, Labor Productivity, O13 Economic Development: Agriculture, Natural Resources, Energy, Environment, Other Primary Product, Q10 Agriculture: General, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1855&r=all |
| By: | Janna Bergsvik (Statistics Norway); Agnes Fauske; Rannveig K. Hart |
| Abstract: | This paper describes the results of a systematic review of the literature of policy effects on fertility after 1970 in Europe, USA, Canada and Australia. Empirical studies were selected through extensive systematic searches, with subsequent literature list screening. Inclusion was conditional on implementing an experimental or quasi-experimental design. 57 published papers and recent working papers were included, covering the topics of parental leave, childcare, health services, universal child transfers and welfare reforms. Childcare and universal transfers seem to have the most positive effects on fertility. Few effects were found for parental leave, but this could be linked to these reforms not lending themselves to efficient (quasi)experimental evaluation. Withdrawing cash transfers to families through welfare reforms has limited fertility effects. Subsidizing assisted reproductive technologies show some promise in increasing birth rates of women above age 35. |
| Keywords: | Fertility; Public policy; Family policy; Policy effects; Quasi experiment |
| JEL: | J13 J16 J18 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:922&r=all |
| By: | Christopher Cotton (Queen's University); Jordan Nanowski; Ardyn Nordstrom; Eric Richert |
| Abstract: | We examine the impact of a large, randomized Girls’ Education Challenge (GEC) project in rural Zimbabwe. The multifaceted project initially provided information about girls’ rights and education barriers to girls, parents, teachers, and others. Later, the project introduced a learn-to-read program and provided resources such as bicycles and books. The information campaign significantly improved mathematics performance and school enrolment in a short time frame. The subsequent provision of resources and curriculum changes corresponded to improvements in literacy but did not correspond to any additional improvements in mathematics and enrolment beyond what was observed following the information provision alone. |
| Keywords: | Girls’ Education Challenge, education, empowerment, information provision, impact evaluation, economic development, field experiment, multifaceted intervention |
| JEL: | C93 I25 O15 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1426&r=all |
| By: | Hoffmann, Manuel (Texas A&M University); Mosquera, Roberto (Universidad de las Américas); Chadi, Adrian (University of Konstanz) |
| Abstract: | Influenza vaccination could be a cost-effective way to reduce costs in terms of human lives and productivity losses, but low take-up rates and vaccination unintentionally causing moral hazard may decrease its benefits. We ran a natural field experiment in cooperation with a bank in Ecuador, where we modified its vaccination campaign. Experimentally manipulating incentives to participate in this health intervention allows us to study peer effects with organizational data and to determine the personal consequences of being randomly encouraged to get vaccinated. We find that assigning employees to get vaccinated during the workweek roughly doubled take-up compared to employees assigned to the weekend, which indicates that reducing opportunity costs plays an important role in increasing vaccination rates. Coworker take-up also increased individual take-up significantly and is driven by social norms. Contrary to the company's expectation, vaccination did not reduce sickness absence during the flu season. Getting vaccinated was ineffective with no measurable health externalities from coworker vaccination. We rule out meaningful individual health effects when considering several thresholds of expected vaccine effectiveness. Using a dataset of administrative records on medical diagnoses and employee surveys, we find evidence consistent with vaccination causing moral hazard, which could decrease the effectiveness of vaccination. |
| Keywords: | health intervention, flu vaccination, sickness-related absence, field experiment, random encouragement design, moral hazard, technology adoption |
| JEL: | D90 I12 J01 N36 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12939&r=all |
| By: | Olivier Coibion; Dimitris Georgarakos; Yuriy Gorodnichenko; Michael Weber |
| Abstract: | We compare the causal effects of forward guidance communication about future interest rates on households’ expectations of inflation, mortgage rates, and unemployment to the effects of communication about future inflation in a randomized controlled trial using more than 25,000 U.S. individuals in the Nielsen Homescan panel. We elicit individuals’ expectations and then provide 22 different forms of information regarding past, current and/or future inflation and interest rates. Information treatments about current and next year’s interest rates have a strong effect on household expectations but treatments beyond one year do not have any additional impact on forecasts. Exogenous variation in inflation expectations transmits into other expectations. The richness of our survey allows us to better understand how individuals form expectations about macroeconomic variables jointly and the non-response to long-run forward guidance is consistent with models in which agents have constrained capacity to collect and process information. |
| JEL: | C83 D84 E31 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26778&r=all |
| By: | Ghosh, Ranjan Kumar; Gupta, Shweta; Singh, Vartika; Ward, Patrick S. |
| Abstract: | Researchers and policymakers have long understood the benefits of crop insurance but have been consistently disappointed by the poor performance of these programs. Rarely have programs seen sizeable take-up rates without support through large government subsidies, and in many countries, demand has been meager even at prices well below fair-market rates. Experiences from India have largely followed this trend, despite a number of large policy initiatives. Limited demand stems from low perceived value, arguably because the existing insurance products are unsuited to farmers’ needs. The present study fills an important gap in rural development by improving upon existing insurance policy design by incorporating product characteristics better suited to farmers’ preferences. To do so, we conducted a discrete choice experiment with agricultural households in four states in India. While farmers seem to like several of the features of policies offered under existing programs, our results suggest they would generally be willing to pay more than the highly subsidized rate they currently pay and are also clearly dissatisfied with delayed and uncertain indemnity payments and would be willing to pay a significant premium for more assured and timely payment delivery. |
| Keywords: | INDIA, SOUTH ASIA, ASIA, crop insurance, willingness to pay, agriculture, agricultural policies, subsidies, developing countries, farmers, discrete choice experiments, government subsidies, crop insurance program, Q10 Agriculture: General, Q11 Agriculture: Aggregate Supply and Demand Analysis, Prices, Q18 Agricultural Policy, Food Policy, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1820&r=all |
| By: | Felix Koelle (University of Cologne) |
| Abstract: | Many situations in the social and economic life are characterized by rivalry and conflict between two or more competing groups. Warfare, socio-political conflicts, political elections, lobbying, and R&D competitions are all examples of inter-group conflicts in which groups spend scarce and costly resources to gain an advantage over other groups. Here, we report on an experiment that investigates the impact of political institutions within groups on the development of conflict between groups. We find that relative to the case in which group members can decide individually on their level of conflict engagement, conflict significantly intensifies when investments are determined democratically by voting or when a single group member (the dictator) can decide on behalf of the group. These results hold for both symmetric and asymmetric contests, as well as for situations in which institutions are adopted exogenously or endogenously. Our findings thus suggest that giving people the possibility to vote is not the main reason for why democracies seem to engage in less wars than autocracies. Nevertheless, when giving participants the possibility to choose which institution to adopt, we find that the voting institution is the by far most popular one as it combines the desirable features of autonomy and equality |
| Keywords: | : Conflict, competition, institutions, democracy, groups, experiment |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2020-04&r=all |
| By: | Corgnet, Brice (EMLYON Business School); Gächter, Simon (University of Nottingham); González, Roberto Hernán (University of Bourgogne) |
| Abstract: | People are generally assumed to shy away from activities generating stochastic rewards, thus requiring extra compensation for handling any additional risk. In contrast with this view, neuroscience research with animals has shown that stochastic rewards may act as a powerful motivator. Applying these ideas to the study of work addiction in humans, and using a new experimental paradigm, we demonstrate how stochastic rewards may lead people to continue working on a repetitive and effortful task even after monetary compensation becomes saliently negligible. In line with our hypotheses, we show that persistence on the work task is especially pronounced when the entropy of stochastic rewards is high, which is also when the work task generates more stress to participants. We discuss the economic and managerial implications of our findings. |
| Keywords: | incentives, work addiction, occupational health, experiments |
| JEL: | C92 D87 D91 M54 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12992&r=all |
| By: | Kölle, Felix |
| Abstract: | Many situations in the social and economic life are characterized by rivalry and conflict between two or more competing groups. Warfare, socio-political conflicts, political elections, lobbying, and R&D competitions are all examples of inter-group conflicts in which groups spend scarce and costly resources to gain an advantage over other groups. Here, we report on an experiment that investigates the impact of political institutions within groups on the development of conflict between groups. We find that relative to the case in which group members can decide individually on their level of conflict engagement, conflict significantly intensifies when investments are determined democratically by voting or when a single group member (the dictator) can decide on behalf of the group. These results hold for both symmetric and asymmetric contests, as well as for situations in which institutions are adopted exogenously or endogenously. Our findings thus suggest that giving people the possibility to vote is not the main reason for why democracies seem to engage in less wars than autocracies. Nevertheless, when giving participants the possibility to choose which institution to adopt, we find that the voting institution is the by far most popular one as it combines the desirable features of autonomy and equality. |
| Keywords: | Conflict, competition, institutions, democracy, groups, experiment |
| JEL: | C72 C92 D72 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98859&r=all |
| By: | Knaus, Michael C. |
| Abstract: | This paper consolidates recent methodological developments based on Double Machine Learning (DML) with a focus on program evaluation under unconfoundedness. DML based methods leverage flexible prediction methods to control for confounding in the estimation of (i) standard average effects, (ii) different forms of heterogeneous effects, and (iii) optimal treatment assignment rules. We emphasize that these estimators build all on the same doubly robust score, which allows to utilize computational synergies. An evaluation of multiple programs of the Swiss Active Labor Market Policy shows how DML based methods enable a comprehensive policy analysis. However, we find evidence that estimates of individualized heterogeneous effects can become unstable. |
| Keywords: | Causal machine learning, conditional average treatment effects, optimal policy learning, individualized treatment rules, multiple treatments |
| JEL: | C21 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2020:04&r=all |
| By: | Bobba, Matteo (Toulouse School of Economics); Frisancho, Veronica (Inter-American Development Bank) |
| Abstract: | A growing body of evidence suggests that people exhibit large biases when processing information about themselves, but less is known about the underlying inference process. This paper studies belief updating patterns regarding academic ability in a large sample of students transitioning from middle to high school in Mexico City. The paper takes advantage of rich and longitudinal data on subjective beliefs together with randomized feedback about individual performance on an achievement test. On average, the performance feedback reduces the relative role of priors on posteriors and shifts substantial probability mass toward the signal. Further evidence reveals that males and high-socioeconomic status students, especially those attending relatively better schools, tend to process new information on their own ability more effectively. |
| Keywords: | information, subjective expectations, academic ability, Bayesian updating, overconfidence, secondary education |
| JEL: | C93 D80 D83 D84 I24 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12945&r=all |
| By: | Andras Molnar; Shereen J. Chaudhry; George Loewenstein |
| Abstract: | We examine whether belief-based preferences - caring about what transgressors believe - play a crucial role in punishment decisions: Do punishers want to make sure that transgressors understand why they are being punished, and is this desire to affect beliefs often prioritized over distributive and retributive preferences? We test whether punishers derive utility from three distinct sources: material outcomes (their own and the transgressor’s payoff), affective states (the transgressor’s suffering), and cognitive states (the transgressor’s beliefs about the cause of that suffering). In a novel, preregistered experiment (N = 1,959) we demonstrate that consideration for transgressors’ beliefs affects punishment decisions on its own, regardless of the considerations for material outcomes (distributional preferences) and affective states (retributive preferences). By contrast, we find very little evidence for pure retributive preferences (i.e., to merely inflict suffering on transgressors). We also show that people who would otherwise enact harsh punishments, are willing to punish less severely, if by doing so they can tell the transgressor why they are punishing them. Finally, we demonstrate that the preference for affecting transgressors’ beliefs cannot be explained by deterrence motives (i.e., to make transgressors behave better in the future). |
| Keywords: | beliefs, belief-based utility, justice, fairness, morality, punishment, revenge |
| JEL: | C91 D63 D82 D83 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8102&r=all |