nep-exp New Economics Papers
on Experimental Economics
Issue of 2020‒06‒22
twenty papers chosen by
Daniel Houser
George Mason University

  1. Choosing an Electoral Rule By Bol, Damien; Blais, André; Coulombe, Maxime; Laslier, Jean-François; Pilet, Jean-Benoit
  2. Migration intentions: Data from a Field Study in Albania By Michel Beine; Arnaud Dupuy; Majlinda Joxhe
  3. Adoption of environment-friendly agricultural practices with background risk: experimental evidence By Marianne Lefebvre; Estelle Midler; Philippe Bontems
  4. Financial education affects financial knowledge and downstream behaviors By Kaiser, Tim; Lusardi, Annamaria; Menkhoff, Lukas; Urban, Carly
  5. Experimental Design in Two-Sided Platforms: An Analysis of Bias By Johari, Ramesh; Li, Hannah; Weintraub, Gabriel
  6. Coordination and free-riding problems in the provision of multiple public goods By Ai Takeuchi; Erika Seki
  7. Economic preferences in the classroom - research documentation By Horn, Dániel; Kiss, Hubert Janos; Lénárd, Tünde
  8. Social Interaction and Technology Adoption: Experimental Evidence from Improved Cookstoves in Mali By Jacopo Bonan; Pietro Battiston; Jaimie Bleck; Philippe LeMay-Boucher; Stefano Pareglio; Bassirou Sarr; Massimo Tavoni
  9. Improving parenting practices for early child development: Experimental evidence from Rwanda By Patricia Justino; Marinella Leone; Pierfrancesco Rolla; Monique Abimpaye; Caroline Dusabe; Diane Uwamahoro; Richard Germond
  10. Debiasing preferences over redistribution: An experiment By Romain Espinosa; Bruno Deffains; Christian Thöni
  11. Effects of scatter plot initial solutions on regular grid facility layout algorithms in typical production models By Jerzy Grobelny; Rafal Michalski
  12. Reusing Natural Experiments By Heath, Davidson; Ringgenberg, Matthew; Samadi, Mehrdad; Werner, Ingrid M
  13. Checking and Sharing Alt-Facts By Guriev, Sergei; Henry, Emeric; Zhuravskaya, Ekaterina
  14. Discrimination, narratives and family history: An experiment with Jordanian host and Syrian refugee children By Kai Barron; Heike Harmgart; Steffen Huck; Sebastian Schneider; Matthias Sutter
  15. Investigating human visual behavior by hidden Markov models in the design of marketing information By Jerzy Grobelny; Rafal Michalski
  16. Statistical Decision Properties of Imprecise Trials Assessing COVID-19 Drugs By Charles F. Manski; Aleksey Tetenov
  17. Why so Negative? Belief Formation and Risk Taking in Boom and Bust Markets By Kieren, Pascal; Mueller-Dethard, Jan; Weber, Martin
  18. Simulated annealing based on linguistic patterns: experimental examination of properties for various types of logistic problems By Jerzy Grobelny; Rafal Michalski
  19. Incentivizing Behavioral Change: The Role of Time Preferences By Aggarwal, Shilpa; Dizon-Ross, Rebecca; Zucker, Ariel
  20. Bootstrap Inference for Quantile Treatment Effects in Randomized Experiments with Matched Pairs By Liang Jiang; Xiaobin Liu; Yichong Zhang

  1. By: Bol, Damien (Université de Montréal); Blais, André; Coulombe, Maxime; Laslier, Jean-François; Pilet, Jean-Benoit
    Abstract: Citizens are increasingly involved in the design of democratic institutions, for instance via referendums. If they support the institution that best serves their self-interest, the outcome inevitably advantages the largest group and disadvantages minorities. In this paper, we challenge this pessimistic view with an original lab experiment in France and Great Britain. In the first phase, experimental subjects experience elections under plurality and approval voting. In the second phase, they decide which rule they want to use for extra elections. The treatment is whether they do or do not have information to determine where their self-interest lies before deciding. We find that self-interest shapes people’s decisions, but so do intrinsic egalitarian values that subjects have outside of the lab. The implications are: (1) people have consistent ‘value-driven preferences’ for electoral rules, and (2) putting them in a situation of uncertainty leads to an outcome that reflects these values.
    Date: 2020–06–05
  2. By: Michel Beine (Department of Economics and Management, Université du Luxembourg); Arnaud Dupuy (Department of Economics and Management, Université du Luxembourg); Majlinda Joxhe (Department of Economics and Management, Université du Luxembourg)
    Abstract: This paper documents data about migration intentions collected through a survey conducted between September and December 2019 in the city of Tirana (Albania). The information contained in the data belongs to three main categories: (i) the socio-demographic characteristics of the subjects interviewed (ii) their migration intentions in the form of rankings of preferred destinations within Europe as well as worldwide, and (iii) measures of their risk and time preferences. The data collection involved two different approaches. First, incentivized lab-in-the-field laboratory games were used to elicit risk and time preferences of the subjects. Second, a randomized experiment with respect to the preferred migration destinations was used to unveil the importance of information about potential destinations when individuals rank destinations. Descriptive statistics of the data indicate that approximately 72% of the subjects in our sample express the desire to migrate in the future. The country ranked as most preferred European destination is Germany, while worldwide the US rank first. About 57% of the subjects consider the level of earnings at destination as the most important attribute to decide where to emigrate. We find further that, when provided with official statistics about earnings at destinations, 26% of individuals change their most preferred destination. Interestingly, the data suggest that this change is twice as much prevailing for those with no intention to migrate than for intended movers. Finally, whether we provide more than just information about earnings or not does not seem to matter much.
    Keywords: Field Experiment, Data Collection, Albania, Intended Migration
    JEL: C93 C81 F22
    Date: 2020
  3. By: Marianne Lefebvre (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut National de l'Horticulture et du Paysage); Estelle Midler (Alexander von Humboldt Professorship of Environmental Economics - Osnabrück University); Philippe Bontems (TSE - Toulouse School of Economics - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UT1 - Université Toulouse 1 Capitole)
    Abstract: Agriculture is one of the economic sectors most exposed to exogenous risks such as climate hazards and price volatility on agricultural markets. Agricultural policies targeting the adoption of environment-friendly but potentially risk-increasing practices cannot ignore this challenge. Farmers have indeed to decide if they take the foreground risk associated with the adoption of environment-friendly practices, while simultaneously facing exogenous background risk beyond their control. Using a theoretical model and a public good experiment, we analyse the adoption of agri-environmental practices and the effect of agri-environmental subsidies in a context where risks are both foreground and background. While most of the literature on background risk focuses on its impact on individual decisions, we analyse the influence of background risk in a context of strategic uncertainty (contribution to a public good). The results highlight the potential synergies between greening the CAP and supporting risk management. We find that background risk discourages the adoption of green practices, although it affects all farmland independently from the farmer's choice of practices (environment friendly or conventional). An incentive payment per hectare of land farmed with green practices increases the adoption of risk-increasing practices but is significantly less effective in the presence of background risk.
    Keywords: Background risk,Agri-environmental measures,Risk aversion,Public good game,Lab experiment,Common Agricultural Policy
    Date: 2020–05–21
  4. By: Kaiser, Tim; Lusardi, Annamaria; Menkhoff, Lukas; Urban, Carly
    Abstract: We study the rapidly growing literature on the causal effects of financial education programs in a meta-analysis of 76 randomized experiments with a total sample size of over 160,000 individuals. The evidence shows that financial education programs have, on average, positive causal treatment effects on financial knowledge and downstream financial behaviors. Treatment effects are economically meaningful in size, similar to those realized by educational interventions in other domains and are at least three times as large as the average effect documented in earlier work. These results are robust to the method used, restricting the sample to papers published in top economics journals, including only studies with adequate power, and accounting for publication selection bias in the literature. We conclude with a discussion of the cost-effectiveness of financial education interventions.
    Keywords: financial behavior; Financial Education; financial literacy; meta-analysis; RCT
    JEL: D14 I21
    Date: 2020–05
  5. By: Johari, Ramesh (Stanford U); Li, Hannah (Stanford U); Weintraub, Gabriel (Stanford U)
    Abstract: We develop an analytical framework to study experimental design in two-sided platforms. In the settings we consider, customers rent listings; rented listings are occupied for some amount of time, then become available. Platforms typically use two common designs to study interventions in such settings: customer-side randomization (CR), and listing-side randomization (LR), along with associated estimators. We develop a stochastic model and associated mean field limit to capture dynamics in such systems, and use our model to investigate how performance of these estimators is affected by interference effects between listings and between customers. Good experimental design depends on market balance: we show that in highly demand-constrained markets, CR is unbiased, while LR is biased; conversely, in highly supply-constrained markets, LR is unbiased, while CR is biased. We also study a design based on two-sided randomization (TSR) where both customers and listings are randomized to treatment and control, and show that appropriate choices of such designs can be unbiased in both extremes of market balance, and also yield low bias in intermediate regimes of market balance.
    Date: 2020–02
  6. By: Ai Takeuchi (College of Economics, Ritsumeikan University); Erika Seki (Graduate School of Economics, Osaka University)
    Abstract: This study considers the twin problems of free riding and coordination failure prevailing in the provision of multiple public goods with diminishing marginal returns in which the payoff-sum maximising Pareto optimal outcome requires less-than-full contributions by group members. We examine theoretically and experimentally whether the provision of information on the demand for public goods helps overcome these problems and improves efficiency. We construct a game of two public goods,each with an upper bound on effective contributions. Theoretical analysis predicts that this information improves efficiency as it prompts efficiency concerned individuals to match the upper bound of each public good in equilibrium.The experimental results show countervailing effects of demand information,i.e.,it improves coordination but deteriorates the free-riding problem.
    Keywords: Charity,Freeriding,Coordination,Multiplepublicgoods,Laboratoryexperiment, Information.
    JEL: C72 C91 C92 H41
    Date: 2020–06
  7. By: Horn, Dániel; Kiss, Hubert Janos; Lénárd, Tünde
    Abstract: In this paper, we document how we carried out a research that aimed at measuring the economic preferences of high school students. We describe the preferences that we study and what experimental games we used to investigate them. Then we report how we carried out the experiments in the schools. We provide detailed descriptive statistics on the preferences in aggregate and also school by school. Last, we validate our measurement by comparing the measured preferences to those in the literature.
    Keywords: altruism, competitive preferences, cooperation, risk preferences, social preferences, student, time preferences, trust
    JEL: C91 C92 I21 I24
    Date: 2020–05–30
  8. By: Jacopo Bonan; Pietro Battiston; Jaimie Bleck; Philippe LeMay-Boucher; Stefano Pareglio; Bassirou Sarr; Massimo Tavoni
    Abstract: Easy-to-use and risk-free technologies, which require little investment and potentially provide health and environmental benefits, often have low adoption rates. Using a randomized experiment in urban Mali, we assess the impact of a training session in which information on an improved cookstove (ICS) is provided along with the opportunity to purchase the product at the market price. We find direct and spillover effects from our invitation to the session on ICS ownership and usage. We then randomly assign half of the training participants to receive information on a peer's actual purchase. Our results indicate that conditional on receiving information, an individual is more likely to adopt the product if informed about a peer they know and who purchased the product. Our sessions have no discernible impact on product knowledge or household welfare. We argue that social interaction, through imitation, can represent an important channel for increasing take-up and diffusion.
    Keywords: Technology Adoption, Social Interaction, Imitation Effects, Cookstoves, Mali
    JEL: D91 O33 O13 M31
    Date: 2020–05
  9. By: Patricia Justino; Marinella Leone; Pierfrancesco Rolla; Monique Abimpaye; Caroline Dusabe; Diane Uwamahoro; Richard Germond
    Abstract: This paper investigates the short- and medium-term impact of a randomized group-based early child development programme targeting parents of children aged six to 24 months in a poor, rural district of Rwanda. The programme engaged parents through sessions that included a radio show and facilitated discussions during 17 weekly village-level meetings. Twelve months after baseline, children's communication, problem-solving, and personal social skills improved in treated groups.
    Keywords: Child education, early child development, parenting programme, radio, randomized controlled trial, Rwanda
    Date: 2020
  10. By: Romain Espinosa (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Bruno Deffains (Centre de Recherches en Droit et Economie (CRED) - UP2 - Université Panthéon-Assas); Christian Thöni (UNIL - Université de Lausanne)
    Abstract: We study the manipulation of preferences over redistribution. Previous work showed that preferences over redistribution are malleable by the experience of success or failure in a preceding real-effort task. We manipulate the information subjects receive about the importance of chance relative to effort in determining success. We investigate the effect of this manipulation on (i) subjects' redistribution choices affecting third parties, and (ii) preferences for redistributive taxation. Our results show that informing the subjects about the relative importance of chance after the real-effort task does not mitigate the self-serving bias in redistribution choices. Only providing full information before the real-effort task prevents the emergence of the self-serving bias.
    Keywords: Redistribution,Self-serving bias,Debiasing,Experiment
    Date: 2020
  11. By: Jerzy Grobelny; Rafal Michalski
    Abstract: Two simulation experiments were conducted to verify whether the idea of virtual force scatter plot algorithm, used for searching solutions of the facility layout problems, may be used as an input to the classical CRAFT and simulated annealing (SA) algorithms. The proposed approach employs a regular grid for specifying possible locations of objects. Three independent variables were investigated in the first experiment, namely, (1) the size of the problem: 16, 36 and 64 objects, (2) the type of links between objects: grid, line, and loop, and (3) the shape of the possible places in which the objects can be situated: circle, row and square. The patterns of possible location places were also adapted to the analysis of examples taken from literature, included in the second experiment. The gathered data were statistically analyzed. The results shows substantial decrease in goal function means for all of the examined experimental conditions, if the proposed starting solutions are applied to the CRAFT algorithm. The application of the approach to SA is profitable in specific tasks. The presented comparative numerical results show, in which circumstances the proposed method is superior over various genetic algorithms and other hybrid approaches. Overall, the experimental data investigation demonstrates the usefulness of the proposed method and encourages further research in this direction.
    Keywords: Production layout; Human factors; Facility layout problem; Initial solutions; Scatter plots; Simulated annealing; Simulation experiments
    JEL: C00 D24 L16 L23 L91 M11
    Date: 2020–08–19
  12. By: Heath, Davidson; Ringgenberg, Matthew; Samadi, Mehrdad; Werner, Ingrid M
    Abstract: After a natural experiment is first used, other researchers often reuse the setting, examining different outcome variables. We examine the consequences of reusing an experimental setting using two extensively studied natural experiments, business combination laws and the Regulation SHO pilot. We apply multiple hypothesis corrections and our findings suggest many results in the existing literature are false positives. We provide guidelines for inference when an experiment is reused using simulation evidence for several popular empirical settings including difference-in-differences regressions, instrumental variables regressions, and regression discontinuity designs.
    Keywords: False Positive; identification; Multiple Hypothesis Testing; Natural Experiments
    JEL: G1 G10
    Date: 2020–05
  13. By: Guriev, Sergei; Henry, Emeric; Zhuravskaya, Ekaterina
    Abstract: Using a randomized experiment in the context of the 2019 European elections in France, we study how fact-checking affects real sharing of "alternative facts" (false or misleading statements by politicians) on Facebook and the determinants of the decision to view the factchecking. We expose over 4200 voting-age French to statements on the role of the EU made by the extreme-right party Rassemblement National. A randomly selected subset of participants was exposed to fact-checking of these statements while another randomly selected subset was offered a choice whether to view the fact-checking or not. Then, all participants were offered an opportunity to share alternative facts on their Facebook pages. Those who saw fact-checking information could also share it on Facebook. We show that: (i) both imposed and voluntary fact-checking reduces sharing of alternative facts by more than 25%; (ii) the size of the treatment effect is similar between these two treatments; and (iii) each additional click required to share alternative facts reduces sharing by 75%.
    Keywords: alternative facts; Facebook; fake news; Sharing; social media
    JEL: D8 D91
    Date: 2020–05
  14. By: Kai Barron (Wissenschaftszentrum Berlin); Heike Harmgart (European Bank for Reconstruction and Development, London, UK, and Wissenschaftszentrum Berlin); Steffen Huck (Wissenschaftszentrum Berlin); Sebastian Schneider (Max Planck Institute for Research on Collective Goods, Bonn); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: We measure the prevalence of discrimination between Jordanian host and Syrian refugee children attending school in Jordan. Using a simple sharing experiment, we find only little discrimination. Among the Jordanian children, however, we see that those who descended from Palestinian refugees do not discriminate at all, suggesting that a family history of refugee status can generate solidarity with new refugees. We also find that parents’ narratives about the refugee crisis are correlated with the degree of discrimination, suggesting that discriminatory preferences are being transmitted through parental attitudes
    Keywords: Discrimination, refugees, children, experiment, integration
    JEL: C91 D90 J15 C93 J13
    Date: 2020–06
  15. By: Jerzy Grobelny; Rafal Michalski
    Abstract: The research demonstrates the use of hidden Markov models (HMMs) in analyzing fixation data recorded by an eye-tracker. The visual activity was registered while performing pairwise comparisons of simple marketing messages. The marketing information was presented in a form of digital leaflets appearing on a computer screen and differed in the components’ arrangement and graphical layout. Better variants were selected by clicking on them with a mouse. A simulation experiment was performed to determine best HMMs in terms of information criteria. Seven selected models were presented in detail, four of them graphically illustrated and thoroughly analyzed. The identified hidden states along with predicted transition and emission probabilities allowed for the description of possible subjects’ visual behavior. Hypotheses about relations between these strategies and marketing message design factors were also put forward and discussed.
    Keywords: Eye-tracking; Cognitive modeling; Visual presentation; Digital signage; Advertisement; Human factors; Ergonomics
    JEL: C00 D01 D03 D40 D81 D83 D87 D91 L15 L81 L82 L86 M31 M37
    Date: 2020–08–15
  16. By: Charles F. Manski; Aleksey Tetenov
    Abstract: As the COVID-19 pandemic progresses, researchers are reporting findings of randomized trials comparing standard care with care augmented by experimental drugs. The trials have small sample sizes, so estimates of treatment effects are imprecise. Seeing imprecision, clinicians reading research articles may find it difficult to decide when to treat patients with experimental drugs. Whatever decision criterion one uses, there is always some probability that random variation in trial outcomes will lead to prescribing sub-optimal treatments. A conventional practice when comparing standard care and an innovation is to choose the innovation only if the estimated treatment effect is positive and statistically significant. This practice defers to standard care as the status quo. To evaluate decision criteria, we use the concept of near-optimality, which jointly considers the probability and magnitude of decision errors. An appealing decision criterion from this perspective is the empirical success rule, which chooses the treatment with the highest observed average patient outcome in the trial. Considering the design of recent and ongoing COVID-19 trials, we show that the empirical success rule yields treatment results that are much closer to optimal than those generated by prevailing decision criteria based on hypothesis tests.
    Date: 2020–05
  17. By: Kieren, Pascal; Mueller-Dethard, Jan; Weber, Martin
    Abstract: What determines investors' risk-taking across macroeconomic cycles? Researchers have proposed rational expectations models that introduce countercyclical risk aversion to generate the empirically observed time variation in risk-taking. In this study, we test whether systematic deviations from rational expectations can cause the same observed investment pattern without assuming unstable risk preferences. We let subjects form beliefs in two different market environments which resemble key characteristics of boom and bust markets, followed by an independent investment task. Those subjects who learned in the negative domain form overly pessimistic beliefs and invest significantly less in an unrelated ambiguous investment option. However, similar investment patterns cannot be observed for an unrelated risky investment option, where expectations are fixed. The proposed mechanism presents an alternative explanation for time-varying risk-taking and provides new implications for both theory and policy makers.
    Keywords: Belief formation; Market Cycles; Return Expectations; risk-taking
    JEL: D83 D84 E32 E44 G01 G11
    Date: 2020–04
  18. By: Jerzy Grobelny; Rafal Michalski
    Abstract: The paper presents simulation experiment results regarding properties of linguistic pattern based simulated annealing used for solving the facilities layout problems in logistics. In the article, we investigate four different arrangements (02 × 18, 03 × 12, 04 × 09, and 06 × 06) comprising of 36 items. The examined layouts also differ in the links matrix density (20%, 40%, and 60%) and in defining distance between objects’ pairs for the distance membership function (absolute and relative). We formally examine how these factors influence corrected mean truth values and average classical goal function values based on Manhattan distance metric. The results generally revealed a significant influence of all of the studied effects on the analyzed dependent variables. Some of the findings, however, were surprising and confirmed previous outcomes showing that the linguistic pattern approach is not a simple extension of the classic simulated annealing.
    Keywords: Facilities layout; Optimization; Linguistic variables; Logistics; Fuzzy sets
    JEL: C00 D24 L16 L23 L91 M11
    Date: 2018–09–15
  19. By: Aggarwal, Shilpa; Dizon-Ross, Rebecca; Zucker, Ariel
    Abstract: How should the design of incentives vary with agent time preferences? We develop two predictions. First, "bundling" the payment function over time â?? specifically by making the payment for future effort increase in current effort -- is more effective if individuals are impatient over effort. Second, increasing the frequency of payment is more effective if individuals are impatient over payment. We test the efficacy of time-bundling and payment frequency, and their interactions with impatience, using a randomized evaluation of an incentives program for exercise among diabetics in India. Consistent with our theoretical predictions, bundling payments over time meaningfully increases effort among the impatient relative to the patient. In contrast, increasing payment frequency has limited efficacy, suggesting limited impatience over payments. On average, incentives increase daily steps by 1,266 (13 minutes of brisk walking) and improve health.
    Date: 2020–05
  20. By: Liang Jiang; Xiaobin Liu; Yichong Zhang
    Abstract: This paper examines inference for quantile treatment effects (QTEs) in randomized experiments with matched-pairs designs (MPDs). We derive the limiting distribution of the QTE estimator under MPDs and highlight the difficulty of analytical inference due to parameter tuning. We show that a naive weighted bootstrap fails to approximate the limiting distribution ofthe QTE estimator under MPDs because it ignores the dependence structure within the matched pairs. We then propose two bootstrap methods that can consistently approximate that limiting distribution: the gradient bootstrap and the weighted bootstrap of the inverse propensity score weighted (IPW) estimator. The gradient bootstrap is free of tuning parameters but requires the knowledge of pairs' identities. The weighted bootstrap of the IPW estimator does not require such knowledge but involves one tuning parameter. Both methods are straightforward to implement and able to provide pointwise confidence intervals and uniform confidence bands that achieve exact limiting rejection probabilities under the null. We illustrate their finite sample performance using both simulations and a well-known dataset on microfinance.
    Date: 2020–05

This nep-exp issue is ©2020 by Daniel Houser. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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