nep-exp New Economics Papers
on Experimental Economics
Issue of 2020‒08‒10
thirty-six papers chosen by
Daniel Houser
George Mason University

  1. Default vs. Active Choices: An Experiment on Electricity Tariff Switching By Atasoy, Ayse Tugba; Madlener, Reinhard
  2. Standard vs random dictator games. The effect of role uncertainty on generosity By Ernesto Mesa-Vázquez; Ismael Rodriguez-Lara; Amparo Urbano
  3. Does selection bias cause us to overestimate gender differences in competitiveness? By Aurélie Dariel; Nikos Nikiforakis; Jan Stoop
  4. Instiutions, Opportunism and Prosocial Behavior: Some Experimental Evidence By Antonio Cabrales; Irma Clots-Figueras; Roberto Hernán-Gonzalez; Praveen Kujal
  5. Face mask use and physical distancing before and after mandatory masking: Evidence from public waiting lines By Seres, Gyula; Balleyer, Anna; Cerutti, Nicola; Friedrichsen, Jana; Süer, Müge
  6. The Positive Impact of Moral Reasoning and Moral Identity on Whistleblowing when Accounting for Personal Costs: Theory and Experimental Evidence By Mir Djawadi, Behnud; Schäfers, Sabrina
  7. Addressing validity and generalizability concerns in field experiments By Riener, Gerhard; Schneider, Sebastian; Wagner, Valentin
  8. Addressing Validity and Generalizability Concerns in Field Experiments By Gerhard Riener; Sebastian O. Schneider; Valentin Wagner
  9. Strategic Problems with Risky Prospects By Alessandro Sontuoso; Christina Bicchieri; Alexander Funcke; Einav Hart
  10. Trust and Trustworthiness After Negative Random Shocks By Hernán Bejarano; Joris Gillet; Ismael Rodriguez-Lara
  11. Sex workers, Stigma and Self-Image: Evidence from Kolkata Brothels By Sayantan Ghosal; Smarajit; Jana; Anandi; Mani; Sandip; Mitra; Sanchari Roy
  12. Does Scarcity of Female Instructors Create Demand for Diversity among Students? Evidence from Observational and Experimental Data By Funk, Patricia; Iriberri, Nagore; Savio, Giulia
  13. Covenants before the swords: The limits of efficient cooperation in heterogenous groups By Christian Koch; Nikos Nikiforakis; Charles N. Noussair
  14. Information Aggregation and the Cognitive Make-up of Traders By Brice Corgnet; Mark DeSantis; David Porter
  15. Deciding how to decide on public goods provision: The role of instrumental vs. intrinsic motives By Philipp Harms; Claudia Landwehr; Maximilian Lutz; Markus Tepe
  16. The $100 Million Nudge: Increasing Tax Compliance of Businesses and the Self-Employed using a Natural Field Experiment By Marvin Cardoza; Justin Holz; John List; Joaquin Zentner; Alejandro Zentner
  17. The Favored but Flawed Simultaneous Multiple-Round Auction By Nicolas C. Bedard; Jacob K. Goeree; Philippos Louis; Jingjing Zhang
  18. The Effect of Payment Medium on Effort By Elif Incekara-Hafalir; Raymond Kumar
  19. Do Women Shy Away from Public Speaking? A Field Experiment By Maria De Paola; Rosetta Lombardo; Valeria Pupo; Vincenzo Scoppa
  20. Risk framing and business model adaptation: A conceptualization based on threat-rigidity theory By Aarøen, Camilla; Selart, Marcus
  21. Walrasian Dynamics with Endowment Changes: The Gale Example in a Laboratory Market Experiment By Emiko Fukuda; Shuhei Sato; Junyi SHEN; Ken-Ichi Shimomura; Takehiko Yamato
  22. Linking human destruction of nature to COVID-19 increases support for wildlife conservation policies By Shreedhar, Ganga; Mourato, Susana
  23. ICT-enabled Connectedness: Implications for Sharing Economy and Communication Contexts By Abramova, Olga
  24. Do economic preferences of children predict behavior? By Breitkopf, Laura; Chowdhury, Shyamal K.; Priyam, Shambhavi; Schildberg-Hörisch, Hannah; Sutter, Matthias
  25. Consumption Response to Credit Expansions: Evidence from Experimental Assignment of 45,307 Credit Lines By Aydin, Deniz
  26. Social Groups and the Effectiveness of Protests By Marco Battaglini; Rebecca B. Morton; Eleonora Patacchini
  27. Stemming Learning Loss During the Pandemic: A Rapid Randomized Trial of a Low-Tech Intervention in Botswana By Noam Angrist; Peter Bergman; Caton Brewster; Moitshepi Matsheng
  28. An Experiment on the Neolithic Agricultural Revolution. Causes and Impact on Equality By Antonio J. Morales; Ismael Rodriguez-Lara
  29. Legitimizing Policy By Chen, Daniel L.; Michaeli, Moti; Spiro, Daniel
  30. Competition and Coming Clean By Cary Deck; Dustin Tracy
  31. An Efficient Revealed Preference Test for the Maxmin Expected Utility Model By Thomas Demuynck; Clément Staner
  32. Cash Transfers and Migration: Theory and Evidence from a Randomized Controlled Trial By Jules Gazeaud; Eric Mvukiyehe; Olivier Sterck
  33. Job Search and Hiring with Two-sided Limited Information about Workseekers’ Skills By Kate Orkin; Eliana Carranza; Robert Garlick; Neil Rankin
  34. Planar Beauty Contests By Mikhail Anufriev; John Duffy; Valentyn Panchenko
  35. Gender Differences in Recognition for Group Work By Heather Sarsons; Klarita Gerxhani; Ernesto Reuben; Arthur Schram
  36. Intrahousehold Bargaining and Agricultural Technology Adoption : Experimental Evidence from Zambia By Ken Miura; Yoko Kijima; Takeshi Sakurai

  1. By: Atasoy, Ayse Tugba (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: In distinct decision environments, consumers often fail to financially optimize their decisions. In liberalized electricity markets, consumers frequently do not optimize their electricity choices and stick with the default providers instead, despite the ability to choose among an increasingly large set of electricity suppliers and benefit from lower cost options. In this paper, we study the effect of different contextual features of the choice environment (i.e., default and active choice enforcement) and search costs (i.e., high and low) on the quality of electricity contract choices, with the help of a randomized controlled laboratory experiment. We provide evidence that the default contract rule lowers decision quality compared to the active decision rule in both search cost environments. Default rules lower the quality of contract choices especially for the individuals with lower cognitive ability. Contrary to the expectations, we observe that the number of alternatives has no effect on the quality of electricity contract choices. Our findings have important implications for regulatory rule setting in the electricity market.
    Keywords: Contract Switching; Electricity Contracts; Default Rules; Search Costs; Decisionmaking
    JEL: C91 D12 D91 Q48
    Date: 2020–05
  2. By: Ernesto Mesa-Vázquez (University of Valencia & ERICES.); Ismael Rodriguez-Lara (Department of Economic Theory and Economic History, University of Granada.); Amparo Urbano (University of Valencia & ERICES.)
    Abstract: Using a multiple-price list dictator game, this paper provides experimental evidence that the level of generosity is affected when we vary the probability that the dictator’s decision will be implemented. We also show that framing matters for generosity in that subjects are less generous when their choices under role uncertainty are such that subjects perceive that they are in the role of dictators and know that their choices will be implemented with a certain probability, compared with a setting in which subjects are told that they are in the role of recipients and know that their choices will not be implemented with certain probability.
    Keywords: dictator games, generosity, role uncertainty, framing effects.
    JEL: C91 D3 D6 D81
    Date: 2019–07–29
  3. By: Aurélie Dariel; Nikos Nikiforakis; Jan Stoop (Division of Social Science)
    Abstract: Experimental evidence suggests there is a substantial difference in the willingness of men and women to compete that could help explain the gender gap in labor market outcomes. The use of volunteer samples, however, raises a question about whether self-selection into experiments biases the estimated difference in competitiveness. To address it, we first measure the willingness of 1,145 individuals to compete in a classroom experiment. We then identify among them the subset of ‘lab volunteers’ by observing who accepts an invitation to participate in lab experiments. To test for the existence of selection bias, we compare the gender gap among lab volunteers to that in the population from which they were recruited. We find that selection causes us to overestimate the gender gap in competitiveness by 16 percentage points in absolute terms and, in relative terms, by a factor of 2 to 3 depending on the econometric model. We also show that selection causes us to significantly overestimate the gender gap in risk attitudes and the tendency of low performing men to select into competition. We present evidence men and women select differently into the lab, and discuss the implications of our findings for future research.
    Date: 2020–05
  4. By: Antonio Cabrales (Dept. of Economics, Universidad Carlos III de Madrid); Irma Clots-Figueras (School of Economics, University of Kent); Roberto Hernán-Gonzalez (Burgundy School of Business); Praveen Kujal (Dept. of Economics, Middlesex University)
    Abstract: Formal or informal institutions have long been adopted by societies to protect against opportunistic behavior. However, we know very little about how these institutions are chosen and their impact on behavior. We experimentally investigate the demand for different levels of institutions that provide low to high levels of insurance and its subsequent impact on prosocial behavior. We conduct a large-scale online experiment where we add the possibility of purchasing insurance to safeguard against low reciprocity to the standard trust game. We compare two different mechanisms, the private (purchase) and the social (voting) choice of institutions. Whether voted or purchased, we find that there is demand for institutions in low trustworthiness groups, while high trustworthiness groups always demand lower levels of institutions. Lower levels of institutions are demanded when those who can benefit from opportunistic behavior, i.e. low trustworthiness individuals, can also vote for them. Importantly, the presence of insurance crowds out civic spirit even when subjects can choose the no insurance option: trustworthiness when formal institutions are available is lower than in their absence.
    Keywords: Institutions; Trust; Trustworthiness; Voting; Insurance
    JEL: C92 D02 D64
    Date: 2020
  5. By: Seres, Gyula; Balleyer, Anna; Cerutti, Nicola; Friedrichsen, Jana; Süer, Müge
    Abstract: During the COVID-19 pandemic, the introduction of mandatory face mask usage was accompanied by a heated debate. It was argued that community use of masks creates a false sense of security that could decrease social distancing, thus making matters worse. We conducted a randomized field experiment in Berlin, Germany, to investigate whether masks lead to decreases in distancing and whether this mask effect interacts with the introduction of a mask mandate in Berlin. Joining lines in front of stores, we measured the distance kept from the experimenter in two treatment conditions - the experimenter wore a mask in one and no face covering in the other - both before and after the introduction of mandatory mask use in stores. We find no evidence that mandatory masking has a negative effect on distance keeping. To the contrary, in our study, masks significantly increase distancing and the effect does not differ between the two periods. Further, we find no evidence that the mask mandate affected distancing. However, our results suggest that the relaxation of shop opening restrictions had a negative effect on distancing.
    Keywords: COVID-19,Face Masks,Social Distancing,Risk Compensation,Field Experiment,Health Policy
    JEL: I12 D9 C93
    Date: 2020
  6. By: Mir Djawadi, Behnud; Schäfers, Sabrina
    Abstract: While it has been assumed that employees who blow the whistle in organizations are simply those with higher than average moral standards, to understand whistleblowing behavior only in relation to moral functioning has been empirically questioned. We claim that the missing empirical link is rooted in a view of morality that demands too much personal sacrifice from even the most moral employees. Instead, our conceptual model posits that the decision to blow the whistle always involves a trade-off between an individual’s level of moral standard and the extent of the personal costs they would incur, and that employees with postconventional moral reasoning or a strong moral identity are less concerned with those costs and more willing to fulfil their moral duty in order to prevent harm to others. The results of our experiment support this proposition. However, actions are not always chosen to create the optimal outcome for the higher good. Rather, study participants weigh up personal interests in their decision to act morally. By demonstrating that moral functioning and personal costs are much more intertwined than previously assumed under a normative lens, our study offers new insights to whistleblowing research and valuable implications for management practice.
    Keywords: whistleblowing, moral functioning, moral reasoning, moral identity, moral motivation, personal costs, laboratory experiment
    JEL: C91 D23 M50
    Date: 2020–06
  7. By: Riener, Gerhard; Schneider, Sebastian; Wagner, Valentin
    Abstract: In this paper, we systematically analyze the empirical importance of standard conditions for the validity and generalizability of field experiments: the internal and external overlap and unconfoundedness conditions. We experimentally varied the degree of overlap in disjoint sub-samples from a recruitment experiment with more than 3,000 public schools, mimicking small scale field experiments. This was achieved by using different techniques for treatment assignment. We applied standard methods, such as pure randomization, and the novel minMSE treatment assignment method. This new technique should achieve improved overlap by balancing covariate dependencies and variances instead of focusing on individual mean values. We assess the relevance of the overlap condition by linking the estimation precision in the disjoint sub-samples to measures of overlap and balance in general. Unconfoundedness is addressed by using a rich set of administrative data on institution and municipality characteristics to study potential self-selection. We find no evidence for the violation of unconfoundedness and establish that improved overlap, and balancedness, as achieved by the minMSE method, reduce the bias of the treatment effect estimation by more than 35% compared to pure randomization, illustrating the importance of, and suggesting a solution to, addressing overlap also in (field) experiments.
    Keywords: external validity,field experiments,generalizability,treatment effect,overlap,balance,precision,treatment assignment,unconfoundedness,self-selection bias,site-selection bias
    JEL: C9 C90 C93 D04
    Date: 2020
  8. By: Gerhard Riener (University of Düsseldorf); Sebastian O. Schneider (Max Planck Institute); Valentin Wagner (Johannes Gutenberg University Mainz)
    Abstract: In this paper, we systematically analyze the empirical importance of standard conditions for the validity and generalizability of field experiments: the internal and external overlap and unconfoundedness conditions. We experimentally varied the degree of overlap in disjoint sub-samples from a recruitment experiment with more than 3,000 public schools, mimicking small scale field experiments. This was achieved by using different techniques for treatment assignment. We applied standard methods, such as pure randomization, and the novel minMSE treatment assignment method. This new technique should achieve improved overlap by balancing covariate dependencies and variances instead of focusing on individual mean values. We assess the relevance of the overlap condition by linking the estimation precision in the disjoint sub-samples to measures of overlap and balance in general. Unconfoundedness is addressed by using a rich set of administrative data on institution and municipality characteristics to study potential self-selection. We find no evidence for the violation of unconfoundedness and establish that improved overlap, and balancedness, as achieved by the minMSE method, reduce the bias of the treatment effect estimation by more than 35% compared to pure randomization, illustrating the importance of, and suggesting a solution to, addressing overlap also in (field) experiments.
    Keywords: External validity, field experiments, generalizability, treatment effect, overlap, balance, precision, treatment assignment, unconfoundedness, self-selection bias, site-selection bias
    JEL: C9 C90 C93 D04
    Date: 2020–06–30
  9. By: Alessandro Sontuoso (Smith Institute for Political Economy and Philosophy, Chapman University; Center for Social Norms and Behavioral Dynamics, University of Pennsylvania); Christina Bicchieri (Center for Social Norms and Behavioral Dynamics, University of Pennsylvania); Alexander Funcke (Center for Social Norms and Behavioral Dynamics, University of Pennsylvania); Einav Hart (Center for Social Norms and Behavioral Dynamics, University of Pennsylvania)
    Abstract: We study games where the impact of strategic uncertainty (i.e., ambiguity arising from uncertainty about other players’ actions and beliefs) is compounded by the simultaneous presence of risky prospects (chance moves with commonly-known conditional probabilities). We embed such games in an experimental environment that allows us to test if risk-taking behavior is affected by information that reduces the extent of strategic uncertainty. In doing so, we test some implications of expected utility theory, while making minimal assumptions about individual-level (risk or ambiguity) attitudes. Our analysis provides evidence for an effect of the information: notably, we find that the effect on choice behavior is triggered in some cases by a rational belief revision about others’ actions, and in other cases by a reversal in risk preferences.
    Keywords: Strategic Uncertainty; Risk Preferences; Belief Revision; Mixed-Motive games; Network
    JEL: C72 C92 D81 D83
    Date: 2020
  10. By: Hernán Bejarano (Center of Economics Research and Teaching (CIDE); Economic Science Institute (ESI), Chapman University); Joris Gillet (Middlesex University, Business School); Ismael Rodriguez-Lara (Universidad de Granada, Departamento de Teoría e Historia Económica)
    Abstract: We investigate experimentally the effect of a negative endowment shock in a trust game to assess whether different causes of inequality have different effects on trust and trustworthiness. In our trust game there may be inequality in favor of the second mover and this may (or may not) be the result of a negative random shock (i.e., the outcome of a die roll) that decreases the endowment of the firstmover. Our findings suggest that inequality leads to differences in behavior. First-movers send more of their endowment and second-movers return more when there is inequality. However, we do not find support for the hypothesis that the cause of the inequality matters. Behavior after the occurrence of a random shock is not significantly different from the behavior when the inequality exists from the outset. Our results highlight that we have to be cautious when interpreting the effects on trust and trustworthiness of negative random shocks that occur in the field (e.g., natural disasters). Our results suggest that these effects are largely driven by the inequality caused by the shock and not by any of the additional characteristics of the shock like saliency or uncertainty.
    Keywords: Trust Game; Endowment Heterogeneity; Random Shocks; Inequality Aversion; Experimental Economics
    JEL: C91 D02 D03 D69
    Date: 2020
  11. By: Sayantan Ghosal; Smarajit; Jana; Anandi; Mani; Sandip; Mitra; Sanchari Roy
    Abstract: This paper studies the link between self-image and behaviour among those who face stigma due to povertyand social exclusion. Using a randomized field experiment with sex workers in Kolkata (India), we examine whether a psychological intervention aimed at mitigating the adverse effects of internatlized stigma can induce behaviour change. We find significant improvements in participants' self-image, as well as their savings and preventive health choices. Additionally, changes in savings and health behaviour persist up to fifteen and 21 months later respectively. Our findings highlight the potential of purely psychological interventions to improve the life choices and outcomes of marginalized groups.
    Keywords: Stigma; Self-image; Saving Public health; HIV prevention; Gender sex workers; India
    JEL: O12 J15 D87
    Date: 2020
  12. By: Funk, Patricia; Iriberri, Nagore; Savio, Giulia
    Abstract: This paper combines observational and experimental data to investigate whether scarcity of female instructors affects students' preferences for instructor gender. We find that female students evaluate female professors relatively more favorably but only in male-dominated faculties. To shed light on scarcity of female professors as a potential channel, we design an incentivized instructor-choice experiment on MTurk. We experimentally vary the existing pool of instructor gender and let subjects choose one additional (male or female) instructor. Female (and only female) subjects are more likely to choose the female instructor when the pool of instructors is male-dominated.
    Date: 2019–12
  13. By: Christian Koch; Nikos Nikiforakis; Charles N. Noussair (Division of Social Science)
    Abstract: When agents derive heterogeneous benefits from cooperation, a tension often arises between efficiency and equality that can impede their ability to cooperate efficiently. We design a lab experiment, in which we investigate the efficacy of communication and punishment, separately and jointly, to promote cooperation in such an environment. Our results reveal that communication allows most groups to establish covenants, i.e., agreements about the profile of individual contributions, while the threat of punishment (the ‘sword’) discourages deviations from the covenants. Most covenants, however, reflect a concern for equality. As a result, cooperation levels and earnings fall substantially below the maximum possible. The timing of communication is also critical: covenants reduce the use of sanctions dramatically when communication precedes punishment opportunities but when punishment precedes communication opportunities, a history of sanctioning emerges which reduces the probability that groups establish covenants subsequently. Our findings illustrate not only the benefits of early communication, but also some limits to self-governance in heterogeneous groups. JEL Codes: C92, H41, D74
    Date: 2020–06
  14. By: Brice Corgnet (Univ Lyon, emlyon business school); Mark DeSantis (Argyros School of Business and Economics, Chapman University; Economic Science Institute, Chapman University); David Porter (Argyros School of Business and Economics, Chapman University; Economic Science Institute, Chapman University)
    Abstract: We put forth that cognitive skills, such as cognitive reflection, are crucial for ensuring the informational efficiency of markets because they endow traders with the ability to infer others’ information from prices. Using laboratory experiments, we show that information aggregation is significantly enhanced when (i) all traders possess high levels of cognitive sophistication and (ii) this high level of cognitive sophistication is common information for all traders. Our findings shed light on the cognitive and informational constraints underlying the efficient market hypothesis.
    Keywords: Information Aggregation; Market Efficiency; Cognitive Skills; Cognitive Finance; Experimental Finance
    JEL: C92 D91 G14
    Date: 2020
  15. By: Philipp Harms (Johannes Gutenberg-University Mainz, Germany); Claudia Landwehr (Johannes Gutenberg-University Mainz, Germany); Maximilian Lutz (University of Oldenburg); Markus Tepe (University of Oldenburg)
    Abstract: What determines citizens’ preferences over alternative decision-making procedures – the expected personal gain associated with a procedure, or the intrinsic value assigned to it? To answer this question, we present the results of a laboratory experiment in which participants select a procedure to decide on the provision of a public good. In the first stage of the experiment, they choose between majority voting and delegation to a welfare-maximizing “expert” as alternative decision-making procedures. In the second stage of the experiment, subjects either vote on the provision of the public good, or the decision is taken by the expert. We define three treatments in which participants receive information about whether a majority in the group faces a positive or negative payoff from the provision of the public good, about whether there is a positive group benefit from its provision, or neither kind of information. Our findings confirm the importance of instrumental motives in procedural choices. At the same time, however, a significant share of participants chooses a procedure that does not maximize their individual benefit. While majority voting seems to be preferred for intrinsic values of fairness and equality, support for delegation to the welfaremaximizing expert increases if the group benefit from a public good is known – even in participants who are net payers for its provision.
    Keywords: process preferences, public goods, laboratory experiment
    Date: 2020–07–01
  16. By: Marvin Cardoza; Justin Holz; John List; Joaquin Zentner; Alejandro Zentner
    Abstract: This paper uses a natural field experiment to examine the effectiveness of specific nudges on tax compliance amongst firms and the self-employed in the Dominican Republic. In collaboration with the Dominican Republic's tax authority, we designed messages for more than 28,000 self-employed workers and over 56,000 firms. Leveraging administrative tax data, we find evidence that our nudges (increasing the salience of prison sentences or public disclosure of tax evaders) have large effects on increasing tax compliance, primarily working through the channel of decreasing claimed tax exemptions. Interestingly, we find that firms are more impacted than the self-employed, and that firm size is critically linked to nudge effectiveness: larger firms are considerably more influenced by nudges than smaller firms. We find this latter result noteworthy given the paucity of evidence showing significant behavioral impacts of nudges amongst the largest players in a market. Overall, our messages increased tax revenue by $193 million (roughly 0.23% of the Dominican Republic's GDP in 2018), with over $100 million constituting income that the government would not have received without our field experimental nudges.
    Date: 2020
  17. By: Nicolas C. Bedard (Wilfrid Laurier University, Ontario, Canada); Jacob K. Goeree (AGORA Center for Market Design, UNSW, Sydney, Australia); Philippos Louis (University of Cyprus, Cyprus); Jingjing Zhang (University of Technology Sydney)
    Abstract: We compare the first-price sealed-bid (FPSB) auction and the simultaneous multiple- round auction (SMRA) in an environment based on the planned sale of 900 MHz spectrum in Australia. Three bidders compete for five indivisible items. Bidders are permitted to obtain at most three items and need to obtain at least two to achieve profitable scale, i.e. items are complements. Value complementarities, which are a common feature of spectrum auctions, exacerbate the Òfitting problemÓ and undermine the usual logic for superior price discovery in the SMRA. With substitutes, bidders reduce demands as prices rise and a tatonnement-like dynamic produces market-clearing prices. With complements, however, all that bidders may be interested in at higher prices are larger packages. In addition, the SMRA assigns provisional winners each round, which exposes bidders to the risk of losses when they win only a subset of their desired package. We find that the FPSB outperforms the SMRA across a range of bidding environments: in terms of efficiency, revenue, and protecting bidders from losses due to the exposure problem. Moreover, the FPSB exhibits superior price discovery in that it almost always results in competitive (ÒcoreÓ) prices unlike the SMRA, which frequently produces prices that are too low because of demand-reduction or too high because of the exposure problem. We demonstrate the robustness of our findings by considering two-stage variants of the FPSB and SMRA as well as environments in which bidders know their own values but not the distributions from which values are drawn.
    Keywords: Spectrum auctions; laboratory experiments; price discovery; exposure problem; market design
    JEL: C78 C92 D47
    Date: 2020–02–01
  18. By: Elif Incekara-Hafalir (University of Technology Sydney); Raymond Kumar (Allianz, Australia)
    Abstract: There are a number of payment mediums that are used to pay participants in Economics lab experiments, with cash payments being common practice. However, institutional barriers or funding constraints may prevent researchers using this conventional payment medium. Alternative payment mediums may have different psychological effects on participants, and thereby change the behaviour in the lab. In this paper, we investigate the effect of using different payment mediums on participants. We find that different payment mediums affect participantsÕ effort when a fixed payment scheme is used but does not influence effort when a performance-based scheme is used.
    Keywords: payment medium; monetary incentives; social norms; market norms
    Date: 2019–09–01
  19. By: Maria De Paola; Rosetta Lombardo; Valeria Pupo; Vincenzo Scoppa
    Abstract: Public speaking is an important skill for career prospects and for leadership positions, but many people tend to avoid it because it generates anxiety. We run a field experiment to analyze whether in an incentivized setting men and women show differences in their willingness to speak in public. The experiment involved more than 500 undergraduate students who could gain two points to add to the final grade of their exam by presenting solutions to a problem set. Students were randomly assigned to present only to the instructor or in front of a large audience (a class of 100 or more). We find that while women are more willing to present face-to-face, they are considerably less likely to give a public presentation. Female aversion to public speaking does not depend on differences in ability, risk aversion, self-confidence and self-esteem. The aversion to public speaking greatly reduces for daughters of working women. From data obtained through an on-line Survey we also show that neither increasing the gains deriving from public speaking nor allowing participants more time to prepare enable to close the gender gap.
    Date: 2020
  20. By: Aarøen, Camilla; Selart, Marcus
    Abstract: Firm leaders’ inclination to adapt their business model is sensitive to how risk is framed (as an external threat or an opportunity) in the macro-economic environment. We apply threat-rigidity theory to examine the relationship between risk framing and business model adaptation. We also investigate if emotionality has explanatory value for how managers adapt to business models. We test our hypotheses in a field experiment involving 134 Scandinavian managers. Here, we relate managers’ inclinations to adapt to different business models to different risk scenarios. The results reveal that, in general, managers are more risk seeking in gain scenarios than in loss scenarios. This finding is in line with the threat-rigidity theory. Emotionality was found to relate more to risk aversion than to risk seeking in the domain of potential gain. We argue that emotionality has explanatory value for how managers adapt to business models, because emotions are key influences on risk perception.
    Date: 2020–06–08
  21. By: Emiko Fukuda (Department of Industrial Engineering and Economics, School of Engineering, Tokyo Institute of Technology, Japan); Shuhei Sato (Department of Social Engineering, Graduate School of Decision Science and Technology, Tokyo Institute of Technology, Japan); Junyi SHEN (Research Institute for Economics and Business Administration, Kobe University, Japan and School of Economics, Shanghai University, China); Ken-Ichi Shimomura (Research Institute for Economics and Business Administration, Kobe University, Japan); Takehiko Yamato (Department of Industrial Engineering and Economics, School of Engineering, Tokyo Institute of Technology, Japan)
    Abstract: We study the stability of price dynamics when endowments change by a laboratory market experiment. We consider a general equilibrium model of an exchange economy based on Gale (1963). By changing endowments while keeping preferences the same, both demand and supply functions change so that stability of equilibria is reversed in the middle of our double auction experiment. We observe that when the interior equilibrium is unstable (resp. stable) in Walrasian tatonnement dynamics, transaction prices show a tendency moving away from (resp. toward to) the equilibrium. However, theoretical predictions on transaction prices movement works better when the interior equilibrium is unstable than when the interior equilibrium is stable. Moreover, efficiency is higher when the interior equilibrium is unstable than when the interior equilibrium is stable. Our observation reinforces the result by Crockett et al. (2010) regarding predictability of the Walrasian model in Gale's economy even when endowments of economies change such that stability of equilibrium is reversed in the middle of a double auction experiment.
    Keywords: Walrasian stability; Experiments; Double auction
    JEL: C92 D51
    Date: 2020–07
  22. By: Shreedhar, Ganga; Mourato, Susana
    Abstract: This paper investigates if narratives varying the cause of the COVID-19 pandemic affects pro-wildlife conservation outcomes. In a pre-registered online experiment (N = 1081), we randomly allocated subjects to either a control group or to one of three narrative treatment groups, each presenting a different likely cause of the COVID-19 outbreak: an animal cause; an animal and human cause (AHC); and an animal, human or lab cause. We found that the AHC narrative elicited significantly greater pro-conservation policy support, especially for bans in the commercial trade of wildlife, when compared to the control group. Possible mechanisms driving this effect are that AHC narratives were less familiar, elicited higher mental and emotional engagement, and induced feelings that firms and governments are responsible for mitigating wildlife extinction.
    Keywords: narratives; communication; conversation; wildlife; extinction; conservation policy; environmental policy; prosocial behaviour; experiment; Covid-19; coronavirus
    JEL: D62 D64 D83 Q20 Q28 C99
    Date: 2020–07–11
  23. By: Abramova, Olga
    Abstract: The advent of the Internet and other modern ICTs has culminated in a “global village,” where people can interact with others across the globe as if they were living next door. This ICT-enabled connectedness has brought opportunities for the creation of new forms of exchange. Companies like YouTube, Alibaba or BlaBlaCar have successfully adopted a novel way of structuring their businesses – a platform model - by shifting organizational design away from selling products towards the facilitation of exchanges between two or more (related) user groups (e.g., content creators and audience in case of Youtube, sellers and buyers for Alibaba, riders and drivers in case of BlaBlaCar). This thesis focuses on two main areas that are affected by the transformation engendered by the ICT-enabled connectedness – business and communication. First, it discusses the sharing economy as a new economic paradigm that disrupted the traditional ownership model by leveraging peer-to-peer technological platforms to facilitate the exchange of resources. While many practitioners have presaged the sharing economy to open significant opportunities for a more sustainable and open society, some experts questioned the potentially devastating future of such peer-to-peer deals, drawing particular attention to the amplified information asymmetries. Prior research has explored uncertainty as a significant source of information asymmetry, mainly in e-commerce (e.g., eBay). Focusing on the unique contextual characteristics of sharing transactions (e.g., absence of ownership transfer, service orientation and intense interaction among parties), seven papers respond to an apparent urgency for systematic and thorough scrutiny of the sources and consequences of uncertainty in this particular domain. Paper A conceptualizes uncertainty in sharing arrangements by building on information asymmetry theory and extends it from supplier and resource to collaboration. We construct and validate a theoretical model that includes the antecedents, nature, and consequences of uncertainty. Building on the fact that ambiguity can be reduced with information, Paper B investigates the effectiveness and monetary value of the information cues commonly used by sharing platforms via a discrete choice experiment methodology. Acknowledging the potentially adverse effect of such cues as negative reviews, peer-to-peer sharing platforms have readily embraced the “response” option, empowering providers with the opportunity to challenge, deny or at least apologize for the subject of critique. Leaning on communication theory, Paper C explores the impact of different response strategies and review negativity on trusting beliefs towards the provider in accommodation sharing settings. Extending this line of research, Paper D, as a practice-oriented article, highlights the implications of negative reviews on the host’s image and willingness to rent a room. Lastly, Paper E reverses the perspective and affirms the receptivity of suppliers to the cues sent from the consumer’s side. As such, it uncovers the impact of different self-presentation strategies of an applicant on the host’s decision to accept a request from a stranger on a peer-to-peer sharing platform. Second, this thesis debates the implications of the ICT-enabled connectedness in the interpersonal communication context. The pervasive use of ICTs (especially smartphones) makes a difference in the ways we maintain and develop relationships, disclose things to each other, and exchange information. Users’ attachment to their smartphones, which often serve to engage with social media, evidenced detrimental intra- and interpersonal consequences, including negative emotions like envy, anger, depression and conflicts among conversational partners. To this end, two papers of the dissertation challenge the frequently promoted euphoria regarding the permanent “connectedness.” Specifically, the phenomenon of snubbing an interlocutor when using the smartphone in his or her company, coined as “phubbing,” motivations behind this behavior and the effect on communicational outcomes in education and relationship contexts have been investigated. Paper F focuses on the academic environment and demonstrates how interruptions through ICT undermine two key learning modalities – visual and auditory attention. Paper G investigates excessive smartphone use in a romantic context. We construct and validate a conceptual model that posits ignoring a partner with the smartphone as a predictor of adverse relationship outcomes through triggering feelings of jealousy. Implications for future research and practitioners are extensively discussed for each article and recapped in the final chapter.
    Date: 2020
  24. By: Breitkopf, Laura; Chowdhury, Shyamal K.; Priyam, Shambhavi; Schildberg-Hörisch, Hannah; Sutter, Matthias
    Abstract: Economic theory and empirical evidence establish that economic preferences predict behavior and life outcomes for children, adolescents, and adults. In this paper, we use novel data on 4,282 siblings aged 6 to 16 that combine incentivized measures of time, risk, and social preferences with comprehensive information on child behavior and family environment. Using standard cross-sectional specifications, our results confirm the predictive power of children's preferences for behavior. However, when estimating household fixed effects models that allow controlling forall characteristics that are shared by siblings, this predictive power largely vanishes. We discuss implications for research on children's preferences and behavior.
    Keywords: time preferences,risk preferences,social preferences,experiments with children,origins of preferences,human capital,behavior,household fixed effects,siblings
    JEL: C91 D01 J13
    Date: 2020
  25. By: Aydin, Deniz
    Abstract: I design and implement a large scale field experiment in an economy that had been experiencing a decade-long debt-driven consumption boom, in which I construct a randomized credit line extension that isolates selection and interest rate effects, and track impulse responses using comprehensive data on spending and consumer balance sheets. I document substantial indirect effects of credit, and that the propensity to borrow and spend out of credit remains quantitatively large for those with substantial slack in borrowing capacity, as well as those with a sizable buffer of assets. I use data on the dynamics of the response and expenditure composition to distinguish two classes of potential explanations: one embracing precautionary savings in response to a credit constraint that may bind in the future; and the other invoking behavioral explanations based on myopia or dynamically inconsistent behavior. The reduced form findings provide strong support for a buffer-stock model emphasizing the importance of precautionary savings.
    Keywords: consumption,credit,MPC,precautionary saving,field experiment
    JEL: D12 E21 E51
    Date: 2020
  26. By: Marco Battaglini; Rebecca B. Morton; Eleonora Patacchini (Division of Social Science)
    Abstract: We present an informational theory of public protests, according to which public protests allow citizens to aggregate privately dispersed information and signal it to the policy maker. The model predicts that information sharing of signals within social groups can facilitate information aggregation when the social groups are sufficiently large even when it is not predicted with individual signals. We use experiments in the laboratory and on Amazon Mechanical Turk to test these predictions. We find that information sharing in social groups significantly affects citizens' protest decisions and as a consequence mitigates the effects of high conflict, leading to greater efficiency in policy makers' choices. Our experiments highlight that social media can play an important role in protests beyond simply a way in which citizens can coordinate their actions; and indeed that the information aggregation and the coordination motives behind public protests are intimately connected and cannot be conceptually separated.
    Date: 2020–02
  27. By: Noam Angrist; Peter Bergman; Caton Brewster; Moitshepi Matsheng
    Abstract: The COVID-19 pandemic has closed schools for over 1.6 billion children, with potentially long-term consequences. This paper provides some of the first experimental evidence on strategies to minimize the fallout of the pandemic on education outcomes. We evaluate two low-technology interventions to substitute schooling during this period: SMS text messages and direct phone calls. We conduct a rapid trial in Botswana to inform real-time policy responses collecting data at four- to six-week intervals. We present results from the first wave. We find early evidence that both interventions result in cost-effective learning gains of 0.16 to 0.29 standard deviations. This translates to a reduction in innumeracy of up to 52 percent. We find increased parental engagement in their child’s education and more accurate parent perceptions of their child’s learning. In a second wave of the trial, we provide targeted instruction, customizing text messages to the child's learning level using data from the first wave. The low-tech interventions tested have immediate policy relevance and could have long-run implications for the role of technology and parents as substitutes or complements to the traditional education system.
    Date: 2020
  28. By: Antonio J. Morales (Universidad de Málaga); Ismael Rodriguez-Lara (Universidad de Granada; Economic Science Institute, Chapman University)
    Abstract: Testing causal relationships expressed by mathematical models on facts about human behaviour across history is challenging. A prominent example is the Neolithic agricultural revolution [1]. Many theoretical models of the adoption of agriculture has been put forward [2] but none has been tested. The only exception is [3], that uses a computational approach with agent-based simulations of evolutionary games. Here, we propose two games that resemble the conditions of human societies before and after the agricultural revolution. The agricultural revolution is modelled as an exogenous shock in the lab (n=180, 60 independent groups), and the transition from foraging to farming results from an equilibrium selection process decided by experimental subjects. The experimental data replicate the known facts that foragers organized themselves around division of labour [4] and were more egalitarian than farmers [5]. There is also evidence of bi-modal distribution along the foraging-farming axis with many in-between groups [6, 7, 8]. These results provide direct evidence that the modes of production determine the system of values of societies (inequality) and lend support for the idea that human moved in a widespread manner from foraging to farming societies. We also find that cultural and institutional preconditions were crucial for farming [9], as more egalitarian foraging groups adopted earlier agricultural techniques, but inequality raises in farming societies as agriculture settles [10], with the long run success of agriculture being determined by the land-owner’s legitimacy. These results enrich our understanding of the Neolithic agricultural revolution and highlight the relevance of experimental methodology to generate a rich dataset that complements the fragmented evidence from archaeological sites.
    Keywords: Inequality; Agricultural Revolution; Foragers Societies; Farming Societies; Property Rights; Land-owner; Human Values; Experimental Economics
    JEL: C72 C92 D02 D31 D70 N00 N50 O33 P14 Z13
    Date: 2020
  29. By: Chen, Daniel L.; Michaeli, Moti; Spiro, Daniel
    Abstract: In many settings of political bargaining over policy, agents care not only about getting their will but also about having others approve the chosen policy thus giving it more weight. What is the effect on the bargaining outcome when agents care about such legitimacy of the policy? We study this question theoretically and empirically. We show that the median-voter theorem holds in groups that are ideologically very cohesive and in groups with extreme ideological disagreement. However, in groups with intermediate ideological disagreement, the median-voter theorem does not hold. This is since, on the individual level, ideological disagreement with the median has a non-monotonic effect on the policy. We test our model in a natural experimental setting—U.S. appeals courts—where causal identification is based on random assignment of judges into judicial panels, each consisting of three judges who rule on a case. Here judges care about legitimacy of the policy they write because a norm of consensus prevails and because increased legitimacy reduces the likelihood of the judicial case to be heard by the Supreme Court. The predicted pattern of how policies depend on the participants’ ideologies are corroborated by our empirical tests.
    JEL: D7 K0 Z1
    Date: 2020–07
  30. By: Cary Deck (Economic Science Institute, Chapman University); Dustin Tracy (Economic Science Institute, Chapman University)
    Abstract: Conflicts of interest arise in many principal agent settings. Conventional wisdom suggests that the bias such incentives generate can be reduced with disclosure requirements, but at least some studies have found disclosure can exacerbate the level of bias. We consider an alternative force to reduce bias - market competition between agents and consider the effect of disclosure in the presence of market pressure. In each round of our experimental task, principals face a choice between two options and select among two agents from whom to seek advice. We test three treatments: one, in which the principals rate agents after receiving advice and other principals can condition which agent they select on those ratings; a second, which is similar to the ï¬ rst treatment but where the conflict of interest is disclosed; and a third in which market pressure is removed. Our results demonstrate that without disclosure there is no bias when there is competitive pressure while introducing disclosure generates bias. As expected, removing competitive pressure also leads to biased behavior.
    Keywords: Conflict of Interest; Principal-Agent; Disclosure; Market Competition
    JEL: D82 G14 G18 I18 K12 L14 M55
    Date: 2020
  31. By: Thomas Demuynck; Clément Staner
    Abstract: We develop a revealed preference approach for the maxmin expected utility model. In contrast to the existing tests in the literature, our revealed preference test can be efficiently implemented and does not rely on a grid search over the set of possible priors. We illustrate the usefulness of our results by implementing our revealed preference tests on two experimental datasets from the literature and we compare the empirical fit of the max-min expected utility model with the subjective expected utility model.
    Keywords: Revealed preference theory; Maxmin expected utility; Subjective expected utility
    JEL: C14 C60 D11 D12 D81
    Date: 2020–07
  32. By: Jules Gazeaud; Eric Mvukiyehe; Olivier Sterck
    Abstract: Will the fast expansion of cash-based programming in developing countries increase international migration? Theoretically, cash transfers may favor international migration by relaxing liquidity, credit, and risk constraints. But transfers, especially those conditional upon staying at home, may also increase the opportunity cost of migrating abroad. This paper evaluates the impact of a cash-for-work program on migration. Randomly selected households in Comoros were offered up to US$320 in cash in exchange for their participation in public works projects. We find that the program increased migration to Mayotte – the neighboring and richer French Island – by 38 percent,from 7.8% to 10.8%. The increase in migration is explained by the alleviation of liquidity and risk constraints, and by the fact that the program did not increase the opportunity cost of migration for likely migrants.
    Keywords: Migration Cash Transfers Financial Constraints Risk-aversion
    JEL: J61 O12 O15 F22
    Date: 2019
  33. By: Kate Orkin; Eliana Carranza; Robert Garlick; Neil Rankin
    Abstract: We present field experimental evidence that limited information about workseekers’ skills distorts both firm and workseeker behavior. Assessing workseekers’ skills, giving workseekers their assessment results, and helping them to credibly share the results with firms increases workseekers’ employment and earnings. It also aligns their beliefs and search strategies more closely with their skills. Giving assessment results only to workseekers has similar effects on beliefs and search, but smaller effects on employment and earnings. Giving assessment results only to firms increases callbacks. These patterns are consistent with two-sided information frictions, a new finding that can inform design of information-provision mechanisms.
    JEL: J23 J24 J31 J41 O15 O17
    Date: 2020
  34. By: Mikhail Anufriev (University of Technology Sydney); John Duffy (University of California); Valentyn Panchenko (UNSW Business School)
    Abstract: We introduce a planar beauty contest game where agents must simultaneously guess two, endogenously determined variables, a and b. The system of equations determining the actual values of a and b is a coupled system; while the realization of a depends on the average forecast for a, a, as in a standard beauty contest game, the realization of b depends on both a and on the average forecast for b, b. Our aim is to better understand the conditions under which agents learn the steady state of such systems and whether the eigenvalues of the system matter for the convergence or divergence of this learning process. We find that agents are able to learn the steady state of the system when the eigen- values are both less than 1 in absolute value (the sink property) or when the steady state is saddle path stable with the one root outside the unit circle being negative. By contrast, when the steady state exhibits the source property (two unstable roots) or is saddle path stable with the one root outside the unit circle being positive, subjects are unable to learn the steady state of the system. We show that these results can be explained by either an adaptive learning model or a mixed cognitive levels model, while other approaches, e.g., na•ve or homo-geneous level-k learning, do not consistently predict whether subjects converge to or diverge away from the steady state.
    Keywords: Beauty Contest; Learning; Stability; Simultaneous Equation Systems, Level-k cognitive theory
    JEL: C30 C92 D83 D84
    Date: 2019–06–01
  35. By: Heather Sarsons; Klarita Gerxhani; Ernesto Reuben; Arthur Schram (Division of Social Science)
    Abstract: We study whether gender in fluences credit attribution for group work using observational data and two experiments. We use data from academic economists to test whether coauthorship matters di erently for tenure for men and women. We find that conditional on quality and other observables, men are tenured similarly regardless of whether they coauthor or solo-author. Women, however, are less likely to receive tenure the more they coauthor. We then conduct two experiments that demonstrate that biases in credit attribution in settings without confounds exist. Taken together, our results are best explained by gender and stereotypes in uencing credit attribution for group work.
    Date: 2020–05
  36. By: Ken Miura (Kyoto University, Japan); Yoko Kijima (National Graduate Institute for Policy Studies, Japan); Takeshi Sakurai (The University of Tokyo, Japan)
    Abstract: This study examines how technology adoption is determined in an intra-household bargaining process between spouses with different incentives and resource constraints. We develop a noncooperative bargaining model in which individual investments affect not only a household’s total income but also its members’ future bargaining position, which can yield Pareto-inferior outcomes. To test for possible inefficiency, we introduce rice seeds to farmers in rural Zambia and randomly distribute vouchers for transportation from the village to a miller in town to husbands and wives. The results show that the identity of the voucher recipients matters for rice seed take-up when wives choose which crop to grow on suitable plots for rice production. We also find that the voucher given to husbands is effective only when they manage the plots by themselves. Furthermore, intra-household information flows are distorted by the recipients. The heterogeneous effects and incomplete information sharing among spouses provide evidence against efficient resource pooling within the family. We present suggestive evidence that limited commitment to the production plan is a key mechanism behind strategic spousal behavior. Overall, this study highlights the importance of directly targeting individuals with productive resources relevant to a technology.
    Keywords: Non-unitary model, productive efficiency, gender, targeting, Zambia
    Date: 2020–07

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