nep-exp New Economics Papers
on Experimental Economics
Issue of 2020‒08‒31
34 papers chosen by

  1. Clustering Standard Errors at the "Session" Level By Duk Gyoo Kim
  2. Trading by Professional Traders: An Experiment By Marco Cipriani; Roberta De Filippis; Antonio Guarino; Ryan Kendall
  3. Financial Contagion and the Wealth Effect: An Experimental Study By Anna Bayona; Oana Peia
  4. Designing Information Provision Experiments By Ingar K. Haaland; Christopher Roth; Johannes Wohlfart
  5. Financial literacy, risk and time preferences – Results from a randomized educational intervention By Matthias Sutter; Michael Weyland; Anna Untertrifaller; Manuel Froitzheim
  6. Does Voting Solve Intergenerational Sustainability Dilemma? By Shun Katsuki; Yoichi Hizen
  7. (Dis)honest Politicians and the Value of Transparency for Campaign Promises By Matthias Lang; Simeon Andreas Dermot Schudy
  8. Inequality and Fairness: A Networked Experiment By Yildirim, Ugur; Feehan, Dennis
  9. Present Bias for Monetary and Dietary Rewards: Evidence from Chinese Teenagers By Cheung, Stephen L.; Tymula, Agnieszka; Wang, Xueting
  10. Public discourse and socially responsible market behavior By Björn Bartling; Vanessa Valero; Roberto A. Weber; Lan Yao
  11. Moral Transgressions by Groups: What Drives Individual Voting Behavior? By Eberhard Feess; Florian Kerzenmacher; Gerd Muehlheusser
  12. Risks on Others By Takaaki HAMADA; Tomohiro HARA
  13. Mixed strategies and preference for randomization in games with ambiguity averse agents By Evan M. Calford
  14. The Impact of Taxes and Wasteful Government Spending on Giving By Sheremeta, Roman; Uler, Neslihan
  15. Salience of Inherited Wealth and the Support for Inheritance Taxation By Spencer Bastani; Daniel Waldenström
  16. Can shorter transfer chains and transparency reduce embezzlement? By Salvatore Di Falco; Brice Magdalou; David Masclet; Marie Claire Villeval; Marc Willinger
  17. How Much to Save? Decision Costs and Retirement Plan Participation By Jacob Goldin; Tatiana Homonoff; Richard W. Patterson; William L. Skimmyhorn
  18. The acceptability of lotteries in allocation problems By Elias Bouacida; Renaud Foucart
  19. How can neuroscience contribute to the science of intergenerational sustainability? By Ryuta Aoki; Ayahito Ito; Keise Izuma; Tatsuyoshi Saijo
  20. Psychological pressure and the right to determine the moves in dynamic tournaments – Evidence from a natural field experiment By Mark Kassis; Sascha L. Schmidt; Dominik Schreyer; Matthias Sutter
  21. Can Early Intervention have a Sustained Effect on Human Capital? By Orla Doyle
  22. Deviant or Wrong? The Effects of Norm Information on the Efficacy of Punishment By Cristina Bicchieri; Eugen Dimant; Erte Xiao
  23. Visual Narrative for Taking Future Generation’s Perspective By Yoshinori Nakagawa; Tatsuyoshi Saijo
  24. Willing to Pay? Spatial Heterogeneity of e-Vehicle Charging Preferences in Germany By Wolff, Stefanie; Madlener, Reinhard
  25. Automation and the Future of Work: How Rhetoric Shapes the Response in Policy Preferences By Jeffrey, Karen
  26. Identity and Redistribution: Theory and Evidence. By Sanjit Dhami; Emma Manifold; Ali al-Nowaihi
  27. The Impact of Employer Discrimination on Female Labor Market Outcomes : Experimental Evidence from Tunisia By Alaref,Jumana Jamal Subhi; Nikaein Towfighian,Samira; Paez Salamanca,Gustavo Nicolas; Audah,Mohammed Thabet M
  28. Is labour market discrimination against ethnic minorities better explained by taste or statistics? A systematic review of the empirical evidence By Lippens, Louis; Baert, Stijn; Ghekiere, Abel; Verhaeghe, Pieter-Paul; Derous, Eva
  29. Why do (or don't) people carpool for long distance trips? A discrete choice experiment in France By Guillaume Monchambert
  30. Trustworthiness in the financial industry By Andrej Gill; Matthias Heinz; Heiner Schumacher; Matthias Sutter
  31. The Power of Focal Points is Strong: Coordination Games with Labels and Payoffs By Bodoff, David
  32. Bootstrap Inference for Quantile Treatment Effects in Randomized Experiments with Matched Pairs By Liang Jiang; Xiaobin Liu; Peter C.B. Phillips; Yichong Zhang
  33. Is the euro up for grabs? Evidence from a survey experiment By Baccaro, Lucio; Bremer, Björn; Neimanns, Erik
  34. Does Policy Communication During COVID Work? By Olivier Coibion; Yuriy Gorodnichenko; Michael Weber; Michael Weber

  1. By: Duk Gyoo Kim
    Abstract: Session-specific features of a laboratory experiment, if those exist, do not disappear by clustering standard errors at the session level. Randomly ordering sessions, which is crucial to deal with sampling issues, cannot justify clustering the standard errors at the session level. The experimental design should primarily determine the clustering level. In a typical controlled laboratory experiment where subjects make choices in the same environment repeatedly, clustering at a participant level is inherited from the experimental design, and standard errors could be larger (that is, statistical inference can be more conservative) when clustered at the individual or decision-group level than the session level. It implies that clustering standard errors at the session level can lead to false-positive treatment effects if it is mistakenly chosen. A rule of thumb using standard deviations is introduced.
    Keywords: lab experiment, cluster-adjusted standard errors
    JEL: C18 C90
    Date: 2020
  2. By: Marco Cipriani; Roberta De Filippis; Antonio Guarino; Ryan Kendall
    Abstract: We examine how professional traders behave in two financial market experiments; we contrast professional traders’ behavior to that of undergraduate students, the typical experimental subject pool. In our first experiment, both sets of participants trade an asset over multiple periods after receiving private information about its value. Second, participants play the Guessing Game. Finally, they play a novel, individual-level version of the Guessing Game and we collect data on their cognitive abilities, risk preferences, and confidence levels. We find three differences between traders and students: Traders do not generate the price bubbles observed in previous studies with student subjects; traders aggregate private information better; and traders show higher levels of strategic sophistication in the Guessing Game. Rather than reflecting differences in cognitive abilities or other individual characteristics, these results point to the impact of traders’ on-the-job learning and traders’ beliefs about their peers’ strategic sophistication.
    Keywords: bubbles; experiments; financial markets; information aggregation; professional traders; strategic sophistication
    JEL: C93 G11 G14
    Date: 2020–08–01
  3. By: Anna Bayona; Oana Peia
    Abstract: We design a laboratory experiment to test the importance of wealth as a channel for financial contagion across markets with unrelated fundamentals. Specifically, in a sequential global game, we analyze the decisions of a group of investors that hold assets in two markets. We consider two treatments that vary the level of diversification of these assets across markets, which allows us to disentangle the wealth effect from other sources of financial contagion. We provide evidence of contagion due to a wealth effect when investors have completely diversified portfolios. In this treatment, for certain ranges of fundamentals, we show that a coordination failure in the first market reduces investors' wealth, which makes them more likely to withdraw their investments in the second market, thereby increasing the probability of a crisis.
    Keywords: Financial contagion; Financial crises; Wealth; Coordination games; Global games
    JEL: C72 C92 D8 G01 G11
    Date: 2020–03
  4. By: Ingar K. Haaland; Christopher Roth; Johannes Wohlfart
    Abstract: We review methodological questions relevant for the design of information provision experiments. We first provide a literature review of major areas in which information provision experiments are applied. We then outline key measurement challenges and design recommendations that may be of help for practitioners planning to conduct an information experiment. We discuss the measurement of subjective beliefs, including the role of incentives and ways to reduce measurement error. We also discuss the design of the information intervention, as well as the measurement of belief updating. Moreover, we describe ways to mitigate potential experimenter demand effects and numerical anchoring arising from the information treatment. Finally, we discuss typical effect sizes in information experiments.
    Keywords: experimental design, beliefs, information, obfuscation
    JEL: C90 D83 D91 L82
    Date: 2020
  5. By: Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn, University of Cologne, University of Innsbruck, IZA Bonn, and CESifo Munich); Michael Weyland (Ludwigsburg University of Education); Anna Untertrifaller (University of Cologne); Manuel Froitzheim (University of Siegen)
    Abstract: We present the results of a randomized intervention in schools to study how teaching financial literacy affects risk and time preferences of adolescents. Following more than 600 adolescents, aged 16 years on average, over about half a year, we provide causal evidence that teaching financial literacy has significant short-term and longer-term effects on risk and time preferences. Compared to two different control treatments, we find that teaching financial literacy makes subjects more patient, less present-biased, and slightly more risk-averse. Our finding that the intervention changes economic preferences contributes to a better understanding of why financial literacy has been shown to correlate systematically with financial behavior in previous studies. We argue that the link between financial literacy and field behavior works through economic preferences. In our study, the latter are also related in a meaningful way to students’ field behavior.
    Keywords: Financial literacy, randomized intervention, risk preferences, time preferences, field experiment
    JEL: C93 D14 I21
    Date: 2020–08
  6. By: Shun Katsuki (School of Economics and Management, Kochi University of Technology); Yoichi Hizen (School of Economics and Management, Kochi University of Technology)
    Abstract: Does voting solve intergenerational sustainability dilemma? Do voting rules matter for inducing people to collectively select a sustainable alternative that leaves more resources for future generations? To answer these questions, we conduct a laboratory experiment with human subjects in the framework of intergenerational sustainability dilemma game, in which the own-payoff maximizing choice by the current generation decreases the size of resource left for the subsequent generations. The choice is made by voting among the members of each generation, and we compare three voting rules, ordinary voting, whereby each person has one vote, proxy voting, whereby a part of people are given an extra vote on behalf of the subsequent generations, and two-ballot voting, whereby all people are given an extra vote. We observe that proxy voting and two-ballot voting improve the frequency of sustainable choice in comparison with ordinary voting, but the frequency is still low. This result implies that having people vote individually hardly achieves sustainable choices by successive generations even if the rules of voting are elaborated to some extent.
    Keywords: proxy vote, intergenerational sustainability dilemma, future generation, laboratory experiment
    Date: 2020–07
  7. By: Matthias Lang; Simeon Andreas Dermot Schudy
    Abstract: Promises are prevalent in many competitive environments, but promise keeping is often difficult to observe. Do promises still offer an opportunity to honor future obligations, if promise keeping is unobservable? Focusing on campaign promises, we study the value of transparency. We show how preferences for truth-telling shape promise competition when promise keeping can(not) be observed. We identify the causal effects of transparency in a laboratory experiment. Transparency leads to less generous promises, but also to less promise breaking. Nonetheless, officials appropriate similar rents as in opaque institutions. Preferences for truth-telling and (instrumental) reputational concerns explain these results.
    Keywords: prospective voting, retrospective voting, promises, promise breaking, lying costs, preferences for truth-telling, experiment, political economy
    JEL: C91 C92 D72 D73 D91
    Date: 2020
  8. By: Yildirim, Ugur; Feehan, Dennis
    Abstract: Why do humans cooperate? Lab experiments have found that cooperation may emerge in part because humans have intrinsically egalitarian motives, meaning that they resist inequality even at some personal cost. But outside the lab, economic inequality is high and on the rise, yet survey data suggest that people do not prioritize policies intended to address inequality. If people are intrinsically egalitarian, why are dramatic increases in inequality not a bigger concern? One possibility is that most people care more about unfairness than inequality per se. Here, we report the results of a networked, online experiment designed to unpack the relationship between fairness and inequality. In our experiment, we create fair and unfair wealth allocations by experimentally manipulating two factors: wealth distribution (i.e., whether starting wealth is equal vs unequal) and wealth source (i.e., the specific mechanism through which wealth (in)equality comes about, earned vs random). Our results show that the source of subjects’ wealth has important effects on their attitudes and behavior: when subjects “earned” their endowments, they perceived their wealth regimes to be more fair, and they were less likely to cooperate. These findings suggest that it can be misleading to study inequality without accounting for subjects’ understanding of how that inequality arose.
    Date: 2020–07–10
  9. By: Cheung, Stephen L. (University of Sydney); Tymula, Agnieszka (University of Sydney); Wang, Xueting (University of Sydney)
    Abstract: Economists model self-control problems through time-inconsistent preferences. Empirical tests of these preferences largely rely on experimental elicitation methods using monetary rewards, with several recent studies failing to find present bias for money. In this paper, we compare estimates of present bias for money with estimates for healthy and unhealthy foods. In a within-subjects longitudinal experiment with 697 low-income Chinese high school students we find strong present bias for both money and food, and that individual measures of present bias are moderately correlated across reward types. Our experimental measures of time preferences over money predict field behaviours better than preferences elicited over foods.
    Keywords: self-control, quasi-hyperbolic discounting, present bias, adolescents, food rewards
    JEL: C91 D12 D80 D91
    Date: 2020–06
  10. By: Björn Bartling; Vanessa Valero; Roberto A. Weber; Lan Yao
    Abstract: We investigate the causal impact of public discourse on socially responsible market behavior. We conduct laboratory market experiments with products that differ in their production costs and social impact, and provide market actors and impacted third parties with the opportunity to discuss appropriate market behavior. Across two studies that vary characteristics of the discourse, the external impact and the participants, we find that public discourse substantially increases market social responsibility. Our findings suggest that discussions and campaigns focusing on appropriate market behavior can be powerful tools for shaping responsible norms governing market conduct and addressing inefficiencies due to market failures.
    Keywords: Public discourse, market failure, externalities, social responsibility, social norms, experiment, communication
    JEL: C92 D62 D83 M14
    Date: 2020–08
  11. By: Eberhard Feess; Florian Kerzenmacher; Gerd Muehlheusser
    Abstract: We conduct an experiment where subjects are matched in groups of three and vote on a moral transgression. Analyzing different voting rules, the frequency of votes for the moral transgression increases with the number of votes required for it. This effect persists when considering pivotal votes only, which eliminates opportunities to save on own moral costs and to rely instead on sufficiently many votes for the transgression by other group members. A series of novel treatments allows us to identify guilt sharing and preferences for consensual voting as empirically relevant and independent drivers of voting behavior.
    Keywords: group decisions, unethical behaviour, experiment, voting, diffusion of responsibility, guilt sharing, donations
    JEL: C92 D02 D63 D71
    Date: 2020
  12. By: Takaaki HAMADA (Faculty of Management and Administration, Shumei University, Research Institute for Economics and Business Administration, Kobe University); Tomohiro HARA (Department of Economics, University of Maryland at College Park, U.S.A.)
    Abstract: We investigate other regarding preferences when others are involved in some risks. We introduce two concepts to examine risk attitudes towards others: "absolute level of risk attitudes toward others" (ARAO) which capture general risk attitudes toward recipients' risky payoffs, and "relative level of risk attitudes toward others" (RRAO) which capture behavioral difference depending on types of risks conditional on same expected outcomes. For RRAO, we compare two different types of risks: "state risk" where recipients' initial endowments are risky and "non-state risk" where recipients' states are not risky but transfers are risky. We provide a novel experimental design to measure both ARAO and RRAO, and theoretically explore potential mechanisms behind behaviors based on these concepts by extending representative inequality aversion models under risks. In our experiment, we find decision makers exhibit robust risk averse behaviors on ARAO, which cannot be predicted by existing theories. Yet, we find no strong evidence on RRAO.
    Keywords: Other-regarding preferences; Charity; Risk preferences; Cognitive bias
    Date: 2020–08
  13. By: Evan M. Calford
    Abstract: We study the use of mixed strategies in games by ambiguity averse agents with a preference for randomization. Applying the decision theoretic model of Saito (2015) to games, we establish that the set of rationalizable strategies grows larger as preferences for randomization weaken. An agent’s preference for randomization is partially observable: given the behavior of an agent in a game, we can determine an upper bound on the strength of randomization preferences for that agent. Notably, data in previous experiments on ambiguity aversion in games is not consistent with a maximal preference for randomization for approximately 30% of subjects.
    Keywords: Ambiguity Aversion, Mixed Strategies, Game Theory
    JEL: D81 C70 C72
    Date: 2020–08
  14. By: Sheremeta, Roman; Uler, Neslihan
    Abstract: We examine how taxes impact charitable giving and how this relationship is affected by the degree of wasteful government spending. In our model, individuals make donations to charities knowing that the government collects a flat-rate tax on income (net of charitable donations) and redistributes part of the tax revenue. The rest of the tax revenue is wasted. The model predicts that a higher tax rate increases charitable donations. Surprisingly, the model shows that a higher degree of waste decreases donations (when the elasticity of marginal utility with respect to consumption is high enough). We test the model’s predictions using a laboratory experiment with actual donations to charities and find that the tax rate has an insignificant effect on giving. The degree of waste, however, has a large, negative and highly significant effect on giving.
    Keywords: charitable giving, tax, waste, redistribution, experiment, public goods provision, neutrality, income inequality
    JEL: C93 D64 H21
    Date: 2020–07–22
  15. By: Spencer Bastani (Linnaeus University); Daniel Waldenström (PSE - Paris School of Economics, WIL - World Inequality Lab)
    Abstract: We study how attitudes to inheritance taxation are influenced by information about the role of inherited wealth in society. Using a randomized experiment in a register-linked Swedish survey, we find that informing individuals about the large aggregate importance of inherited wealth and its link to inequality of op- portunity significantly increases the support for inheritance taxation. The effect is almost uniform across socio-economic groups and survives a battery of robust- ness tests. Changes in the perceived economic importance of inherited wealth and altered views on whether luck matters most for economic success appear to be the main driving factors behind the treatment effect. Our findings suggest that the low salience of inherited wealth could be one explanation behind the relatively marginalized role of inheritance taxation in developed economies.
    Keywords: Wealth,wealth inequality,Taxation,Inheritance,Capital taxation,Tax attitudes,Equality of opportunity,Randomized experiment
    Date: 2019
  16. By: Salvatore Di Falco (UNIGE - Université de Genève); Brice Magdalou (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); David Masclet (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); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon); Marc Willinger (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: We study embezzlement when donations have to pass through intermediaries to reach recipients, by means of a sequential game tested in a laboratory experiment conducted in Tanzania. We investigate the impact on the amount embezzled of both the number of intermediaries in transfer chains and transparency about the donation. We show that donors are less generous in the presence of intermediaries. When transfer chains are shorter, aggregate embezzlement decreases, at least when donations are transparent. At the individual level, intermediaries embezzle less, the longer the transfer chain; this is due to less embezzlement at the beginning of the chain. We fail finding significant positive effects of transparency on the honesty of individual transfers through social judgment. JEL Codes: C91, D73, O19
    Keywords: Embezzlement,corruption,donations,transparency,experiment
    Date: 2020
  17. By: Jacob Goldin; Tatiana Homonoff; Richard W. Patterson; William L. Skimmyhorn
    Abstract: Deciding how much to save for retirement can be complicated. Drawing on a field experiment conducted with the Department of Defense, we study whether such complexity depresses participation in an employer-sponsored retirement saving plan. We find that simplifying one dimension of the enrollment decision, by highlighting a potential rate at which non-participants might contribute, increases participation in the plan. Similar communications that did not include a highlighted rate yield smaller effects. The results highlight how reducing complexity on the intensive margin of a decision (how much to contribute) can affect extensive margin behavior (whether to contribute at all) in a setting of policy interest.
    JEL: D14
    Date: 2020–07
  18. By: Elias Bouacida; Renaud Foucart
    Abstract: We report the results of two experiments on the social acceptability of random devices in allocation mechanisms. A majority of subjects do not opt for a lottery if they can rationalize an alternative mechanism as non-random. It is, however, possible to design a payoff-equivalent mechanism to the lottery that is more acceptable. Our results shed light on the real-world reliance on obscure criteria in allocation problems where lotteries seem to be simpler and more efficient.
    Keywords: lotteries, mechanism design
    JEL: D01 D78 D91
    Date: 2020
  19. By: Ryuta Aoki (Tokyo Metropolitan University); Ayahito Ito (Research Institute for Future Design, Kochi University of Technology,); Keise Izuma (School of Economics and Management, Kochi University of Technology); Tatsuyoshi Saijo (Research Institute for Future Design, Kochi University of Technology)
    Abstract: Intergenerational sustainability is an existential problem for humans, and coping with this issue requires large-scale cooperation extended across generations. However, recent empirical evidence suggests that people’s concern for future generations is typically low, which is rooted from human’s cognitive biases (e.g., temporal discounting and bounded empathy) and possibly exacerbated by modern social systems depreciating future generations’ rights and voices. To achieve sustainable society, we need to design and implement novel social institutions that leverage our concern for future generations. In this paper, we discuss how neuroscience can tackle this fundamental challenge in collaboration with other disciplines. We review psychological factors and neural substrates that may underlie decision-making regarding intergenerational sustainability. We also propose empirical approaches to study neural bases of intergenerationally-sustainable decision-making. Notably, neuroimaging research has potential to unveil “hidden†neurobiological processes that are difficult to identify by behavioral observations alone. In addition, neural data can be used to predict real-world outcomes, which complements behavioral and self-report measures that may not always reflect true motives behind decisions. Understanding the neurocognitive mechanisms would provide insights into effective institutions that promote concern for future generations. We prospect that future neuroscience research will accumulate evidence from both laboratory and field experiments, thereby contributing to policy making and the transformation toward sustainable society.
    Keywords: intergenerational sustainability, neuroscience, transdisciplinary approach
    Date: 2020–08
  20. By: Mark Kassis (Center for Sports and Management (CSM), WHU Otto Beisheim School of Management, Erkrather Str. 224a, 40233, Düsseldorf, Germany); Sascha L. Schmidt (Center for Sports and Management (CSM), WHU Otto Beisheim School of Management, Erkrather Str. 224a, 40233, Düsseldorf, Germany); Dominik Schreyer (Center for Sports and Management (CSM), WHU Otto Beisheim School of Management, Erkrather Str. 224a, 40233, Düsseldorf, Germany); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Kurt-Schumacher-Straße 10, 53113 Bonn, Germany; University of Cologne and University of Innsbruck)
    Abstract: In this paper, we show that the right to determine the sequence of moves in a dynamic team tournament improves the chances of winning the contest. Because studying dynamic team tournaments – like R&D races – with interim feedback is difficult with company data, we examine decisions of highly paid professionals in soccer penalty shootouts and show that teams whose captains can decide about the shooting sequence are more likely to win the shootout. So, managerial decisions matter for outcomes of dynamic tournaments and we discuss potential reasons for this finding.
    Keywords: Dynamic tournament, sports professionals, psychological pressure, value of decision rights, penalty shoot-outs, behavioral economics
    JEL: C93 D00 D81 D91 Z20
    Date: 2020–08
  21. By: Orla Doyle
    Abstract: Evidence on the sustained effect of early intervention is inconclusive, with many studies experiencing a dissolution of treatment effects once the program ends. Using a randomized trial, this paper examines the impact of Preparing for Life (PFL), a pregnancy to age five home visiting and parenting program, on outcomes in middle childhood. We find little evidence of cognitive fade-out at age nine, with significant treatment effects on cognitive skills (0.67SD) and school achievement tests (0.47-0.74SD) that are of a similar magnitude to those observed at the end of the program. There is no impact on other school outcomes and earlier effects for socio-emotional skills are no longer evident. While about 50 percent of the sample is retained at age nine, the treatment groups are still balanced on all key baseline characteristics and the results are robust to inverse probability weighting. Mediation analysis suggests that ~46 percent of the treatment effect on cognitive skills is explained by improvements in early parental investment. This study demonstrates that boosting children’s early cognitive skills can reduce school-age inequalities five years after program completion, yet continued investment may be needed to break long-standing inequalities in other dimensions of skills.
    Keywords: Early childhood intervention; Cognitive skills; Socio-emotional and behavioral skills; Randomized control trial; School-age inequalities
    JEL: C93 D13 I26 J13
    Date: 2020–04
  22. By: Cristina Bicchieri (University of Pennsylvania); Eugen Dimant (University of Pennsylvania; CESifo, Munich); Erte Xiao (Monash University)
    Abstract: A stream of research examining the effect of punishment on conformity indicates that punishment can backfire and lead to suboptimal social outcomes. We examine whether this effect is due to a lack of perceived legitimacy of rule enforcement, enabling agents to justify selfish behavior. We address the question of punishment legitimacy by shedding light upon the importance of social norms and their interplay with punishment. People are often presented with incomplete norm information: either about what most others do (empirical) or what most others deem appropriate (normative). We show that in isolation, neither punishment nor empirical/normative information increase prosocial behavior. In turn, we find that prosociality significantly increases when normative information and punishment are combined, but only when compliance is relatively cheap. When compliance is more expensive, we find that the combination of punishment and empirical information about others' conformity can have detrimental effects. In additional experiments, we explain how this negative effect is due, at least for some individuals, to punishment not being perceived as justified. Our results have important implications for researchers and practitioners alike.
    Keywords: Conformity, Punishment, Social Norms, Trust
    JEL: C91 D03 D73 H26
    Date: 2020–08
  23. By: Yoshinori Nakagawa (School of Economics and Management, Kochi University of Technology); Tatsuyoshi Saijo (Research Institute for Future Design, Kochi University of Technology)
    Abstract: Intergenerational problems occur when the current generation chooses actions that benefit them without fully considering future generations’ needs. The present study posits that the public has a general tendency to serve as the proxy of future generations willingly, and aims to develop a visual narrative intervention measure to accelerate this willingness. The narrative was created on the basis of the interview survey with a participant in a Future Design workshop (Hara et al., 2019) as an “imaginary future generation†. A lab-experiment was designed using this visual narrative as an intervention tool, to assess the impact of this intervention on the research subjects’ political preferences and their concerns for future generations. A total of 186 subjects were collected and requested to choose their most preferred option among a list of four options prevalent in the life of the present generation, both before and after the exposure to this intervention. It was found that the exposure to this visual narrative significantly changed the subjects’ preferences as the proxies of the future generation. After this intervention, the subjects wished the present generation had chosen sustainable options more different from the status quo so that the future generations’ do not regret from inaction (i.e., the regret of not having done certain actions at present), indicating that the intervention was effective in acquiring the perspective of the future generation. The present study demonstrates that individuals of the present generation can be motivated to take the perspective of the future generation.
    Keywords: Perspective, future design, retrospective treatment, retrospective assessment
    Date: 2020–07
  24. By: Wolff, Stefanie (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 this paper, we spatially map the willingness to pay for e-vehicle charging options according to the availability of public charging spots. We combine a Discrete Choice Experiment on charging preferences with a data set of public charging spots. Our results show spatial heterogeneity, i.e. respondents’ choices depend on the quantity of public charging spots available to them. Non-availability of public charging spots in the vicinity has a larger effect on the choice probability than 1, 2, or 3 charging spots have. This could be evidence for charging infrastructure awareness. For the charging locations, we find marked spatial heterogeneity in the willingness to pay subject to the number of available public charging spots. The interaction of charging location with the number of public charging spots reveals a strong preference for charging at home rather than at work or charging on the road. However, with every additional public charging spot, respondents are more likely to charge away from home. This holds until the number of charging spots has reached a tipping point at which respondents become indifferent between home and work charging. When the tipping point is exceeded, respondents rather charge at work than at home. Thus, with increasing numbers of charging spots, public chargers near home are less relevant than those near work. Eventually, public chargers away from home become more attractive. Also, with increasing numbers of charging spots our results reveal a fivefold greater willingness to pay for reducing waiting time (for a charging spot to become available) than for accelerating charging speed. Thus, charging point operators could surcharge by implementing a booking scheme than by implementing fast-charging. From the findings, we derive further implications for charging infrastructure policy, business models, and infrastructure planning, e.g. regarding the expected break-even points for rolling out charging infrastructure and the provision of green energy.
    Keywords: Electric mobility charging behavior; Charging spot awareness; Discrete Choice Experiment; Econometric modeling; Willingness to pay; Germany
    JEL: C25 D12 M38 Q58 R40
    Date: 2020–06
  25. By: Jeffrey, Karen
    Abstract: I conduct a survey experiment to test how individuals' preferences for redistributive policies respond to news of their vulnerability to an automation-induced labor market shock. As respondents feel more vulnerable, their preferences for redistributive policies remain constant or decline. However, introducing rhetoric that causes respondents to view automation-induced inequality as unfair increases preferences for several redistributive policies. The effects are pronounced among more-educated respondents - a group expected to increasingly be affected by automation in future. This suggests that, going forward, rhetoric may become increasingly influential in terms of the political viability of a redistributive policy response to automation going forward
    Date: 2020–07–02
  26. By: Sanjit Dhami; Emma Manifold; Ali al-Nowaihi
    Abstract: We propose a theoretical model that embeds social identity concerns, as in Akerlof and Kranton (2000), with inequity averse preferences, as in Fehr and Schmidt (1999). We conduct an artefactual ultimatum game experiment with registered members of British political parties, for whom political identity is salient and redistribution is also likely to be salient. The empirical results are as follows. (1) Proposers and responders demonstrate ingroup-favoritism. (2) Proposers exhibit quantitatively stronger social identity effects relative to responders. (3) As redistributive taxes increase, average offers by proposers and the average minimum acceptable offers of responders (both as a proportion of income) decline by almost the same amount, suggesting a shared understanding that is characteristic of social norms. (4) Subjects experience less disadvantageous inequity from ingroup members relative to outgroup members.
    Keywords: social identity, political identity, prosocial behavior, ultimatum game, fiscal redistribution, entitlements
    JEL: D01 D03
    Date: 2020
  27. By: Alaref,Jumana Jamal Subhi; Nikaein Towfighian,Samira; Paez Salamanca,Gustavo Nicolas; Audah,Mohammed Thabet M
    Abstract: The role of employer discrimination in widening labor market differences between men and women has been hypothesized and investigated in different settings. Using a field experiment, this paper examines the presence and magnitude of gender-based discrimination by employers at the point of screening in Tunisia. The study sent out 1,571 fictitious and substantially identical pairs of male and female resumes in response to online job advertisements. On average, women were 2.4 percentage points more likely than men to receive a callback from an employer. However, this average effect hides substantial heterogeneity across economic sectors. In the information technology sector, women were 15 percentage points less likely to receive a callback than men. No discrimination against or in favor of women is found in engineering, whereas in marketing and finance, women were 19 and 4 percentage points more likely to receive a callback, respectively. The paper also finds that, unlike men, women may suffer from discrimination based on their physical appearance. Veiled women were 8.5 percentage points less likely to receive a callback than non-veiled women. Overall, the findings suggest that, at the point of screening, employer discrimination against women in Tunisia is sector specific, and, on its own, it cannot fully explain the complex challenge of female unemployment in the country.
    Date: 2020–08–13
  28. By: Lippens, Louis; Baert, Stijn; Ghekiere, Abel; Verhaeghe, Pieter-Paul; Derous, Eva
    Abstract: Scholars have gone to great lengths to chart the incidence of ethnic labour market discrimination. To effectively mitigate this discrimination, however, we need to understand its underlying mechanisms because different mechanisms lead to different counteracting measures. To this end, we reviewed the recent literature that confronts the seminal theories of taste-based and statistical discrimination against the empirical reality. First, we observed that the measurement operationalisation of the mechanisms varied greatly between studies, necessitating the development of a measurement standard. Second, we found that 20 out of 30 studies examining taste-based discrimination and 18 out of 34 studies assessing statistical discrimination produced supportive evidence for said mechanisms. However, (field) experimental research, which predominantly focuses on hiring outcomes, yielded more evidence in favour of taste-based vis-à-vis statistical discrimination, suggesting that the taste-based mechanism might better explain ethnic discrimination in hiring.
    Keywords: taste-based discrimination,statistical discrimination,ethnicity,race,labour market, systematic review
    Date: 2020
  29. By: Guillaume Monchambert (LAET - Laboratoire Aménagement Économie Transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique, UL2 - Université Lumière - Lyon 2, Université de Lyon)
    Abstract: Long-distance carpooling is an emerging mode in France and Europe, but little is known about monetary values of this mode attributes in transport economics. We conducted a discrete choice experiment to identify and measure the values of attributes of long-distance transport modes for a trip as a driver and as a passenger, with a special focus on carpooling. Around 1.700 French individuals have been surveyed. We use discrete mixed logit models to estimate the probability of mode choice. We find that the value of travel time for a driver who carpools is on average 13% higher than the value of travel time when driving alone in his/her car. The average value of travel time for a carpool trip as passenger is around 26 euros per hour, 60% higher than for a train trip and 20% higher than for a bus trip. Moreover, our study confirms a strong preference for driving solo over taking carpoolers in one's car. We also show that individuals traveling as carpool passenger incur a "discomfort" cost of on average 4.5 euros per extra passenger in the same vehicle. Finally, we identify robust socioeconomic effects affecting the probability of carpooling, especially gender effects. When they drive a car, females are less likely to carpool than male, but they prefer to carpool two passengers over only one passenger.
    Keywords: Value of time,Long-distance,Carpooling,Discrete choice experiment
    Date: 2020
  30. By: Andrej Gill (University of Mainz); Matthias Heinz (University of Cologne, ECONtribute, Max Planck Institute for Research on Collective Goods, Bonn, and CEPR); Heiner Schumacher (KU Leuven, and University of Innsbruck); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn, University of Cologne, ECONtribute, IZA Bonn, CESifo Munich and University of Innsbruck)
    Abstract: The financial industry has been struggling with widespread misconduct and public mistrust. Here we argue that the lack of trust into the financial industry may stem from the selection of subjects with little, if any, trustworthiness into the financial industry. We identify the social preferences of business and economics students, and follow up on their first job placements. We find that during college, students who want to start their career in the financial industry are substantially less trustworthy. Most importantly, actual job placements several years later confirm this association. The job market in the financial industry does not screen out less trustworthy subjects. If anything the opposite seems to be the case: Even among students who are highly motivated to work in finance after graduation, those who actually start their career in finance are significantly less trustworthy than those who work elsewhere.
    Keywords: Trustworthiness, Financial Industry, Selection, Social Preferences, Experiment
    JEL: C91 G20 M51
    Date: 2020–08
  31. By: Bodoff, David
    Abstract: People’s ability to coordinate on salient labels has been widely reported since Schelling. However, it is not known how players behave when label salience conflicts with payoff dominance. We consider such games by independently varying the two elements, focusing especially on cases where the two criteria conflict. We also introduce a new form of the game, in which players choose labeled strategies in response to a stimulus. In games with no reference stimulus, behavior is consistent with a simple model, according to which strategic players assume their naïve counterparts choose the higher payoff. In games with a reference stimulus, behavior is consistent with a model in which strategic players assume their naïve counterparts choose the label that is more salient to them, except perhaps where the two labels’ salience are very similar, in which case the higher payoff is chosen. A key finding is that in the presence of a stimulus, play is best explained by a model in which players choose according to label salience, even against the combination of payoff and risk dominance.
    Keywords: coordination games; focal points; cognitive hierarchy;
    JEL: C70 C72
    Date: 2020–08–03
  32. By: Liang Jiang (Singapore Management University); Xiaobin Liu (School of Economics, Academy of Financial Research, and Institute for Fiscal Big-Data & Policy of Zhejiang University); Peter C.B. Phillips (Cowles Foundation, Yale University); Yichong Zhang (Singapore Management University)
    Abstract: This paper examines methods of inference concerning quantile treatment effects (QTEs) in randomized experiments with matched-pairs designs (MPDs). We derive the limit distribution of the QTE estimator under MPDs, highlighting the difficulties that arise in analytical inference due to parameter tuning. We show that the naive weighted bootstrap fails to approximate the limit distribution of the QTE estimator under MPDs because it ignores the dependence structure within the matched pairs.To address this difficulty we propose two bootstrap methods that can consistently approximate the limit 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 knowledge of the pair 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 coverage rates. We demonstrate their finite sample performance using simulations and provide an empirical application to a well-known dataset in microfinance.
    Keywords: Bootstrap inference, Matched pairs, Quantile treatment effect, Randomized control trials
    JEL: C14 C21
    Date: 2020–08
  33. By: Baccaro, Lucio; Bremer, Björn; Neimanns, Erik
    Abstract: The COVID-19 pandemic may lead to a resurgence of the euro crisis. In this context, Italy seems particularly vulnerable: support for the euro is lower than in most other eurozone countries, and a possible exit could have serious consequences for the common currency. Based on a novel survey experiment, this paper shows that the pro-euro coalition is fragile in Italy and preferences are malleable. They are heavily dependent on the perceived costs of continued membership, as a majority of Italians would opt for Italexit rather than accepting a bailout plan requiring the implementation of austerity policies. Individuals who feel they have not benefited from the euro are most likely to support exit when faced with the prospect of austerity. This suggests that, differently from Greece, where voters were determined to remain in the euro at all costs, the pro-euro coalition may crumble if Italy is exposed to harsh conditionality.
    Keywords: euro,framing,Italy,public opinion,survey experiment,voting behaviour,Italien,öffentliche Meinung,Umfrageexperiment,Wahlverhalten
    Date: 2020
  34. By: Olivier Coibion; Yuriy Gorodnichenko; Michael Weber; Michael Weber
    Abstract: Using a large-scale survey of U.S. households during the Covid-19 pandemic, we study how new information about fiscal and monetary policy responses to the crisis affects households’ expectations. We provide random subsets of participants in the Nielsen Homescan panel with different combinations of information about the severity of the pandemic, recent actions by the Federal Reserve, stimulus measures, as well as recommendations from health officials. This experiment allows us to assess to what extent these policy announcements alter the beliefs and spending plans of households. In short, they do not, contrary to the powerful effects they have in standard macroeconomic models.
    Keywords: subjective expectations, fiscal policy, monetary policy, COVID-19, surveys
    JEL: E31 C83 D84 J26
    Date: 2020

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.