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on Experimental Economics |
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Issue of 2020‒10‒05
forty-four papers chosen by |
| By: | Jason Shachat (Durham University Business School; Economics and Management School, Wuhan University); Matthew J. Walker (Durham University Business School); Lijia Wei (Economics and Management School, Wuhan University) |
| Abstract: | We examine how the emergence of Covid-19 in Wuhan, and the ramifications of associated events, influence pro-sociality, trust and attitudes towards risk and ambiguity. We assess these influences using an experiment consisting of financially incentivized economic tasks. We establish causality via the comparison of a baseline sample collected pre-epidemic with five sampling waves starting from the imposition of a stringent lock- down in Wuhan and completed six weeks later. We find significant long-term increases - measured as the difference between the baseline and final wave average responses - in altruism, cooperation, trust and risk tolerance. Participants who remained in Wuhan during the lockdown exhibit lower trust and cooperation relative to other participants. We identify transitory effects from two events that permeated the public psyche. First, in the immediate aftermath of the Wuhan lockdown, there is a decrease in trust and an increase in ambiguity aversion. Second, the news of a high-profile whistleblower's death also decreases trust while heightening risk aversion. |
| Keywords: | Covid-19, Social Preferences, Cooperation, Trust, Risk Preferences |
| JEL: | C93 D64 D81 D91 I18 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:20-33&r=all |
| By: | Castagnetti, Alessandro (University of Warwick); Proto, Eugenio (University of Glasgow) |
| Abstract: | Anger is an important driver in shaping economic activities, particularly in instances that involve strategic interactions between individuals. Here we test whether anger impairs the capacity to think strategically, and we analyze the implications of our result on bargaining and cooperation games. Accordingly, with a preregistered experiment (Experiment 1), we externally induce anger to a subgroup of subjects following a standard procedure that we verify by using a novel method of text analysis. We show that anger can impair the capacity to think strategically in a beauty contest game. Angry subjects choose numbers further away from the Nash equilibrium, and earn significantly lower profits. A structural analysis estimates that there is an increase in the share of level-zero players in the treated group compared to the control group. Furthermore, with a second preregistered experiment (Experiment 2), we show that this effect is not common to all negative emotions. Sad subjects do not play significantly further away from the Nash equilibrium than the control group in the same beauty contest game of Experiment 1, and sadness does not lead to more level-zero play. |
| Keywords: | anger, induced emotions, strategic interactions, beauty-contest |
| JEL: | C92 D90 D91 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13661&r=all |
| By: | Almås, Ingvild (Dept. of Economics, Norwegian School of Economics and Business Administration); Berge, Lars Ivar (Dept. of Accounting, Auditing and Law, Norwegian School of Economics and Business Administration); Bjorvatn, Kjetil (Dept. of Economics, Norwegian School of Economics and Business Administration); Somville, Vincent (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | An influential literature has shown that women are less willing to compete than men, and the gender gap in competition may contribute to explaining gender differences in educational choices and labor market outcomes. This study reports from a large-scale randomized controlled trial of a women empowerment program in Tanzania targeting young women at the end of secondary school. Combining the randomized controlled trial, a lab-in-the-field experiment and survey data, we provide evidence suggesting that the program caused adverse selection into competition: low performing women competed more, while there was no effect on the high performers. We provide a theoretical framework to illustrate an adverse selection mechanism that may contribute to explain why the program only affected the willingness to compete among low performers. Our results emphasize the importance of understanding sorting mechanisms and heterogeneous treatment effects in the design of policies and programs. |
| Keywords: | Competition; Fairness |
| JEL: | C19 I24 J16 |
| Date: | 2020–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2020_019&r=all |
| By: | Landmann, Andreas (University of Erlangen-Nuremberg); Vollan, Björn (University of Marburg); Henning, Karla (KfW Development Bank); Frölich, Markus (University of Mannheim) |
| Abstract: | We analyze whether the availability of formal insurance products affects informal solidarity transfers in two independent behavioral experiments in the Philippines. The first experiment allows for communication, non-anonymity and unrestricted transfers. The second experiment mimics a laboratory setting without communication and preserves anonymity, which minimizes strategic concerns. The introduction of an insurance treatment alters solidarity in both experiments. We find crowding-out effects in the first setting with strategic motives, while there are even crowding-in effects due to insurance availability in the anonymous experiment. These and additional supporting results are in line with crowding-out of strategic, but not necessarily intrinsic motives due to the availability of insurance. |
| Keywords: | insurance, solidarity, crowding effects, lab-in-the-field experiment, Philippines |
| JEL: | O12 Z13 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13688&r=all |
| By: | Adman, Per (Department of Government, Uppsala University,); Larsson Taghizadeh, Jonas (Department of Government, Uppsala University,) |
| Abstract: | The aim of this paper is to investigate the occurrence of discrimination based on ethnicity in public officials’ treatment of welfare clients. Previous research has confirmed the existence of ethnic discrimination, but we argue that further investigations are needed. Field experiments in the form of correspondence tests, as we use here, are in many ways appropriate for discovering discrimination. However, an ethnic minority background is often perceived to be associated with low socioeconomic status (SES), which most previous field experiments have not paid attention to. Hence, ethnic discrimination may have been confused with socioeconomic discrimination. Our research design provides possibilities to take this problem into consideration. Furthermore, the research design allows investigation of whether ethnic discrimination occurs primarily among individuals with certain SES levels, which is currently an open question in the literature. Discrimination is assessed through a field experiment in which one administrator at each Swedish municipality is randomly contacted by an individual with an Arabic-sounding or a Swedish-sounding name who is interested in moving to the municipality. We find no statistically significant signs of ethnic discrimination. Admittedly, this may be due to the limited sample size and not only to our efforts of separating ethnic and socioeconomic dimensions. Furthermore, no signs of ethnic discrimination occurring at any particular SES level are discovered. |
| Keywords: | ethnic discrimination; field experiment; Sweden; socioeconomic discrimination; correspondence test |
| JEL: | C93 D63 D73 D91 I24 |
| Date: | 2020–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2020_012&r=all |
| By: | Julia Blasch; Stefano Carattini |
| Abstract: | Nudges and behavioral interventions have become a popular tool to stimulate prosocial behavior. Little is known, however, on how to design effective social interventions in contexts in which the descriptive norm is low, i.e. when a desirable behavior is only practiced by a minority within the respective reference group. Bringing climate-friendly behaviors from nonnormative to normative is, however, crucial to tackle the climate crisis. We take up this challenge, devise a new strategy for social interventions, and test it with an especially sophisticated target group. In particular, we implemented a field experiment at two subsequent conferences in environmental economics, with which we examine the conference participants’ proclivity to offset their carbon emissions as part of the standard registration process. We introduced two randomized treatment conditions, one relying on social norms and one on social identity, to be compared with a neutral control group. The social norm treatment leverages past contributions to voluntary carbon emissions at those conferences. The social identity treatment primes participants’ social identity as environmental economists. We provide two main insights. First, if properly adjusted to the context, interventions leveraging social norms can be effective in changing behavior also when the descriptive norm is low and when the target group is composed of experts, if targeted individuals feel socially close to the referenced peer group. Second, the effectiveness of such interventions increases as individuals are exposed to multiple “doses” of treatment, although with decreasing marginal returns. Hence, our paper provides novel insights to policymakers and practitioners on the use of social interventions when the descriptive norm is low as well as on the ability of nudges to affect experts. |
| Keywords: | carbon offsets, social norms, social identity, nudge, field experiment |
| JEL: | A11 C93 D12 D91 H23 H41 Q54 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8542&r=all |
| By: | Stefano Caria; Grant Gordon; Simon Quinn; Soha Shami; Alexander Teytelboym; Maximilian Kasy |
| Abstract: | We introduce a novel methodology for adaptive targeted experiments. Our Tempered Thompson Algorithm balances the goals of maximizing the precision of treatment effect estimates and maximizing the welfare of experimental participants. A hierarchical Bayesian model allows us to adaptively target treatments at different groups. We implement our methodology in a field experiment. We examine the impact of three interventions designed to improve formal employment outcomes of Syrian refugees and local jobseekers in Jordan: one treatment to address liquidity constraints, one to address information frictions, and one to address challenges of self-control. Six weeks after being offered treatment, none of the interventions has a significant or meaningful impact on the probability that individuals are in wage employment; we estimate that our targeting algorithm had a positive but small effect on aggregate employment (approximately 1 percentage point). However, we find large employment effects of all treatments for refugees at the two-month follow-up, and suggestive evidence of four-month impacts for the cash grant; liquidity appears to be a key barrier to employment for refugees. |
| Keywords: | adaptive experiments, refugees, job search |
| JEL: | C93 J6 O15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8535&r=all |
| By: | Jordi Brandts; Catherine Eckel; Enrique Fatas; Shaun Hargreaves-Heap |
| Abstract: | Democracies go to war with each other less frequently than dictatorships do with each other. This is an established empirical regularity. However, it is not clear whether there is a causal link between democracy and peace. We use laboratory experiments to study whether there is a causal impact. We study the bellicosity of democracies compared with two types of dictatorships, inclusive and exclusive, where each society is composed of three members. We also analyze how bellicosity depends on the presence of the possibility of deliberation among the members of a society. Neither the ‘voting’ nor ‘inclusion’ aspect of democracy nor ‘deliberation’ in isolation has a positive causal impact on peace. However, when all three are combined, there is evidence that their combination produces less bellicosity than some kinds of dictatorship. It is the availability of deliberation that makes the crucial distinguishing difference for democracy in our experiment. We observe democratic peace only in the presence of deliberation. |
| Keywords: | conflict, governance, democracy, dictatorship, inclusivity, lab experiment |
| JEL: | C72 C91 C92 H11 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1203&r=all |
| By: | Janina Isabel Steinert (Technical University of Munich, TUM School of Governance; Department of Social Policy and Intervention, University of Oxford); Rucha Vasumati Satish (Chair of Development Economics, University of Goettingen); Felix Stips (Centre for Evaluation (CEval)); Sebastian Vollmer (Chair of Development Economics, University of Goettingen) |
| Abstract: | We study the impact of a portable "soft" commitment device on the financial behavior of low-income slum dwellers in Maharashtra, India. 1525 individuals were randomly allocated to receiving either a zip purse and a lockbox (treatment arm) or a lockbox only (control arm). Based on self-reported measures and hand counts of money held in the distributed saving devices, we document an 81% increase in total savings in the treatment group. We do not find significant reductions in temptation spending, thus suggesting that increases in savings were not primarily realized through improvements in self-control. Instead, we suggest that reduced sharing obligations are driving the effect. In additional analyses, we document a 35% decrease in past-month transfers of cash to other household members. Hence, our findings suggest that saving can be more effectively promoted by alleviating access-related rather than behavior-related constraints, and particularly by giving women access to a saving device of their own. |
| Keywords: | Saving, Temptation Spending, Commitment Device, RCT |
| JEL: | D14 D91 I31 O12 O16 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:aiw:wpaper:04&r=all |
| By: | Sebastian O. Schneider; Matthias Sutter |
| Abstract: | We use a novel method to elicit and measure higher order risk preferences (prudence and temperance) in an experiment with 658 adolescents. In line with theoretical predictions, we find that higher order risk preferences particularly prudence are strongly related to adolescents' field behavior, including their financial decision making, eco-friendly behavior, and health status, including addictive behavior. Most importantly, we show that dropping prudence and temperance from the analysis of students' field behavior would yield largely misleading conclusions about the relation of risk aversion to these domains of field behavior. Thus our paper puts previous work that ignored higher order risk preferences into an encompassing perspective and clarifies which orders of risk preferences can help understand field behavior of adolescents. |
| Keywords: | higher order risk preferences, prudence, temperance, risk aversion, field behavior, adolescents, health, addictive behavior, smartphone addiction, experiment |
| JEL: | C93 D81 D91 J13 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8544&r=all |
| By: | Leaver, Clare (University of Oxford); Ozier, Owen (Williams College); Serneels, Pieter (University of East Anglia); Zeitlin, Andrew (Georgetown University) |
| Abstract: | This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay-for-performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a pay- for-percentile or fixed-wage contract. Once recruits were placed, an unexpected, incentive-compatible, school-level re-randomization was performed, so that some teachers who applied for a fixed-wage contract ended up being paid by P4P, and vice versa. By the second year of the study, the within-year effort effect of P4P was 0.16 standard deviations of pupil learning, with the total effect rising to 0.20 standard deviations after allowing for selection. |
| Keywords: | pay-for-performance, selection, incentives, teachers, field experiment |
| JEL: | C93 I21 J45 M52 O15 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13696&r=all |
| By: | Diaz-Serrano, Luis (Universitat Rovira i Virgili); Flamand, Sabine (Universitat Rovira i Virgili) |
| Abstract: | Single parenthood is on the rise everywhere in the world. While previous studies show that acceptance of single-parent households is increasing, some authors point out that single-parent families are often considered as a reality rather than as an ideal. This circumstance may cause negative attitudes towards single parents, who are also among the most vulnerable groups of society. Motivated by these findings, we study whether schools are more reluctant to interact with single parents than with heterosexual couples. We conduct a field experiment with schools during the children's pre-registration period. We create three types of fictitious families (heterosexual couple, single mother and single father) and send e-mails to schools in which the family structure is made explicit. Our results indicate that single parents benefit from positive discrimination. Schools are more prone to interact with single parents than with heterosexual couples. Further, single mothers receive more answers than single fathers. |
| Keywords: | single parents, schools, discrimination, field experiment, children |
| JEL: | I24 I29 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13699&r=all |
| By: | Huber, Christoph (University of Innsbruck); Rose, Julia |
| Abstract: | In situations where both the magnitude of gains and losses as well as the probability distribution over these realizations is uncertain, imprecision is an inherent feature of decision-making. While imprecision has been shown to affect individual valuations, many decisions are made in market settings with potentially different implications. We thus examine the impact of imprecision, first, in an individual decision task, and second, in experimental asset markets—with no imprecision (risk), imprecision in probabilities (ambiguity), imprecision in outcomes, and full imprecision. We find imprecision seeking in outcomes in people’s individual attitudes, but these preferences do not withstand market dynamics. Nevertheless, we observe imprecision aversion in probabilities at the end of trading, suggesting that ambiguity aversion, in contrast, prevails in experimental markets. |
| Date: | 2020–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:bw8fc&r=all |
| By: | Dickinson, David L. (Appalachian State University); McEvoy, David M. (Appalachian State University) |
| Abstract: | Recent policies require some interactions previously conducted in close social proximity (e.g., school, workplace) to take place remotely, which motivates our investigation of how in-person versus online environments impact honesty. We modify a well-known coin-flip task and examine the influence of going from the physical laboratory environment, to online with identifiable participants (same lab subject pool), to online with anonymous participants using mTurk. Surprisingly, while a simple move from in-lab to online (using the same subject pool) appears to increase "fake effort" – those who likely never flip the coin - it does not predict more dishonest behavior when there is a monetary incentive to cheat. The most socially distant and anonymous participants (mTurk) are more likely to be deemed cheaters in our analysis—these individuals report coin flip outcomes consistent with cheating for monetary gain. Implications of our findings indicate the greatest risk of potentially costly dishonest behavior results when anonymity, not just social distance, is high. |
| Keywords: | social distance, cheating, coin flip, anonymity, behavioral economics, experiment |
| JEL: | C91 D90 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13686&r=all |
| By: | Ruben C. Arslan; Martin Brümmer; Thomas Dohmen; Johanna Drewelies; Ralph Hertwig; Gert G. Wagner |
| Abstract: | People differ in their willingness to take risks. Recent work found that revealed preference tasks (e.g., laboratory lotteries)—a dominant class of measures—are outperformed by survey-based stated preferences, which are more stable and predict real-world risk taking across different domains. How can stated preferences, often criticised as inconsequential “cheap talk,” be more valid and predictive than controlled, incentivized lotteries? In our multimethod study, over 3,000 respondents from population samples answered a single widely used and predictive risk-preference question. Respondents then explained the reasoning behind their answer. They tended to recount diagnostic behaviours and experiences, focusing on voluntary, consequential acts and experiences from which they seemed to infer their risk preference. We found that third-party readers of respondents’ brief memories and explanations reached similar inferences about respondents’ preferences, indicating the intersubjective validity of this information. Our results help unpack the self perception behind stated risk preferences that permits people to draw upon their own understanding of what constitutes diagnostic behaviours and experiences, as revealed in high-stakes situations in the real world. |
| Keywords: | risk preferences, self-reports, revealed preferences, intersubjective validity, BASE-II, SOEP-IS |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1104&r=all |
| By: | Banerjee, Ritwik (Indian Institute of Management); Majumdar, Priyama (Indian Institute of Management Bangalore) |
| Abstract: | Exponential growth bias (EGB) is the pervasive tendency of people to perceive a growth process as linear when, in fact, it is exponential. In this paper, we document that people exhibit EGB when asked to predict the number of COVID-19 positive cases in the future. The bias is positively correlated with optimistic expectations about the future macroeconomic conditions and personal economic circumstances, and investment in a risky asset. We design four interventions to correct EGB and evaluate them through a randomized experiment. In the first treatment (Step), participants make predictions in several short steps; in the second and third treatments (Feedback-N and Feedback-G) participants are given feedback about their prediction errors either in the form of numbers or graphs; and in the fourth treatment (Forecast), participants are offered a forecast range of the future number of cases, based on a statistical model. Our results show that a) Step helps mitigate EGB relative to Baseline, b) Feedback-N, Feedback-G, and Forecast significantly reduce bias relative to both Baseline and Step, c) the interventions decrease risky investment and help moderate future economic expectations through the reduction in EGB. The results suggest that nudges, such as behaviorally informed communication strategies, which correct EGB can also help rationalize economic expectations. |
| Keywords: | COVID-19, economic expectation, exponential growth bias |
| JEL: | I12 I18 C91 D84 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13664&r=all |
| By: | Mari, Gabriele; Luijkx, Ruud |
| Abstract: | We ran a survey experiment with Dutch employers to investigate hiring discrimination in sex-typical jobs. We ask if women are especially discriminated against when they have children, whether discrimination applies similarly in different occupations, and whether statistical discrimination or status-characteristic theories best account for discriminatory practices (if any). Employers rate fictitious candidates for either a female-typical job (primary-school teacher) or a male-typical job (software engineer). Employers are found to display a slight preference for female candidates when filling a teacher post, although such bias is less strong for female applicants with children. No such ranking is found for a software engineer vacancy, nor do we find different salary offers across candidates and across vacancies. Employers do not appear to favour men over women for positions likely to be on the career track, as predicted by statistical discrimination theories, nor do they expect women to be less capable than men, as posited by status-characteristic theory. Female candidates with children, however, are expected to be less committed to their job and work fewer hours, especially in the teacher experiment. Such expectations seem to have small consequences for the hiring decisions and salary offers Dutch employers make in our study. |
| Date: | 2020–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:kwdyp&r=all |
| By: | NAKAMURO Makiko; ITO Hirotake |
| Abstract: | This paper examines the causal effects of computer-assisted learning on children's cognitive and noncognitive skills. We ran school-by-grade-level clustered randomized controlled trials at five public elementary schools in Cambodia. After confirming that the IQ scores of treated students significantly improved over just three months, we randomly reassigned those students either into treatment or control groups for an additional seven-month comparison. We find that students retain their cognitive skills during the additional seven-month treatment, but the initial gain diminishes for students who leave the program. Conversely, a meaningful effect on noncognitive skills is not detected immediately after the first three-month short-run program, but the effect appears to become significant and persists in the longer run. |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:20074&r=all |
| By: | Brown, Pike; Knowles, Stephen; Grimson, Duncan |
| Abstract: | The majority of donors prefer to donate to charities with domestic foci rather than to charities with international foci. This finding is evident in observational, survey, and experimental data, implying a declining radius of altruism. In this paper, we analyse whether this declining radius of altruism also applies within countries; that is, are domestic charities given equal preference or do people prefer to give to local charities rather than charities based elsewhere in the country? If the latter, how quickly does the radius of altruism decline? In New Zealand, 8.7% of private charitable donations are allocated to international development (Cox et al., 2015), suggesting that New Zealanders strongly prefer domestic charities. Similar results have been found for the US (Casale and Baumann 2015), the UK (Mickelwright and Schepf 2009; Atkinson et al. 2014), and Canada (Rajan et al. 2009). To distinguish between location of charities and types of charities, Knowles and Sullivan (2017) incentivise survey participation by offering respondents a choice of earmarking donation to World Vision (a charity assisting families in need in developing countries) or the Salvation Army (a charity helping families in need in the home country) and find that 72% of New Zealanders selected the latter. The literature on locational preferences over charities within countries is less extensive, although Herzenstein and Posavac (2019) find that undergraduates at an East Coast university in the US preferred researchers to donate to East Cost charities over West Coast charities. Our research differs from Herzenstein and Posavac in that we conduct a field experiment with farmers who are tied to the land rather than a laboratory experiment with highly mobile university students. More importantly, we analyse whether people from 16 different regions of New Zealand are more inclined to give to two different types of charities (environmental and farmer welfare) in two different parts of the country (Otago and Bay of Plenty), enabling us to analyse in more detail how the radius of altruism diminishes the further away people live from where a charity is based. Our field experiment was incorporated into the Survey of Rural Decision Makers, a large-scale, web-based survey of farmers, foresters, and growers across New Zealand that has been conducted bi-annually since 2013. For the 2017 wave, participation was incentivised by offering a choice of charities to which respondents could earmark $10 donations upon completion of the survey. For a subset of respondents, the choice set consisted of four charities, two of which are located in the Otago region in the South Island and two of which are located in the Bay of Plenty region in the North Island. For each region, one of the two charities was an environmental charity and the other a farmer welfare charity. The two Otago charities were the Yellow-Eyed Penguin Trust and the Rural Support Trust for flood relief in Otago. The two Bay of Plenty charities were the Kaharoa Kōkako Trust and the Bay of Plenty Rural Support Trust for flood relief in the Bay of Plenty. The North Island kōkako is entirely restricted to New Zealand’s North Island while the yellow-eyed penguin breeds only as far north as the Banks Peninsula on New Zealand’s South Island; as such, the two species are geographically distinct, as were the two flooding incidents. Participants were provided with a brief description of the charity and a link to the charities’ web sites. Our results show there is a significant locational bias. Not only do people prefer to donate to charities in their own area, but the further away a charity is the less likely they are to support it. For example, people living in Otago are 50 times more likely to choose the Otago-based charity than are North Island based residents. Further, those living in regions bordering Otago are 14 times more likely to choose the Otago charity than are North Island based residents and those living elsewhere in the South Island are three times as likely as a North Island resident to support the Otago based charity. These results hold for both charities that support environmental causes as well as charities that support farmer welfare. As such, there is a very strong declining radius of altruism with respect to charitable giving. Two implications are immediately evident. First, survey researchers who wish to motivate participation via charitable contributions would be well served by including charities of local significance. Second, charities that support protection of endangered species should focus fundraising efforts in their own backyards. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2020–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare20:305241&r=all |
| By: | Yagiz Özdemir; Björn Bartling; Ernst Fehr |
| Abstract: | The widespread use of markets leads to unprecedented material well-being in many societies. We study whether market interaction, as a side effect, erodes moral values. An encompassing understanding of the virtues and vices of markets, including their possible impact on moral values, is necessary to make informed decisions on the spheres in society where the allocation and incentive functions of markets should exercise their power, and where this may not be desirable. In a seminal and highly influential paper, Falk and Szech (2013) provide experimental data that seem to suggest that “market interaction erodes moral values.” Although we replicate their main treatment effect, we show that additional treatments are necessary to corroborate their conclusion. These treatments, however, reveal that repeated play and not market interaction causes the erosion of moral values. Our paper thus shows that neither Falk and Szech’s data nor our data support the claim that market interaction erodes moral values. |
| Keywords: | market interaction, moral values |
| JEL: | C91 D02 D62 D63 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8546&r=all |
| By: | Maffioli,Alessandro; Mckenzie,David J.; Ubfal,Diego Javier |
| Abstract: | Business training programs are typically offered for free. Charging for training provides potential benefits including financial sustainability, but little is known about how price affects the demand for training. This study conducted two experiments in Jamaica using the Becker-DeGroot-Marschak mechanism and take-it-or-leave-it offers to estimate the demand for training. Most entrepreneurs have a positive willingness to pay for training, but demand falls sharply as price increases: in the Becker-DeGroot-Marschak experiment, 76 percent of the entrepreneurs attend training when it is free, but only 43 percent attend when they are charged one-quarter of the cost, and only 11 percent when charged the full cost. Providing a credit option did not increase willingness to pay. Higher prices screen out poorer, older, and more risk-averse business owners, and those who expect to benefit less from training and have a low value of sales. However, charging a higher price increases attendance among those who pay, suggesting a psychological effect where paying for training makes firms value it more. |
| Date: | 2020–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9415&r=all |
| By: | Diego Aycinena (Department of Economics, Universidad del Rosario; Economic Science Institute, Chapman University); Szabolcs Blazsek (Escuela de Negocios, Universidad Francisco Marroqu´ın); Lucas Rentschler (Department of Economics and Finance, Utah State University; lucas.rentschler@usu.edu); Charles Sprenger (California Institute of Technology; sprenger@caltech.edu) |
| Abstract: | Intertemporal choice experiments are increasingly implemented to make inference about discounting and marginal utility, yet little is known about the predictive power of resulting measures. This project links standard experimental choices to a decision on the desire to smooth a large-stakes payment — around 10% of annual income — through time. In a sample of around 400 Guatemalan Conditional Cash Transfer recipients, we find that preferences over large-stakes payment plans are closely predicted by experimental measures of patience and diminishing marginal utility. These represent the first findings in the literature on the predictive content of such experimentally elicited measures of discounting and marginal utility for a large-stakes decision. |
| Keywords: | Structural estimation, Out-of-sample prediction, Discounting, Convex Time Budget |
| JEL: | D1 D3 D90 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:20-36&r=all |
| By: | Avram, Silvia |
| Abstract: | This paper experimentally studies labour supply responses to earnings uncertainty. 301 low-income, working age, non-student individuals took part in an on-line experiment simulating standard and zero-hours contractual conditions. Results unambiguously support the hypothesis that work uncertainty discourages work. This is not only because variability in work availability reduced total expected pay but also because uncertainty itself is perceived as detrimental. Uncertainty is avoided even at the cost of lower total earnings. Interactions between work related uncertainty and the benefit system are important. Both the use of benefits as insurance when work is unavailable and benefit sanctions can increase incentives to take up insecure work. |
| Date: | 2020–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2020-10&r=all |
| By: | Michele Garagnani |
| Abstract: | This work reports an online experiment with a general-population sample examining the performance of budget-choice tasks for elicitation of risk attitudes. First, I compare the investment task of Gneezy and Potters (1997) with the standard choicelist method of Holt and Laury (2002), and evaluate their performance in terms of the number of correctly-predicted binary decisions in a set of out-of-sample lottery choices. There are no significant differences between the tasks in this sense, and performance is modest. Second, I included three additional budget-choice tasks (selection of a lottery from a linear budget set) where optimal decisions should have been corner solutions, and find that a large majority of participants provided interior solutions instead, casting doubts on subjects’ understanding of tasks of this type. |
| Keywords: | Risk preferences, elicitation methods, budget sets, portfolio Choices |
| JEL: | C91 D81 C83 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:362&r=all |
| By: | Filmer,Deon P.; Habyarimana,James Paul; Sabarwal,Shwetlena |
| Abstract: | This study evaluates the impacts of low-cost, performance-based incentives in Tanzanian secondary schools. Results from a two-phase randomized trial show that incentives for teachers led to modest average improvements in student achievement across different subjects. Further, withdrawing incentives did not lead to a"discouragement effect"(once incentives were withdrawn, student performance did not fall below pre-baseline levels). Rather, impacts on learning were sustained beyond the intervention period. However, these incentives may have exacerbated learning inequality within and across schools. Increases in learning were concentrated among initially better-performing schools and students. At the same time, learning outcomes may have decreased for schools and students that were lower performing at baseline. Finally, the study finds that incentivizing students without simultaneously incentivizing teachers did not produce observable learning gains. |
| Keywords: | Effective Schools and Teachers,Educational Institutions&Facilities,Educational Sciences,Public Sector Administrative&Civil Service Reform,De Facto Governments,Public Sector Administrative and Civil Service Reform,Administrative&Civil Service Reform,Democratic Government |
| Date: | 2020–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9382&r=all |
| By: | Kuan-Ming Chen; Claire Ding; John A. List; Magne Mogstad |
| Abstract: | Recent changes in labor arrangements have increased interest in estimating and understanding the value of job flexibility. We leverage a large natural field experiment at Uber to create exogenous variation in expected market wages across individuals and over time. Combining this experiment with high frequency panel data on wages and individual work decisions, we document how labor supply responds to exogenous changes in expected market wages in a setting with virtually no restrictions on driver labor allocation. We find that there is i) systematic heterogeneity in labor supply responses both across drivers and within a driver over time, ii) significant fixed costs of beginning a shift, and iii) high rider demand when it is costly for drivers to work. These three findings motivate a model of labor supply with heterogenous preferences over work schedules, adjustment costs, and statistical dependence between market wages and the costs of driving. We recover the labor supply elasticities and reservation wages of this dynamic labor supply model via a combination of experimental estimates and other data moments. We then perform counterfactual analyses that allow us to examine how preference heterogeneity and adjustment costs influence the responses of workers' to wage incentives as well as infer drivers' willingness to pay for the ability to customize and adjust their work schedule. We also show that a static approach to the driver's dynamic problem delivers materially different estimates of workers' labor supply elasticities and their value of job flexibility. |
| JEL: | C93 J2 J3 J4 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27807&r=all |
| By: | John List |
| Abstract: | Last year I put together a summary of data from my field experiments website that pertained to framed field experiments. Several people have asked if I have an update. In this document I update all figures and numbers to show the details for 2020. I also include the description from the 2019 paper below. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00716&r=all |
| By: | Llopis Abella,Jimena; Fruttero,Anna; Tas,Emcet Oktay; Taj,Umar |
| Abstract: | Public spaces can be an instrument to increase social cohesion, yet they are often underutilized. This paper presents findings from a randomized virtual reality experiment with more than 2,000 participants in Karachi, Pakistan. The paper investigates the relationship between urban design, willingness to use public spaces, and social cohesion. The findings show that exposure to a two-and-a-half-minute-long virtual reality experience featuring various urban design and social diversity elements has a statistically significant impact. In particular, improvements in the design of a public park through the virtual reality experience increased the park's perceived attractiveness and participants'willingness to use it. Exposure to diverse social groups in the virtual reality experience, by itself, had mixed impacts on social cohesion indicators such as trust and perception of and willingness to interact with outgroups. The impacts varied by ethnic affiliation, income, sex, and education level. This may be partly explained by the segregated nature of Karachi and the high prevalence of mistrust of outgroups. The paper illustrates how modern technology can be used as an effective, low-cost tool for diagnosing social phenomena, soliciting feedback about urban interventions for inclusive design, and promoting social contact. |
| Keywords: | Social Cohesion,Educational Sciences,Gender and Development,Social Inclusion&Institutions,Economic Growth,Economic Theory&Research,Industrial Economics |
| Date: | 2020–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9407&r=all |
| By: | Matthew J. Walker (Durham University Business School); Elena Katok (Naveen Jindal School of Management, University of Texas at Dallas); Jason Shachat (Durham University Business School) |
| Abstract: | When product quality is unverifiable by third parties, enforceable contracts that condition price upon quality are not feasible. If higher quality is also costly to deliver, moral hazard by sellers flourishes, particularly when procurement is via a competitive auction process. Retainage is a contractual mechanism that presents a solution to the third-party unverifiability problem, by setting aside a portion of the purchase price. After delivery, the buyer has sole discretion over the amount of retainage money that is released to the seller. While generally a feasible contract form to implement, retainage introduces a moral hazard for the buyer. We use laboratory experiments to investigate how and when retainage might be successfully used to facilitate trust and trustworthiness in procurement contracts. We observe that retainage induces a significant improvement in product quality when there are some trustworthy buyers in the population, consistent with a model of fair payment norms that we develop. This improvement is realized at the cost of increased buyer-seller profit inequalities. We also observe that at high levels of retainage, there is a welfaredecreasing market unraveling in which sellers do not bid on contracts. Our results imply that retainage incentives can mitigate the tension between competition and cooperation arising from reverse auctions, but only at appropriate levels of retainage |
| Keywords: | trust, procurement, reverse auction, retainage, moral hazard |
| JEL: | C92 L15 D86 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:20-34&r=all |
| By: | Carlos Alós-Ferrer; Johannes Buckenmaier; Georg Kirchsteiger |
| Abstract: | When alternative market institutions are available, traders have to decide both where and how much to trade. We conducted an experiment where traders could decide to trade either in an (efficient) double-auction institution or in a posted-offers one, which should favor sellers. When sellers face decreasing returns to scale (increasing production costs), fast coordination on the double-auction occurs, with the posted-offers institution becoming inactive. In contrast, under constant returns to scale, both institutions remain active and coordination is slower. The reason is that, in a finite-horizon setting, sellers trade off larger efficiency in a market with dwindling profits for biased-up profits in a market with vanishing customers. Hence, our results indicate that efficiency alone might not be sufficient to guarantee coordination on a single market institution if the distribution of the gains from trade is asymmetric. Trading behavior approaches equilibrium predictions (market clearing) within each institution, but switching behavior across institutions is explained by simple rules of thumb, with buyers chasing low prices and sellers considering both prices and trader ratios. |
| Keywords: | Market Selection; Market clearing; Posted offer market; Constant returns to scale; Experiment |
| JEL: | D40 D83 L10 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/312590&r=all |
| By: | Cueva, Carlos |
| Abstract: | The COVID-19 pandemic forced almost all professional football matches worlwide to be played in empty stadiums. This large-scale natural experiment offers a unique opportunity to assess the impact of social pressure on decision making and behavior. In particular, I investigate the effect of the home crowd on match outcomes and referee decisions. Using a large dataset from 41 professional football leagues in 30 different countries, I find that the home advantage in match outcomes drops by around one half and that referee bias against away teams completely disappears following the lockdowns. My results therefore suggest that social pressure exerted by home crowds has an important effect on the behavior of referees and on game outcomes. |
| Date: | 2020–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:hczkj&r=all |
| By: | Rogna, Marco; Vogt, Carla |
| Abstract: | Obtaining significant levels of cooperation in public good and environmental games, under the assumption of players being purely selfish, is usually prevented by the problem of freeriding. Coalitions, in fact, generally fail to be internally stable and this cause a serious underprovision of the public good together with a significant welfare loss. The assumption of relational preferences, capable of better explaining economic behaviors in laboratory experiments, helps to foster cooperation, but, without opportune transfers scheme, no substantial improvements are reached. The present paper proposes an optimal transfers scheme under the assumption of players having Fehr and Schmidt (1999) utility functions, whose objective is to guarantee internal stability and to maximize the sum of utilities of coalition members. The transfers scheme is tested on a public good contribution game parameterized on the data provided by the RICE model and benchmarked with other popular transfers scheme in environmental economics. The proposed scheme outperforms its benchmarking counterparts in stabilizing coalitions and sensibly increases cooperation compared to the absence of transfers. Furthermore, for high but not extreme values of the parameter governing the intensity of dis-utility from disadvantageous inequality, it manages to support very large coalitions including three quarters of all players. |
| Keywords: | climate policy,coalitions,inequality aversion,RICE model,transfers scheme |
| JEL: | C72 D63 H41 Q54 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:865&r=all |
| By: | Carlos Alós-Ferrer; Johannes Buckenmaier; Georg Kirchsteiger |
| Abstract: | When alternative market institutions are available, traders have to decide both where and how much to trade. We conducted an experiment where traders could decide to trade either in an (efficient) double-auction institution or in a posted- offers one, which should favor sellers. When sellers face decreasing returns to scale (increasing production costs), fast coordination on the double-auction occurs, with the posted-offers institution becoming inactive. In contrast, under constant returns to scale, both institutions remain active and coordination is slower. The reason is that, in a finite-horizon setting, sellers trade off larger efficiency in a market with dwindling profits for biased-up profits in a market with vanishing customers. Hence, our results indicate that efficiency alone might not be sufficient to guarantee coor- dination on a single market institution if the distribution of the gains from trade is asymmetric. Trading behavior approaches equilibrium predictions (market clearing) within each institution, but switching behavior across institutions is explained by simple rules of thumb, with buyers chasing low prices and sellers considering both prices and trader ratios. |
| Keywords: | Market selection, market clearing, posted offer market, constant returns to scale, experiment |
| JEL: | D4 D83 L1 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:364&r=all |
| By: | Casal, Sandro (University of Trento); Filippin, Antonio (University of Milan) |
| Abstract: | This paper investigates experimentally how the inclination to cheat changes when agents report the result of multiple realizations of a (private information) stochastic event rather than a single outcome. Extreme outcomes clearly signal opportunistic behavior with multiple realizations. The consequent reputation concerns dramatically reduce cheating by large amounts. Multiple draws, however, erode the intrinsic cost of lying, inducing a widespread inclination to slightly misreport the outcomes in a plausible manner. These two opposite effects are similar in magnitude, on average, but show an interesting gender differentiation implying that multiple realizations can be effective with males but may backfire with females. |
| Keywords: | cheating, reputation concerns, moral self-licensing |
| JEL: | C81 C91 D82 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13689&r=all |
| By: | Brad C. Nathan; Ricardo Perez-Truglia; Alejandro Zentner |
| Abstract: | In all U.S. states, individuals can file a protest with the goal of legally reducing their property taxes. This choice provides a unique opportunity to study preferences for redistribution via revealed preference. We study the motives driving tax protests through two sources of causal identification: a quasi-experiment and a pre-registered large-scale natural field experiment. We show that, consistent with selfish motives, households are highly elastic to their private benefits and private costs from protesting. We also find that social preferences are a significant motive: consistent with conditional cooperation, households are willing to pay higher tax rates if they perceive that others pay high tax rates too. Lastly, we document significant differences between the motivations of Democrats and Republicans. |
| JEL: | C93 H2 H26 Z13 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27816&r=all |
| By: | Ila Fazzio; Alex Eble; Robin L. Lumsdaine; Peter Boone; Baboucarr Bouy; Pei-Tseng Jenny Hsieh; Chitra Jayanty; Simon Johnson; Ana Filipa Silva |
| Abstract: | Children in many extremely poor, remote regions are growing up illiterate and innumerate despite high reported school enrollment ratios. Possible explanations for such poor outcomes include demand – for example, low perceived returns to education compared to opportunity cost; and supply – poor state provision and inability of parents to coordinate and finance better schooling. We conducted a cluster-randomized trial in rural Guinea Bissau to understand the effectiveness and cost of concerted supply-based interventions in such contexts. Our intervention created simple schools offering four years of education to primary-school aged children in lieu of the government. At endline, children receiving the intervention scored 58.1 percentage points better than controls on early grade reading and math tests, demonstrating that the intervention taught children to read and perform basic arithmetic, from a counterfactual condition of very high illiteracy. Our results provide evidence that particularly needy areas may require more concerted, dramatic interventions in education than those usually considered, but that such interventions hold great potential for increasing education levels among the world’s poorest people. |
| JEL: | I21 I24 I25 J24 O15 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27799&r=all |
| By: | Islam,Asad; Kwon,Sungoh; Masood,Eema; Prakash,Nishith; Sabarwal,Shwetlena; Saraswat,Deepak |
| Abstract: | This paper reports the results of an at-scale randomized controlled trial among 18,000 secondary students in Zanzibar (Tanzania) to examine the effects of personal best goal-setting on student outcomes. The paper also tests the impact of combining goal setting with non-financial rewards conditional on students meeting the goals they set. The results suggest that goal-setting has a significant, positive impact on students'time use, study effort, and self-discipline. However, there are no significant impacts on test scores. This is partially because nearly two-thirds of the students do not set realistic goals. The paper finds that the effects on time use, study effort, and discipline are weaker when goal setting is combined with nonfinancial rewards. This suggests that tying goal setting to extrinsic incentives could weaken its impact. The results show stronger impacts for female students and from students from weaker socioeconomic backgrounds. These results demonstrate that goal setting can have positive impacts on student outcomes, especially for the relatively disadvantaged. However, for maximizing the impacts, goal setting may need to be combined with guidance on setting realistic goals, and extrinsic rewards tied to goals may need to be avoided. |
| Keywords: | Educational Sciences,Gender and Development,Educational Institutions&Facilities,Effective Schools and Teachers,Financial Sector Policy |
| Date: | 2020–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9406&r=all |
| By: | Gabrielyan, Gnel; Just, David R. |
| Keywords: | Research Methods/Statistical Methods, Institutional and Behavioral Economics, Marketing |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304642&r=all |
| By: | Nian, Yefan; Gao, Zhifeng |
| Keywords: | Research Methods/Statistical Methods, Agribusiness, Research Methods/Statistical Methods |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304315&r=all |
| By: | Gallenstein, Richard |
| Keywords: | International Development, Institutional and Behavioral Economics, Research Methods/Statistical Methods |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304236&r=all |
| By: | Eliana Avitzour; Adi Choen; Daphna Joel; Victor Lavy |
| Abstract: | In recent years, explicit bias against women in Science, Technology, Engineering and Math (STEM) is disappearing but gender discrimination is still prevalent. We assessed the gender-biased behavior and related explicit and implicit stereotypes of 93 math teachers to identify the psychological origins of such discrimination. We asked the teachers to grade math exam papers and assess the students’ capabilities while manipulating the perceived gender of the students to capture gender-biased grading and assessment behavior. We also measured the teachers’ implicit and explicit stereotypes regarding math, gender, and talent. We found that implicit, but not explicit, gender stereotypes correlated with grading and assessment behavior. We also found that participants who underestimated their own implicit stereotypes engaged in more pro-male discrimination compared to those who overestimated or accurately estimated them. Reducing implicit gender stereotypes and exposing individuals to their own implicit biases may be beneficial in promoting gender equality in STEM fields. |
| JEL: | J16 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27818&r=all |
| By: | Guevara Alvarez, Gloria |
| Keywords: | Research Methods/Statistical Methods, International Development, Marketing |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304311&r=all |
| By: | Christine Valente; Hans H. Sievertsen; Mahesh C. Puri |
| Abstract: | Over 400,000 children die annually from neonatal sepsis, despite several RCTs finding that this can be prevented by chlorhexidine cord care (CHX) for only US$0.23 per dose. Unresolved heterogeneity in findings and other RCT scalability concerns contribute to slow CHX adoption. Studying the first national CHX roll-out — in Nepal — we find that CHX reduces neonatal mortality by 56 percent for births predicted to take place at home. We find no effect for predicted health facility births, which is consistent with heterogeneity in prior experimental estimates. Conditional on predicted place of delivery, there is little significant treatment effect heterogeneity. |
| Date: | 2020–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:bri:uobdis:20/728&r=all |
| By: | ONO Yoshikuni; ASANO Masahiko |
| Abstract: | Why do better-looking candidates gain more votes in elections? Existing research shows that candidates' facial appearance—perceived beauty, in particular—affects the fate of their election outcomes. Yet, little is known about the mechanisms by which the beauty of candidates creates a premium in elections. To solve this puzzle, we ran a survey that asked around 1,500 people to subjectively evaluate more than 400 real candidates' facial appearance, including beauty. We then conducted a survey experiment with about 3,000 people that explored the effects of candidate beauty on voter perceptions. Our findings demonstrate that neither candidates' facial expression nor the impressions they impart on the viewer, such as smiling, competence and trustworthiness, hinder the positive influence of perceived beauty of the candidates on election outcomes. We find that the beauty of the candidates attracts the attention of voters and alters voters' impressions of the candidates' prospects of winning the election, suggesting that voters' incentives to seek information and get on the bandwagon are driving them to support good-looking candidates. |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:20072&r=all |