nep-exp New Economics Papers
on Experimental Economics
Issue of 2020‒12‒07
thirty papers chosen by

  1. Cooperation in a Fragmented Society: Experimental Evidence on Syrian Refugees and Natives in Lebanon By Michalis Drouvelis; Bilal Malaeb; Michael Vlassopoulos; Jackline Wahba
  2. Cheating in primary school: Experimental evidence on ego-depletion and individual factors By Tamás Keller; Hubert János Kiss; Szabolcs Számadó
  3. Loss Aversion in Social Image Concerns By Petrishcheva, Vasilisa; Riener, Gerhard; Schildberg-Hörisch, Hannah
  4. Policy choice in experiments with unknown interference By Davide Viviano
  5. Ethnic Background and the Value of Self-Employment Experience: Evidence from a Randomized Field Experiment By Aldén, Lina; Bastani, Spencer; Hammarstedt, Mats
  6. Corruption and Cheating: Evidence from Rural Thailand By Olaf Hübler; Melanie Koch; Lukas Menkhoff; Ulrich Schmidt
  7. Earnings autocorrelation and the post-earnings-announcement drift: Experimental evidence By Fink, Josef; Palan, Stefan; Theissen, Erik
  8. Multilevel Public Goods Game: an Online Experiment By Marco Catola; Simone D'Alessandro; Pietro Guarnieri; Veronica Pizziol
  9. Subjects, Trials, and Levels: Statistical Power in Conjoint Experiments By Stefanelli, Alberto; Lukac, Martin
  10. The Cost of a Divided America: An Experimental Study Into Destructive Behavior By Wladislaw Mill; John Morgan
  11. The Volunteer’s Dilemma explains the Bystander Effect By Pol Campos-Mercade
  12. The impact of cash transfers on subjective well-being and mental health in low- and middle- income countries: A systematic review and meta-analysis By McGuire, Joel; Kaiser, Caspar; Bach-Mortensen, Anders
  13. The Neural Markers Correlates of the Kindness & Greediness Contagion in Social Interaction By Deldoost, Mostafa
  14. The Effect of Group Identity on Hiring Decisions with Incomplete Information By Fortuna Casoria Author e-mail:; Ernesto Reuben Author e-mail:; Christina Rott Author e-mail:
  15. Delegation Decisions in Finance By Holzmeister, Felix; Holmén, Martin; Kirchler, Michael; Stefan, Matthias; Wengström, Erik
  16. The back-scratching game By Murray, Cameron; Frijters, Paul; Vorster, Melissa
  17. Channeling Fisher: randomization tests and the statistical insignificance of seemingly significant experimental results By Young, Alwyn
  18. Belief Elicitation When More Than Money Matters:Controlling for "Control". By Juan Dubra; Jean-Pierre Benoit; Giorgia Romagnoli
  19. Do rights to resistance discipline the elites? An experiment on the threat of overthrow By Konstantin Chatziathanasiou; Svenja Hippel; Michael Kurschilgen
  20. Ethnic cooperation and conflict in Kenya By Barriga, Alicia; Ferguson, Neil T. N.; Fiala, Nathan; Leroch, Martin Alois
  21. Does household income affect children’s outcomes? A systematic review of the evidence By Stewart, Kitty
  22. Policies for Transactional De-Dollarization: A Laboratory Study By Johar Arrieta; David Florián; Kristian López; Valeria Morales
  23. Heterogeneity in banker culture and its influence on dishonesty By Rahwan, Zoe; Yoeli, Erez; Fasolo, Barbara
  24. The Influence Of Natural And Induced Emotional States On The Recognition Of Emotional Facial Expressions By Ekaterina Suchkova; Dmitry Lyusin
  25. The Effect of Manager Gender and Performance Feedback: Experimental Evidence from India By Abel, Martin; Buchman, Daniel
  26. Social Proximity and the Erosion of Norm Compliance By Bicchieri, Cristina; Dimant, Eugen; Gächter, Simon; Nosenzo, Daniele
  27. Mandatory integration agreements for unemployed job seekers: a randomized controlled field experiment in Germany By Gerard J. van den Berg; Barbara Hofmann; Gesine Stephan; Arne Uhlendorff
  28. Savings Goal Calendars as Soft Commitment Devices: Evidence from Small Business Owners in Uganda By Antonia Grohmann; Tabea Lakemann; Helke Seitz
  29. Managerial Beliefs and Firm Performance: Field Evidence from Professional Elite Soccer By David Boto-Garcìa; Alessandro Bucciol; Luca Zarri
  30. Parent-bias By Guilherme Lichand; Juliette Thibaud

  1. By: Michalis Drouvelis (University of Birmingham); Bilal Malaeb (Institute of Global Affairs, London School of Economics and Political Science); Michael Vlassopoulos (University of Southampton); Jackline Wahba (University of Southampton)
    Abstract: Lebanon is the country with the highest density of refugees in the world, raising the question of whether the host and refugee populations can cooperate harmoniously. We conduct a lab-in-the-field experiment in Lebanon studying intra- and inter-group behavior of Syrian refugees and Lebanese nationals in a repeated public goods game without and with punishment. We randomly assign participants to Lebanese-only, Syrian-only, or mixed sessions. We find that randomly formed pairs in homogeneous sessions, on average, contribute and punish significantly more than those in mixed sessions, suggesting in-group cooperation is stronger. These patterns are driven by Lebanese participants. Further analysis indicates that behavior in mixed groups is more strongly conditioned on expectations about the partner’s cooperation than in homogeneous groups.
    Keywords: refugees, public goods game, cooperation, punishment
    JEL: D91 J5 F22
    Date: 2020–11
  2. By: Tamás Keller (Computational Social Science - Research Center for Educational and Network Studies, Centre for Social Sciences. 1097 Budapest, Tóth Kálmán utca 4. and Institute of Economics, Centre for Economic and Regional Studies. 1097 Budapest, Tóth Kálmán utca 4.); Hubert János Kiss (Institute of Economics, Centre for Economic and Regional Studies. 1097 Budapest, Tóth Kálmán utca 4. and Department of Economics, Corvinus University of Budapest. 1093 Budapest Fõvám tér 8.); Szabolcs Számadó (Department of Sociology and Communication, Budapest University of Technology and Economics. 1111 Budapest, Egry J. u. 1. E.71. and Computational Social Science - Research Center for Educational and Network Studies, Centre for Social Sciences. 1097 Budapest, Tóth Kálmán utca 4. and Evolutionary Systems Research Group, Centre for Ecological Research)
    Abstract: We contribute to the experimental literature on primary school students’ cheating behavior by studying i) how cheating is influenced by ego depletion; ii) how it correlates with different individual factors. We carried out a large-scale, pre-registered experiment in the field of 28 Hungarian primary schools (126 classrooms) on a voluntary subsample of 1,143 students at grade levels 4 to 8. Students’ cheating behavior was measured by the incentivized dice-roll experiment. We find suggestive evidence that our light-touch treatment on ego-depletion increased students’ deceptive behavior. Cheating behavior correlated weakly with students’ individual characteristics. In a multivariate context controlling for between-classroom differences, we document that students’ cognitive ability correlated negatively, while their age positively, with their cheating behavior. We found students’ social context (their classroom belonging) as a more decisive determinant of students’ cheating behavior than individual characteristics.
    Keywords: honesty, cheating, individual factors, ego depletion, dice-roll exercise, pre-registered experiment
    JEL: A13 C91 D91
    Date: 2020–11
  3. By: Petrishcheva, Vasilisa (Heinrich Heine University Düsseldorf); Riener, Gerhard (Düsseldorf Institute for Competition Economics (DICE)); Schildberg-Hörisch, Hannah (Heinrich Heine University Düsseldorf)
    Abstract: This paper explores whether loss aversion applies to social image concerns. In a simple model, we combine loss aversion in social image concerns and attitudes towards lying. We then test its predictions in a laboratory experiment. Subjects are first ranked publicly in a social image relevant domain, intelligence. This initial rank serves as within-subject reference point. After inducing an exogenous change in subjects' rank across treatments, subjects are offered scope for lying to improve their final rank. We find evidence for loss aversion in social image concerns. Subjects who face a loss in social image lie more than those experiencing gains if they sufficiently care about social image and have a reputation to lose. Individual-level analyses document a discontinuity in lying behavior when moving from rank losses to gains, indicating a kink in the value function for social image.
    Keywords: loss aversion, social image concerns, lying behavior, laboratory experiment
    JEL: C91 D91
    Date: 2020–11
  4. By: Davide Viviano
    Abstract: This paper discusses experimental design for inference and estimation of individualized treatment allocation rules in the presence of unknown interference, with units being organized into large independent clusters. The contribution is two-fold. First, we design a short pilot study with few clusters for testing whether base-line interventions are welfare-maximizing, with its rejection motivating larger-scale experimentation. Second, we introduce an adaptive randomization procedure to estimate welfare-maximizing individual treatment allocation rules valid under unobserved interference. We propose non-parametric estimators of direct treatments and marginal spillover effects, which serve for hypothesis testing and policy-design. We discuss the asymptotic properties of the estimators and small sample regret guarantees of the estimated policy. Finally, we illustrate the method's advantage in simulations calibrated to an existing experiment on information diffusion.
    Date: 2020–11
  5. By: Aldén, Lina (Department of Economics and Statistic, Linnaeus University); Bastani, Spencer (Institute for Evaluation of Labor Market and Education Policy (IFAU), Uppsala); Hammarstedt, Mats (Linneaus University)
    Abstract: In this paper, we use a randomized field experiment in Sweden to investigate how self-employment experience is valued in the labor market. We find that self-employment experience negatively impacts the probability of receiving a positive response from employers. For male applicants, this holds regardless of their ethnic background, and independently of whether we consider applicants with experience solely from self-employment, or applicants with a mix of experience from wage-employment and self-employment. For female applicants, the results are less clear-cut. Our findings provide input into the discussion about the impact of self-employment on the chances for natives and immigrants to obtain wage-employment.
    Keywords: Self-employment; Wage-employment; Randomized experiment; Discrimination; Labor market outcomes
    JEL: J15 J24 J71 L26
    Date: 2020–11–19
  6. By: Olaf Hübler; Melanie Koch; Lukas Menkhoff; Ulrich Schmidt
    Abstract: This study tests the prediction that perceived corruption reduces ethical behavior. Integrating a standard “cheating” experiment into a broad household survey in rural Thailand, we find clear support for this prediction: respondents who perceive corruption in state affairs are more likely to cheat and, thus, to fortify the negative consequences of corruption. Interestingly, there is a small group of non-conformers. The main relation is robust to consideration of socio-demographic, attitudinal, and situational control variables. Attendance of others at the cheating experiment, stimulating the reputational concern to be seen as honest, reduces cheating, thus indicating transparency as a remedy.
    Keywords: corruption; cheating; individual characteristics; lab-in-the-field experiment
    JEL: O12 D73 D91
    Date: 2020
  7. By: Fink, Josef; Palan, Stefan; Theissen, Erik
    Abstract: Post-earnings-announcement drift (PEAD) is one of the most solidly documented asset pricing anomalies. We use the controlled conditions of an experimental lab to investigate whether earnings autocorrelation is the driving cause of this anomaly. We observe PEAD in settings with uncorrelated and correlated earnings surprises, implying that earnings autocorrelation is not a necessary condition for PEAD. It rather is a moderator, as the PEAD is stronger when earnings surprises are serially correlated. We further show that market prices underadjust to fundamental value changes, and that trading strategies can profitably exploit the PEAD. Besides offering new results regarding the PEAD-phenomenon, we thus provide a proof-of-concept for the ability of experiments to generate valuable insights into this asset pricing anomaly.
    Keywords: post-earnings-announcement drift,earnings autocorrelation,experimental asset markets
    JEL: G12 G14 G40 M41
    Date: 2020
  8. By: Marco Catola; Simone D'Alessandro; Pietro Guarnieri; Veronica Pizziol
    Abstract: In the multilevel public goods games, subjects face a trade-off between contributing to the provision of a local good or a global good benefiting the whole society. Institutions may attempt to counteract ingroup favouritism by increasing the efficiency of the global public good. In an online experiment, we systematically address all the conflicting results concerning efficiency obtained in the literature. By gradually increasing the relative return of the global good, we find evidence of i. a levelling up in the contribution to the global good, ii. a substitution at the expenses of the local good, and iii. no evidence of an increase in the total contribution to the two groups (i.e. marginal crowding in). We also provide a measure of an intrinsic preference for the local group revealing in-group favouritism and a novel measure of an intrinsic preference for the global good revealing a motivation to contribute to the society independently of efficiency reasons.
    Keywords: Multilevel public good game, online experiment, efficiency, social dilemma
    JEL: C9 D71 H4
    Date: 2020–11–01
  9. By: Stefanelli, Alberto; Lukac, Martin (London School of Economics and Political Science)
    Abstract: Conjoint analysis is an experimental technique that has become quite popular to understand people's decisions in multi-dimensional decision-making processes. Despite the importance of power analysis for experimental techniques, current literature has largely disregarded statistical power considerations when designing conjoint experiments. The main goal of this article is to provide researchers and practitioners with a practical tool to calculate the statistical power of conjoint experiments. To this end, we first conducted an extensive literature review to understand how conjoint experiments are designed and gauge the plausible effect sizes discovered in the literature. Second, we formulate a data generating model that is sufficiently flexible to accommodate a wide range of conjoint designs and hypothesized effects. Third, we present the results of an extensive series of simulation experiments based on the previously formulated data generation process. Our results show that---even with relatively large sample size and the number of trials---conjoint experiments are not suited to draw inferences for experiments with large numbers of experimental conditions and relatively small effect sizes. Specifically, Type S and Type M errors are especially pronounced for experimental designs with relatively small effective sample sizes (< 3000) or a high number of levels (> 15) that find small but statistically significant effects (< 0.03). The proposed online tool based on the simulation results can be used by researchers to perform power analysis of their designs and hence achieve adequate design for future conjoint experiments.
    Date: 2020–11–18
  10. By: Wladislaw Mill; John Morgan
    Abstract: Does the polarization in the US lead to dysfunctional behavior? To study this question, we investigate the attitudes of supporters of Donald Trump and of Hillary Clinton towards each other and how these attitudes affect spiteful behavior. We find that both Trump and Clinton supporters have less positive attitudes towards the opposing supporters compared to coinciding supporters. More importantly, we show that significantly more wealth is destroyed if the opponent is an opposing voter. Surprisingly, this effect is mainly found for Clinton voters. This provides the first experimental evidence that the divide in the nation leads to destructive behavior.
    Keywords: Spite, Voting, Experiment, Hillary Clinton, Donald Trump
    JEL: C91 D01 D62 D72 D74
    Date: 2020–11
  11. By: Pol Campos-Mercade (Department of Economics, University of Copenhagen)
    Abstract: The bystander effect is the phenomenon that people are less likely to help others when they are in a group than when they are alone. The theoretical literature typically explains the bystander effect with the volunteer’s dilemma: if providing help is equivalent to creating a public good, then bystanders could be less likely to help in groups because they free ride on the other bystanders. This paper uses a dynamic game to experimentally test such strategic interactions as an explanation for the bystander effect. In line with the predictions of the volunteer’s dilemma, I find that bystanders help immediately when they are alone but help later and are less likely to help if they are part of a larger group. In contrast to the model’s predictions, subjects in need of help are helped earlier and are more likely to be helped in larger groups. This finding can be accounted for in an extended model that includes both altruistic and selfish bystanders. The paper concludes that the volunteer’s dilemma is a sensible way to model situations in which someone is in need of help, but it highlights the need to take heterogeneous social preferences into account.
    Keywords: volunteer’s dilemma, bystander effect, helping behavior, group size, altruism
    JEL: C92 D64 D90
    Date: 2020–11–27
  12. By: McGuire, Joel; Kaiser, Caspar (University of Oxford); Bach-Mortensen, Anders
    Abstract: Background: A large body of evidence evaluates the impact of cash transfers (CTs) on physical health and economic indicators. A growing amount of research on CTs contains measures of subjective well- being (SWB) and mental health (MH) but no attempt has been made to systematically synthesize this work. Methods/design: We undertook a systematic review and meta-analysis of RCTs and quasi- experimental studies, including peer-reviewed publications and grey literature (e.g. reports, pre-prints, and working papers), conducted over the period 2000-2020, examining the impact of CTs on self- reported SWB and MH outcomes. Results: Two authors (JM and CK) double-screened 1,147 records of potentially relevant studies, finding 38 studies suitable for inclusion in our meta-analysis, covering 100 outcomes and a total sample of n=114,274 individuals. The average effect size (Cohen’s d) of 38 CT studies on our composite outcome of MH and SWB is 0.10 standard deviations (SDs) (95% CI: 0.8, 0.13) for an average time until follow-up of two years. However, there is a substantial amount of heterogeneity in the estimated effects (I-squared = 64% and 95% Prediction interval: 0.0021, 0.215). CT value, both in absolute terms and relative to previous income, are significant predictors of the effect size. We find only weak evidence that the impact diminishes over time. Four randomized controlled trials in our sample were designed to identify the spillover effects of CTs on the SWB and MH outcomes of non-recipients. Two found negative spillovers but the average effect is not statistically significant and is close to zero. Discussion: Cash transfers significantly increase MH and SWB in low- and middle-income countries. More research on the long run (5+ years) effects is needed, as well as further analysis of the community and household spillover effects of cash transfers on MH and SWB outcomes. We encourage the inclusion of MH and SWB metrics in impact evaluations of interventions to enable the assessment of their relative cost-effectiveness at improving lives compared to cash transfers.
    Date: 2020–11–13
  13. By: Deldoost, Mostafa
    Abstract: In human populations and many group-living species, individuals rely on the observation of others to filter and modify their opinions, attitudes, beliefs, or behavior. Behavioral contagion is a form of social influence and refers to the tendency for individuals to copy and imitate certain behavior of others. The aim of this study is to investigate the contagiousness of peer preferences on changes in individual decisions as well as the neural mechanism behind this phenomenon. This is a novel idea, in the literature in experimental economics. I am planning on conducting the experiments to extract and analyze behavioral and electrophysiological (qEEG) responses to stimuli in behavioral game .In particular, we examine whether repeating the dictator (taking) game after observing peer decision affect individual decision-making differently and can modulate an individual’s own (un) fairness preferences. This research will provide important information to policymakers who wish influencing behavior by applying new insights and tools from behavioral science. At the micro-level, social contagion and network effects have a substantial impact on e.g. products of retailers who sell their products through multiple channels, or people who want to donate organs to charity. This research will provide a new understanding of the contagion effect on individuals' decision making.
    Date: 2020–11–08
  14. By: Fortuna Casoria Author e-mail:; Ernesto Reuben Author e-mail:; Christina Rott Author e-mail: (Division of Social Science)
    Abstract: We investigate the effects of group identity on hiring decisions with adverse selection problems. We run a laboratory experiment in which employers cannot observe a worker's ability nor verify the veracity of the ability the worker claims to have. We evaluate whether sharing an identity results in employers discriminating in favor of ingroup workers, and whether it helps workers and employers overcome the adverse selection problem. We induce identities using the minimal group paradigm and study two settings: one where workers cannot change their identity and one where they can. Although sharing a common identity does not make the worker's claims more honest, employers strongly discriminate in favor of ingroup workers when identities are fixed. Discrimination cannot be explained by employers' beliefs and hence seems to be taste-based. When possible, few workers change their identity. However, the mere possibility of changing identities erodes the employers' trust towards ingroup workers and eliminates discrimination.
    Date: 2020–11
  15. By: Holzmeister, Felix (University of Innsbruck, Department of Banking and Finance); Holmén, Martin (University of Gothenburg, Department of Economics, Centre for Finance); Kirchler, Michael (University of Innsbruck, Department of Banking and Finance); Stefan, Matthias (University of Innsbruck, Department of Banking and Finance); Wengström, Erik (Department of Economics, Lund University)
    Abstract: We run an online experiment with finance professionals and subjects from the general population (clients) to examine drivers and implications of clients' delegation decisions. We find that clients favor delegation to investment algorithms, followed by delegation to finance professionals with aligned incentives and lastly to those with fixed incentives. We also show that trust in investment algorithms or money managers (finance professionals), respectively, and clients' propensity to shift blame on others increases the likelihood of delegation, whereas own decision-making quality is associated with a decrease. In measuring the implications of clients' delegation decisions, we report high variability among finance professionals' perceptions of clients' preferred risk levels. We show that this results in overlaps in portfolio risk across risk-levels of clients, indicating problems of risk communication between clients and their money managers.
    Keywords: Experimental finance; finance professionals; delegation decisions.
    JEL: C93 G11 G41
    Date: 2020–11–20
  16. By: Murray, Cameron (The University of Sydney); Frijters, Paul; Vorster, Melissa
    Abstract: We develop a new experiment to study the emergence of welfare-reducing bilateral alliances within larger groups, and the effectiveness of institutional interventions to curtail ‘back-scratching’. In each of the 25 rounds of our experiments, a player (the ‘allocator’) nominates one of three others in a group as a co-worker (the ‘receiver’), which determines the group production that period to be the productivity of the receiver (which varies by round), but also gives the receiver a bonus and makes them the allocator in the next round. Alliances then form if two individuals keep choosing each other even when their productiv- ities are lower than that of others, causing efficiency losses. We study whether particular interventions reduce the rate of alliance formation. Random allocator rotation policies were found to be ineffective, whether implemented prior to, or following, a baseline treatment. Low bonuses did significantly reduce the advent of alliances. There hence seems to be some hope in preventing back-scratching via reducing the gain that can be made by alliances.
    Date: 2020–11–18
  17. By: Young, Alwyn
    Abstract: I follow R. A. Fisher's The Design of Experiments (1935), using randomization statistical inference to test the null hypothesis of no treatment effects in a comprehensive sample of 53 experimental papers drawn from the journals of the American Economic Association. In the average paper, randomization tests of the significance of individual treatment effects find 13% to 22% fewer significant results than are found using authors’ methods. In joint tests of multiple treatment effects appearing together in tables, randomization tests yield 33% to 49% fewer statistically significant results than conventional tests. Bootstrap and jackknife methods support and confirm the randomization results.
    JEL: C12 C90
    Date: 2019–05–01
  18. By: Juan Dubra; Jean-Pierre Benoit; Giorgia Romagnoli
    Abstract: Incentive compatible mechanisms for eliciting beliefs typically presume that theutilty of money is state independent, or that money is the only argument in utilityfunctions. However, subjects may have non-monetary objectives that confound themechanisms. In particular, psychologists have argued that people favour bets wheretheir ability is involved over equivalent random bets ña so-called preference for control.We propose a new belief elicitation method that mitigates the control preference. Usingthis method, we determine that under the ostensibly incentive compatiblematchingprobabilities method, our subjects report self-beliefs 18% higher than their true beliefsin order to increase control. Non-monetary objectives account for at least 68% of whatwould normally be measured as overconÖdence. Our mechanism can be used to yieldbetter measurements of beliefs in contexts beyond the study of overconÖdence. Ourpaper also contributes to a reÖned understanding of control. We find that control manifests itself only as a desire for betting on doing well; betting on doing badly isperceived as a negative.
    Keywords: Elicitation, OverconÖdence, Control. Experimental Methods
    JEL: D3
    Date: 2020
  19. By: Konstantin Chatziathanasiou (University of Münster); Svenja Hippel (Unversity of Würzburg); Michael Kurschilgen (Technical University of Munich and the Max Planck Institute for Research on Collective Goods)
    Abstract: The threat of overthrow stabilizes a constitution because it disciplines the elites. This is the main rationale behind rights to resistance. In this paper, we test this conjecture experimentally. We model a society in which players can produce wealth by solving a coordination problem. Coordination is facilitated through a pre-game status-ranking. Compliance with the status hierarchy yields an efficient yet inequitable payoff distribution, in which a player’s wealth is determined by her pre-game status. Between treatments, we vary (a) whether overthrows – which reset the status-ranking via collective disobedience – are possible or not, and (b) whether voluntary redistributive transfers – which high-status players can use to appease the low-status players – are available or not. In contrast to established thinking we find that, on average, the threat of overthrow does not have a stabilizing effect as high-status players fail to provide sufficient redistribution to prevent overthrows. However, if an overthrow brings generous players into high-status positions, groups stabilize and prosper. This suggests an alternative rationale for rights to resistance.
    Keywords: Rights to resistance; civil resistance; constitutional stability; redistribution; coordination; battle of the sexes; experiment
    JEL: C72 C92 D74 H23 P48
    Date: 2020–11
  20. By: Barriga, Alicia; Ferguson, Neil T. N.; Fiala, Nathan; Leroch, Martin Alois
    Abstract: There is growing evidence that ethnic divisions and conflict experience affect social capital and economic interactions, in both positive and negative ways. However, recent work has suggested that the experience of electoral violence in Kenya does not correlate with laboratory behavior between the two largest ethnic groups, the Luo and Kikuyu. We conduct a similar set of experiments measuring social capital and find the same results: altruism, trusting and trustworthy behavior, and cooperation between these two ethnic groups are not affected by priming people on the ethnic identity of their partners or on the salience of election conflict. Our findings suggest electoral violence does not necessarily lead to changes in behavior between ethnic groups and that cooperative failure across groups may be easily overstated or have other mechanisms.
    Keywords: ethnic cooperation,conflict,election violence,priming
    JEL: C90 H41 O43
    Date: 2020
  21. By: Stewart, Kitty
    Abstract: There is abundant evidence that children in low income households do less well than their peers on a range of developmental outcomes. However, there is continuing uncertainty about how far money itself matters, and how far associations simply reflect other, unobserved, differences between richer and poorer families. The authors conducted a systematic review of studies using methods that lend themselves to causal interpretation. To be included, studies had to use Randomised Controlled Trials, quasi-experiments or fixed effect-style techniques on longitudinal data. The results lend strong support to the hypothesis that household income has a positive causal effect on children’s outcomes, including cognitive and social- behavioural development and early childhood health, particularly in households with low income to begin with. There is also clear evidence of a positive causal effect of income on ‘intermediate outcomes’ that are important for children’s development, including maternal mental health, parenting and the home environment. The review also makes a methodological contribution, identifying that effects tend to be larger in experimental and quasi-experimental studies than in fixed effect approaches. This finding has implications for our ability to generalise from observational studies.
    Keywords: poverty; family income; child development; child outcomes; maternal depression; casual estimates; forthcoming
    JEL: N0
    Date: 2020–11–04
  22. By: Johar Arrieta (Central Bank of Peru); David Florián (Central Bank of Peru); Kristian López (UCSC); Valeria Morales (Central Bank of Peru)
    Abstract: Partial currency substitution typically occurs in small economies amid economic crises, when the local currency loses some of its essential functions and a foreign currency, usually the US Dollar, is widely adopted. Interestingly, the coexistence of two currencies often persists after macroeconomic stability has been restored, which imposes challenges to the conduct of monetary policy. Central banks have responded by applying de-dollarization policies. This paper studies the effectiveness of three of them: (1) taxes on transactions in foreign currency among domestic agents, (2) storage costs on foreign currency holdings, and (3) information on the acceptance rate of the foreign currency among local agents. We extend the model in Matsuyama et al. (1993) to study the effects of these policies, both theoretically and experimentally. We contribute to the theoretical literature by characterizing a new circulation regime where agents use the foreign currency solely for international trade and settle domestic transactions exclusively in local currency. Our experimental evidence suggests that both taxes and storage costs reduce the overall acceptability of foreign currency in international and domestic transactions (around 40 percent in both cases). Information treatment does not have a significant impact relative to baseline.
    Keywords: Bimonetary Economy, Dollarization, Central Bank, Monetary Policy, Experiment, Money.
    JEL: E51 E52 E58 E59 C91 C92
    Date: 2020–11
  23. By: Rahwan, Zoe; Yoeli, Erez; Fasolo, Barbara
    Abstract: The social sciences are going through what has been described as a ‘reproducibility crisis’1,2. Highly influential findings derived from accessible populations, such as laboratories and crowd-sourced worker platforms, are not always replicated. Less attention has been given to replicating findings that are derived from inaccessible populations, and recent high-profile replication attempts explicitly excluded such populations3. Pioneering experimental work4 offered a rare glimpse into banker culture and found that bankers, in contrast to other professionals, are more dishonest when they think about their job. Given the importance of the banking sector, and before academics or policy-makers rely on these findings as an accurate diagnosis of banking culture, an exploration of their generalizability is warranted. Here we conduct the same incentivized task with bankers and non-bankers from five different populations across three continents (n = 1,282 participants). In our banker studies in the Middle East and Asia Pacific (n = 148 and n = 620, respectively), we observe some dishonesty, although—in contrast to the original study4—this was not significantly increased among bankers primed to think about their work compared to bankers who were not primed. We also find that inducing non-banking professionals to think about their job does not have a significant effect on honesty. We explore sampling and methodological differences to explain the variation in findings in relation to bankers and identify two key points. First, the expectations of the general population regarding banker behaviour vary across jurisdictions, suggesting that banking culture in the jurisdiction of the original study4 may not be consistent worldwide. Second, having approached 27 financial institutions, many of which expressed concerns of adverse findings, we expect that only banks with a sound culture participated in our study. The latter introduces possible selection bias that may undermine the generalizability of any similar field study. More broadly, our study highlights the complexity of undertaking a high-fidelity replication of sensitive, highly publicized fieldwork with largely inaccessible populations resulting from institutional and geographical barriers. For policy-makers, this work suggests that caution should be exercised in generalizing the findings of the original study4 to other populations.
    Keywords: decision making; human behaviour
    JEL: F3 G3
    Date: 2019–11–14
  24. By: Ekaterina Suchkova (National Research University Higher School of Economics); Dmitry Lyusin (National Research University Higher School of Economics)
    Abstract: There are a number of factors that influence emotion recognition, one of which is the perceiver’s emotional state. This study verifies the predictions of two theories concerning the influence of mood on emotion recognition. According to the affect-as-information theory, people in a positive mood are prone to a more global processing style and perceive emotional facial expressions more easily compared to those in a negative mood. The emotion congruence theory claims that people in a positive mood are more sensitive to positive expressions and people in a negative mood are more sensitive to negative expressions. These predictions were tested with the experimental paradigm using morphed faces developed by Jackson and Arlegui-Prieto. Study 1 used participants’ natural moods; its findings failed to replicate the main results of the original study. Study 2 used laboratory mood induction and showed that participants in a negative mood are more sensitive to negative emotions compared to those in positive mood. These findings support the emotion congruence theory. However, this result was obtained only for the participants with the most effective mood induction. The observed effects of mood are weak and fragile. For more persuasive results, a study with greater statistical power using more effective mood induction procedures is needed.
    Keywords: mood, emotion recognition, mood induction, facial morphing task.
    JEL: Z
    Date: 2020
  25. By: Abel, Martin (Middlebury College); Buchman, Daniel (Middlebury College)
    Abstract: We hire 1,800 Indian gig economy workers for a real-effort transcription task and randomize the gender of the (fictitious) manager as well as the delivery of performance feedback. We find that negative feedback (i.e. criticism) leads to moderate deterioration in worker attitudes, but it increases effort provision in both mandatory and voluntary tasks. By contrast, praise affects neither attitudes nor effort provision. Importantly, feedback effects do not vary between workers assigned to female and male managers. Consistent with this finding, there is no evidence for attention discrimination towards female managers, implicit gender bias, or gendered expectations among workers. By contrast, Abel (2019) employs the same research design in the U.S. and finds substantial gender discrimination and no effect of feedback on effort. This highlights that the effects of feedback and manager gender vary across different contexts.
    Keywords: India, gender discrimination, gig economy, feedback
    JEL: J50 J70
    Date: 2020–11
  26. By: Bicchieri, Cristina (University of Pennsylvania); Dimant, Eugen (University of Pennsylvania); Gächter, Simon (University of Nottingham); Nosenzo, Daniele (Aarhus University)
    Abstract: We study how individuals' compliance with norms of pro-social behavior is influenced by other actors' compliance in a novel, dynamic, and non-strategic experimental setting. We are particularly interested in the role that social proximity among peers plays in eroding or upholding norm compliance. Our results suggest that social proximity is crucial. In settings without known proximity, norm compliance erodes swiftly because participants only conform to observed norm violations of their peers while ignoring norm compliance. With known social proximity, participants conform to both types of observed behaviors, thus halting the erosion of norm compliance. Our findings stress the importance of the broader social context for norm compliance and show that, even in the absence of social sanctions, compliance can be sustained in repeated interactions, provided there is group identification, as is the case in many social encounters in natural and online environments.
    Keywords: norm compliance, social norms, social proximity
    JEL: C92 D64 D9
    Date: 2020–11
  27. By: Gerard J. van den Berg; Barbara Hofmann; Gesine Stephan; Arne Uhlendorff
    Abstract: In the German unemployment insurance system, Integration Agreements (IA) are mandatory contracts between the employment agency and the unemployed, jointly signed by the latter and the caseworker. IAs stipulate rights and obligations but are generally perceived as instruments to control search behavior. We designed and implemented a Randomized Controlled Trial involving thousands of newly unemployed workers, where we randomize the timing of the IA as well as the extent to which this timing is announced prior to the meeting. Randomization is at the individual level. We use administrative registers to observe outcomes. A theoretical analysis of anticipation of prior announcements provides suggestions to empirically detect this. The results show that IAs early in the spell have on average a small positive effect on entering employment within a year. When classifying individuals using an employability indicator, we find that this result is driven by individuals with adverse prospects. Among them, being assigned to an early IA increases the probability of re-employment within a year from 45% to 53%.
    Date: 2020–11–23
  28. By: Antonia Grohmann; Tabea Lakemann; Helke Seitz
    Abstract: This study examines the effect of a soft commitment device in the form of a savings goal calendar on savings for small business owners in Kampala, Uganda. We run a randomized controlled trial (RCT) under which the treatment group receives a calendar designed to set savings goals and to make a plan to reach this goal. The control group is given a plain calendar. We find no average effect on savings, but show that present-biased individuals save more when given the calendar. Further examinations indicate that present-biased individuals are more likely to use the calendar, suggesting that, in line with theory, present-biased individuals have a demand.
    Keywords: Soft commitment, savings, time preferences, small business growth
    JEL: O12 D14 D22 C93
    Date: 2020
  29. By: David Boto-Garcìa (University of Oviedo); Alessandro Bucciol (Department of Economics (University of Verona)); Luca Zarri (Department of Economics (University of Verona))
    Abstract: Using detailed field data covering ten seasons of the Italian soccer premier league, we provide the first evidence on the key role played by managerial beliefs in firm performance in a high-powered incentives natural setting where managers receive frequent feedback. We show that managers’ confidence and risk tolerance positively affect performance. Next, we document asymmetrically biased belief updating, in line with prior laboratory work on non-managers. By shedding light on overlooked features of manager-firm interplays and managers’ information processing, our findings corroborate and help qualify the “managers matter” view advanced in recent fieldwork based on low-frequency data.
    Keywords: Managerial Beliefs, Firm performance, Professional Soccer, Field data
    JEL: D01 D22 D81 D91 L20 Z20
    Date: 2020–11
  30. By: Guilherme Lichand; Juliette Thibaud
    Abstract: This paper uses a lab-in-the-field experiment in Malawi to document two new facts about how parents share resources with their children over time. First, for almost a third of study participants, the further in the future consumption is, the more generous are parents’ plans to share it with their children. Second, many participants revise those plans as consumption gets closer, reallocating from children towards themselves – even when consumption is still in the future. None of these patterns can be accounted for by present-bias. Instead, both are consistent with a relevant share of parents discounting their future utility of consumption to a greater extent than that of their children. We document that parents characterized by such asymmetric geometric discounting display sizable preference reversals every period, a phenomenon we denote parent-bias. We find that, despite ambitious plans, those parents actually allocate less to their children in the present than other parents, and that such preferences predict under-investment in children outside the lab just as much as quasi-hyperbolic discounting. Commitment devices designed for present-bias do not mitigate parentbias. Our findings provide a new explanation for under-investment in children and inform the design of new interventions to address it.
    Keywords: Time preferences, preference reversals, children’s human capital
    JEL: C91 D13 E24
    Date: 2020–11

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.