nep-exp New Economics Papers
on Experimental Economics
Issue of 2020‒12‒21
thirty-two papers chosen by

  1. You Cannot Judge a Book by Its Cover: Evidence from a Laboratory Experiment on Recognizing Generosity from Facial Information By C. Bram Cadsby; Fei Song; Ninghua Du
  2. Economic Preferences and Obesity: Evidence from a Clinical Lab-in-Field Experiment By Pastore, Chiara; Schurer, Stefanie; Tymula, Agnieszka; Fuller, Nicholas; Caterson, Ian
  3. The "Fake News" Effect: Experimentally Identifying Motivated Reasoning Using Trust in News By Michael Thaler
  4. Gender Differences in Face-to-Face Deceptive Behavior By Tim Lohse; Salmai Qari
  5. The effect of group identity on hiring decisions with incomplete information By Fortuna Casoria; Ernesto Reuben; Christina Rott
  6. Biased Programmers? Or Biased Data? A Field Experiment in Operationalizing AI Ethics By Bo Cowgill; Fabrizio Dell'Acqua; Samuel Deng; Daniel Hsu; Nakul Verma; Augustin Chaintreau
  7. Raising COVID-19 Awareness in Rural Communities: A Randomized Experiment in Bangladesh and India By Abu Siddique; Tabassum Rahman; Debayan Pakrashi; Asad Islam; Firoz Ahmed
  8. Ethnicity and gender influence the decision making in a multinational state: The case of Russia By Tatiana Kozitsina; Anna Mikhaylova; Anna Komkova; Anastasia Peshkovskaya; Anna Sedush; Olga Menshikova; Mikhail Myagkov; Ivan Menshikov
  9. The Effect of Gender and Gender Pairing on Bargaining: Evidence from an Artefactual Field Experiment By D'Exelle, Ben; Gutekunst, Christine; Riedl, Arno
  10. Labor Market Integration of Low-Educated Refugees: RCT Evidence from an Ambitious Integration Program in Sweden By Dahlberg, Matz; Egebark, Johan; Vikman, Ullrika; Özcan, Gülay
  11. Attainment of Equilibrium via Marshallian Path Adjustment: Queueing and Buyer Determinism By Collins, Sean M.; James, Duncan; Servátka, Maroš; Vadovič, Radovan
  12. Gender Differences in Motivated Reasoning By Michael Thaler
  13. Search and Information Frictions on Global E-Commerce Platforms: Evidence from AliExpress By Jie Bai; Maggie Chen; Jin Liu; Daniel Yi Xu
  14. Cooperation in the Age of COVID-19: Evidence from Public Goods Games By Patrick Mellacher
  15. Morally Monotonic Choice in Public Good Games By James C. Cox; Vjollca Sadiraj; Susan Xu Tang
  16. Competitive Preferences among Asians in the U.S. By Ifcher, John; Zarghamee, Homa
  17. Enabling reciprocity through blockchain design By Jens Gudmundsson; Jens Leth Hougaard
  18. Do People Engage in Motivated Reasoning to Think the World Is a Good Place for Others? By Michael Thaler
  19. Gender differences in overplacement in familiar and unfamiliar tasks: Far more similarities By Brañas-Garza, Pablo; Mesa-Vázquez, Ernesto; Rivero-Garrido, Noelia
  20. Eliminating supportive crowds reduces referee bias By J. James Reade; Dominik Schreyer; Carl Singleton
  21. Pre-Decisional Information Acquisition: Do We Pay TooMuch for Information? By Marc Oliver Rieger; Mei Wang; Daniel Hausmann
  22. Can Nudges Increase Take-up of the EITC?: Evidence from Multiple Field Experiments By Elizabeth Linos; Allen Prohofsky; Aparna Ramesh; Jesse Rothstein; Matt Unrath
  23. Perceptual Load Effect On Target Detection In Banner Blindness By Ksenia Gorbatova; Grigoriy Anufriev; Elena Gorbunova
  24. Pick-an-object Mechanisms By In\'acio B\'o; Rustamdjan Hakimov
  25. Depth of Reasoning Models with Sophisticated Agents By Peter G Moffatt; Ganna Pogrebna; Graciela Zevallos-Porles
  26. Improving Public Sector Management at Scale? Experimental Evidence on School Governance India By Karthik Muralidharan; Abhijeet Singh
  27. Building an Epidemiology of Happiness By John F. Helliwell; David Gyarmati; Craig Joyce; Heather Orpana
  28. Generosity and Wealth : Experimental Evidence from Bogota Stratification By Blanco, M.; Dalton, Patricio
  29. On the stability of risk and time preferences amid the COVID-19 pandemic By Drichoutis, Andreas C.; Nayga, Rodolfo
  30. Prospect theory in experiments: behaviour in loss domain and framing effects By Géraldine Bocqueho; Julien Jacob; Marielle Brunette
  31. The Value of Time in the United States: Estimates from Nationwide Natural Field Experiments By Ariel Goldszmidt; John List; Robert Metcalfe; Ian Muir; Jenny Wang
  32. Long-term Effects of the Targeting the Ultra Poor Program By Abhijit Banerjee; Esther Duflo; Garima Sharma

  1. By: C. Bram Cadsby (Department of Economics and Finance, University of Guelph, Guelph ON Canada); Fei Song (Ted Rogers School of Management, Ryerson University, Toronto ON Canada); Ninghua Du (School of Economics, Shanghai University of Finance and Economics, Shanghai, China)
    Abstract: People form first impressions of others and make judgments about their social traits and character on the basis of facial perceptions. We implement a controlled laboratory experiment to investigate whether people can glean information about another person's other-regarding preferences from photographs of their face. To do so, we conduct a dictator game with an allocator and a recipient, and then present pairs of allocator photos to observers. Each pair portrays one relatively generous allocator and another who has demonstrated less generosity. The experimental results show that the observers cannot accurately recognize more generous allocators, but instead make systematic errors. In particular, the observers believe that allocators who are rated as being more attractive by others are more generous, despite there being no actual relationship between physical attractiveness and generosity.
    Keywords: Experiment, Dictator Game, Social Preference, Other-regarding Preferences, Generosity, Appearance.
    JEL: C91 D91
    Date: 2020
  2. By: Pastore, Chiara (University of York); Schurer, Stefanie (University of Sydney); Tymula, Agnieszka (University of Sydney); Fuller, Nicholas (University of Sydney); Caterson, Ian (University of Sydney)
    Abstract: We study economic decision-making of 284 people with obesity and pre-diabetes who participated in a 6-months randomised controlled trial to control weight and prevent diabetes. To elicit preferences, we use incentive-compatible experimental tasks that participants completed during their medical screening examination. We find that, on average, participants are risk averse, show no evidence of present bias, and have impatience levels comparable to healthy samples described in the international literature. Variations in present bias and impatience are not significantly associated with variations in markers of obesity. But we find a significant negative association between risk tolerance and BMI and other markers of obesity for women. A 1 standard deviation increase in risk tolerance is associated with a 0.2 standard deviation drop in BMI and waist circumference. Impatience moderates the link between risk tolerance and obesity. We replicate the key finding of interaction effects between risk and time preferences using survey data from a nationally representative sample of 6,281 Australians with similar characteristics. Deviating markedly from the literature, we conclude that risk tolerance brings benefits for health outcomes if combined with patience in this understudied but highly policy-relevant population.
    Keywords: impatience, risk tolerance, obesity, incentive-compatible economic experiment, lab-in-field experiment
    JEL: C9 D9 D81 I12
    Date: 2020–12
  3. By: Michael Thaler
    Abstract: Motivated reasoning posits that people distort how they process information in the direction of beliefs they find attractive. This paper creates a novel experimental design to identify motivated reasoning from Bayesian updating when people enter into the experiment with endogenously different beliefs. It analyzes how subjects assess the veracity of information sources that tell them the median of their belief distribution is too high or too low. A Bayesian would infer nothing about the source veracity from this message, but a motivated reasoner would believe the source were more truthful when it reports the direction that he is more motivated to believe. Experimental results show evidence for politically-motivated reasoning about immigration, income mobility, crime, racial discrimination, gender, climate change, and gun laws. Motivated reasoning from these messages leads people's beliefs to become more polarized and less accurate, even though the messages are uninformative.
    Date: 2020–12
  4. By: Tim Lohse; Salmai Qari
    Abstract: We study the role of face-to-face interaction for gender differences in deceptive behavior and perceived honesty. In the first part, we compare women to men’s deceptive behavior using data from an incentivized income-reporting experiment with three treatments. Reporting is fully computerized in a baseline treatment but occurs face-to-face in the second and third treatment. Lies can be detected in the course of an audit, which happens with a given probability in the first and second treatment whereas it depends on perceptions by others in the third treatment. In the computerized baseline treatment, men and women’s deceptive behavior is statistically indistinguishable. However, women’s truthfulness increases when face-to-face interaction is introduced in the second treatment. In contrast, males’ deceptive behavior does not change until the audit probability depends on their perceived honesty in the third treatment. Then, men’s truthfulness rises sharply and exceeds women’s level of honesty by far. We elaborate on these gender differences in the second part. We conduct an experiment to assess the honesty of videotaped income-reporting statements from a setting identical to the third treatment. Our findings confirm that men anticipate their low perceived honesty, which is consistent with the results from the first part.
    Keywords: Gender differences, lying, face-to-face interaction, honesty assess- ment, perception, video analysis, laboratory experiment
    JEL: C91 D91 J16
    Date: 2020
  5. By: Fortuna Casoria (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Ernesto Reuben (New York University [Abu Dhabi] - NYU - NYU System, LISER - Luxembourg Institute of Socio-Economic Research); Christina Rott (VU - Vrije Universiteit Amsterdam [Amsterdam])
    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.
    Keywords: Labor,Discrimination,Identity,Economics: Game Theory and Bargaining Theory,Hiring
    Date: 2020
  6. By: Bo Cowgill; Fabrizio Dell'Acqua; Samuel Deng; Daniel Hsu; Nakul Verma; Augustin Chaintreau
    Abstract: Why do biased predictions arise? What interventions can prevent them? We evaluate 8.2 million algorithmic predictions of math performance from $\approx$400 AI engineers, each of whom developed an algorithm under a randomly assigned experimental condition. Our treatment arms modified programmers' incentives, training data, awareness, and/or technical knowledge of AI ethics. We then assess out-of-sample predictions from their algorithms using randomized audit manipulations of algorithm inputs and ground-truth math performance for 20K subjects. We find that biased predictions are mostly caused by biased training data. However, one-third of the benefit of better training data comes through a novel economic mechanism: Engineers exert greater effort and are more responsive to incentives when given better training data. We also assess how performance varies with programmers' demographic characteristics, and their performance on a psychological test of implicit bias (IAT) concerning gender and careers. We find no evidence that female, minority and low-IAT engineers exhibit lower bias or discrimination in their code. However, we do find that prediction errors are correlated within demographic groups, which creates performance improvements through cross-demographic averaging. Finally, we quantify the benefits and tradeoffs of practical managerial or policy interventions such as technical advice, simple reminders, and improved incentives for decreasing algorithmic bias.
    Date: 2020–12
  7. By: Abu Siddique (Economics Group, Technical University of Munich); Tabassum Rahman (School of Medicine and Public Health, University of Newcastle); Debayan Pakrashi (Department of Economic Sciences, Indian Institute of Technology Kanpur); Asad Islam (Centre for Development Economics and Sustainability (CDES) and Department of Economics, Monash University); Firoz Ahmed (Economics Discipline, Khulna University)
    Abstract: Effective health information campaigns play an important role in raising public awareness and encouraging preventive and health-promoting behavior. We study the extent to which awareness campaigns promoting simple COVID-19 precautionary measures foster health-preserving behavior among people in rural communities. Two weeks after the lockdowns in March 2020, we conducted a randomized controlled trial in Bangladesh and India targeting people living in remote rural areas to disseminate validated COVID-19 information over the phone. We find that relative to the information provided via text messages, discussing various precautions over the phone can significantly improve rural people's awareness and induce compliance with COVID-19 public health guidelines. We also find compliance to be substantially higher among women, which is partially due to their concerns about the health of household members, and increased awareness. The compliance also persists after three months of the campaign. These findings help shed light on the importance of health communication methods during public health crises for remote rural communities in developing countries, where rumors and myths about diseases are often ubiquitous, and disseminating validated health information remains a challenge.
    Keywords: COVID-19, health communications, awareness campaign, compliance, RCT
    Date: 2020–12
  8. By: Tatiana Kozitsina (Babkina); Anna Mikhaylova; Anna Komkova; Anastasia Peshkovskaya; Anna Sedush; Olga Menshikova; Mikhail Myagkov; Ivan Menshikov
    Abstract: Individuals' behavior in economic decisions depends on such factors as ethnicity, gender, social environment, personal traits. However, the distinctive features of decision making have not been studied properly so far between indigenous populations from different ethnicities in a modern and multinational state like the Russian Federation. Addressing this issue, we conducted a series of experiments between the Russians in Moscow (the capital of Russia) and the Yakuts in Yakutsk (the capital of Russian region with the mostly non-Russian residents). We investigated the effect of socialization on participants' strategies in the Prisoner's Dilemma game, Ultimatum game, and Trust game. At the baseline stage, before socialization, the rates of cooperation, egalitarianism, and trust for the Yakuts are higher than for the Russians in groups composed of unfamiliar people. After socialization, for the Russians all these indicators increase considerably; whereas, for the Yakuts only the rate of cooperation demonstrates a rising trend. The Yakuts are characterized by relatively unchanged indicators regardless of the socialization stage. Furthermore, the Yakutsk females have higher rates of cooperation and trust than the Yakuts males before socialization. After socialization, we observed the alignment in indicators for males and females both for the Russians and for the Yakuts. Hence, we concluded that cultural differences can exist inside one country despite the equal economic, politic, and social conditions.
    Date: 2020–12
  9. By: D'Exelle, Ben (University of East Anglia); Gutekunst, Christine (University of East Anglia); Riedl, Arno (Maastricht University)
    Abstract: Men and women negotiate differently, which might create gender inequality in access to resources as well as efficiency losses due to disagreement. We study the role of gender and gender pairing in bilateral bargaining, using a lab-in-the-field experiment in which pairs of participants bargain over the division of a fixed amount of resources. We vary the gender composition of the bargaining pairs as well as the disclosure of the participants' identities. We find gender differences in earnings, agreement and demands, but only when the identities are disclosed. Women in same-gender pairs obtain higher earnings than men and women in mixed-gender pairs. This is the result of the lower likelihood of disagreement among women-only pairs. Women leave more on the bargaining table, conditional on their beliefs, which contributes to the lower disagreement and higher earnings among women-only pairs.
    Keywords: bargaining, gender, gender pairing, beliefs, experiment
    JEL: C9 J16 O12
    Date: 2020–12
  10. By: Dahlberg, Matz (Institute for Dialectology, Onomastics and Folklore Research); Egebark, Johan (Research Institute of Industrial Economics (IFN)); Vikman, Ullrika (Institute for Evaluation of Labour Market and Education Policy); Özcan, Gülay (Swedish Public Employment Service)
    Abstract: This paper evaluates an ambitious and newly designed program for increased integration in Sweden. The purpose of the program is to help newly arrived, low-educated refugees into employment. The program includes four main components: (1) intensive initial language training, (2) work practice under close supervision, (3) job search assistance, and (4) extended cooperation between the local public sector and firms. An important feature of the program is that the demand side of the labor market, represented by the largest real estate company in Gothenburg, is involved in designing the program. Our evaluation is based on a randomized controlled trial, where potential participants in one of the first waves were randomly assigned to treatment and control groups. The paper presents results from the first two years after randomization. Using inference based on Fisher's exact test, we show that the program has positive effects on employment: around 30% of the individuals in the treatment group are employed each month during the first year following the end of the program, compared to an average of approximately 15% in the control group.
    Keywords: Refugee immigration; Integration; Randomized experiment; Labor market program
    JEL: C93 J08 J15 J23 J61
    Date: 2020–12–08
  11. By: Collins, Sean M.; James, Duncan; Servátka, Maroš; Vadovič, Radovan
    Abstract: We examine equilibration in a market where Marshallian path adjustment can be enforced, or not, as a treatment: a posted offer market either with buyer queueing via value order, or random order, respectively. We derive equilibrium predictions, and run experiments crossing queueing rules with either human or deterministically optimizing robot buyers under both locally stationary and nonstationary marginal cost. Results on rate of convergence to competitive equilibrium are obtained, and Marshallian path adjustment is established as conducive to attaining competitive equilibrium.
    Keywords: laboratory experiment, Marshallian path adjustment, equilibration, markets
    JEL: C4 C9 C91
    Date: 2020–11–02
  12. By: Michael Thaler
    Abstract: Men and women systematically differ in their beliefs about their performance relative to others; in particular, men tend to be more overconfident. This paper provides support for one explanation for gender differences in overconfidence, performance-motivated reasoning, in which people distort how they process new information in ways that make them believe they outperformed others. Using a large online experiment, I find that male subjects distort information processing to favor their performance, while female subjects do not systematically distort information processing in either direction. These statistically-significant gender differences in performance-motivated reasoning mimic gender differences in overconfidence; beliefs of male subjects are systematically overconfident, while beliefs of female subjects are well-calibrated on average. The experiment also includes political questions, and finds that politically-motivated reasoning is similar for both men and women. These results suggest that, while men and women are both susceptible to motivated reasoning in general, men find it particularly attractive to believe that they outperformed others.
    Date: 2020–12
  13. By: Jie Bai; Maggie Chen; Jin Liu; Daniel Yi Xu
    Abstract: Global e-commerce platforms present new export opportunities for small and medium-sized enterprises in developing countries by significantly lowering the entry barriers of exporting. However, the lack of market selection can lead to a large number of online firms competing for consumers’ attention, resulting in severe congestion in consumers’ search process. When firms’ intrinsic quality is not perfectly observed, these search frictions can further slow down the resolution of the information problem and hinder market allocation towards better firms. In this paper, we investigate how search and information frictions shape firm dynamics and market evolution in global e-commerce. Using detailed data from AliEpxress as well as a rich set of self-collected objective quality measures, we provide stylized facts that are consistent with the presence of search and information frictions. Moreover, using a randomized experiment that offers exogenous demand and information shocks to small prospective exporters, we establish that firms with larger past sales have an advantage in overcoming the search friction and generating future orders. This indicates that initial demand shocks could confound firms’ true quality in determining firm growth and the long-run market structure. We construct and estimate an empirical model of the online market that are consistent with our descriptive and experimental findings and use the model to quantify the extent of demand-side frictions. Counterfactual analyses show that alleviating information frictions and reducing the number of firms can help to improve allocative efficiency and raise consumer welfare.
    JEL: F14 L15 O12
    Date: 2020–11
  14. By: Patrick Mellacher
    Abstract: Does COVID-19 change the willingness to cooperate? Four Austrian university courses in economics play a public goods game in consecutive semesters on the e-learning platform Moodle: two of them in the year before the crisis, one immediately after the beginning of the first lockdown in March 2020 and the last one in the days before the announcement of the second lockdown in October 2020. Between 67% and 76% of the students choose to cooperate, i.e. contribute to the public good, in the pre-crisis year. Immediately after the imposition of the lockdown, 71% choose to cooperate. Seven months into the crisis, however, cooperation drops to 43%. Depending on whether two types of biases resulting from the experimental design are eliminated or not, probit and logit regressions show that this drop is statistically significant at the 0.05 or the 0.1 significance level.
    Date: 2020–11
  15. By: James C. Cox; Vjollca Sadiraj; Susan Xu Tang
    Abstract: Decades of robust data from public good games with positive and negative externalities challenges internal consistency axioms that comprise rational choice theory. This paper reports an extension of rational choice theory that incorporates observable moral reference points. This morally monotonic choice theory is consistent with data in the literature and has idiosyncratic features that motivate new experimental designs. We report experiments on choices in public good games with positive, negative, and mixed-sign externalities, with and without non-binding quotas on extractions or minimum contributions. Data favors choices predicted by moral monotonicity over choices predicted by: (a) conventional rational choice theory; or (b) conventional reference dependent model of loss aversion.
    Keywords: choice theory, public goods, externalities, crowding out, moral reference points, experiment
    JEL: C91 D62 H41
    Date: 2020–11
  16. By: Ifcher, John (Santa Clara University); Zarghamee, Homa (Barnard College)
    Abstract: The median income of Asian households is the highest of all racial/ethnic groups in the U.S. In a laboratory experiment, we examine whether Asians are more willing to compete and have greater competitive preferences than non-Asians. Both with and without controls for performance, performance improvement, and confidence, we find that Asians have significantly greater competitive preferences than non-Asians.
    Keywords: race/ethnicity, Asian, identity, norm, competitive preferences, willingness to compete
    JEL: J15 L0
    Date: 2020–11
  17. By: Jens Gudmundsson (Department of Food and Resource Economics, University of Copenhagen); Jens Leth Hougaard (NYU-Shanghai, China; Department of Food and Resource Economics, University of Copenhagen)
    Abstract: We introduce a reciprocity protocol, an innovative approach to coordinating and sharing rewards in blockchains. Inherently decentralized and easy to implement, it puts emphasis on incentives rather than forcing specific sharing rules from the outset. Analyzing the non-cooperative game the protocol induces, we identify a robust, strict, and Pareto-dominant symmetric equilibrium. In it, even self-centered participants show extensive reciprocity to one another. Thus, despite a setting that is generally unfavorable to reciprocal behavior, the protocol manages to build trust between the users by taking on a role akin to a social contract.
    Keywords: Blockchain, reciprocity, protocol design, Nash equilibrium
    JEL: C62 C72 D02 D63 D91
    Date: 2020–12
  18. By: Michael Thaler
    Abstract: Motivated reasoning is a bias in inference in which people distort their updating process in the direction of more attractive beliefs. Prior work has shown how motivated reasoning leads people to form overly "positive" beliefs that also serve to bolster one's self-image in domains such as intelligence, prosociality, and politics. In this paper, I study whether positivity-motivated reasoning persists in domains where self-image does not play a role. In particular, I analyze whether individuals motivatedly reason to think that the world is a better place for others. Building off of the design from Thaler (2020), I conduct a large online experiment to test for positivity-motivated reasoning on issues such as cancer survival rates, others' happiness, and infant mortality. I find no systematic evidence for positivity-motivated or negativity-motivated reasoning, and can rule out modest effects. Positivity is not a sufficient condition for motivated reasoning.
    Date: 2020–12
  19. By: Brañas-Garza, Pablo; Mesa-Vázquez, Ernesto; Rivero-Garrido, Noelia
    Abstract: This paper explores gender differences in overplacement in two independent and unrelated tasks. The first measures performance via Raven’s Progressive Matrices test, the second in a video presentation assessed by external judges. While in the first task, we expected participants to have prior knowledge about their own experience in similar tasks, we did not expect them to have experience of the second task. Therefore, the latter seems an ideal environment in which to test overplacement given that participants had no ex-ante information with which to make performance predictions. In both cases, participants received monetary incentives depending on the accuracy of their predictions regarding their own performance compared to other participants. We analyzed overplacement – whether participants expect to outperform their actual performance compared to the entire sample – and in/out-group overplacement– whether the participants expect to outperform participants of the same and the opposite sex. Results show that there are no gender differences in any task except in Raven’s Progressive Matrices for out-group overplacement.
    Keywords: Overplacement, gender, experiments, in-group, out-group
    JEL: D84 D91 J16
    Date: 2020–12–29
  20. By: J. James Reade (Department of Economics, University of Reading); Dominik Schreyer (Wissenschaftliche Hochschule für Unternehmensführung (WHU)); Carl Singleton (Department of Economics, University of Reading)
    Abstract: We use a series of historical natural experiments in association football (soccer) to test whether social pressure affected behaviour and outcomes. We observe how the normal advantage for the home team of playing in their own stadium was eroded behind closed doors, with no supporters. After designing a three-step sample selection and regression strategy, to get as close as possible to a causal interpretation, the standout effect of an empty stadium was that referees cautioned visiting players significantly less often, by over a third of a yellow card per match or once for every twenty-two fouls. Closed doors matches were different because referees favoured the home team less in their decision making. These results add to the literature describing how home advantage in sports decreased during the Covid-19 pandemic, though many other factors changed at that time besides the emptying stadiums.
    Keywords: Home Advantage, Referee Bias, Social Pressure, Attendance, Natural Experiments, Sports Economics, Coronavirus
    JEL: C90 D91 L83 Z20
    Date: 2020–12–05
  21. By: Marc Oliver Rieger; Mei Wang; Daniel Hausmann
    Abstract: It is a common phenomenon that people tend to acquire more information in a decision task than a rational benchmark would predict. What is the reason behind this? To answer this question we conducted an information acquisition experiment that has been carefully designed to disentangle several plausible reasons for information overpurchasing before decision-making. A within-subject experiment with a simple basic information acquisition task on an investment project, equivalent formulated lotteries, estimations of probability, and an additional option to satisfy one’s curiosity was used to test five different potential reasons. The results show that overpurchasing of information can be explained nearly entirely by systematic information-processing errors (misestimationor incorrect Bayesean updating). Other factors, such as overoptimism on the validity of new information, risk aversion, ambiguity aversion, and curiosity for (irrelevant) information, play at most a minor role. Our results imply that overinvestment in information acquisition can be mostly avoided if more detailed informationis given to decision makers on how much (or little) further information can improve the decision quality.
    Keywords: sequential information acquisition, ambiguity, Bayesian updating, financial decision-making
    JEL: G11 G12 G1
    Date: 2020
  22. By: Elizabeth Linos; Allen Prohofsky; Aparna Ramesh; Jesse Rothstein; Matt Unrath
    Abstract: The Earned Income Tax Credit (EITC) distributes more than $60 billion to over 20 million low-income families annually. Nevertheless, an estimated one-fifth of eligible households do not claim it. We ran six pre-registered, large-scale field experiments to test whether “nudges” could increase EITC take-up (N=1million). Despite varying the content, design, messenger, and mode of our messages, we find no evidence that they affected households’ likelihood of filing a tax return or claiming the credit. We conclude that even the most behaviorally informed low-touch outreach efforts cannot overcome the barriers faced by low-income households who do not file returns.
    JEL: D91 H24 H26 I38
    Date: 2020–11
  23. By: Ksenia Gorbatova (National Research University Higher School of Economics); Grigoriy Anufriev (National Research University Higher School of Economics); Elena Gorbunova (National Research University Higher School of Economics)
    Abstract: Perceptual load theory claims that the processing of task-irrelevant information can be predicted by the level of perceptual load. If a particular task places a high demand on attention, the task-irrelevant stimuli processing can be prevented. That means that in high load condition the subjects are more likely to ignore distractors, while in low load task-relevant and task-irrelevant information is processed simultaneously. Though several studies showed that perceptual load can play a crucial role in inattentional blindness phenomenon, there is a lack of applied researches conducted on real-life tasks. Current study aimed implement load theory to a real-life task and to describe the effect it has on banner blindness, that has common grounds with inattentional blindness. Banner blindness is a phenomenon in usability studies which shows that subjects do not notice banners on the webpage despite their saliency. The study represents an important application of load theory to real-world behavior of Internet users. Participants were divided into low-load and high-load groups (that differed in number of presented stimuli) and asked go online shopping. At the critical trail, a banner appeared. The subjects under high load condition were expected to notice the banner less often, then under low load. The hypothesis was not supported. However, a tendency towards more reports about the banner’s presence can be seen in the low load group. We assume that if there are enough people who noticed the banner, we will be able to detect the effect of cognitive load on banner blindness.
    Keywords: perceptual load, banner blindness, usability, visual search.
    JEL: Z
    Date: 2020
  24. By: In\'acio B\'o; Rustamdjan Hakimov
    Abstract: We introduce a new family of mechanisms for one-sided matching markets, denoted pick-an-object (PAO) mechanisms. When implementing an allocation rule via PAO, agents are asked to pick an object from individualized menus. These choices may be rejected later on, and these agents are presented with new menus. When the procedure ends, agents are assigned the last object they picked. We characterize the allocation rules that can be sequentialized by PAO mechanisms, as well as the ones that can be implemented in a robust truthful equilibrium. We justify the use of PAO as opposed to direct mechanisms by showing that its equilibrium behavior is closely related to the one in obviously strategy-proof (OSP) mechanisms, but includes commonly used rules, such as Gale-Shapley DA and Top Trading Cycles, which are not OSP-implementable. We run laboratory experiments comparing truthful behavior when using PAO, OSP, and direct mechanisms to implement different rules. These indicate that individuals are more likely to behave in line with the theoretical prediction under PAO and OSP implementations than their direct counterparts.
    Date: 2020–12
  25. By: Peter G Moffatt (School of Economics, University of East Anglia, Norwich.); Ganna Pogrebna (The Alan Turing Institute, The University of Sydney); Graciela Zevallos-Porles (School of Economics, University of East Anglia, Norwich.)
    Abstract: In the context of guessing games, we propose the Sophisticated Reasoning Model (SRM) which includes a “sophisticated†type. A parameter ps represents the proportion of sophisticated players in the population. Asophisticated player is one who forms a belief (eps) of the proportion of the population who are sophisticated (following the same cognitive process as themselves) and best responds to this belief. The model nests the standard Level-k and cognitive hierarchy models (when eps = 0) and also Nash behaviour (when eps = 1). Moreover, a sophisticated player with correct beliefs (eps = ps) has best response equal to the winning guess. The model is extended to allow heterogeneity in beliefs. When applied to field data from a guessing game, only 9% of players are estimated to be sophisticated, but these players greatly over-estimate the proportion who are of the same type. This is interpreted as a manifestation of the Dunning-Kruger effect.
    Keywords: Beauty contest game; Sophisticated reasoning model; Level k-model; Cognitive hierarchy model; Dunning-Kruger effect.
    Date: 2020–12
  26. By: Karthik Muralidharan; Abhijeet Singh
    Abstract: We present results from a large-scale experimental evaluation of an ambitious attempt to improve management quality in Indian schools (implemented in 1,774 randomly-selected schools). The intervention featured several global “best practices” including comprehensive assessments, detailed school ratings, and customized school improvement plans. It did not, however, change accountability or incentives. We find that the assessments were near-universally completed, and that the ratings were informative, but the intervention had no impact on either school functioning or student outcomes. Yet, the program was perceived to be successful and scaled up to cover over 600,000 schools nationally. We find using a matched-pair design that the scaled-up program continued to be ineffective at improving student learning in the state we study. We also conduct detailed qualitative interviews with frontline officials and find that the main impact of the program on the ground was to increase required reporting and paperwork. Our results illustrate how ostensibly well-designed programs, that appear effective based on administrative measures of compliance, may be ineffective in practice.
    JEL: C93 H75 I28 O15
    Date: 2020–11
  27. By: John F. Helliwell; David Gyarmati; Craig Joyce; Heather Orpana
    Abstract: Starting from the assumption that improving well-being is the central consideration for public policies, we show how subjective well-being research can help, and already is helping, to choose public policies based on their consequences for all aspects of life. The core of the paper lies in examples where the methods we propose, often in systematic experimental contexts, have already been used to guide the evaluation and ranking of alternative policy options in public health, education, workplace training, and social welfare. The arrival of COVID-19 has increased the urgency for a well-being focus, since the policy decisions being faced by governments dealing with the pandemic require an approach much broader than provided by more typical policy evaluations in all disciplines, including especially the social context and the distribution of costs and consequences. A broader approach to policy design and choice is fully consistent with the underlying aims of epidemiology, with similar gains likely in other policy disciplines. A focus on subjective well-being as an umbrella measure of welfare might help to restore to economics the breadth of purpose and methods it had two centuries ago, when happiness was considered the appropriate goal for private actions and public policies.
    JEL: H12 H51 I14 I18 I31
    Date: 2020–11
  28. By: Blanco, M.; Dalton, Patricio (Tilburg University, School of Economics and Management)
    Date: 2019
  29. By: Drichoutis, Andreas C.; Nayga, Rodolfo
    Abstract: We elicited incentivized and stated measures of risk and time preferences from a sample of undergraduate students in Athens, Greece, as part of a battery of psychological, behavioral and economic measures and traits that could be later matched with data from laboratory experiments. Data collection for these measures was first initiated in 2017 and the exact same battery of measures was administered in 2019 and early 2020 to students of the university that had voluntarily enrolled to participate in surveys/experiments. About halfway through the 2020 wave, our study was re-designed because of the COVID-19 pandemic. We re-launched our study on March 23, 2020, coinciding with a general curfew imposed by the government, and invited back all subjects that had participated in the 2019 and the early 2020 wave. The exact same sets of incentivized and stated measures of risk and time preferences were administered to the invited subjects and the wave duration was extended until a few weeks after the opening up of the economy and restart of business activity that followed the curfew. We then estimated structural parameters for various theories of risk and time preferences from the incentivized tasks and find no effect between the different waves or other key events of the pandemic, despite the fact that we have about 1,000 responses across all waves. Similar conclusions come out of the stated preferences measures. Overall, our subjects exhibit intertemporal stability of risk and time preferences despite the very disruptive effect of the COVID-19 pandemic on the global economy.
    Keywords: time preferences; risk preferences; pandemic; natural disaster
    JEL: C90 D12 D81 D91 Q54
    Date: 2020–11–26
  30. By: Géraldine Bocqueho (BETA - Bureau d'Économie Théorique et Appliquée - UL - Université de Lorraine - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Julien Jacob (BETA - Bureau d'Économie Théorique et Appliquée - UL - Université de Lorraine - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Marielle Brunette (BETA - Bureau d'Économie Théorique et Appliquée - UL - Université de Lorraine - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Keywords: Reflected behaviour,Loss aversion,Probability weighting,Tanaka-Camerer-Nguyenmethod,Risk preferences
    Date: 2020
  31. By: Ariel Goldszmidt; John List; Robert Metcalfe; Ian Muir; Jenny Wang
    Abstract: The value of time determines relative prices of goods and services, investments, productivity, economic growth, and measures of income inequality. Economists in the 1960s began to focus on the value of non-work time, pioneering a deep literature exploring the optimal allocation and value of time. By leveraging key features of these classic time allocation theories, we use a novel approach to estimate the value of time (VOT) via two large-scale natural field experiments with the ridesharing company Lyft. We use random variation in both wait times and prices to estimate a consumer's VOT with a data set of more than 14 million observations across consumers in US cities. We find that the VOT is roughly $19 per hour (or 75% (100%) of the after-tax mean (median) wage rate) and varies predictably with choice circumstances correlated with the opportunity cost of wait time. Our VOT estimate is larger than what is currently used by the US Government, suggesting that society is under-valuing time improvements and subsequently under-investing public resources in time-saving infrastructure projects and technologies.
    Date: 2020
  32. By: Abhijit Banerjee; Esther Duflo; Garima Sharma
    Abstract: This paper studies the long-run effects of a “big-push” program providing a large asset transfer to the poorest Indian households. In a randomized controlled trial that follows these households over 10 years, we find positive effects on consumption (1 SD), food security (0.1 SD), income (0.3 SD), and health (0.2 SD). These effects grow for the first seven years following the transfer and persist until year 10, consistent with the alleviation of a poverty trap. One main channel for persistence is that treated households take better advantage of opportunities to diversify into lucrative wage employment, especially through migration.
    JEL: I32 I38 O12 O15 O22
    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.