nep-exp New Economics Papers
on Experimental Economics
Issue of 2021‒01‒11
28 papers chosen by

  1. Heterogeneous group contests with incomplete information By Vasudha Chopra; Hieu M. Nguyen; Christian A. Vossler
  2. Other-regarding preferences and pro-environmental behaviour: An interdisciplinary review of experimental studies By Heinz, Nicolai; Koessler, Ann-Kathrin
  3. An Experiment on Gender Representation in Majoritarian Bargaining By Andrzej Baranski Author e-mail:; Diogo Geraldes Author e-mail:; Ada Kovaliukaite Author e-mail:; James Tremewan Author e-mail:
  4. Debiasing Through Experience Sampling: The Case of Myopic Loss Aversion. By Laura Hueber; Rene Schwaiger
  5. Policy decisions and evidence use among civil servants: A group decision experiment in Pakistan By Laura Metzger; Adnan Qadir Khan; Teddy Svoronos
  6. The Role of Common-Pool Resources’ Institutional Robustness in a Collective Action Dilemma under Environmental Variations By Ana Alicia Dipierri; Dimitrios Zikos
  7. Proximity Can Induce Diverse Friendships: A Large Randomized Classroom Experiment By Julia M. Rohrer; Tamás Keller; Felix Elwert
  8. To Share or Not to Share: An Experiment on Information Transmission in Networks By Sergio Currarini; Francesco Feri; Bjoern Hartig; Miguel A. Meléndez-Jiménez
  9. Why people give to their governments: The role of outcome-oriented norms. By Raúl López-Pérez; Aldo Ramírez-Almudio
  10. Gender and leadership in organizations: Promotions, demotions and angry workers By Priyanka Chakraborty; Danila Serra
  11. The Effect of Gender and Gender Pairing on Bargaining: Evidence from an Artefactual Field Experiment By Ben D'Exelle; Christine Gutekunst; Arno Riedl
  12. Deriving rules of thumb for facility decision making in humanitarian operations By TURKEŠ, Renata; SÖRENSEN, Kenneth; PALHAZI CUERVO, Daniel
  13. Rearranging the Desk Chairs: A large randomized field experiment on the effects of close contact on interethnic relations By Felix Elwert; Tamás Keller; Andreas Kotsadam
  14. Labor market integration of low-educated refugees By Dahlberg, Matz; Egebark, Johan; Vikman, Ulrika; Özcan, Gülay
  15. Gender Identity, Race, and Ethnicity Discrimination in Access to Mental Health Care: Preliminary Evidence from a Multi-Wave Audit Field Experiment By Patrick Button; Eva Dils; Benjamin Harrell; Luca Fumarco; David Schwegman
  16. A Theory of Quasi-Experimental Evaluation of School Quality By Yusuke Narita
  17. Consumer Sentiment During the COVID-19 Pandemic By Dzung Bui; Lena Draeger; Bernd Hayo; Giang NghiemŸ
  18. Subjective Judgment and Gender Bias in Advice: Evidence from the Laboratory By Silva Goncalves, Juliana; van Veldhuizen, Roel
  19. Conventional or Reverse Magnitude Effect for Negative Outcomes: A Matter of Framing By Breuer, Wolfgang; Soypak, Can K.; Steininger, Bertram
  20. If future generations had a say: An experiment on fair sharing of a common-pool resource across generations By Farjam, Mike; Wolf, Stephan
  21. The Expert and The Charlatan: an Experimental Study in Economic Advice By Aristotelis Boukouras; Theodore Alysandratos; Sotiris Georganas; Zacharias Maniadis
  22. Susceptibility to misinformation: a study of climate change, Covid-19, and artificial intelligence By Gruener, Sven
  23. Information Asymmetries and Remittance Recipient Income: A Field Experiment in Malawi By Kate Ambler; Susan Godlonton
  24. Using Social Recognition to Address the Gender Difference in Volunteering for Low Promotability Tasks By Banerjee, Ritwik; Mustafi, Priyoma
  25. Why Do People Stay Poor? By Clare Balboni; Oriana Bandiera; Robin Burgess; Maitreesh Ghatak; Anton Heil
  26. Determinants of Relational Contract Performance: Experimental Evidence By Wu, Steven Y.
  27. Building Social Cohesion in Ethnically Mixed Schools: An Intervention on Perspective Taking By Sule Alan; Ceren Baysan; Mert Gumren; Elif Kubilay
  28. Artificial Intelligence-Based Consumer Communication by Brick-and-Mortar Retailers in India Leading to Syllogistic Fallacy and Trap – Insights from an Experiment By H. R., Ganesha; Aithal, Sreeramana

  1. By: Vasudha Chopra (Department of Economics, University of Tennessee); Hieu M. Nguyen (Department of Economics, University of Tennessee); Christian A. Vossler (Department of Economics, University of Tennessee)
    Abstract: This study examines how behavior in inter-group contests is altered when players have incomplete information on their opponent. We model a Tullock contest where there are two possible types of groups that are heterogeneous in the incentives they face, and players only know the probability their opponent is a particular group type. Relative to a contest with complete information, we find theoretically that incomplete information lowers contest-level effort in (even) contests between groups of the same type, whereas it increases effort in uneven contests. Through an experiment, we compare three sources of heterogeneity – differences in cost-of-effort, prize value, and group size. For the cost and value treatments, we find that incomplete information increases effort in uneven contests but has no effect in even contests. For the group size treatments, incomplete information has no effect. A theory that assumes players are altruistic towards group members, rather than purely self-interested, is much better at predicting outcomes.
    Keywords: inter-group competition; heterogeneous contests; Tullock contests; incomplete information; public goods; group size paradox; experiments; altruism
    JEL: C72 C92 D74 D82 D91 H41
    Date: 2020–12
  2. By: Heinz, Nicolai; Koessler, Ann-Kathrin
    Abstract: Pro-environmental behaviour (PEB) is often promoted by reinforcing or highlighting own benefits. However, considering that actors also care about the outcomes for others (i.e. they hold other-regarding preferences), PEB may also be encouraged by addressing these other-regarding preferences. In this paper, we review the results from social science experiments where interventions addressing other-regarding preferences were used to promote PEB. Based on our synthesis, we conclude that addressing other-regarding preferences can be effective in promoting (various types of) PEB in some, but not in all instances. Whether an intervention was effective depended inter alia on the pre-established preferences, cost structures and the perceived cooperation of others. Effective interventions included the provision of information on behavioural consequences, perspective-taking, direct appeals, framing and re-categorization. The interventions worked by activating other-regarding preferences, raising awareness about adverse consequences, evoking empathic concern and expanding the moral circle. We propose to take these findings as an impulse to examine policy instruments and institutions in terms of whether they activate and strengthen other-regarding preferences, thereby enabling collective engagement in PEB.
    Keywords: pro-environmental behaviour,experiments,other-regarding preferences,empathic concern,preference activation,review
    JEL: Q56 Y80 D90
    Date: 2021
  3. By: Andrzej Baranski Author e-mail:; Diogo Geraldes Author e-mail:; Ada Kovaliukaite Author e-mail:; James Tremewan Author e-mail: (Division of Social Science)
    Abstract: Does the gender composition of committees affect negotiations in majoritarian bargaining? We report the results of an experiment in which subjects are placed in triads to negotiate the division of a sum of money under majority rule and the gender composition of the group is manipulated, ranging from all female (FFF), female majority (FFM), male majority (MMF), to all male (MMM). Results show that men are more likely to make the opening offer, and contrary to our hypothesis, agreements are reached fastest in MMM and slowest in FFF. The proportion of grand coalitions is increasing in the number of females while minimal winning coalitions (MWCs) increase monotonically in the number of males. MWCs are disproportionately more likely to be same-gender in MMF, which leads to a gender gap in earnings compared to FFM. When provisional MWCs form prior to a final agreement, excluded men are more proactive than excluded women in attempting to break the coalition by making alluring offers, which partially explains why mixed gender MWCs are less frequent in MMF compared to FFM. Notably, some females adopt male-type behavior in MMF regarding their initial proposals and aggressiveness when left out from a MWC.
    Date: 2021–01
  4. By: Laura Hueber; Rene Schwaiger
    Abstract: We introduce a training intervention based on a novel tool to mitigate behavior consistent with myopic loss aversion (MLA). We present the results of a large-scale online experiment with 894 student participants. The study featured a two-step debiasing training intervention based on experience sampling and a subsequent elicitation of MLA. We found that participants at baseline exhibit behavior consistent with MLA, which was not the case for decisionmakers who underwent the debiasing training intervention. Nonetheless, we found no statistically significant difference-in-difference effect of the training intervention on the magnitude of MLA. However, when we focused on the more attentive participants by excluding participants with the 10% longest and 10% shortest processing times on the task relevant instruction screens, the magnitude of the difference-in-difference effect of the training intervention increased strongly and became statistically significant when controlling for age, gender, education, field of study, investment experience, and financial risk preferences.
    Keywords: online experiment, myopic loss aversion, debiasing, experience sampling
    JEL: G11 G41 G51
    Date: 2021–01
  5. By: Laura Metzger; Adnan Qadir Khan; Teddy Svoronos
    Abstract: In a lab-in-field experiment with elite civil servants in Pakistan, we investigate whether groups outperform individuals in a two-staged task which requires effective use of data and evidence. We also study how efficiently groups harness their members' individual knowledge for problem-solving. We do not find a significant difference in individual (first stage) and group performance (second stage). Yet, groups could have significantly improved their performance during the second stage of the task, had they more efficiently collaborated to retrieve their members' respective knowledge. Carefully interpreted in the setting of our experiment, our data suggests that diversity in individual knowledge may hamper effective use of data and evidence for decision-making in small groups of policymakers.
    Keywords: evidence-based policy, adult learning, group decisions, lab-in-field experiment, civil servants, Pakistan
    JEL: A29 C92 I28 I38
    Date: 2020–04
  6. By: Ana Alicia Dipierri; Dimitrios Zikos
    Abstract: Extreme environmental variations, as a phenomenon deriving from climate change, led to an exacerbated uncertainty on water availability and increased the likelihood of conflicts regarding water-dependent activities such as agriculture. In this paper, we investigate the role of conflict resolution mechanisms—one of Ostrom’s acclaimed Design Principles—when social-ecological systems are exposed to physical external disturbances. The theoretical propositions predict that social-ecological systems with conflict-resolution mechanisms will perform better than those without them. We tested this proposition through a framed field experiment that mimicked an irrigation system. This asymmetric setting exposed farmers to two (2) dilemmas: (i) how much to invest in the communal irrigation system’s maintenance and (ii) how much water to extract. The setting added a layer of complexity: water availability depended not only on the investment but also on the environmental variability. Our findings confirmed the theoretical proposition: groups with stronger ‘institutional robustness’ can cope with environmental variations better than those with weaker robustness. However, we also found that some groups, despite lacking conflict-resolution mechanisms, were also able to address environmental variations. We explored potential explanatory variables to these unexpected results. We found that subjects’ and groups’ attributes might address uncertainty and avert conflict. Thus, social-ecological systems’ capacity to respond to external disturbances, such as environmental variations, might not only be a question of Design Principles. Instead, it might also be strongly related to group members’ attributes and group dynamics. Our results pave the way for further research, hinting that some groups might be better equipped for mitigation measures, while others might be better equipped for adaptation measures.
    Keywords: irrigation systems; common-pool resources governance; environmental variability; collective action; institutional robustness; climate change
    Date: 2020–12
  7. By: Julia M. Rohrer (Department of Psychology, University of Leipzig & International Max Planck Research School on the Life Course (LIFE), Max Planck Institute for Human Development, Berlin); Tamás Keller (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. 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); Felix Elwert (Department of Sociology & Department of Biostatistics and Medical Informatics, University of Wisconsin-Madison)
    Abstract: Can outside interventions foster socio-culturally diverse friendships? We executed a large field experiment that randomized the seating charts of 182 primary-school classrooms (N=2,996 students) for the duration of one semester. We found that being seated next to each other increased the probability of a mutual friendship from 15% to 22% on average. Furthermore, induced proximity increased the latent propensity toward friendship equally for all students, regardless of students’ dyadic similarity with respect to educational achievement, gender, and ethnicity. However, the probability of a manifest friendship increased more among similar than among dissimilar students. Our findings demonstrate that a scalable light-touch intervention can affect face-to-face networks and foster diverse friendships in groups that already know each other, but they also highlight that transgressing boundaries defined by ethnicity and gender remains an uphill battle.
    Keywords: Friendship formation, Social networks, Diversity, Homophily, Randomized field experiment, Deskmates
    JEL: C93 I21 I24 J18 Z13
    Date: 2020–12
  8. By: Sergio Currarini; Francesco Feri; Bjoern Hartig; Miguel A. Meléndez-Jiménez
    Abstract: We design an experiment to study how agents make use of information in networks. Agents receive payoff-relevant signals automatically shared with neighbors. We compare the use of information in different network structures, considering games in which strategies are substitute, complement and orthog- onal. To study the incentives to share information across games, we also allow subjects to modify the network before playing the game. We find behavioral deviations from the theoretical prediction in the use of information, which de- pend on the network structure, the position in the network and the strategic nature of the game. There is also a bias toward oversharing information, which is related to risk aversion and the position in the network.
    Keywords: Networks, experiment, information sharing, strategic complements, strategic substitutes, pairwise stability
    JEL: C72 C91 C92 D82 D85
  9. By: Raúl López-Pérez; Aldo Ramírez-Almudio
    Abstract: The social and economic factors leading to selfless acts such as charitable donations have been a central concern in the social sciences. We contribute to this scholarship with an artefactual field experiment in Peru where subjects anonymously decide how much of their endowment they freely donate to the Peruvian government. The standard rational choice model and several well-known models of non-selfish preferences predict zero giving. Yet we observe that around 75% of the subjects give something (N = 164), with substantial heterogeneity. Further, individual donations depend positively on the level of support to the government and beliefs about the average donation. Additional evidence on the role of beliefs comes from one treatment in which these beliefs are exogenously shaped, resulting in a change in the distribution of donations. Our results are consistent with a utility theory based on outcome-oriented social norms, which we develop in detail, and suggest that people are willing to contribute to their governments if they believe that enough others give as well and that the money is not wasted or ‘stolen’ by the government, but used to promote social welfare.
    Keywords: Altruism, Donations, Norms, Public Goods, Social Information
    JEL: D64 D91 H41
  10. By: Priyanka Chakraborty (Allegheny College, Department of Economics); Danila Serra (Texas A&M University, Department of Economics)
    Abstract: Managerial decisions, such as promotions and demotions, please some employees and upset others. We examine whether having to communicate such decisions to employees, and knowing that employees may react badly, have a differential impact on men's and women's self-selection into leadership roles and their performance if they become leaders. In a novel laboratory experiment that simulates corporate decision-making, we find that women are significantly less likely to self-select into a managerial position when employees can send them angry messages. Once in the manager role, there is some evidence of gender differences in decision-making, but no difference in final outcomes, i.e., overall profits. Male and female managers use different language to motivate their employees, yet differences in communication styles emerge only when workers can send angry messages to managers. Finally, low-rank employees send more angry messages to female managers, and are more likely to question their decisions.
    Keywords: Gender Differences, Leadership, Backlash, Experiment.
    JEL: C92 D91 J16
    Date: 2021–01–04
  11. By: Ben D'Exelle; Christine Gutekunst; Arno Riedl
    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-filed 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: C90 J16 O12
    Date: 2020
  12. By: TURKEŠ, Renata; SÖRENSEN, Kenneth; PALHAZI CUERVO, Daniel
    Abstract: In this paper,we investigate the factors that have an impact on the choice of facility configuration for inventory pre-positioning in preparation for emergencies - a critical decision faced by humanitarian managers. Current research in the field is rich with mathematical models and solution algorithms for the problem of pre-positioning emergency supplies. However, due to a lack of a strong mathematical background and/or computational infrastructure, the decision makers rely on simpler rules of thumb to guide their planning. Some managerial implications have been offered in the literature, but these have been derived from sensitivity analyses focused on a single factor and using a single case study, and as such can be misleading as they ignore important interactions between many instance characteristics. We carried out a large experimental study that analyses the effect of different instance characteristics and their interactions on the facility decision making. On the one hand, the outcomes of the study help us identify the most important factors and factor interactions that are further used to yield policy recommendations for facility planning. On the other hand, this study also demonstrates the extent of erroneousness of the guidelines derived from simple analyses, and as such hopefully promotes better experimental designs in the field of humanitarian logistics.
    Date: 2020–03
  13. By: Felix Elwert (Department of Sociology & Department of Biostatistics and Medical Informatics, University of Wisconsin-Madison); Tamás Keller (Computational Social Science - Research Center for Educational and Network Studies, Centre for Social Sciences, Budapest Institute of Economics, Center for Economic and Regional Studies, BudapestTÁRKI Social Research Institute, Budapest 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); Andreas Kotsadam (Ragnar Frisch Centre for Economic Research, Oslo, Norway)
    Abstract: Contact theory and conflict theory offer sharply conflicting predictions about the effects of interethnic exposure on prejudice. Contact theory predicts that close collaborative contact under conditions of equal status causes a reduction in inter-ethnic prejudice. By contrast, conflict theory predicts that shallow or competitive exposure causes an increase in inter-ethnic antipathy. Both theories are backed by rigorous field-experimental evidence. However, much of this evidence tests each theory under arguably extreme conditions. Therefore, the boundaries of the scope conditions for contact and conflict theory remain unclear: where is the line between close versus shallow, or collaborative versus competitive, inter-ethnic exposures? We test the consequences of inter-ethnic exposure in a natural and non-extreme setting by executing a large, well-powered, and pre-registered randomized field experiment on inter-ethnic discrimination in 40 Hungarian schools. We show that neither manipulating the closeness of interethnic contact within classrooms, nor variation in inter-ethnic exposure across classrooms, has an effect on non- Roma students' inter-ethnic discrimination. These findings suggest that inter-ethnic contact may be neutral with respect to discrimination in many everyday settings, thus failing both to fulfill the hopes of contact theory and to actualize the concerns of conflict theory.from two waves of voluntary online surveys. Students with the highest socioeconomic status (SES) experienced a marginally significant absolute increase in DG, opening up a relative advantage between low- and high-SES students. The additional effort that high-SES parents invested due to the flexible home-office arrangements into the control and support of their offspring’s’ learning may have spurred these changes. Students’ DG is thus malleable according to the quantity and quality of time parents spend with their children.
    Keywords: Contact theory, Conflict theory, Deskmates, Inter-ethnic prejudice, Randomized field experiment
    JEL: C93 I21 I24 J15 J18 Z13
    Date: 2020–12
  14. By: Dahlberg, Matz (IFAU - Institute for Evaluation of Labour Market and Education Policy); Egebark, Johan (Arbetsförmedlingen (Swedish PES)); Vikman, Ulrika (IFAU - Institute for Evaluation of Labour Market and Education Policy); Özcan, Gülay (Arbetsförmedlingen (Swedish PES))
    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: 2020–11–30
  15. By: Patrick Button; Eva Dils; Benjamin Harrell; Luca Fumarco; David Schwegman
    Abstract: A broad body of interdisciplinary research establishes that transgender and non-binary individuals face discrimination across many contexts, including healthcare. Simultaneously, transgender individuals face various mental health disparities, including higher rates of depression and anxiety, suicidality, and PTSD. Therefore, understanding the role of discrimination in access to mental health care is essential. However, no previous research quantifies the extent to which transgender and non-binary people face discrimination in mental healthcare markets. We provide the first experimental evidence, using an audit study, of the extent to which cisgender women, transgender women, transgender men, non-binary people, and racial and ethnic minorities (African American and Hispanic individuals) face discrimination in access to mental health services. While data collection is ongoing, we find significant discrimination against transgender or non-binary African Americans and Hispanics in access to mental health care appointments.
    JEL: C93 I11 I14 I18 J15 J16
    Date: 2020–12
  16. By: Yusuke Narita (Massachusetts Institute of Technology)
    Abstract: Many centralized school admissions systems use lotteries to ration limited seats at oversubscribed schools. The resulting random assignment is used by empirical researchers to identify the effects of schools on outcomes like test scores. I first find that the two most popular empirical research designs may not successfully extract a random assignment of applicants to schools. When do the research designs overcome this problem? I show the following main results for a class of data-generating mechanisms containing those used in practice: The “first-choice” research design extracts a random assignment under a mechanism if the mechanism is strategy-proof for schools. In contrast, the other “qualification instrument” research design does not necessarily extract a random assignment under any mechanism. The former research design is therefore more compelling than the latter. Many applications of the two research designs need some implicit assumption, such as large-sample approximately random assignment, to justify their empirical strategy.
    Keywords: market design, natural experiment, school effectiveness
    JEL: C93 D47 I24
    Date: 2020–12
  17. By: Dzung Bui (Philipps University Marburg); Lena Draeger (Leibniz University of Hannover); Bernd Hayo (Philipps University Marburg); Giang NghiemŸ (Leibniz University of Hannover)
    Abstract: We analyze consumer sentiment with a novel survey of Thai and Vietnamese consumers conducted in May 2020, that is, shortly after the end of the immediate lockdown due to the COVID-19 pandemic. In a randomized control trial, we expose subgroups of the survey respondents to four different information treatments: (1) how their country ranks in a global survey on agreement or disagreement with the government's response to COVID-19, (2) how the country compares in a global survey on the appropriateness of the general public's reaction to the pandemic, (3) the negative unemployment outlook due to the pandemic, and (4) the positive effects of social distancing for the spread of the virus. First, our results show that consumers are more optimistic if they expect higher GDP growth and trust the government in dealing with the crisis, whereas having stronger concerns about their household's financial situation due to COVID-19 is related to less optimistic sentiment. Second, we find that the information treatments only weakly affect consumer sentiment. However, consumer sentiment is strongly affected by treatment (1) and (2) when they go against respondents' previously held views. Finally, we discover large differences between the two countries.
    Keywords: Consumer sentiment; COVID-19; randomized control trial (RCT); survey experiment; government trust; macroeconomic expectations; Thailand; Vietnam
    JEL: E71 H12 I12 I18 Z18
    Date: 2020
  18. By: Silva Goncalves, Juliana (University of Sydney, Australia); van Veldhuizen, Roel (Department of Economics, Lund University)
    Abstract: Better understanding and reducing gender gaps in the labor market remains an important policy goal. We study the role of advice in sustaining these gender gaps using a laboratory experiment. In the experiment, “advisers” advise “workers” to choose between a more ambitious and a less ambitious task based on the worker’s subjective self-assessment. We expected female workers to be less confident and advisers to hold gender stereotypes, leading to a gender bias in advice. However, we find no evidence that women are less confident or that advice is gender-biased. Our results contribute to our understanding of the mechanisms driving gender differences in the labor market. They also call for caution when making general interpretations of research findings pointing to a gender bias in specific settings.
    Keywords: Advice; Subjective judgment; Gender bias
    JEL: C91 D91 J16
    Date: 2020–12–14
  19. By: Breuer, Wolfgang (RWTH Aachen University, Department of Finance, Aachen, Germany); Soypak, Can K. (RWTH Aachen University, Department of Finance, Aachen, Germany); Steininger, Bertram (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: We present and expand existing theories about why individuals may assess positive outcomes differently from negative outcomes in intertemporal choices. All of our theories – based on utility or cost considerations – predict a conventional magnitude effect for positive outcomes, i.e., a negative relation between outcome size and subjective discount rates. For negative outcomes, however, implications are different for utility- and cost-based approaches. We argue that the relevance of utility-based aspects is strengthened in a money frame, leading to a conventional magnitude effect even for negative outcomes, whereas cost-based considera¬tions gain in importance in an interest rate frame, implying, in contrast, a “reverse” magnitude effect, i.e. higher discount rates for (absolutely) higher outcome size. By conducting a web-based experiment with 676 participants, we confirm our theoretical findings and conclude: the conventional magnitude effect prevails for positive outcomes in the money and the interest rate frame and for negative outcomes in the money frame. However, there is a reverse magnitude effect for negative outcomes in the interest rate frame. Our results might help to better understand prevailing magnitude effects in practical applications and might also be apt to derive suggestions for better designing of intertemporal decision problems.
    Keywords: Discounting anomalies; Intertemporal choice; Framing; Magnitude effect; Reverse magnitude effect
    JEL: D14 D90 D91 G02 G12
    Date: 2020–12–28
  20. By: Farjam, Mike; Wolf, Stephan
    Abstract: Through an online experiment with 682 participants, we test how inter-generational resource sharing is affected by granting veto power to later generations. We specifically study the over-use of a common-pool resource (CPR) by early generations at the expense of later generations and examine how the veto empowerment of later generations can be used to restrain egoistic tendencies. We compare sequential ultimatum and dictator games of various lengths and find that (1) the CPR consumption of early generations does not depend on the number of generations that follow them; (2) the veto empowerment of later generations leads to a fairer, but ultimately less efficient use of the CPR across generations; and (3) the vetoes are used more carefully if not only previous generations, but also future generations that do not yet have access to the resource are affected by the veto.
    Date: 2021–01–07
  21. By: Aristotelis Boukouras; Theodore Alysandratos; Sotiris Georganas; Zacharias Maniadis
    Abstract: How do people choose what economic advice to heed? We develop a set of validated multiple-choice questions on economic policy problems, to examine empirically the persuasiveness of expert versus populist advice. We define populism as advice that conforms to commonly held beliefs, even when wrong. Two (computerised) advisers suggest answers to each question, and experimental participants are incentivised to choose the most accurate adviser. Do participants choose the high-accuracy adviser (`the Expert'), or the low-accuracy one (`the Charlatan'), whose answers are designed to be similar to the modal participant's priors? Our participants overwhelmingly choose the Charlatan, and this is only slowly and partially reversed with sequential feedback on the correct answer. We develop Bayesian models to determine optimal choice benchmarks, but find that behaviour is best explained by a naive choice model akin to reinforcement learning with high inertia
    Keywords: Democracy, Economic Literacy, Expert Advice, Populism
    JEL: C91 A11
    Date: 2020–07
  22. By: Gruener, Sven
    Abstract: This study explores whether susceptibility to misinformation is context dependent. We conduct a survey experiment in which subjects had to rate the reliability of several statements in the fields of climate change, Covid-19, and artificial intelligence. There is some evidence for a monological belief system, i.e., being susceptible to one statement containing misinformation is correlated with falling to other false news stories, in all three contexts. The main findings to explain the susceptibility to misinformation can be summarized as follows: trust in social networks is positively associated with falling for misinformation in all contexts. There are also several context-related differences: Individuals are less likely to be susceptible to misinformation in the contexts of climate change and Covid-19 if they have a higher risk perception, tend to take a second look at a problem (i.e., willingness to think deliberately), update their prior beliefs to new evidence (actively open-minded thinking), and trust in science and mass media. Within the context of artificial intelligence, being less prone to conspiracy theories in general and lower subjective knowledge helps not to be susceptible to misinformation.
    Date: 2021–01–07
  23. By: Kate Ambler (International Food Policy Research Institute); Susan Godlonton (Williams College)
    Abstract: A growing literature suggests that asymmetric information about migrant income may affect the remittance behavior of migrants. In this study we examine whether improving information about the economic status of recipients impacts migrant remittance decisions. In a sample of internal migrants and their remittance recipients in Malawi, we provide a randomly chosen half of migrants with information regarding the agricultural production of their recipients’ farmer clubs. We test whether this information impacts remittances sent immediately following information provision and over the next three weeks. We find no evidence that the information impacts remittances, but our estimates are imprecise.
    Keywords: Labor Supply, Agriculture, Malawi
    Date: 2020–12
  24. By: Banerjee, Ritwik (Indian Institute of Management); Mustafi, Priyoma (University of Pittsburgh)
    Abstract: Research shows that women volunteer significantly more for tasks that people prefer others to complete. Such tasks carry little monetary incentives because of their very nature. We use a modified version of the volunteer's dilemma game to examine if non-monetary interventions, particularly, social recognition can be used to change the gender norms associated with such tasks. We design three treatments, where a) a volunteer receives positive social recognition, b) a non-volunteer receives negative social recognition, and c) a volunteer receives positive, but a non-volunteer receives negative social recognition. Our results indicate that competition for social recognition increases the overall likelihood that someone in a group has volunteered. Positive social recognition closes the gender gap observed in the baseline treatment, so does the combination of positive and negative social recognition. Our results, consistent with the prior literature on gender differences in competition, suggest that public recognition of volunteering can change the default gender norms in organizations and increase efficiency at the same time.
    Keywords: gender, social recognition, volunteering, low promotability tasks
    JEL: J16 J71 M12 D91
    Date: 2020–12
  25. By: Clare Balboni; Oriana Bandiera; Robin Burgess; Maitreesh Ghatak; Anton Heil
    Abstract: There are two views as to why people stay poor. The equal opportunity view emphasizes that differences in individual traits like talent or motivation make the poor choose low productivity jobs. The poverty traps view emphasizes that access to opportunities depends on initial wealth and hence poor people have no choice but to work in low productivity jobs. We test the two views using the random allocation of an asset transfer program that gave some of the poorest women in Bangladesh access to the same job opportunities as their wealthier counterparts in the same villages. The data rejects the null of equal opportunities. Exploiting small variation in initial endowments, we estimate the transition equation and find that, if the program pushes individuals above a threshold level of initial assets, then they escape poverty, but, if it does not, they slide back into poverty. Structural estimation of an occupational choice model reveals that almost all beneficiaries are misallocated at baseline and that the gains arising from eliminating misallocation would far exceed the costs. Our findings imply that large one-off transfers that enable people to take on more productive occupations can help alleviate persistent poverty.
    Keywords: poverty traps, misallocation
    JEL: O10
    Date: 2020–03
  26. By: Wu, Steven Y.
    Abstract: This study examines the determinants of relational contractual performance using data from a series of laboratory experiments. There is currently limited empirical evidence on the determinants of contractual performance, which includes contractual acceptance, and the delivery of promised quantity/quality under the terms of the contract. While theory predicts that the primary drivers of contractual performance are high discount factors, and contract designs that obey individual rationality and self-enforcement constraints, the empirical analysis suggests that other determinants such as a history of prior cooperation can matter as much, if not more, than the theoretical constraint conditions.
    Keywords: Financial Economics, Research Methods/ Statistical Methods
    Date: 2021–01
  27. By: Sule Alan; Ceren Baysan; Mert Gumren; Elif Kubilay
    Abstract: We evaluate the impact of an educational program that aims to build social cohesion in ethnically mixed schools by developing perspective-taking ability in children. The program is implemented in a high-stakes context where the ethnic composition in schools has changed due to a massive influx of refugee children. We measure a comprehensive set of outcomes that characterize a cohesive school environment, including peer violence incidents, the prevalence of inter-ethnic social ties, and prosocial behavior. Using randomized variation in program implementation, we find that the program significantly lowers peer violence and victimization on school grounds. The program also reduces the likelihood of social exclusion and increases inter-ethnic social ties in the classroom. We find that the program significantly improves prosocial behavior, measured by incentivized tasks: treated students exhibit significantly higher trust, reciprocity, and altruism toward each other as well as toward anonymous out-school peers. We show that this enhanced prosociality is welfare improving from the ex-post payoff perspective. We investigate multiple channels that could explain the results, including ethnic bias, impulsivity, empathetic concern, behavioral norms, and perspective-taking. Children’s increased effort to take others’ perspectives emerges as the most robust mechanism to explain our results.
    Keywords: social cohesion, social exclusion, ethnic segregation, perspective taking
    JEL: I24 I28 C93
    Date: 2020
  28. By: H. R., Ganesha; Aithal, Sreeramana
    Abstract: It is observed that a majority of organized brick-and-mortar (B&M) retailers in India believe that they have adopted the latest Artificial Intelligence-based consumer communication (AIBCC) tools/solutions and are yielding accurate outputs that can be used for interpretation, conclusion, and decision-making concerning consumer communications. This belief/assumption in itself is a classic example of a syllogistic trap. This study reveals that the B&M retailers in India are least worried about AIBCC tools/solutions repeatedly sending promotional/campaign messages to consumers based on their past transactional data till they come back again to the store without knowing the ‘Purpose of Previous Purchase’. This is mere because the cost of such communications is negligible (Just costs about 1 US dollar for sending 500 messages to a mobile phone number). We have also observed that the B&M retailers are unaware of the potential negative impacts of false/fake/artificial promotional/campaign messages being sent to consumers as a result of syllogistic fallacy caused by the AIBCC tools/solutions on the overall brand image in the consumers’ minds. Experimentation results demonstrate that the existing belief of the organized B&M retailers in India which assumes that the AIBCC tools/solutions are accurate is just a misconception and does not hold. On the other hand, when we experimented by identifying two main gaps (input and output-level) in their existing AIBCC tool/solution for six months at over 35 percent stores of a select retailer, the real treatment effect indicated that the experimental group of stores has shown (i) two times higher rate of conversion to any promotional/campaign messages; (ii) 19 times better in capturing the ‘Purpose of Purchase’ field; (iii) 22% lesser consumer communication expenses; (iv) 22.80% higher revenue generation; and most importantly; (v) 4.25 times higher store-level profits in comparison with the control group of stores. We have also noted that in the control group of stores about 36% of the customers/consumers who have received the promotional/campaign messages from the automated AIBCC tool/solution were not real consumers. Besides finding evidence of the syllogistic fallacy and trap, our results are also consistent with our ‘Theory of B&M Retailing in India and the concept of ‘Debiasing by Instruction’ by Evans et al.
    Keywords: Indian Retail; Brick-and-Mortar Retail; Artificial Intelligence; Digital Analytics; Consumer Communication; Syllogistic Trap; Syllogistic Fallacy; Customer Relationship Management; CRM
    JEL: M15 M31 M39
    Date: 2020–12–15

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.