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on Experimental Economics |
| By: | Ambler, Kate; Jones, Kelly M.; Recalde, Maria P. |
| Abstract: | We study the validity of experimental methods designed to measure preferences for intra-household resource control among spouses in Ghana and Uganda. We implement two incentivized tasks; (1) a game that measures willingness to pay to control resources, and (2) private and joint dictator games that measure preferences for resource allocation and the extent to which those preferences are reflected in joint decisions. Behavior in the two tasks is correlated, suggesting that they describe similar underlying latent variables. In Uganda the experimental measures are robustly correlated with a range of household survey measures of resource control and women’s empowerment and suggest that simple private dictator games may be as informative as more sophisticated tasks. In Ghana, the experimental measures are not predictive of survey indicators, suggesting that context may be an important element of whether experimental measures are informative. |
| Keywords: | GHANA; WEST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; UGANDA; EAST AFRICA; empowerment; gender; women; women's empowerment; bargaining power; field experimentation; decision making; households; intra-household resource control; lab-in-the-field experiment |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1984&r=all |
| By: | Bergantino, Angela Stefania; Morone, Andrea; Gil Gallen, Sara |
| Abstract: | We investigate the effect of intragroup competition and risky marginal per capita returns on subjects' cooperative behavior in a one-shot public good game – following the wellknown approach proposed by Fischbacher, Gächter, and Fehr (2001) and extending the Colasante et al. (2019) and Colasante et al. (2018) parametrization. We are aiming to study the interaction between environment and social preferences and test the existence of a causal relationship of risk and competition over cooperative behavior when an individual’s benefit of the public good is heterogeneous and uncertain. Our results report experimental evidence about competition fostering cooperative behavior leading a raise contribution for all the subjects regardless of their social preferences. On the contrary, risky has a detrimental effect on cooperative behavior due to encouraging free riding. |
| Keywords: | risk; competition; conditional cooperator; marginal per capita return. |
| JEL: | C72 C92 D80 H41 |
| Date: | 2020–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:104465&r=all |
| By: | Geraldes, Diogo (Utrecht University); Riedl, Arno (Maastricht University); Strobel, Martin (Maastricht University) |
| Abstract: | The gender gap in income and leadership positions in many domains of our society is an undisputed pervasive phenomenon. One explanation for the disadvantaged position of women put forward in the economic and psychology literature is the weaker response of women to competitive incentives. Despite the large amount of literature trying to explain this fact, the precise mechanisms behind the gender difference in competitive responsiveness are still not fully uncovered. In this paper, we use laboratory experiments to study the potential role of stereotype threat on the response of men and women to competitive incentives in mixed-gender competition. We use a real effort math task to induce an implicit stereotype threat against women in one treatment. In additional treatments we, respectively, reinforce this stereotype threat and induce a stereotype threat against men. In contrast to much of the literature we do not observe that women are less competitive than men, neither when there is an implicit nor when there is an explicit stereotype threat against women. We attribute this to two factors which differentiates our experiment from previous ones. We control, first, for inter-individual performance differences using a within-subject design, and, second, for risk differences between non-competitive and competitive environments by making the former risky. We do find an adverse stereotype threat effect on the performance of men when there is an explicit stereotype threat against them. In that case any positive performance effect of competition is nullified by the stereotype threat. Overall, our results indicate that a stereotype threat has negative competitive performance effects only if there is information contradicting an existing stereotype. This suggests that the appropriate intervention to prevent the adverse effect of stereotype threat in performance is to avoid any information referring to the stereotype. |
| Keywords: | competitiveness, gender gaps, stereotype threat, experiment |
| JEL: | C91 D01 J16 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13991&r=all |
| By: | Marco Castillo; John List; Ragan Petrie; Anya Samek |
| Abstract: | We use field experiments with nearly 900 children to investigate how skills developed at ages 3-5 drive later-life outcomes. We find that skills map onto three distinct factors - cognitive skills, executive functions, and economic preferences. Returning to the children up to 7 years later, we find that executive functions, but not cognitive skills, predict the likelihood of receiving disciplinary referrals. Economic preferences have an independent effect: children who displayed impatience at ages 3-5 were more likely to receive disciplinary referrals. Random assignment to a parenting program reduced disciplinary referrals. This effect was not mediated by skills or preferences. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00723&r=all |
| By: | Galeotti, Fabio (CNRS, GATE); Maggian, Valeria (Ca' Foscari University of Venice); Villeval, Marie Claire (CNRS, GATE) |
| Abstract: | Deterrence institutions are widely used in modern societies to discourage rule violations but whether they have an impact beyond their immediate scope of application is usually ignored. Using a quasi-experiment, we found evidence of spillover effects across contexts. We identified fraudsters and non-fraudsters on public transport who were or not exposed to ticket inspections by the transport company. We then measured the intrinsic honesty of the same persons in a new, unrelated context where they could misappropriate money. Instead of having an expected educative effect across contexts, the exposure to deterrence practices increased unethical behavior of fraudsters but also, strikingly, of non-fraudsters, especially when inspection teams were larger. Learning about the prevailing norm is the most likely channel of this spillover effect. |
| Keywords: | deterrence institutions, intrinsic honesty, spillovers, quasi-experiment |
| JEL: | C93 K42 D02 D91 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13977&r=all |
| By: | Satoshi Nakano (R&D Division, INTAGE Inc.); Ryo Kato (Research Institute for Economics and Business Administration, Kobe University); Makito Takeuchi (Faculty of Business Administration, Tohoku Gakuin University); Takahiro Hoshino (Department of Economics, Keio University) |
| Abstract: | This study aims to improve survey response behavior by including schedules of reinforcement with financial incentives in a 12-week real-world field experiment. We found that lottery based-incentives produce more resistance to extinction and are also more cost-efficient than fixed honorariums, despite having the same expectations. We also found that immediate reinforcement and the high chance, low prize incentives reduce underreporting bias. In addition, we confirmed the resistance to extinction when switching incentives and sustained responses due to lottery-based incentives. Moreover, we evaluated the past reward winning experience and the habit of past responses, and found that experience influenced subsequent survey responses. Thus, participants' responses are dependent on incentive programs. |
| Keywords: | Resistance to extinction, Financial incentive, Underreporting bias, Schedule of reinforcement, Survey response |
| JEL: | D10 D91 M31 |
| Date: | 2020–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2020-020&r=all |
| By: | Benistant, Julien (GATE, University of Lyon); Galeotti, Fabio (CNRS, GATE); Villeval, Marie Claire (CNRS, GATE) |
| Abstract: | We study a dynamic variant of the die-under-the-cup task where players can repeatedly misreport the outcomes of consecutive die rolls to earn more money, either under a non- competitive piece rate scheme or in a two-player competitive tournament. In this dynamic setting we test (i) whether giving continuous feedback (vs. final ex post feedback) on the opponent's reported outcome to both players encourages cheating behavior, and (ii) to what extent this influence depends on the incentive scheme in use (piece rate vs. tournament). We also vary whether the opponent is able to cheat or not. We find that people lie more when placed in a competitive rather than a non-competitive setting, but only if both players can cheat in the tournament. Continuous feedback on the counterpart's reports increases cheating under the piece-rate scheme but not in a competitive setting. Our results provide new insights on the role that feedback plays on cheating behavior in dynamic settings under different payment schemes, and shed light on the origins of the effect of competition on dishonesty. |
| Keywords: | dishonesty, feedback, peer effects, competitive incentives, experiment |
| JEL: | C92 M52 D83 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14014&r=all |
| By: | Castro, Juan Francisco (Universidad del Pacifico); Velásquez, Daniel (Universidad del Pacifico); Beltrán, Arlette (Universidad del Pacifico); Yamada, Gustavo (Universidad del Pacifico) |
| Abstract: | We carry out a randomized controlled trial to evaluate the effect of three different types of messages sent to taxpayers on their compliance with the rental income tax (direct effect) and the spillovers produced on payments related to the capital gains and the self-employment income taxes. One message highlights detection, another appeals to social norms, and the third type appeals to altruism. This is the first study to evaluate if these messages can produce spillovers across taxes and to perform a long-term follow-up. This is important to determine if the treatment increases tax revenues. We find that the message addressing detection produces a positive and permanent direct effect and a negative but transitory spillover on the other two taxes. Overall, it increases tax revenues by US$3.92 per dollar spent in the long run. The message appealing to social norms has no direct effect but produces a permanent negative spillover on the capital gains tax. Ignoring this spillover would have lead one to conclude that this message is innocuous when in fact produces a loss of US$ 5.20 per dollar spent in the long run. The message appealing to altruism produces a transitory negative effect and no spillovers, and has no effect on tax revenues in the long run. |
| Keywords: | social norms, altruism, tax evasion, randomized controlled trial, Latin America |
| JEL: | D91 K42 H24 H26 H41 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13974&r=all |
| By: | Carrieri, Vincenzo (Magna Graecia University); De Paola, Maria (University of Calabria); Gioia, Francesca (University of Milan) |
| Abstract: | How do people balance health/wealth concerns during a pandemic? And, how does the communication of this trade-off affect individual preferences? We address these questions using a field experiment involving around 2000 students enrolled in a large university in Italy. We design four treatments where the trade-off is communicated using different combinations of a positive framing that focuses on protective strategies and a negative framing which refers to potential costs. We find that positive framing on the health side induces individuals to give greater relevance to the health dimension. The effect is sizeable and highly effective among many different audiences, especially females. Importantly, this triggers a higher level of intention to adhere to social distancing and precautionary behaviors. Moreover, irrespective of the framing, we find a large heterogeneity in students' preferences over the trade-off. Economics students and students who have directly experienced the economic impact of the pandemic are found to favor wealth-centered policies. |
| Keywords: | COVID-19, health, economic costs, trade-off, framing |
| JEL: | D04 D83 D84 D91 H12 I10 J10 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13943&r=all |
| By: | List, John A. (University of Chicago); Momeni, Fatemeh (University of Chicago); Zenou, Yves (Monash University) |
| Abstract: | The behavioral revolution within economics has been largely driven by psychological insights, with the sister sciences playing a lesser role. This study leverages insights from sociology to explore the role of neighborhoods on human capital formation at an early age. We do so by estimating the spillover effects from a large-scale early childhood intervention on the educational attainment of over 2,000 disadvantaged children in the United States. We document large spillover effects on both treatment and control children who live near treated children. Interestingly, the spillover effects are localized, decreasing with the spatial distance to treated neighbors. Perhaps our most novel insight is the underlying mechanisms at work: the spillover effect on non-cognitive scores operate through the child's social network while parental investment is an important channel through which cognitive spillover effects operate. Overall, our results reveal the importance of public programs and neighborhoods on human capital formation at an early age, highlighting that human capital accumulation is fundamentally a social activity. |
| Keywords: | early education, social activity, neighborhood, field experiment, spillover effects, non-cognitive skills |
| JEL: | C93 I21 R1 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13966&r=all |
| By: | Bui, Dzung; Dräger, Lena; Hayo, Bernd; Nghiem, Giang |
| 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: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-680&r=all |
| By: | Andersson, Ola (Department of Economics, Uppsala University, UCFS); Campos-Mercade, Pol (University of Copenhagen, Denmark); Meier, Armando N. (University of Lausanne and University of Basel, Switzerland); Wengström, Erik (Lund University, Sweden, and Hanken School of Economics, Finland) |
| Abstract: | We show that the anticipation of COVID-19 vaccines reduces voluntary social distancing. In a large-scale preregistered survey experiment with a representative sample, we study whether providing information about the safety, effectiveness, and availability of COVID-19 vaccines affects compliance with public health guidelines. We find that vaccine information reduces peoples’ voluntary social distancing, adherence to hygiene guidelines, and their willingness to stay at home. Vaccine information induces people to believe in a swifter return to normal life and puts their vigilance at ease. The results indicate an important behavioral drawback of the successful vaccine development: An increased focus on vaccines can lead to bad health behaviors and accelerate the spread of the virus. The results imply that, as vaccinations start and the end of the pandemic feels closer, existing policies aimed at increasing social distancing will be less effective and stricter policies might be required. |
| Keywords: | Economic epidemiology; Social distancing; Vaccination; Information |
| JEL: | D83 D91 I12 I18 |
| Date: | 2021–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1378&r=all |
| By: | Prateek Chandra Bhan |
| Abstract: | This paper offers experimental evidence on the significance of role-models on fostering hope, increasing effort and improving the academic performance of primary school students in India. Students from private schools were individually randomised to a treatment or a placebo group. Treated students watch a short film produced as a part of the experiment in Jaipur, Rajasthan - the study location. The placebo group students watch a television show for kids, ‘Malgudi Days’. I find a 0.17 standard deviation (s.d.) increase in student hope and 0.25 s.d increase in their effort, immediately after the intervention. The one-off treatment leads to a 0.16 s.d. increase on standardised test scores in English, six-weeks after the intervention. Along with hope, I find significant improvements in students’ self-efficacy or optimism and happiness. A cost-effectiveness analysis highlights role-models as a promising treatment intervention tool that can have an effect on student motivation and their learning outcomes. |
| Keywords: | Role models, hope, effort, education, primary school, India. |
| JEL: | O12 I25 I21 J24 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2021_01&r=all |
| By: | Anna Lovasz (Centre for Economic and Regional Studies, Toth Kalman u. 4. Budapest, 1097 Hungary and University of Washington Tacoma, 1900 Commerce Street, Tacoma, WA 98402-3100, USA); Boldmaa Bat-Erdene (Eotvos Lorand University, Pazmany Peter setany 1/a, Budapest, 1117 Hungary); Ewa Cukrowska-Torzewska (University of Warsaw, Faculty of Economic Sciences, D³uga 44/50, 00-241 Warsaw, Poland); Mariann Rigo (University of Düsseldorf, Institute of Medical Sociology, Moorenstr. 5, 40225 Düsseldorf, Germany); Agnes Szabo-Morvai (Centre for Economic and Regional Studies, Toth Kalman u. 4. Budapest, 1097 Hungary and University of Debrecen, Economics Department, Böszörményi út 132, Debrecen, 4032 Hungary) |
| Abstract: | We study gender differences in the impacts of competition and subjective feedback, using an online game with pop-up texts and graphics as treatments. We define 8 groups: players see a Top 10 leaderboard or not (competitiveness), and within these, they receive no feedback, supportive feedback, rewarding feedback, or "trash talk" (feedback type). Based on 5191 participants, we find that competition only increases the performance of males. However, when it is combined with supportive feedback, the performance of females also increases. This points to individualized feedback as a potential tool for decreasing gender gaps in competitive settings such as STEM fields. |
| Keywords: | Gender Gaps, Competition, Supervisory Feedback |
| JEL: | I20 J16 J24 M54 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2101&r=all |
| By: | Haushofer, Johannes (Department of Economics, Stockholm University and); Mudida, Robert (Strathmore Business School); Shapiro, Jeremy (Busara Center for Behavioral Economics) |
| Abstract: | We study the economic and psychological effects of a USD 1076 PPP unconditional cash transfer, a five-week psychotherapy program, and the combination of both interventions among 5,756 individuals in rural Kenya. One year after the interventions, cash transfer recipients had higher consumption, asset holdings, and revenue, as well as higher levels of psychological well-being than control households. In contrast, the psychotherapy program had no measurable effects on either psychological or economic outcomes, both for individuals with poor mental health at baseline and others. The effects of the combined treatment are similar to those of the cash transfer alone. |
| Keywords: | Unconditional cash transfers; Psychotherapy; Randomized experiment |
| JEL: | C93 D90 O12 |
| Date: | 2021–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1377&r=all |
| By: | Bagues, Manuel (University of Warwick); Roth, Christopher (University of Warwick) |
| Abstract: | We study the long-run effects of contact with individuals from other regions on beliefs, preferences and national identity. We combine a natural experiment, the random assignment of male conscripts to different locations throughout Spain, with tailored survey data. Being randomly assigned to complete military service outside of one's region of residence fosters contact with conscripts from other regions, and increases sympathy towards people from the region of service, measured several decades later. We also observe an increase in identification with Spain for individuals originating from regions with peripheral nationalism. Our evidence suggests that intergroup exposure in early adulthood can have long-lasting effects on individual preferences and national identity. |
| Keywords: | interregional contact, intergroup exposure, beliefs, preference formation, identity |
| JEL: | R23 D91 Z1 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13964&r=all |
| By: | Torsten Heinrich; Yoojin Jang; Luca Mungo; Marco Pangallo; Alex Scott; Bassel Tarbush; Samuel Wiese |
| Abstract: | We show that the playing sequence--the order in which players update their actions--is a crucial determinant of whether the best-response dynamic converges to a Nash equilibrium. Specifically, we analyze the probability that the best-response dynamic converges to a pure Nash equilibrium in random $n$-player $m$-action games under three distinct playing sequences: clockwork sequences (players take turns according to a fixed cyclic order), random sequences, and simultaneous updating by all players. We analytically characterize the convergence properties of the clockwork sequence best-response dynamic. Our key asymptotic result is that this dynamic almost never converges to a pure Nash equilibrium when $n$ and $m$ are large. By contrast, the random sequence best-response dynamic converges almost always to a pure Nash equilibrium when one exists and $n$ and $m$ are large. The clockwork best-response dynamic deserves particular attention: we show through simulation that, compared to random or simultaneous updating, its convergence properties are closest to those exhibited by three popular learning rules that have been calibrated to human game-playing in experiments (reinforcement learning, fictitious play, and replicator dynamics). |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2101.04222&r=all |
| By: | Morin, Olivier (Max Planck Society); Jacquet, Pierre O. (Ecole Normale Supérieure); Vaesen, Krist; Acerbi, Alberto (Brunel University London) |
| Abstract: | Social information is immensely valuable. Yet we waste it. The information we get from observing other humans and from communicating with them is a cheap and reliable informational resource. It is considered the backbone of human cultural evolution. Theories and models focused on the evolution of social learning show the great adaptive benefits of evolving cognitive tools to process it. In spite of this, human adults in the experimental literature use social information quite inefficiently: they do not take it sufficiently into account. A comprehensive review of the literature on five experimental tasks documented 45 studies showing social information waste, and 4 studies showing social information being over-used. These studies cover “egocentric discounting” phenomena as studied by social psychology, but also include experimental social learning studies. Social information waste means that human adults fail to give social information its optimal weight. Both proximal explanations and accounts derived from evolutionary theory leave crucial aspects of the phenomenon unaccounted for: egocentric discounting is a pervasive effect that no single unifying explanation fully captures. Cultural evolutionary theory’s insistence on the power and benefits of social influence is to be balanced against this phenomenon. |
| Date: | 2020–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:rqcdf&r=all |
| By: | Yuki Takahashi |
| Abstract: | Do competent women receive unfavorable treatment than equally competent men? I study this question in a laboratory experiment where unfavorable treatment has material consequences. I find that neither men nor women treat competent women less favorably; if anything, both men and women treat competent women slightly more favorably than equally competent men. The findings provide a piece of evidence that competent women may not necessarily receive unfavorable treatment in settings with material consequences, which may shed new light on hiring and promotion practices in labor markets. |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2012.04591&r=all |
| By: | Kiessling, Lukas; Chowdhury, Shyamal K.; Schildberg-Hörisch, Hannah; Sutter, Matthias |
| Abstract: | We study whether and how parents interfere paternalistically in their children's intertemporal decision-making. Based on experiments with over 2,000 members of 610 families, we find that parents anticipate their children's present bias and aim to mitigate it. Using a novel method to measure parental interference, we show that more than half of all parents are willing to pay money to override their children's choices. Parental interference predicts more intensive parenting styles and a lower intergenerational transmission of patience. The latter is driven by interfering parents not transmitting their own present bias, but molding their children's preferences towards more time-consistent choices. |
| Keywords: | Parental paternalism,Time preferences,Convex time budgets,Present bias,Intergenerational transmission,Parenting styles,Experiment |
| JEL: | C90 D1 D91 D64 J13 J24 O12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:358&r=all |
| By: | Ahmed, Akhter; Hidrobo, Melissa; Hoddinott, John F.; Koch, Bastien; Roy, Shalini; Tauseef, Salauddin |
| Abstract: | Social protection programs are primarily focused on influencing household behavior in the short term, increasing consumption to reduce poverty and food insecurity, and promoting investments in human capital. A large body of evidence across numerous settings shows that cash and food transfer programs are highly effective in doing so. However, there is growing interest in understanding the extent to which such programs can help households stay out of poverty in the longer term, specifically after transfers end. We bring new evidence to this question, re-interviewing Bangladeshi households that participated in a well-implemented randomized social protection intervention four years after it ended. We find that combining transfers, either cash or food, with behavior change communication activities sustainably reduced poverty. Cash transfers alone had sustainable effects, but these were context-specific. The beneficial impacts of food transfers did not persist four years after the intervention finished. |
| Keywords: | BANGLADESH; SOUTH ASIA; ASIA; social protection; food security; poverty; cash transfers; intervention; households; sustainability; nutrition; poverty alleviation; food assistance; behavior change communication; food transfer; beneficiaries; poverty reduction |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1988&r=all |
| By: | OECD |
| Abstract: | Online personalised pricing is a form of price discrimination that involves charging different prices to different consumers, often based on a consumer’s personal data. Policymakers are currently discussing ways to protect consumers from potential adverse effects of personalised pricing. One option involves displaying disclosures on the websites of retailers that use personalised pricing, in order for consumers to make informed purchase decisions. This paper summarizes findings from a laboratory experiment on the effects that online disclosures about personalised pricing have on consumers. Results from the experiment suggest that online disclosures have only limited effects on consumers’ ability to identify and comprehend online personalised pricing, and cannot confirm a significant effect on participants’ purchasing behaviour. Results from a questionnaire distributed to participants reveal that on average personalised pricing is considered an unfair practice that should be prohibited. |
| Date: | 2021–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:303-en&r=all |
| By: | Christian König-Kersting |
| Abstract: | We study the robustness of Krupka and Weber's method (2013) for eliciting social norms. In two experiments with more than 1200 participants, we find that participants' response patterns are invariant to differences in the salience of the monetarily incentivized coordination aspect. We further demonstrate that asking participants for their personal first and second order beliefs without monetary incentives results in qualitatively identical responses. In addition, we observe that participants give sensible responses whether or not they understand the task or their monetary incentives. Overall, Krupka and Weber's method produces remarkably robust response patterns. |
| Keywords: | social norms, incentives, beliefs, task comprehension, robustness |
| JEL: | C72 C90 D90 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2021-02&r=all |
| By: | Björn Bartling; Ernst Fehr; David Huffman; Nick Netzer |
| Abstract: | Under weak contract enforcement the trading parties’ trust, defined as their belief in the other party’s trustworthiness, appears important for realizing gains from trade. In contrast, under strong contract enforcement beliefs about the other party’s trustworthiness appear less important, suggesting that trust and contract enforcement are substitutes. Here, we show, however, that trust and contract enforcement are complements. We demonstrate that in a weak contract enforcement environment trust has no effect on the gains from trade, but when we successively improve contract enforcement, larger effects of trust emerge. We also document that improvements in contract enforcement lead to no, or only small, increases in gains from trade under low initial trust, but generate high increases in gains from trade when initial trust is high. Thus, the effect of improvements in contract enforcement is trust-dependent, and the effect of increases in trust is dependent on the strength of contract enforcement. We identify three key ingredients underlying this complementarity: (1) heterogeneity in trading partners’ trustworthiness; (2) strength of contract enforcement affecting the ability to elicit reciprocal behavior from trustworthy types, and screen out untrustworthy types; (3) trust beliefs determining willingness to try such strategies. |
| Keywords: | Trust, contract enforcement, complementarity, equilibrium selection, causal effect, screening, belief distortions, institutions |
| JEL: | C91 D02 D91 E02 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:377&r=all |
| By: | Ainsworth, Robert (University of Florida); Dehejia, Rajeev (New York University); Pop-Eleches, Cristian (Columbia University); Urquiola, Miguel (Columbia University) |
| Abstract: | This paper examines the roles that information and preferences play in determining whether households choose schools with high value added. We study Romanian school markets using administrative data, a survey, and an experiment. The administrative data show that, on average, households could select schools with 1 s.d. worth of additional value added. This may reflect that households have incorrect beliefs about schools' value added, or that their preferences lead them to prioritize other school traits. We elicit households' beliefs and find that they explain less than a fifth of the variation in value added. We then inform randomly selected households about the value added of the schools in their towns. This improves the accuracy of households' beliefs and leads low-achieving students to attend higher-value added schools. We next estimate households' preferences and predict their choices under the counterfactual of fully accurate beliefs. We find that beliefs account for 18 (11) percent of the value added that households with low- (high-) achieving children leave unexploited. Interestingly, for households with low-achieving children, the experiment seems to have affected both beliefs and preferences. This generates larger effects on choices than would be predicted via impacts on beliefs alone. |
| Keywords: | value added, information intervention, preferences |
| JEL: | I2 C93 D8 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13980&r=all |