|
on Experimental Economics |
| By: | Nisvan Erkal; Lata Gangadharan; Erte Xiao |
| Abstract: | Leadership selection in organizations often requires candidates to actively choose to participate in the competition. We conjecture that such an Opt-in mechanism may contribute to the gender gap observed in leadership positions. We design an Opt-out mechanism where the default is to compete for a leadership position and individuals can opt out of the competition. Data from our experiments show that women are more likely to compete for leadership positions under the Opt-out mechanism and this effectively reduces the gender gap in competition. When given a choice between the Opt-in and Opt-out mechanisms, individuals are equally likely to choose either one. We conclude that the Opt-out mechanism can be an effective and feasible way to break the glass ceiling. |
| Keywords: | Glass ceiling; Gender inequality; Competition; Leadership; Defaults; Laboratory experiments |
| JEL: | C92 J16 D01 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2018-04&r=all |
| By: | Goeschl, Timo; Oestreich, Marcel; Soldà, Alice |
| Abstract: | In a simplifying analytical framework with endogenous levels of actual and self-reported emissions, we consolidate the existing literature into three main hypotheses about the relative merits, for a resource-constrained regulator, of random (RAM) and competitive (CAM) audit mechanisms in the presence or absence of peer information about actual emissions. Testing the three hypotheses in a quasi-laboratory experiment (N = 131), we find supportive evidence that CAM always induce more truthful reporting than RAM. Moreover, we provide the empirical validation of the theoretical prediction that CAM can succeed in aligning actual emissions more closely with the social optimum in the presence of peer information when RAM cannot. Behavioral mechanisms prevent reaching the first-best outcome. |
| Keywords: | environmental regulation; regulatory compliance; tournament theory; mechanism design; Laboratory experiment |
| Date: | 2021–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0699&r=all |
| By: | Doerr, Annabelle; Necker, Sarah |
| Abstract: | We conduct a field experiment with sellers of home-improvement services on two German online markets. We take the role of consumers and vary whether we request an invoice for the delivery of the service. In a market which allows anyone to sell anonymously, a willingness to evade is prevalent. In a market that keeps track of credentials, sellers are only willing to evade when a willingness to collude is signaled. The evasion discount is in most estimates not larger than the tax subsidy for legal demand. Evasion is unlikely to be beneficial for many consumers in our setting. |
| Keywords: | Collaborative tax evasion,evasion discount,undeclared work,third-party reporting,field experiment |
| JEL: | H26 C93 E26 J22 O17 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21024&r=all |
| By: | Booth, Alison L. (Australian National University); Nolen, Patrick J. (University of Essex) |
| Abstract: | Gender differences in paid performance under competition have been found in many laboratory-based experiments, and it has been suggested that these may arise because men and women respond differently to psychological pressure in competitive environments. To explore this further, we conducted a laboratory experiment comprising 444 subjects, and measured gender differences in performance in four distinct competitive situations. These were as follows: (i) the standard tournament game where the subject competes with three other individuals and the winner takes all; (ii) an anonymized competition in which an individual competes against an imposed production target and is paid only if s/he exceeds it; (iii) a 'personified' competition where an individual competes against a target based on the previous performance of one anonymised person of unknown gender; and (iv) a 'gendered' competition where an individual competes against a target based on the previous performance of one anonymised person whose gender is known. We found that only men respond to pressure differently in each situation; women responded the same to pressure no matter the situation. Moreover, the personified target caused men to increase performance more than under an anonymized target and, when the gender of the person associated with the target was revealed, men worked even harder to outperform a woman but strived only to equal the target set by a male. |
| Keywords: | psychological pressure, tournament, piece rate, gender, competitive behaviour, experiment |
| JEL: | C91 C92 J16 J33 M52 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14174&r=all |
| By: | Asadul Islam; Minhaj Mahmud; Paul A. Raschky |
| Abstract: | This paper investigates how exposure to a natural disaster affects risk-sharing behavior us-ing a unique field experiment in rural Bangladesh. We conducted a risk-sharing experiment that randomly assigned different levels of exogenous commitments to households in disasterexposed and unexposed villages and asked them to form risk-sharing groups. Our results show that disaster-affected individuals are less likely to defect from risk-sharing commit-ments, regardless of the level of ex-ante commitment. Interestingly, this group chose more risky bets and realized higher average returns compared to the non-disaster-affected group. Our results have important implications for the design of financial risk-transfer mechanisms in developing countries. |
| Keywords: | Risk preference; risk sharing, intrinsic motivation; asymmetric information; natural disaster; field experiment |
| JEL: | C90 C93 D03 D71 D81 O12 Q54 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2018-03&r=all |
| By: | Cristina Bicchieria; Eugen Dimanta; Erte Xiao |
| Abstract: | A stream of research examining the effect of punishment on conformity indicates that punishment can backfire and lead to suboptimal social outcomes. In such studies, the enforcement of a behavioral rule to cooperate originates from a single party. This feature may raise concern about the legitimacy of the rule and thereby make it easy for the agents to take a penalty and excuse their selfish behavior. We address the question of punishment legitimacy in our experiment by shedding light upon the importance of social norms and their interplay with punishment mechanisms. We show that the separate enforcement mechanisms of punishment and norms cannot achieve higher cooperation rates. In fact, conformity is significantly increased only in those cases when social norms and punishment are combined, but only when cooperation is cheap. Interestingly, when cooperation is expensive we find that the combination of punishment and empirical information about others conformity can also have traceable detrimental effects on conformity levels. Our results have important implications for researchers and practitioners alike. |
| Keywords: | Conformity, Experiments, Punishment, Social Norms, Trust Game |
| JEL: | C91 D03 D73 H26 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2018-07&r=all |
| By: | Bulutay, Muhammed; Hales, David; Julius, Patrick; Tasch, Weiwei |
| Abstract: | We investigate the role tacit collusion plays in Asymmetric Price Transmission (APT), the tendency of prices to respond more rapidly to positive than to negative cost shocks. Using a laboratory experiment that isolates the effects of tacit collusion, we observe APT pricing behavior in markets with 3, 4, 6, and 10 sellers, but not in duopolies. Furthermore, we find that sellers accurately forecast others’ prices, but nevertheless consistently set their own prices above the profit-maximizing response, particularly in the periods immediately following negative shocks. Overall, our findings support theories in which tacit collusion plays a central role in APT. |
| Keywords: | Asymmetric Price Transmission,Tacit Collusion,Oligopolistic Competition,Market Power,Rockets and Feathers |
| JEL: | D43 L13 C92 C72 C73 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:231385&r=all |
| By: | Nisvan Erkal (University of Melbourne); Lata Gangadharan (Monash University); Boon Han Koh (University of East Anglia) |
| Abstract: | Decision makers in positions of power often make unobserved choices under risk and uncertainty. In many cases, they face a trade-o between maximizing their own payoff and those of other individuals. What inferences are made in such instances about their choices when only outcomes are observable? We report fndings from two experiments that investigate whether outcomes are attributed to luck or choices. We show that attribution biases exist in the evaluation of good outcomes. On average, good outcomes of decision makers are attributed more to luck as compared to bad outcomes. This asymmetry implies that decision makers get too little credit for their successes. Interestingly, the biases are exhibited by those individuals who make or would make the less prosocial choice for the group as decision makers, suggesting that a consensus effect may be shaping both the belief formation and updating processes. |
| Keywords: | Decision-making under risk; Beliefs about others' decisions; Attribution biases; Social preferences; Consensus e ect; Experiments |
| JEL: | C92 D91 D81 |
| Date: | 2021–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaeco:2021-03&r=all |
| By: | Koichiro Ito (University of Chicago); Takanori Ida (Kyoto University); Makoto Tanaka (National Graduate Institute for Policy Studies (GRIPS)) |
| Abstract: | We study a problem in which policymakers need to screen self-selected individuals by unobserved heterogeneity in social welfare gains from a policy intervention. In our framework, the marginal treatment effects and marginal treatment responses arise as key statistics to characterize social welfare. We apply this framework to a randomized field experiment on electricity plan choice. Consumers were offered socially efficient dynamic pricing with randomly assigned take-up incentives. We find that price-elastic consumers—who generate larger welfare gains—are more likely to self-select. Our counterfactual simulations quantify the optimal take-up incentives that exploit observed and unobserved heterogeneity in selection and welfare gains. |
| JEL: | L94 Q41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:bfi:wpaper:2021-12&r=all |
| By: | Le Maux, Benoît; Masclet, David; Necker, Sarah |
| Abstract: | We analyze both theoretically and empirically how monetary incentives and information about others' behavior affect dishonesty. We run a laboratory experiment with 560 participants, each of whom observes a number from one to six with there being a payoff associated with each number. They can either truthfully report the number they see or lie about it in order to increase their payoff. We vary both the size of the payoff (Low, High, and Very High) and the amount of information about others' dishonesty (With and Without Information). We first find that dishonesty falls in the Very High treatment. Second, while social information has on average at most a weak positive effect, there is a strong effect if the accuracy of individuals' beliefs is accounted for. Third, social information and payoffs do not interact with each other. |
| Keywords: | Laboratory experiment,theory,cheating,monetary incentives,information on others' behavior,lying costs |
| JEL: | C91 D03 D78 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21025&r=all |
| By: | Lata Gangadharan; Philip J. Grossman; Joe Vecci |
| Abstract: | While the causes for upward income mobility have received considerable attention, the behavioural impact of the prospect of mobility has been largely overlooked. Using a survey and experiment, we investigate if the prospect of mobility influences antisocial behaviour. In our experiment, low- and high-income participants make decisions in an investment game in which, at a cost, they can reduce others’ payoff. A unique feature of the experiment is that lowincome participants can move up the income distribution, via chance or effort. Results show that immobility fuels antisocial behaviour, in particular towards high-income participants |
| Keywords: | Income inequality, Prospect of upward mobility, Antisocial behaviour, Experiment, Survey. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2018-13&r=all |
| By: | Lustenhouwer, Joep; Makarewicz, Tomasz; Peña, Juan Carlos; Proaño Acosta, Christian |
| Abstract: | We investigate the effects of group identity and income inequality on social preferences and polarization by means of a laboratory experiment. We split our subjects into two populations: in-group (representing "natives") and out-group ("migrants"). In-group subjects repeatedly vote whether an unemployment insurance should cover all, some, or no members of their group. By means of a two-by-two design we disentangle the effect of group identity from those of income inequality. Among others, our experiment yields the following findings: (1) subjects tend to vote for less inclusive insurance schemes when they sample a higher chance of employment; however, (2) in-group subjects with an ex ante more beneficial distribution of employment chances - relative to the out-group - are less selfish and vote for more inclusive insurance schemes; (3) ex ante more beneficial relative employment chances of in-group subjects also leads to less polarization; and (4) revelation and priming of group identity does not lead to discrimination against out-group "migrants" but, on the contrary, can lead to more compassionate and inclusive attitudes. |
| Keywords: | Income Inequality,Political Polarization,Migration,Economic Voting Behavior,Group Identity |
| JEL: | C92 D72 J15 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bamber:168&r=all |
| By: | Loukas Balafoutas (University of Innsbruck); Mongoljin Batsaikhan (Georgetown University in Qatar); Matthias Sutter (Max Planck Institute for Research on Collective Goods, University of Cologne, University of Innsbruck, IZA, and CESifo) |
| Abstract: | We measure the willingness to compete of entrepreneurs and salaried workers in an experiment. We let participants choose between a piece-rate and a tournament scheme either in private or in public. We find that in the private condition entrepreneurs are less competitive than salaried workers, but that in the public condition this ordering is reversed. Data from a follow-up survey suggest that social image concerns of entrepreneurs and perceived norms can explain why entrepreneurs are more competitive when decisions are publicly observable. Our survey also reveals that more competitive entrepreneurs earn higher profits in their businesses. |
| Keywords: | Competitiveness, Entrepreneurs, Salaried Workers, Profits, Field Behavior, Experiment |
| JEL: | C91 C93 D01 L26 |
| Date: | 2021–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2021_07&r=all |
| By: | Martin Dufwenberg; Olof Johansson Stenman; Michael Kirchler; Florian Lindner; Rene Schwaiger |
| Abstract: | Does market interaction influence morality? We study a particular angle of this classic question theoretically and experimentally. The novelty of our approach is to posit that people are motivated by reciprocity; an urge many argued affects humans. We scrutinize how this shapes interaction in treatments mimicking societies (autarky, barter, and market societies) that differ only as regards whether and how people trade. While many have argued that market interactions make people more selfish, our reciprocity-based theory suggests that market interaction on the contrary induces more pro-sociality. The experimental results are broadly (but not completely) consistent with the theoretical predictions. The results may also shed light on the development of morality and prosocial behavior over time, in particular with respect to episodes in history where the nature of commerce was transformed. |
| Keywords: | Markets, morality, pro-sociality, reciprocity, kindness, autarky, barter, money |
| JEL: | C92 D02 D91 |
| Date: | 2021–07 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2021-07&r=all |
| By: | ITO Koichiro; IDA Takanori; TANAKA Makoto |
| Abstract: | We study a problem in which policymakers need to screen self-selected individuals based on their unobserved heterogeneity in the social welfare gains resulting from a policy intervention. In our framework, the marginal treatment effects and marginal treatment responses arise as key statistics that allow for the characterization of social welfare. We apply this framework to a randomized field experiment on electricity plan choice. Consumers were offered socially efficient dynamic pricing with randomly assigned take-up incentives. We find that price-elastic consumers—who generate larger welfare gains—are more likely to self-select. Our counterfactual simulations quantify the optimal take-up incentives that exploit observed and unobserved heterogeneity in selection and welfare gains. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:21008&r=all |
| By: | Haruka Uchida |
| Abstract: | Blinding identities during evaluations is often proposed as a way to combat discrimination and alleviate disparities, but previous studies have found mixed results. I implement blind review at an academic conference, and directly com- pare the scores that the same submitted paper received from blind and non-blind reviewers. With this design, I find that the effects of blinding differed by how a subject would perform "under the status quo" without blinding. Blinding did not significantly impact the gender score gap among those that would perform the best or the worst under the status quo, but significantly exacerbated the gap among applicants who would have scored near the median without blinding. Consequently, the effect of blinding on acceptance rate gaps varied with the over- all acceptance rate. This can help reconcile why blinding has "worked" in some contexts while not in others. Ultimately, it is necessary to examine distributional effects to understand exactly in which situations blinding produces desired out- comes. Even when the average treatment effect on gaps is small, this may mask important heterogeneity for individuals at different margins. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00728&r=all |
| By: | Diefeng Peng; Yulei Rao; Xianming Sun; Erte Xiao |
| Abstract: | Observational learning theories often assume that people’s actions can be observed. However, in many naturally-occurring environments, individuals can choose whether to disclose their behavior to others. We provide theoretical analysis of observational learning under optional disclosure conditions. We further examine empirically how individuals decide whether to reveal decisions. Although we find evidence for other-regarding disclosure behavior, our findings highlight the importance of providing public information about how the disclosure behavior affects others. |
| Keywords: | Observational learning; Information cascade; Optional disclosure; Other-regarding preferences |
| JEL: | C91 D82 D83 D64 D91 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2018-05&r=all |
| By: | Julien Benistant (Univ Lyon, CNRS, ISC Marc Jeannerod, UMR 5229, Bron, France); Fabio Galeotti (Univ Lyon, CNRS, GATE, UMR 5824, F-69130 Ecully, France); Marie Claire Villeval (Univ Lyon, CNRS, GATE, UMR 5824, F-69130 Ecully, France; IZA, Bonn, Germany) |
| 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 noncompetitive 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 liht on the origins of the effect of competition on dishonesty. |
| Keywords: | Dishonesty, feedback, peer effects, competitive incentives, experiment |
| JEL: | C92 M52 D83 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:2101&r=all |
| By: | Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Alexander James (University of Alaska [Anchorage]); Stéphane Luchini (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); James Murphy (University of Alaska [Anchorage]); Jason Shogren (UW - University of Wyoming) |
| Abstract: | This study explores whether an oath to honesty can reduce both shirking and lying among crowd-sourced internet workers. Using a classic coin-flip experiment, we first confirm that a substantial majority of Mechanical Turk workers both shirk and lie when reporting the number of heads flipped. We then demonstrate that lying can be reduced by first asking each worker to swear voluntarily on his or her honor to tell the truth in subsequent economic decisions. Even in this online, purely anonymous environment, the oath significantly reduced the percent of subjects telling "big" lies (by roughly 27%), but did not affect shirking. We also explore whether a truth-telling oath can be used as a screening device if implemented after decisions have been made. Conditional on flipping response, MTurk shirkers and workers who lied were significantly less likely to agree to an ex-post honesty oath. Our results suggest oaths may help elicit more truthful behavior, even in online crowd-sourced environments |
| Keywords: | Experimental Economics,Honesty,Solemn Oath,Mechanical Turk,Lying,Shirking |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-03131518&r=all |
| By: | Zack Dorner (University of Waikato); Steven Tucker (University of Waikato); Gazi Hassan (University of Waikato) |
| Abstract: | The linear public goods game with a voluntary contribution mechanism (VCM) has a large literature providing many insights for the field. Recent papers have investigated impacts on contributions of heterogeneity, risk and ambiguity in marginal per capita return (MPCR) from the public good. We investigate a neglected, but highly relevant set up. In our experiment, the voluntary contribution of one individual to the public good may be more/less productive than another, and this productivity may be uncertain or ambiguous. We have four treatments: HOMOGENOUS (all members of the fixed groups of four are of equal productivity), CERTAIN (two high productivity, two low, but randomly switching in future periods), UNCERTAIN (each subject has a 50-50 lottery of being high or low productivity) and AMBIGUOUS (each subject has an unknown probability of being high or low). High productivity subjects contribute more in the CERTAIN treatment. We find contribution levels are stable in the three treatments over the 10 periods, whereas contributions in the HOMOGENOUS control decline as per the standard finding in a public goods game. These results suggest a natural veil of ignorance about current or future individual productivity, and a social norm of the highly productive contributing more, support a more stable level of contributions over time. Our results are relevant to many field examples, such as contributing to the public good by wearing a face mask in a pandemic, given it is uncertain/ambiguous whether the wearer is contagious (high productivity) or not (low productivity). |
| Keywords: | ambiguity; heterogeneous productivity; public goods game; social norms; uncertainty; voluntary contribution mechanism |
| JEL: | C92 D62 D63 D64 H41 |
| Date: | 2021–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:21/01&r=all |
| By: | Zhengyang Bao; Andreas Leibbrandt; ple391 |
| Abstract: | This experimental study investigates the trading of assets that mimic the features of most cryptocurrencies. Groups of traders are randomized into asset markets where fundamental values are either positive, zero, or negative. Our findings indicate the presence of much larger bubbles in asset markets with non-positive fundamental values than in asset markets with positive fundamental values, with either risky or risk-free dividends. We show that these findings are consistent with trader expectations but not with loss aversion and complexity. This study provides experimental evidence that supports the need for particular scrutiny of asset markets that lack positive fundamental value. |
| Keywords: | Asset market experiment, cryptocurrency, fundamental values |
| JEL: | C92 D14 D81 D84 G01 G11 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2019-12&r=all |
| By: | Konrad B. Burchardi; Jonathan de Quidt; Selim Gulesci; Benedetta Lerva; Stefano Tripodi |
| Abstract: | Researchers frequently use variants of the Becker-DeGroot-Marschak (BDM) mechanism to elicit willingness to pay (WTP). These variants involve numerous incentive-irrelevant design choices, some of which carry advantages for implementation but may deteriorate participant comprehension or trust in the mechanism, which are well-known problems with the BDM. We highlight three such features and test them in the field in rural Uganda, a relevant population for many recent applications. Comprehension is very high, and 86 percent of participants bid optimally for an induced-value voucher, with little variation across treatments. This gives confidence for similar applications, and suggests the comprehension-expediency trade-off is mild. |
| Keywords: | willingness to pay, Becker-DeGroot-Marschak, field experiment |
| JEL: | C90 C93 D44 O12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8904&r=all |
| By: | Michele Belot (Cornell University); Philipp Kircher (Cornell University); Paul Muller (Vrije Universiteit Amsterdam) |
| Abstract: | We propose a simple method for eliciting individual time preferences without estimating utility functions even in settings where background consumption changes over time. It relies on lottery tickets with high rewards. In a standard intertemporal choice model high rewards decouple lottery choices from variation in background consumption. We validate our elicitation method experimentally on two student samples: one asked in December when their current budget is reduced by extraordinary expenditures for Christmas gifts; the other asked in February when no such extra constraints exist. We illustrate an application of our method with unemployed job seekers which naturally have income/consumption variation. |
| Keywords: | time preferences, experimental elicitation, job search, hyperbolic discounting |
| JEL: | J64 D90 |
| Date: | 2021–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20210013&r=all |
| By: | Erik Schokkaert (Department of Economics, KU Leuven); Benoît Tarroux (Univ Lyon, University Lumière Lyon 2, GATE UMR 5824, F-69130 Ecully, France) |
| Abstract: | We survey the empirical literature on ethical preferences, covering both survey studies and incentivized laboratory experiments. Crucial axioms such as the Pigou-Dalton transfer principle are not accepted by a large fraction of the subjects. Moreover, in formulating their distributive preferences subjects attach much importance to the sources of income differences. Their preferences behind a veil of ignorance do not coincide with their preferences in the position of a social planner. These results suggest that prioritarian policy proposals will not necessarily be supported by a majority of the population. Although the majority opinion does not necessarily reflect the ethically desirable perspective, the empirical results still raise some interesting normative challenges. |
| Keywords: | surveys, lab experiments, distributive preferences, prioritarianism, inequality aversion |
| JEL: | D63 D71 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:2104&r=all |
| By: | Aaron Nicholas; Birendra Rai |
| Abstract: | A key question in labor and contract law is when does bargaining power disparity become too large to be considered `impermissible'? It has largely been debated from the potentially conflicting perspectives of efficiency and fairness. These debates exhibit the intuitively plausible but empirically untested presumption that efficient bargaining power disparities can be unfair. The paper focuses on ex-post bargaining between agents locked in a relationship without a complete contract wherein surplus may ultimately be realized with or without mutual consent. We propose a consent-based definition to categorize a bargaining power disparity as either efficient or inefficient by treating surplus realized without mutual consent as an imperfect substitute for surplus realized with mutual consent. In order to categorize a power disparity as either fair or unfair, we draw upon some legal doctrines to propose a two-sided definition that accounts for the perspectives of both the weaker and the stronger bargaining parties. The experiment provides no robust evidence to support the presumption that economically efficient power disparities can be unfair. |
| Keywords: | Bargaining power, consent, efficiency, fairness, law, contract, experiment |
| JEL: | K0 C72 C91 D63 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2019-02&r=all |
| By: | Christoph Huber; Jürgen Huber; Michael Kirchler |
| Abstract: | In this paper we investigate how volatility shocks influence investors' perceptions about a stock's risk, its future development, and investors' investment propensity. We ran artefactual field experiments with two participant pools (finance professionals and students) that had to take investment decisions, differing in (i) the direction of the shock (down, up, straight) and (ii) the presentation format of the time series (prices or returns). We find that finance professionals perceive all shocks to increase risk similarly, while students do not perceive upwardlytrending shocks to increase the riskiness of the stock. Furthermore, we show that investment propensity is negatively associated with the direction of the shock and professionals do not show differences in price forecasts between presentation formats, but students do. |
| Keywords: | Risk perception, experimental finance, finance professionals, volatility shocks |
| JEL: | C91 G11 G41 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2021-06&r=all |
| By: | Surajeet Chakravarty (University of Exeter); Todd R. Kaplan (University of Exeter); Navonil Mustafee (University of Exeter) |
| Abstract: | A&E overcrowding is an important problem since many are not seen in a sufficiently quick time. There is evidence that the situation can be improved without adding additional resources by diverting would-be A&E patients to alternative centres of urgent care, for example, Minor Injury Units (MIUs). The aim of this paper is to investigate how access to information on waiting times may influence decision making. We collect laboratory data where subjects are offered a choice between receiving treatment at A&E and MIU. The subjects face a random delay at the A&E but a known wait at the MIU. We manipulate the information that the subjects receive from the probabilities (risk) of the different waiting times at the A&E from known probabilities to merely a vague indication of the waiting time (ambiguity). We find that subjects demonstrate a strong preference for the A&E. Subjects display risk neutrality for the A&E waiting time but are ambiguity averse when waiting times are relatively short and ambiguity-seeking when waiting times are relatively long. This indicates that perhaps partial revelation of waiting times may be optimal. Our research will inform stakeholder decision-making at the operational level (such as individual UK National Health Service (NHS) Trusts) about strategy regarding the release of timing information. |
| Keywords: | Health decisions, waiting times, ambiguity aversion. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:2003&r=all |
| By: | Caria, Stefano (Department of Economics, University of Warwick); Gordon, Grant; Kasy, Maximilian (Department of Economics, University of Oxford, M); Quinn, Simon; Shami, Soha; Teytelboym, Alexander |
| Abstract: | We introduce an adaptive targeted treatment assignment methodology for field experiments. Our Tempered Thompson Algorithm balances the goals of maximizing the precision of treatment effect estimates and maximizing the welfare of experimental participants. A hierarchical Bayesian model allows us to adaptively target treatments. We implement our methodology in Jordan, testing policies to help Syrian refugees and local jobseekers to find work. The immediate employment impacts of a small cash grant, information and psychological support are small, but targeting raises employment by 1 percentage-point (20%). After four months, cash has a sizable effect on employment and earnings of Syrians. JEL Classification: C93 ; J6 ; O15 Creation date: 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1335&r=all |
| By: | Loukas Balafoutas (University of Innsbruck); Mongoljin Batsaikhan (Georgetown University in Qatar); Matthias Sutter (Max Planck Institute for Research on Collective Goods Bonn, University of Cologne, University of Innsbruck, and IZA Bonn) |
| Abstract: | We measure the willingness to compete of entrepreneurs and salaried workers in an experiment. We let participants choose between a piece-rate and a tournament scheme either in private or in public. We find that in the private condition entrepreneurs are less competitive than salaried workers, but that in the public condition this ordering is reversed. Data from a follow-up survey suggest that social image concerns of entrepreneurs and perceived norms can explain why entrepreneurs are more competitive when decisions are publicly observable. Our survey also reveals that more competitive entrepreneurs earn higher profits in their businesses. |
| Keywords: | Competitiveness, Entrepreneurs, Salaried Workers, Profits, Field Behavior, Experiment |
| JEL: | C91 C93 D01 L26 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:069&r=all |
| By: | Fiedler, Charlotte; Rohles, Christopher |
| Abstract: | How does armed conflict affect social cohesion, that is, the social fabric of societies? This question is central if we want to understand better why some countries experience repeated cycles of violence. It is also a crucial question for the design of peacebuilding interventions. In recent years, considerable scientific work has been put into studying the social legacies of armed conflict. This literature review brings these academic studies together in a novel way. In this discussion paper we conduct an extensive review of the empirical academic literature on how armed conflict affects social cohesion. We take a holistic perspective and analyse each of the three constituent elements of social cohesion - trust, cooperation and identity - in detail and along both a vertical (state-society relations) and a horizontal (interpersonal and intergroup relations) dimension. Regarding conflict, the focus lies on intrastate conflict and civil war, but the review also includes the few studies that focus on armed conflict between states or groups (interstate and non-state conflict). Overall, this review brings together insights from 39 published, peer-reviewed, empirical studies, most of which analyse the effects of conflict based on comprehensive survey data or behavioural experiments. Strengths and shortcomings are discussed and future avenues for research are identified. Contrary to the initial optimism of the potentially positive legacies of armed conflict expressed by some scholars, our main finding holds that the literature by now mainly points towards such conflict harming social cohesion. Most clearly, there is quite a large body of literature showing that social trust is negatively affected by experience of violence. Research on political trust and social identities is still nascent but currently also points towards negative effects. The literature on cooperation is more mixed with studies finding both support for an increase or a decrease in cooperative behaviour. However, several (and particularly newer) studies demonstrate that an increase in cooperation can often be explained by prosocial behaviour towards the in-group but not the out-group, calling into question whether this should be interpreted positively for social cohesion overall. Political participation does, however, seem to be one aspect of social cohesion in which effects of the "post-traumatic growth" mechanism can indeed be traced in several contexts. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:diedps:72021&r=all |
| By: | SO Mirai; KOSUGI Ryoko; SHINJO Tokiko; ODAGI Yui; KOSHI Misaki; HASHIMOTO Sora; SEKIZAWA Yoichi; SAITO Fumie; KONISHI Mika; MORI Eri; FUNAYAMA Michitaka; TABUCHI Hajime; MIMURA Masaru |
| Abstract: | Background: Dementia places a severe and far-reaching burden on patients themselves and on their family members and communities. In dementia, olfactory function is known as likely to be antecedently impaired prior to memory. There is a hypothesis that effective stimulation of the olfactory nerve, as with aroma therapy, can improve cognitive function, but there was no evidence of this prior to this study among the elderly including dementia patients. We investigated whether the inhalation of natural fragrances ameliorates cognitive function among healthy elderly volunteers. Methods: The design was a randomized double blinded placebo-controlled trial. Participants were randomly allocated either to the aroma (essential oil) or the placebo (ethanol) groups. Participants prepared a fragrance patch and attached it to their clothing twice daily, for a minimum 2 hours. The primary outcome was PASAT, and participants were evaluated twice, at the baseline and the completion of interventions in Week 12, and the changes from baseline to Week12 were compared between groups using mixed-effects models for repeated measures. Results: A total of 119 were randomly assigned either to the aroma (n=60) or the placebo (n=59) groups. The mean age was 69.5 years and male rate was 49.6%. A total of more than 96% of participants achieved more than 80% of adherences. In PASAT-2, mean changes under 2-second condition from baseline were + 5.80 [95% CI; 3.76 to 7.84] in the aroma and +2.48 [95% CI; 0.48 to 4.47] in the placebo groups. The mean difference was 3.37 [95% CI; 0.47 to 6.17: P=0.0229] with the effect size of 0.44 (Hedges' g). No significant differences were observed in PASAT-1, RAVLT, SDMT or MMSE, while the placebo group was superior in well-being and olfactory function. Conclusions: Three months aroma therapy significantly improved "Attention" as assessed by PASAT-2 compared with the placebo. However, no significant differences were observed in other cognitive functions or psychological measures. "Attention" has been recognized as more important to maintain the independent life of the elderly than other cognitive functions including memory. Further research is considered to be required. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:21003&r=all |
| By: | Timothy N. Cason; Vai-Lam Mui |
| Abstract: | We study experimentally the indefinitely repeated noisy prisoner’s dilemma, in which random events can change an intended action to its opposite. We investigate whether groups choose Always Defect less and use lenient or forgiving strategies more than individuals, and how decision-makers experiment with different strategies by letting them choose from an extensive list of repeated game strategies. We find that groups use forgiving and tit-for-tat strategies more than individuals. Always Defect, however, is the most popular strategy for both groups and individuals. Groups and individuals cooperate at similar rates overall, and they seldom experiment with different strategies in later supergames. |
| Keywords: | Laboratory Experiment; Cooperation; Repeated Games; Strategy |
| JEL: | C73 C92 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2019-01&r=all |
| By: | Fangfang Tan; Erte Xiao |
| Abstract: | We conduct an experiment to examine the role of retribution and deterrence in motivating third party punishment. In particular, we consider how the role of these two motives may differ according to whether a third party is a group or an individual. In a one-shot prisoner’s dilemma game with third party punishment, we find groups punish more when the penalty embeds deterrence than when it can only be retributive. In contrast, individual third parties’ punishment decisions do not vary on whether the punishment has any deterrent effect. In general, third party groups are less likely to impose punishment than individuals even though the punishment is costless for third parties. |
| Keywords: | Third-party punishment, group decision making, retribution, deterrence, social dilemmas, experiment |
| JEL: | C72 C92 D63 D70 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2018-06&r=all |