nep-exp New Economics Papers
on Experimental Economics
Issue of 2021‒03‒22
28 papers chosen by

  1. Group identification and giving: in-group love, out-group hate and their crowding out By Shaun P. Hargreaves Heap; Eugenio Levi; Abhijit Ramalingam
  2. The Fetters of the Sib: An Experimental Study in Burkina Faso By Vollan, Björn; Hadnes, Myriam; Nilgen, Marco; Kosfeld, Michael
  3. Fairness and Willingness to Compete By Buser, Thomas; Cappelen, Alexander; Tungodden, Bertil
  4. Lying and social norms: a lab-in-the-field experiment with children By Despoina Alempaki; Genyue Fu; Jingcheng Fu
  5. Information Provision, Incentives, and Attention: A Field Experiment on Facilitating and Influencing Managers' Decisions By Manthei, Kathrin; Sliwka, Dirk; Vogelsang, Timo
  6. Preferences, Uncertainty, and Biases in Land Division: A Bargaining Experiment in the Field By Gafaro, M; Mantilla, C
  7. Narrative based information: is it the facts or their packaging that matters? By Shaun P. Hargreaves Heap; Aikaterini Karadimitropoulou; Eugenio Levi
  8. Competitiveness of Entrepreneurs and Salaried Workers By Balafoutas, Loukas; Batsaikhan, Mongoljin; Sutter, Matthias
  9. Informed Choices: Gender Gaps in Career Advice By Yana Gallen; Melanie Wasserman
  10. Intertemporal Choice Experiments and Large-Stakes Behavior By Aycinena, D; Blazsek, S; Rentschler, L; Sprenger, C
  11. A Japan’s Experimental Comparison of Rebate and Matching in Charitable Giving By Shusaku Sasaki; Hirofumi Kurokawa; Fumio Ohtake
  12. Motivated Information Acquisition in Social Decisions By Si Chen; Carl Heese
  13. Confrontation Costs in Negotiations: Bargaining Under the Veil of a Screen By Andrés Gago
  14. Price discrimination in informal labor markets in Bogotá: An audit experiment during the 2018 FIFA World Cup By Zamora, P; Mantilla, C; Blanco, M
  15. Paying Adolescents for Health Screenings Works By Martin Halla; Gerald Pruckner; Thomas Schober
  16. Personal and social norms in a multilevel public goods experiment By Marco Catola; Simone D'Alessandro; Pietro Guarnieri; Veronica Pizziol
  17. Provision of noxious facilities using a market-like mechanism: A simple implementation in the lab By Alberti, F; Mantilla, C
  18. Gender Effects in the Battle of the Sexes: a Tale of Two Countries By Fabrizio Adriani; Monika Pompeo; Silvia Sonderegger
  19. Test Format and Calculator Use in the Testing of Basic Math Skills for Principles of Economics: Experimental Evidence By Irene R. Foster; Melanie Allwine Fennell
  20. Consumers' assessment of labelled and packaged fresh potato: Evidence from Experimental Auctions By Rodríguez, Julieta A.; Rodríguez, Elsa Mirta M.; Lupín, Beatriz
  21. Dynamic Inconsistency in Risky Choice: Evidence From the Lab and Field By Rawley Heimer; Zwetelina Iliewa; Alex Imas; Martin Weber
  22. Learning about Ethnic Discrimination from Different Information Sources By Darya Korlyakova
  23. Experimental Evidence on Adoption and Impact of the System of rice Intensification By Barrett, Christopher B.; Islam, Asad; Pakrashi, Debayan; Ruthbah, Ummul
  24. Motivated Information Acquisition in Social Decisions By Si Chen; Carl Heese
  25. Anemia, Diet, and Cognitive Development: Impact of Health Information on Diet Quality and Child Nutrition in Rural India By Krämer, Marion; Kumar, Santosh; Vollmer, Sebastian
  26. Why Not Insure Prices? Experimental Evidence from Peru By Leon, Chris M. Boyd; Bellemare, Marc F.
  27. The Demand for Mobility: Evidence from an Experiment with Uber Riders By Christensen, Peter; Osman, Adam
  28. Reprocity and Uncertainty: When Do People Forgive? By Andrés Gago

  1. By: Shaun P. Hargreaves Heap (Department of Political Economy, King’s College London); Eugenio Levi (Department of Public Economics, Masaryk University); Abhijit Ramalingam (Department of Economics, Walker College of Business, Appalachian State University)
    Abstract: Using a dictator game experiment, we examine whether the introduction of group identities affects giving. Group identities can activate feelings of in-group love and out-group hate to create an in-group bias. In addition, group identities may spawn social sanctions that are designed to reinforce this in-group bias. We find that the aggregate effect on giving of group identities alone tends to be positive but depends on the relative size of two sub-sets of the subject pool: those who exhibit an in-group bias and those who do not. With the latter, the introduction of group identities has no effect on giving. With the former, the in-group bias arises from both in-group love and out-group hate and with interactions skewed towards own group members, in-group love will dominate to produce an increase in gifts. Sanctions too depend for their aggregate effect on the relative size of these two sub-sets in the population, but in the opposite way. This is because in-group biased preferences are crowded-in by the sanctions among the hitherto equal givers and in-group biased preferences are crowded-out among those who would otherwise exhibit the in-group bias.
    Keywords: dictator game, in-group love, out-group hate, crowding-out
    JEL: C72 C91 D31 D63 D91 J70 Z18
    Date: 2021–03
  2. By: Vollan, Björn (University of Marburg); Hadnes, Myriam (workshops work); Nilgen, Marco (University of Marburg); Kosfeld, Michael (Goethe University Frankfurt)
    Abstract: We conducted a field experiment in Burkina Faso to investigate the impact of sharing obligations within kin networks on entrepreneurial effort. The overall treatment effect we find is insignificant and goes in the opposite direction than previous literature suggests. Ex-post explorative analysis reveals that entrepreneurs in the two experimental groups reacted differently in their production process, with some entrepreneurs in the treatment group being able to utilize their kin network to their joint advantage.
    Keywords: field experiment, redristributive pressure, social norms, sharing norms, business development, Burkina Faso
    JEL: C93 D13 H24 H26 O12
    Date: 2021–02
  3. By: Buser, Thomas (University of Amsterdam); Cappelen, Alexander (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: The large experimental literature on competitiveness has typically ignored a key feature of many competitive settings in society: competition is not always fair. The playing field may be uneven and competitors of unequal strength. In our experiment, we systematically vary the fairness of the competition setting. We find that concerns for the chance of winning trump concerns for fairness for most, but not all, people. A majority of participants who compete under fair circumstances are willing to impose competition on opponents who have been exogenously handicapped or are known to be weaker. A majority are also willing to sabotage the performance of their opponent to increase their own chances of winning. However, a large minority do not exploit the costless opportunity to sabotage the performance of their opponent, suggesting at least some concerns for fairness. Our results are relevant for management practices, in particular for the decision to introduce competitive mechanisms in businesses and organizations. By studying gender differences under a range of novel competitive settings, we also shed new light on the much-discussed gender difference in willingness to compete.
    Keywords: Competitiveness; Fairness
    JEL: D90
    Date: 2021–03–12
  4. By: Despoina Alempaki (University of Warwick); Genyue Fu (Hangzhou Normal University, China); Jingcheng Fu (National University of Singapore)
    Abstract: We conduct a lab-in-the-field experiment with 567 children, aged four to eleven, in which we investigate the effect of social norms on lying and test whether norm sensitivity changes with age. Children think about a number between 1 and 6 in private, then roll a die, and report whether the number that came up is the same as the one they thought of. Just before making their report, we expose children to different empirical and normative information prescribing lying or honesty. We show that a normative intervention suggesting other children approve of honesty effectively reduces lying. We find limited evidence of the influence of our empirical interventions: information suggesting other children report honestly is effective only for younger children, while information suggesting other children report dishonestly does not influence lying patterns. We further observe that, although lying is omnipresent across all age groups, honesty significantly increases with age.
    Keywords: truth-telling, lying, social norms, children, lab-in-the-field experiment
    Date: 2021–01
  5. By: Manthei, Kathrin (RFH Koeln); Sliwka, Dirk (University of Cologne); Vogelsang, Timo (Frankfurt School of Finance and Management)
    Abstract: The core role of managerial accounting is to provide information to facilitate managers' decisions and influence their behavior through incentives. We study the impact of these two roles of information on profits by implementing a field experiment in a large retail chain. In a 2 × 2 factorial design, we vary: (i) whether store managers obtain access to decision-facilitating accounting information on the profit margins of individual products and (ii) whether they receive performance pay based on an objective profit metric to influence their decisions. We find that both practices increase profits significantly, albeit through different behavioral channels. In particular, managers make use of the information provided by placing higher-margin products, thereby raising the gross profit margin. While we hypothesized a priori that both practices are complements, we find that the profit increases induced by the combined intervention do not significantly exceed those of the separate interventions. We attribute this finding to an attention-directing role of the interventions toward the objective of raising profits, thereby inducing a countervailing substitution effect. We show that this effect fades over time such that the combined intervention tends to induce more persistent profit increases.
    Keywords: management controls, performance pay, monetary incentives, decision-facilitating, decision-influencing, accounting information, field experiment, complementarity
    JEL: J33 M52 C93
    Date: 2021–03
  6. By: Gafaro, M; Mantilla, C
    Abstract: Divisions of rural land in developing countries reduce the possibilities of farmers to profit from agricultural returns to scale. We design and conduct a framed bargaining experiment to study whether land overvaluation (due to affective reasons) and uncertainty in land values are drivers for land division. In our bargaining game, two players with different agricultural productivity jointly inherit a land plot and individually inherit some tokens they can use to agree on a land allocation. The possible set of land allocations and the spread of land returns vary across treatment arms in the game. We conduct this experiment with 256 participants in eight rural municipalities of the Northeast of Colombia. We find that when players are allowed to divide the land plot, 75% of the bargaining interactions yield the most egalitarian, but less efficient, land allocations. Based on the predictions of a Nash bargaining model and the observations from a sample of 120 college students, we rule out land overvaluation as a driver for land divisions in the context of our game. We also find that uncertainty in land yields reduces the efficiency of land allocations when we do not allow land divisions, by increasing the likelihood of the least productive player keeping the entire land plot. Our results are consistent with a bounded rationality rule in which subjects incorporate a behavioral response to uncertainty by first bargaining over land, which is a certain outcome, and then bargaining over a token transfer.
    Keywords: land division; Nash bargaining; affective value of land; nonuse value
    JEL: C78 C90 O13 Q15
    Date: 2019–09–03
  7. By: Shaun P. Hargreaves Heap (Department of Political Economy, King’s College London); Aikaterini Karadimitropoulou (School of Economics, Business and International Studies, Department of Economics, University of Piraeus); Eugenio Levi (Department of Public Economics, Masaryk University)
    Abstract: People typically do not acquire new information about the facts of the economy through consulting official statistics; they read or listen to mediatype reports/stories on the economy where the facts are packaged in a story. This paper tests with an experiment whether the explanatory style used in such media-type stories affects individual decision making. We also compare this particular narrative influence with that of the actual facts contained in the story. Our subjects receive a media-type story about the economy before they play a minimum effort game. The media story has either good or bad background facts about the economy and we use the psychological theory of explanatory styles to present these facts in a narrative style designed to engender either optimism or pessimism. We find evidence that the explanatory style matters more than facts in the sense that optimistic styles support higher equilibria than pessimistic ones while the influence of the facts itself is weaker.
    Keywords: narratives, information, media, minimum effort game
    JEL: E71
    Date: 2021–03
  8. By: Balafoutas, Loukas (University of Innsbruck); Batsaikhan, Mongoljin (Georgetown University); Sutter, Matthias (Max Planck Institute for Research on Collective Goods)
    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
  9. By: Yana Gallen; Melanie Wasserman
    Abstract: This paper estimates gender differences in access to informal information regarding the labor market. We conduct a large-scale field experiment in which real college students seek information from 10,000 working professionals about various career paths, and we randomize whether a professional receives a message from a male or a female student. We focus the experimental design and analysis on two career attributes that prior research has shown to differentially affect the labor market choices of women: the extent to which a career accommodates work/life balance and has a competitive culture. When students ask broadly for information about a career, we find that female students receive substantially more information on work/life balance relative to male students. This gender difference persists when students disclose that they are concerned about work/life balance. In contrast, professionals mention workplace culture to male and female students at similar rates. After the study, female students are more dissuaded from their preferred career path than male students, and this difference is in part explained by professionals’ greater emphasis on work/life balance when responding to female students. Finally, we elicit students’ preferences for professionals and find that gender differences in information provision would remain if students contacted their most preferred professionals.
    Keywords: career information, gender, discrimination, correspondence study
    JEL: C93 J16 J24 J71
    Date: 2021
  10. By: Aycinena, D; Blazsek, S; Rentschler, L; Sprenger, C
    Abstract: Intertemporal choice experiments are frequently implemented to make inference about time preferences, yet little is known about the predictive power of resulting measures. This project links standard experimental choices to a decision on the desire to smooth a large-stakes payment — around 10% of annual income — through time. In a sample of around 400 Guatemalan Conditional Cash Transfer recipients, we find that preferences over large-stakes payment plans are closely predicted by experimental measures of patience and diminishing marginal utility. These represent the first findings in the literature on the predictive content of experimentally elicited intertemporal preferences for large-stakes decisions.
    Keywords: Structural estimation; Out-of-sample prediction; Discounting; Convex Time Budget
    JEL: D1 D3 D90
    Date: 2019–12–08
  11. By: Shusaku Sasaki; Hirofumi Kurokawa; Fumio Ohtake
    Abstract: This study uses a Japanese nationwide sample and experimentally compares rebate and matching, both of which are schemes intended to lower the price of monetary donation. Standard economic theory predicts that the two schemes will have the same effect on individuals’ donation behavior when their donation price is equivalent. However, we conduct an incentivized economic experiment through the Internet on 2,300 Japanese residents, and find that matching, which lowers the donation price by adding a contribution from a third-party, increases individuals’ donation expenditures compared to rebate, which lowers it through a refund from a third-party. Specifically, the experimental result shows that the donation expenditure in a 50% rebate treatment drops by approximately ¥126 compared to the control, while in a 1:1 matching treatment with essentially the same price of donation as the 50% rebate, the expenditure conversely rises by approximately ¥56. This tendency is consistent with the results of previous experimental studies comparing the two schemes. We further empirically confirm that the superiority of 1:1 matching over 50% rebate is not conclusively influenced by the participants’ confusion or misunderstanding, or budget constraint lines’ difference between the two schemes. Although the Japanese government have previously enriched rebate’s content, the level of monetary donations by the Japanese people is still low on an international scale. Based on this study’s findings, we discuss the possibility that implementing matching into the society effectively encourages their donation behavior.
    Date: 2021–01
  12. By: Si Chen; Carl Heese
    Abstract: Individuals can often inquire about how their decisions would affect others. When do they stop the inquiry if one of their options is preferred based on a selfish motive but is potentially in conflict with social motives? Using a laboratory experiment, we provide causal evidence that having a selfishly preferred option makes individuals more likely to continue the inquiry when the information received up to that point predominantly suggests that the selfish behavior harms others. In contrast, when the information received up to that point predominantly suggests that being selfish harms nobody, individuals are more likely to stop acquiring information. We propose a theoretical model drawing on the Bayesian persuasion model of (Kamenica and Gentzkow, 2011). The model shows that the information acquisition strategy documented in our experiment can be optimal for a Bayesian agent who values the belief of herself not harming others but attempts to persuade herself to behave self-interestedly. The model predicts that strategic information acquisition motivated by self-interest can reduce the decisions' resulting negative externalities and improve the welfare of the affected others. Our laboratory experiment indeed confirms this prediction.
    Keywords: Motivated Beliefs, Social Preferences, Information Preferences, Bayesian Persuasion, Belief Utility
    JEL: D90 D91
    Date: 2020–10
  13. By: Andrés Gago (Universidad Torcuato di Tella)
    Abstract: In negotiations the objectives of parties are generally in conflict. Facing this conflict can trigger negative emotions, such as nervousness, embarrassment and awkwardness, which I refer as confrontation costs. In this paper, I use a lab experiment to explore whether these costs exist and if so what their implications are. First, I show that a significant proportion of participants avoid bargaining even when it delivers higher payoffs. I find that the avoidance rate is 50% higher in face-to-face negotiations than in electronic negotiations. Second, after shutting down alternative channels, I find that the higher avoidance rate in person can be attributed to higher confrontation costs. Together, these two things make e-negotiations welfare-improving in my design, casting doubts on the general belief that face-to-face communication increases efficiency by fostering transactions. Finally, consistent with previous literature, I observe that women haggle less than men, and I find that confrontation costs can also account for this fact.
    Keywords: Bargaining, Conflict Aversion, Social Pressure, Image Concerns, Gender.
    JEL: C78 C91 D91 J16
    Date: 2020–10
  14. By: Zamora, P; Mantilla, C; Blanco, M
    Abstract: We conducted an audit experiment to examine whether street vendors in Bogotá (Colombia) exert price discrimination based on buyers’ attributes, such as gender and nationality; and based on product characteristics, such as the increasing marginal valuation of items needed to complete a collection. We exploited the seasonal demand for album stickers related to the FIFA World Cup Russia 2018. In our within-subjects design, experimenters carried out inperson audits and quoted a pre-determined list of missing stickers. They interacted with 59 sticker vendors located in five geographic clusters. We find that prices quoted to foreign buyers are higher than prices quoted to Colombian buyers. By contrast, we do not find evidence supporting direct gender-based discrimination, neither that vendors charge a higher price per sticker when the list of missing stickers is shorter. We complement the study with a qualitative analysis based on interviews that reveal vendors’ pricing strategies, their awareness of price discrimination, and the trade of counterfeits.
    Keywords: Colombia; dual labor markets; football; Latin America; sports; street vendors
    JEL: C93 J46
    Date: 2020–02–04
  15. By: Martin Halla; Gerald Pruckner; Thomas Schober
    Abstract: With regard to their future health, adolescents are at a critical stage. Previous evaluations have shown that health screenings, counseling and other intervention programs during this phase of life are important, in particular for those with a low socio economic background. Unfortunately, adolescents tend to have little interest in preventive programs. We have designed a field-experiment to evaluate the effectiveness of financial incentives to promote the participation in health screenings. Our study comprises more than 10;000 participants, who we observe in high quality administrative data from Austria. The treatment group received a e40 shopping voucher if they participated in an age-specific health screening. On average the financial incentive increased the likelihood of participation by 280 %. Treatment effects are comparably larger for children in families with a higher socio-economic status, and of parents with a revealed preference for secondary health prevention.
    Keywords: Health screenings, financial incentives, adolescence, early intervention, secondary prevention.
    JEL: I12 J13 I18 I14 H51 H75
    Date: 2021–02
  16. By: Marco Catola; Simone D'Alessandro; Pietro Guarnieri; Veronica Pizziol
    Abstract: In this study we provide a novel measurement of personal normative beliefs, empirical expectations and normative expectations in the multilevel public goods game. The objective is twofold. On the one hand, we aim at investigating whether personal and social norms are reactive to variations in the relative efficiency of the public goods. On the other hand, we aim at understating which kind of norm better explains contribution to both the public goods. In our online experiment, personal norms, as elicited by personal normative beliefs, play a crucial role. They are both more reactive to efficiency gains and more in line with contribution decisions as efficiency increases. However, social norms, as elicited by empirical expectations and normative expectations, still anchor contribution decisions to social expectations, especially when the efficiency of the related public good is relatively low. Moreover, we highlight a norm spillover effect among the public goods with the empirical expectations concerning one good impacting (negatively) the contribution to the other public good. This result reveals how norms referred to alternative reference networks may interact with each other and possibly conflict.
    Keywords: Multilevel public good game, online experiment, personal norms, social norms, social dilemma
    JEL: C9 D71 H4
    Date: 2021–03–01
  17. By: Alberti, F; Mantilla, C
    Abstract: We study the provision of a public project that globally behaves as a public good but locally behaves as a private bad. This scenario imposes two problems: (i) finding a compensation that makes the project acceptable for the pre-determined host, and (ii) securing the budget to pay for the project and the required compensation. We use a market-like mechanism with two useful properties for this scenario: players can either contribute or request subsidies to fund the public project, and players have veto power over the desired project quantity. In our game, two players benefit from a waste incinerator facility, whereas the third group member, the host, is harmed if the facility is too large. We analyze the efficiency and the redistributive potential of this mechanism, with and without communication, among group members. We find that the probability of positive provision did not differ with and without communication. However, average provided quantities with respect to the efficient quantity increased from 54% to 81% with communication. We also find that contributions fell below the Lindahl taxes, allowing the players who benefit from a larger facility to accrue most of the efficiency gains. The latter result is consistent with the infrequent evidence of veto threats as a bargaining strategy.
    Keywords: lab experiment; NIMBY; LULU; public goods;
    JEL: C92 H4 Q58
    Date: 2020–03–20
  18. By: Fabrizio Adriani (University of Leicester); Monika Pompeo (University of Nottingham); Silvia Sonderegger (University of Nottingham)
    Abstract: In a setting where inequality is ingrained and largely unavoidable (battle of the sexes), we investigate whether subjects condition their behaviour on the gender of their co-player. In order to identify the role of culture and gender norms, we run the experiment in two countries, Norway and India, characterised by very different levels of gender inequality. We find different patterns of gender effects in the two countries. In India, subjects are more 'hawkish' when facing a woman. This occurs only for lower education subjects and is observed primarily in female participants. Highly educated Indian participants do not discriminate between male and female co-players. In Norway, the gender effect is the opposite of what observed in India: it is present only in highly educated male participants, and takes the form of subjects becoming more 'hawkish' when facing a man. Our evidence suggests that these gender effects may be due to subjects experiencing different levels of inequality aversion depending on the gender of their co-player, in a manner that is mediated by their culture and gender norms.
    Keywords: gender, social norms, coordination, culture, inequality aversion
    Date: 2021–02
  19. By: Irene R. Foster (George Washington University); Melanie Allwine Fennell (Randolph-Macon College)
    Abstract: Results from an experiment in Fall 2013 of 902 incoming students at this university are reported. In this experiment, after students were given a basic math assessment to ensure they had the necessary math skills to take a principles of economics course, they were randomly allocated to a treatment or control group to test if there was a significant impact of test format, calculator use, and calculator type on students’ scores. The interaction of calculator use/type and test format was also tested. The results from this experiment suggest that each treatment had a significant positive impact on students’ assessment scores, with much variation depending on the type of question asked and the level of performance.
    Keywords: Economic Education, Teaching Economics, Math Assessment, Microeconomics, Calculator Use, Test Format
    JEL: A22 C23
    Date: 2020
  20. By: Rodríguez, Julieta A.; Rodríguez, Elsa Mirta M.; Lupín, Beatriz
    Abstract: Worldwide, the potato is the third more important crop, coming after wheat and rice. In Argentina, it is the horticultural product with the highest consumption in fresh state, but Argentine consumers know little to nothing about potatoes attributes. The objective of this research is to identify the attributes that influence the assessment that consumers make of a potato with differentiated quality. Due to this, a Vickrey Second Price Experimental Auction took place in April 2017. The experiment involved 155 participants, who were students and employees of the School of Economic and Social Sciences of the National University of Mar del Plata. A Multiple Correspondence Analysis was applied based on the data of the bids and the survey carried out at the Auction. The main results showed that the participants, after receiving information about the culinary aptitude of the differentiated potato and its production method - its lower content of agrochemicals -, were willing to pay a higher price for the product. Additionally, participants opted for a higher price of potato when it was presented in a labelled package. Likewise, an identify group of participants were shown to be willing to pay more for this differentiated food.
    Keywords: Experimentos de Elección; Preferencias del Consumidor; Atributos de Calidad; Papa; Disposición a Pagar;
    Date: 2020
  21. By: Rawley Heimer; Zwetelina Iliewa; Alex Imas; Martin Weber
    Abstract: We document a robust dynamic inconsistency in risky choice. Using a unique brokerage dataset and two preregistered experiments, we compare people's initial risk-taking plans to their subsequent decisions. In both settings, people accept risk as part of a "loss-exit" strategy|planning to continue taking risk after gains and stopping after losses. Actual behavior follows the reverse pattern, deviating from initial strategies by cutting gains early and chasing losses. More individuals accept risk when offered a commitment to their initial strategy. Our results help reconcile seemingly contradictory findings on risk-taking in static versus dynamic contexts. We discuss implications for theory and welfare.
    Date: 2021–03
  22. By: Darya Korlyakova
    Abstract: We experimentally study whether public beliefs about ethnic discrimination, an emotionally loaded issue, are shifted more by information from experts or from ordinary people. We also examine whether people are inclined to choose the most influential sources. For this purpose, we combine, in a novel design, the random provision of information from different sources with endogenous information acquisition from the same sources. We find that individuals update their beliefs most in response to information from experts, namely researchers studying ethnic minorities and human resource managers. Exogenous adjustments in beliefs do not induce changes in attitudes to ethnic minorities. Consistent with the strength of belief updating, more individuals choose information from experts over information from ordinary people. This result suggests that, in the aggregate, people behave rationally as they favor a source that is perceived to be relatively accurate. The findings have implications for information dissemination policies.
    Keywords: ethnic discrimination; beliefs; information sources; experts;
    JEL: C90 D83 J71
    Date: 2021–03
  23. By: Barrett, Christopher B.; Islam, Asad; Pakrashi, Debayan; Ruthbah, Ummul
    Abstract: We report the results of a large-scale, multi-year experimental evaluation of the System of Rice Intensification (SRI), an innovation that first emerged in Madagascar in the 1980s and has now diffused to more than 50 countries. Using a randomized training saturation design, we find that greater cross-sectional or intertemporal intensity of direct or indirect training exposure to SRI has a sizable, positive effect on Bangladeshi farmers’ propensity to adopt (and not to disadopt) SRI. We find large, positive and significant impacts of SRI training on rice yields and profits, as well as multiple household well-being indicators, for both trained and untrained farmers in training villages. Despite the significant farm-level impacts on rice productivity and labor costs, we find no evidence of significant general equilibrium effects on rice prices or wage rates. We also find high rates of disadoption, and clear indications of non-random selection into technology adoption conditional on randomized exposure to training, such that adopters and non-adopters within the same treatment arm experience similar outcomes. Rice yields, profits and household well-being outcomes do not, however, vary at the intensive margin with intensity of training exposure, a finding consistent with multi-object learning models.
    Keywords: Agricultural Finance
    Date: 2021–01–20
  24. By: Si Chen; Carl Heese
    Abstract: The literature on motivated reasoning argues that people skew their personal beliefs so that they can feel moral when acting selfishly. We study dynamic information acquisition of decision-makers with a motive to form positive moral self-views and a motive to act selfishly. Theoretically and experimentally, we find that individuals fish for desirable information": they are more likely to continue (stop) acquiring information having received mostly information suggesting that acting selfishly is harmful (harmless) to others. Empirically, the tendency for this behavior is stronger among individuals with above-median cognitive ability. We discuss the resulting welfare effects. We relate our results to the literature on interpersonal Bayesian persuasion (Kamenica and Gentzkow, 2011).
    Keywords: Motivated Beliefs, Social Preferences, Information Preferences, Bayesian Persuasion, Belief Utility
    JEL: D90 D91
    Date: 2021–02
  25. By: Krämer, Marion (German Institute for Development Evaluation); Kumar, Santosh (Sam Houston State University); Vollmer, Sebastian (University of Goettingen)
    Abstract: Lack of information about health risks may limit the adoption of improved nutritional and healthy behavior. This paper studies the effect of a nutrition information intervention on household dietary behavior, hemoglobin levels, and cognitive outcomes of children in rural India. Using experimental data and regression discontinuity design that exploits the exogenous cutoff of hemoglobin level for anemia, we find statistically insignificant treatment effects on dietary improvements, child health, and cognitive outcomes of children. Our findings suggest that light-touch nutrition information alone, even when parents are informed about the health risk of their children, may not promote healthy behavior and factors other than information might constrain households in making nutritional investments for their children.
    Keywords: cognition, anemia, child health, health information, regression discontinuity, India
    Date: 2021–03
  26. By: Leon, Chris M. Boyd; Bellemare, Marc F.
    Keywords: Agricultural Finance
    Date: 2020–10
  27. By: Christensen, Peter (University of Illinois); Osman, Adam (University of Illinois at Urbana-Champaign)
    Abstract: Changes in transport costs can affect mobility in ways that differ across the population, affecting the impacts of transport policies. We randomly assign large price reductions on Uber in Egypt over a 3-month period and collect comprehensive data on participant mobility using Google Timeline. A 50% price reduction quadruples Uber usage and induces a 42% increase in total travel. Effects and welfare gains are larger for women, who are less mobile at baseline and perceive public transit as unsafe. The price elasticity of private vehicle kilometers traveled (-1.28) implies that mobility and external costs increase substantially when ride-hailing prices fall.
    Keywords: travel demand, travel safety, ride-hailing, mobility on demand
    JEL: J16 J28 J61 Q55 R48
    Date: 2021–03
  28. By: Andrés Gago (Universidad Torcuato Di Tella)
    Abstract: A sizable proportion of individuals act reciprocally. They punish and reward depending on the (un)kindness of those with whom they interact. In this paper, I explore whether individuals still reciprocate intentions when others lack full control over the consequences of their actions. By means of a dictator game with punishment opportunities, I show that unkind intentions are enough to trigger punishments, irrespectively of the outcome. By contrast, accidents are forgiven. To isolate how uncertainty over the result of an action affects the assessment of intentions, I control for other possible departures from self-profit maximization, such as distributional concerns or efficiency maximization. I find that the former also plays a role in respondents’ behavior.
    Keywords: Reciprocity, uncertaint,; blame, intentions, dictator, punishment.
    JEL: C91 D63 C79
    Date: 2020–10

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.