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on Experimental Economics |
|
Issue of 2021‒04‒19
forty-one papers chosen by |
| By: | Liza Charroin; Bernard Fortin; Marie Claire Villeval |
| Abstract: | If individuals tend to behave like their peers, is it because of conformity, that is, the preference of people to align behavior with the behavior of their peers; homophily, that is, the tendency of people to bond with similar others; or both? We address this question in the context of an ethical dilemma. Using a peer effect model allowing for homophily, we designed a real-effort laboratory experiment in which individuals could misreport their performance to earn more. Our results reveal a preference for conformity and for homophily in the selection of peers, but only among participants who were cheating in isolation. The size of peer effects is similar when identical peers were randomly assigned and when they were selected by individuals. We thus jointly reject the presence of a self-selection bias in the peer effect estimates and of a link strength effect. |
| Keywords: | , Peer Effects,Homophily,Dishonesty,Self-Selection Bias,Experiment |
| JEL: | C92 D83 D85 D91 |
| Date: | 2021–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2021s-16&r=all |
| By: | Lorenz Goette; Hua-Jing Han; Zhi Hao Lim |
| Abstract: | In a field experiment at two residential colleges, we use moral suasion and real-time feedback to examine how residents respond to different goals on shower water use over time. In phase 1 of our intervention, we find significant conservation effects for residents assigned to either the hard or moderate goal, but surprisingly detect no significant differences between both groups. When the goals are adjusted to a common, intermediate level in phase 2, we see a divergence in average treatment effects, driven by underperformance of the group with the initial hard goal. Interestingly, we find that high baseline users in the moderate goal group display larger conservation effects throughout the intervention, but this pattern is not observed in their counterparts with the initial hard goal. Our results suggest that setting too hard a goal can permanently diminish motivation, and adjusting the goal does not undo the initial damage. |
| Keywords: | field experiment, goal setting, resource conservation |
| JEL: | C93 Q41 D91 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2021_283&r=all |
| By: | KateÅ™ina Chadimová; Jana Cahlíková; Lubomír Cingl |
| Abstract: | One of the current challenges in ï¬ eld experimentation is creating an efficient design including individual treatments. Ideally, a pilot should be run in advance, but when a pilot is not feasible, any information about the effectiveness of potential treatments’ to researchers is highly valuable. We run a laboratory experiment in which we forecast results of two large-scale ï¬ eld experiments focused on TV license fee collection to evaluate the extent to which it is possible to predict ï¬ eld experiment results using a non-expert subject pool. Our main result is that forecasters were relatively conservative regarding the absolute effectiveness of the treatments, but in most cases they correctly predicted the relative effectiveness. Our results suggest that, despite the artiï¬ ciality of laboratory environments, forecasts generated there may provide valuable estimates of the effectiveness of treatments. |
| Keywords: | lab experiments, forecasting experimental results, ï¬ eld experiments, behavioral economics |
| JEL: | C91 C92 C93 D03 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2019-15_1&r=all |
| By: | Kai A. Konrad; Tim Lohse; Sven A. Simon |
| Abstract: | We study self-selection into earning money in an honest or dishonest fashion based on individuals' attitudes toward truthful reporting. We propose a decision-theoretic framework where individuals' willingness to pay for honest earnings is determined by their (behavioral) lying costs. Our laboratory experiment identifies lying costs as the decisive factor causing self-selection into honest earning opportunities for individuals with high costs and into cheating opportunities for those prepared to misreport. Our experimental setup allows us to recover individual lying costs and their distribution in the population. |
| Keywords: | lying behavior, lying costs, misreporting, honest earnings, self-selection, laboratory experiment |
| JEL: | C91 D81 D91 K42 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2020-14&r=all |
| By: | Mekvabishvili, Rati |
| Abstract: | Recent experimental economic research highlights the importance of Altruism and prosociality in many economic relations. Our experiment replicates the cross-cultural public goods game experiment conducted in 16 different countries by (Herrmann, Thöni, and Gächter 2008). We find that the mean contributions in standard public goods experiment with voluntary contribution in Tbilisi participant pool appears the highest compared to 16 experiment participant pool of different countries. Moreover, our experimental results show surprisingly flat pattern of mean contributions, indicating on strong evidence of altruism and prosociality. Individual level experimental data tentatively suggests, the repeated game incentives and considerable portion of altruism seems to reinforce each other and motivate subjects' genuine generosity reputation building, as it is a distinct and esteemed character of Georgian culture. In our view, our results of strong evidence of altruism contributes to the cross-cultural economic research of human cooperation. |
| Keywords: | Prosociality, Altruism, Culture, Human cooperation, Public Goods Experiment |
| JEL: | C92 H41 |
| Date: | 2021–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107048&r=all |
| By: | Cloos, Janis; Greiff, Matthias |
| Abstract: | The achievement of collective climate targets is hampered by a large number of factors. Most obvious is the conflict between self-interest and group interest at both the intra- and intergenerational level. Several experimental studies examine the effects of factors such as wealth heterogeneity, varying thresholds, or time discounting on the probability of achieving a collective climate target. In these experiments, participants act as a group and can invest money in a collective group account over a fixed number of rounds. If the group account is below a threshold after the last round, the members of a group usually lose a large proportion of their potential assets. However, in the real world, agents can not only invest in public goods, but also exploit them. We therefore study cooperation dynamics in a threshold climate change experiment in which group members can not only contribute money into their group account, but also take money out of it. We induce endowment heterogeneity by simulating the contribution decisions in the first rounds of the experiment and vary the loss rate between treatments. Our results show no significant differences between give and give-take treatments. Consistent with the results of previous studies, we find that with a lower loss rate, less groups reach the threshold. |
| Keywords: | climate change, experiment, public goods game, threshold public goods game, exploitation |
| JEL: | C92 D74 D81 H41 Q54 |
| Date: | 2021–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107144&r=all |
| By: | Butz, Britta (RWTH Aachen University); Guillen Alvarez, Pablo (University of Sydney); Harbring, Christine (RWTH Aachen University) |
| Abstract: | We investigate the effect of a donation incentive tied to contributions to a public good when group members can decide on the size of the donation to be made. An up to 20 % donation of the public good was implemented either exogenously or endogenously by group members. In the Vote treatment, groups could either decide in favor of or against a donation of 20 % of the public good; in the Vote Share treatment, subjects could decide on a donation share of between 0 % and 20 %. Results show that a large percentage of the participants vote in favor of implementing a donation share in both treatments. Voting in favor of a 20 % donation share or endogenously implementing a high donation share in the Vote Share treatment has positive effects on contributions to the public good compared to an exogenously implemented donation share. |
| Keywords: | donations, decision right, public good game, team incentives, laboratory experiment, charitable giving |
| JEL: | C72 C92 D64 D70 J33 M52 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14242&r=all |
| By: | Gianmarco Daniele; Andrea F.M. Martinangeli; Francesco Passarelli; Willem Sas; Lisa Windsteiger |
| Abstract: | This paper investigates whether the COVID-19 crisis has affected the way we vote and think about politics, as well as our broader attitudes and underlying value systems. We ï¬ elded large online survey experiments in Italy, Spain, Germany and the Netherlands, well into the ï¬ rst wave of the epidemic (May-June), and included outcome questions on trust, voting intentions, policies & taxation, and identity & values. With a randomised survey flow we vary whether respondents are given COVID-19 priming questions ï¬ rst, before answering the outcome questions. With this treatment design we can also disentangle the health and economic effects of the crisis, as well as a potential “rally around the flag†component. We ï¬ nd that the crisis has brought about severe drops in interpersonal and institutional trust, as well as lower support for the EU and social welfare spending ï¬ nanced by taxes. This is largely due to economic anxiety rather than health concerns. A rallying effect around (scientiï¬ c) expertise combined with populist policies losing ground forms the other side of this coin, and hints at a rising demand for competent leadership. |
| Keywords: | COVID-19, Social Trust, Institutional Trust, Survey Experiment, European Union, Welfare, Health, Taxation, Accountability, Populism, Values |
| JEL: | D72 H51 H53 H55 O52 P52 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2020-10&r=all |
| By: | Tukiainen, Janne; Blesse, Sebastian; Bohne, Albrecht; Giuffrida, Leonardo M.; Jääskeläinen, Jan; Luukinen, Ari; Sieppi, Antti |
| Abstract: | A well-functioning bureaucracy is a precondition for efficient public goods provision. However, bureaucratic decision-making is still largely seen as a black box. We provide novel insights into the preferences of bureaucrats regarding their work outcomes. We focus on a major public sector activity and survey more than 900 real-life procurement officials in Finland and Germany. The questionnaire includes hypothetical choice experiments to study the relative importance of multiple features in tender outcomes. First, bureaucrats state to have substantial discretion at work but no important incentives. Second, our experimental results show that procurers are particularly worried about avoiding negative risks concerning prices and supplier reputation. Third, an avoidance of bidders with prior bad performance appears to be an extremely important factor. Fourth, procurers value a certain degree of competition, while litigation concerns and regional favoritism play only a small role. The striking lack of heterogeneous effects points towards the role of intrinsic motivation among public buyers in countries with high public sector capacity. |
| Keywords: | Bureaucrats,Public Procurement,Preferences,Intrinsic Motivation,Conjoint Experiment |
| JEL: | D73 D90 H11 H57 H83 K41 M54 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21033&r=all |
| By: | Liza Charroin (UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne); Bernard Fortin (CIRPEE - Centre interuniversitaire sur le risque, les politiques économiques et l'emploi [Montréal] - UQAM - Université du Québec à Montréal = University of Québec in Montréal, CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal = University of Québec in Montréal, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); Marie Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics) |
| Abstract: | If individuals tend to behave like their peers, is it because of conformity, that is, the preference of people to align behavior with the behavior of their peers; homophily, that is, the tendency of people to bond with similar others; or both? We address this question in the context of an ethical dilemma. Using a peer effect model allowing for homophily, we designed a real-effort laboratory experiment in which individuals could misreport their performance to earn more. Our results reveal a preference for conformity and for homophily in the selection of peers, but only among participants who were cheating in isolation. The size of peer effects is similar when identical peers were randomly assigned and when they were selected by individuals. We thus jointly reject the presence of a self-selection bias in the peer effect estimates and of a link strength effect.. |
| Keywords: | Peer Effects,Homophily,Dishonesty,Self-Selection Bias |
| Date: | 2021–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03187671&r=all |
| By: | David P. Byrne; Lorenz Goette; Leslie A. Martin; Lucy Delahey; Alana Jones; Amy Miles; Samuel Schob; Thorsten Staake; Verena Tiefenbeck |
| Abstract: | We provide a unique test of competing models of persistence in behavior. We propose a new attention-based behavioral mechanism for habit formation and contrast its predictions with the Stigler and Becker (1977) consumption-based mechanism. We test both mechanisms using a large-scale field experiment in shower water consumption. Our experiment varies cycles of household-level real-time feedback that temporarily draws attention to individuals’ water consumption. Combining this design with real-time consumption data, we test the mechanism for persistence in behavior that our experiment generates. Our results strongly support a dynamic attention-based model of habit over the workhorse habit stock model used in economics. |
| Keywords: | Habit formation, Attention, Realtime feedback, Water usage, Randomized Control Trial |
| JEL: | C93 D12 D83 Q25 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2021_285&r=all |
| By: | Paolo Abarcar; Rashmi Barua; Dean Yang |
| Abstract: | We implemented a randomized controlled trial among transnational households in the Philippines estimating impacts of a financial education treatment, a financial access treatment, and the combination of the two on financial behaviors. |
| Keywords: | Phillippines, randomized controlled trial, financial |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:32f8660dc37848dc9d41ad3780ff978d&r=all |
| By: | Mekvabishvili, Rati |
| Abstract: | Can formal institutions shape prosocial behavior and lead to the spillover effect of cooperation? To explore this question, we experimentally test the spillover- based theory in a novel context. We measured the spillover effect on cooperation in the same domain measured by the repeated anonymous public goods game. We found strong evidence of altruism. Our results are inconsistent with prediction of the spillover-based theory. Our finding suggests that exposure to strong formal institutions that provide top-down motivation for cooperation substantially improves cooperation in their presence, but do not seem to lead to more prosociality after their absence. |
| Keywords: | Centralized Punishment, Spillover, Public Goods, Cooperation |
| JEL: | C92 D02 H41 |
| Date: | 2021–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107047&r=all |
| By: | de Janvry, A; Sadoulet, E |
| Abstract: | Agriculture has a long tradition of randomized experiments in the research station and of comparative demonstration plots under scientist control. The BDK Nobelists have pioneered randomized field experiments under agency control to fight global poverty, thus making behavior, contextual circumstances, and institutional constraints key determinants of outcomes. In agriculture, experimentation has massively responded in jumping the fence from lab to field, with already major advances as to how to better use agriculture for development. We document how this has happened and how the methodology of field experiments has to be adapted to perform in the challenging context of developing country agriculture. |
| Keywords: | Development Studies, Economics, Studies in Human Society |
| Date: | 2020–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:qt2xb9r9pf&r=all |
| By: | Karakostas, Alexandros; Kocher, Martin; Matzat, Dominik; Rau, Holger A.; Riewe, Gerhard |
| Abstract: | We analyze linear, weakest-link and best-shot public goods games in which a distinguished team member, the team allocator, has property rights over the benefits from the public good and can distribute them among team members. These team allocator games are intended to capture natural asymmetries in hierarchical teams facing social dilemmas, such as those that exist in work teams. Our results show that the introduction of a team allocator leads to pronounced cooperation in both linear and best-shot public-good games, while it has no effect in the weakest-link public good. The team allocator uses her allocation power to distribute benefits from the public good in a way that motivates people to contribute. Re-allocating team payoffs allows the team allocator to reward cooperating team members and to sanction non-cooperating members at no efficiency losses from explicit sanctioning costs. As a result, team profits are higher in the linear team allocator game but not in the best-shot case, where the lack of coordination leads to a welfare decrease for the remaining team members. |
| Keywords: | public goods provision,experiment,institutions,cooperation,allocation power,teams |
| JEL: | C72 C91 C92 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:419&r=all |
| By: | Felix Kölle (Department of Economics, University of Cologne, Albertus Magnus Platz, 50923 Cologne); Lukas Wenner (Department of Economics, University of Cologne, Albertus Magnus Platz, 50923 Cologne) |
| Abstract: | We investigate dynamically inconsistent time preferences across contexts with and without interpersonal trade-offs. In a longitudinal experiment participants make a series of intertemporal allocation decisions of real-effort tasks between themselves and another person. Our results reveal that agents are present-biased when making choices that only affect themselves but not when choosing for others. Despite this asymmetry, we find no evidence for time-inconsistent generosity, i.e., when choices involve trade-offs between own and other’s consumption. Structural estimations reveal no individual-level correlation of present bias across contexts. Discounting in social situations thus seems to be conceptually different from discounting in individual situations. |
| Keywords: | Present bias; altruism; stability; real effort; dictator game; intertemporal choice |
| JEL: | C91 D64 D90 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:077&r=all |
| By: | Banerjee, Ritwik; Ibanez, Marcela; Riener, Gerhard; Sahoo, Soham |
| Abstract: | Affirmative action changes incentives at all stages of the employment process. In this paper, we study the effects of affirmative action statements in job ads on i) the effort expended on the application process and ii) the manifestation of emotions, as measured by the textual analysis of the content of the motivation letter. To this end, we use data from two field experiments conducted in Colombia. We find that in the Control condition, women spend less time in the application process relative to men. Besides, female motivation letters exhibit lower levels of emotion, as measured by valence, arousal, and dominance. However, those differences vanish in the affirmative action treatment when we announced to job-seekers that half of the positions were reserved for women. In the Affirmative Action condition, the time dedicated by women significantly increased and the motivation letters written by the female candidates showed a significant increase in the expression of positive emotions. The results indicate that affirmative action policies can have significant encouraging effects on both effort and appeal of job applications of women, thereby reducing the gender gap in these outcomes. |
| Keywords: | Gender,Labor economics,Field experiment |
| JEL: | C91 J15 M52 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:362&r=all |
| By: | Tommaso M. Valletti; André Veiga |
| Abstract: | We conduct an experiment where subjects read online news articles and are shown ads for brands next to those articles. Using eye-tracking technology, we measure the attention that each individual devotes to each article and ad. Then, respondents choose between cash or vouchers for the brands advertised. Attention to ads is a predictor both of willingness-to-pay for brands, and brand recall. The main predictors of attention include the type of news and the match between individual political preferences and the media outlet. |
| Keywords: | online-advertising, experiments, attention, e-commerce, targeting |
| JEL: | M37 C91 L86 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8991&r=all |
| By: | Erlend Berg; Michael Blake; Karlijn Morsink |
| Abstract: | Households in developing countries commonly engage in risk sharing to cope with shocks. Despite this, the residual risk they remain exposed to - often due to aggregate events such as droughts and floods - is considerable. To mitigate these risks, governments, NGOs and multilateral organizations have introduced index insurance. To appreciate its welfare implications, however, we need to assess how insurance interacts with pre-existing risk sharing. We ask to what extent the demand for index insurance - as compared to standard indemnity insurance - depends on the level of pre-existing risk sharing. We contribute by developing a simple theoretical framework which shows that, relative to a state of autarky, risk sharing between agents increases demand for index insurance and decreases demand for indemnity insurance. In an artefactual field experiment with Ethiopian farmers who share risk in real life, we test and confirm these predictions. |
| Date: | 2021–04–09 |
| URL: | http://d.repec.org/n?u=RePEc:bri:uobdis:21/742&r=all |
| By: | Sönke Ehret; Sonja Vogt; Andreas Hefti; Charles Efferson |
| Abstract: | The popular practice of “leading by the successful” is viewed as a hallmark of motivational leadership. A central rationale for leaders to make successful team members salient is that it may induce social learning, where followers strive to adopt a favorable behavior. The reliance of a leader on such success-biased social learning presumes that imitation by followers occurs only to the extent as outstanding success was caused by a superior ability or knowledge of the respective peer. In this article, we conduct a laboratory experiment to study whether imitation of the successful may occur even if imitation necessarily fails to be an effective way of improving one’s performance. The experimental approach establishes the necessary control to assure that success-biased learning cannot systematically improve the decisions made, and allows us to isolate the behavior of the followers from possible feedback effects of the leader. The data show that a substantial amount of imitation occurs, which in our setting leads to a sizeable and persistent increase of the average risk taken in the teams. Our finding thus indicates a limitation of the practice to lead with the successful. |
| Keywords: | Social learning, laboratory experiments, motivational leadership |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:382&r=all |
| By: | Markus Dertwinkel-Kalt (University of Konstanz); Holger Gerhardt (UniversityofBonn); Gerhard Riener (Heinrich Heine University Düsseldorf); Frederik Schwerter (University of Cologne); Louis Strang (University of Cologne) |
| Abstract: | Many intertemporal trade-offs are unbalanced: while the advantages of options are concen- trated in a few periods, the disadvantages are dispersed over numerous periods. We provide novel experimental evidence for “concentration bias”, the tendency to overweight advantages that are concentrated in time. Subjects commit to too much overtime work that is dispersed over multiple days in exchange for a bonus that is concentrated in time: concentration bias increases subjects’ willingness to work by 22.4% beyond what standard discounting models could account for. In additional conditions and a complementary experiment involving mon- etary payments, we study the mechanisms behind concentration bias and demonstrate the robustness of our findings. |
| Keywords: | Attention, Focusing, Bounded rationality, Intertemporal choice, Future bias, Present bias, Framing |
| JEL: | D01 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:076&r=all |
| By: | Delis, Manthos; Galariotis, Emilios; Monne, Jerome |
| Abstract: | The role of a bank advisor is especially important for guiding and counseling financially distressed individuals. Using a randomized controlled survey experiment conducted on a representative sample of French individuals and priming the financial vulnerability of half the respondents, we examine attitudes toward bank advisors. We find that priming deters low-income individuals from showing an extremely negative attitude toward seeking banking advice (positive effect); it also deters them from showing an extremely positive attitude (negative effect). We also find that acute financial distress partially drives the positive effect, and a lack of financial literacy partially drives the negative effect. |
| Keywords: | Behavioral economics and finance; Poverty; Salience; Survey experiment; Priming; Banking services; Financial advisor. |
| JEL: | C83 C9 D14 D90 D91 G2 |
| Date: | 2021–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107095&r=all |
| By: | Raisa Sherif |
| Abstract: | This paper uses a ï¬ eld experiment among adolescents in India to study how interventions to increase one pro-environment activity (namely, recycling single-use plastic carry bags), spill over to other pro-environment activities. I show using lab and ï¬ eld experiments combined with survey data that (i) providing information on the need to recycle does not change recycling behaviour, whereas (ii) providing incentives along with the information leads to higher recycling. There is a positive spillover from the incentive treatment to other pro-environment activities. This positive spillover is observed among subjects who respond to the incentives and increase recycling. Notably, the positive spillover is also observed among those in this treatment who do not respond to the incentives and do not change recycling behaviour. This provides evidence for complementarities among pro-environment behaviours and suggests that interventions may have unaccounted positive effects on non-target environment behaviours. |
| Keywords: | pro-environment behaviours, behavioural interventions, spillovers, willingness to pay, ï¬ eld experiment |
| JEL: | C93 D90 Q50 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2021-03&r=all |
| By: | Sanjeev Goyal (emlyon business school); Penélope Hernández; Guillem Martínez-Cánovas; Frederic Moisan; Manuel Muñoz-Herrera; Angel Sánchez |
| Abstract: | We study a setting where individuals prefer to coordinate with others but they differ on their preferred action. Our interest is in understanding the role of link formation with others in shaping behavior. So we consider the situation in which interactions are exogenous and a situation where individuals choose links that determine the interactions. Theory is permissive in both settings: conformity (on either of the actions) and diversity (with different groups choosing their preferred actions) are both sustainable in equilibrium. We conduct an experiment to understand how link formation affects equilibrium selection. Our experiment reveals the powerful effect of linking on equilibrium selection: with an exogenous complete network, subjects choose to conform on the majority's preferred action. By contrast, with endogenous linking—irrespective of the costs of linking—subjects always opt for diversity of actions. |
| Keywords: | networks,equilibrium selection,Social coordination,experiment |
| Date: | 2020–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03188210&r=all |
| By: | Felipe Maciel Cardoso (emlyon business school); Carlos Gracia-Lázaro; Frederic Moisan; Sanjeev Goyal; Angel Sánchez; Yamir Moreno |
| Abstract: | Global supply networks in agriculture, manufacturing, and services are a defining feature of the modern world. The efficiency and the distribution of surpluses across different parts of these networks depend on the choices of intermediaries. This paper conducts price formation experiments with human subjects located in large complex networks to develop a better understanding of the principles governing behavior. Our first experimental finding is that prices are larger and that trade is significantly less efficient in small-world networks as compared to random networks. Our second experimental finding is that location within a network is not an important determinant of pricing. An examination of the price dynamics suggests that traders on cheapest—and hence active—paths raise prices while those off these paths lower them. We construct an agent-based model (ABM) that embodies this rule of thumb. Simulations of this ABM yield macroscopic patterns consistent with the experimental findings. Finally, we extrapolate the ABM on to significantly larger random and small-world networks and find that network topology remains a key determinant of pricing and efficiency. |
| Date: | 2020–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03188212&r=all |
| By: | Patrick Bareinz (Friedrich Schiller University Jena, School of Economics); Fabian Koenings (Friedrich Schiller University Jena, School of Economics) |
| Abstract: | We investigate the effect of how news outlets communicate macroeconomic information to consumers on support for governmental policy in the context of the COVID-19 crisis. In our survey experiment based on a representative sample of 3000 individuals in Germany, respondents are exposed to an expert forecast of GDP growth. Individuals are randomly assigned to either receive no information, the baseline forecast information, or real-world frames of the same information used in newspaper articles on the topic. We find that in contrast to the baseline information, positive framing of forecasted economic growth by news outlets increases support for pandemic policy. This effect is especially pronounced for respondents with more pessimistic macroeconomic expectations. Further evidence suggests that negative economic news are perceived as more credible and hence less surprising in times of recession, not translating into a change in political opinion. |
| Keywords: | expectation formation, information experiment, media framing, macroeconomic information, policy support, COVID-19 crisis |
| JEL: | C90 D83 D84 D91 |
| Date: | 2021–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2021-004&r=all |
| By: | Vranka, Marek Albert (University of Economics); Hudik, Marek; Frollova, Nikola; Bahník, Štěpán (University of Economics, Prague); Sýkorová, Markéta; Houdek, Petr (University of Economics in Prague) |
| Abstract: | Does the choice of an environment where cheating is possible lead to its escalation? We analyzed behavior of employees (N = 284) hired to perform a task online. In the manual reporting (MR), employees could overreport the number of hours worked. In the automatic reporting (AR), the hours were counted automatically, making cheating impossible. Two-thirds of the participants were given a chance to choose the reporting scheme, the rest were assigned to the MR directly. Although we found that people in MR slightly overreported the hours worked, employees who chose MR did not overreport their hours more than those assigned to MR at random. Moreover, participants lower in honesty-humility were not more likely to choose MR; only those higher in emotionality were. The results show that even when enabled to cheat, online workers reported their hours worked honestly and the possibility for cheaters to select cheating enabling environments may not always lead to an increase of dishonesty in organizations. |
| Date: | 2021–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:zvsdb&r=all |
| By: | Boucher, Vincent (Université Laval); Tumen, Semih (TED University); Vlassopoulos, Michael (University of Southampton); Wahba, Jackline (University of Southampton); Zenou, Yves (Monash University) |
| Abstract: | We study the social integration of ethnic minority children in the context of an early childhood program conducted in Turkey aimed at preparing 5-year-old native and Syrian refugee children for primary school. We randomly assign children to groups with varying ethnic composition and find that exposure to children of the other ethnicity leads to an increase in the formation of interethnic friendships, especially for Turkish children. We also find that the Turkish language skills of Syrian children are better developed in classes with a larger presence of Turkish children. We then develop a model of friendship formation with two key mechanisms: preference bias and congestion in the friendship formation process. Structural estimation of the model suggests that interethnic exposure reduces the share of own-ethnicity friends (homophily) and has a non-monotonic effect on the propensity to form own-ethnicity friendships beyond what would be expected given the size of the group (inbreeding homophily). Counterfactual analysis indicates that improvement in the language skills of Syrian children can offset more than half of the effect that ethnic bias has on friendship formation patterns. Finally, we find that for Syrian children exposure to Turkish children in the pre-school program has a long-term effect on primary school absenteeism. |
| Keywords: | refugees, early childhood, randomized field experiment, structural estimation, network formation, non-cognitive skills |
| JEL: | D85 J15 J18 Z13 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14260&r=all |
| By: | John List; Ragan Petrie; Anya Samek |
| Abstract: | In the past several decades the experimental method has lent deep insights into economics. One surprising area that has contributed is the experimental study of children, where advances as varied as the evolution of human behaviors that shape markets and institutions to how early life influences shape later life outcomes have been explored. We first develop a framework for economic preference measurement that provides a lens into how to interpret data from experiments with children. Next, we survey work that provides general empirical insights within our framework. Finally, we provide 10 tips for pulling off experiments with children, including factors such as taking into account child competencies, causal identification, and logistical issues related to recruitment and implementation. We envision the experimental study of children as a high growth research area in the coming decades as social scientists begin to more fully appreciate that children are active participants in markets who (might) respond predictably to economic incentives. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00729&r=all |
| By: | Janet Jiang; Daniela Puzzello; Cathy Zhang |
| Abstract: | We compare three implementation schemes of an infinite-horizon monetary economy with discounting. Under the standard random termination scheme and its block variation, the economy lasts for an indefinite number of periods and the discounting factor is captured by the probability that the economy continues to the next period. These schemes rely on the belief that the experimenter can credibly implement a game that lasts an arbitrarily long time. We also propose a new method that does not rely on such a belief. Under this scheme, subjects participate in an experiment for a fixed number of periods where the discount factor is captured by a weighting factor that shrinks the payoffs over time. Dynamic incentives are preserved by paying subjects their continuation value, which is based on past market prices. The results show that dynamic incentives are preserved, and behavior is similar in all three implementations. Researchers may decide among these approaches, depending on the research question of interest and more practical concerns, such as the ease of implementation and the need to collect data for multiple supergames when the discount factor is high. |
| Keywords: | Central bank research; Economic models; Inflation and prices |
| JEL: | C92 D83 E40 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:21-16&r=all |
| By: | Zakaria Babutsidze; Nobuyuki Hanaki; Adam Zylbersztejn |
| Abstract: | We experimentally study the effect of the mode of digital communication on the emergence of trust in a principal-agent relationship. We consider three modes of communication that differ in the capacity to transmit nonverbal content: plain text, audio, and video. Communication is pre-play, one-way, and unrestricted, but its verbal content is homogenized across treatments. Overall, both audio and video messages have a positive (and similar) effect on trust as compared to plain text; however, the magnitude of these effects depends on the verbal content of agent's message (promise to act trustworthily vs. no such promise). In all conditions, we observe a positive effect of the agent's promise on the principal's trust. We also report that trust in female principals is sensitive to the availability of nonverbal cues about their partners. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1128&r=all |
| By: | Stefano Barbieri; Kai A. Konrad; David A. Malueg |
| Abstract: | We consider a preemption game between groups where the ï¬ rst agent to take a costly action wins the prize on behalf of his group. We describe the equilibrium solution of this problem when players differ in their own costs of action and these costs are private information. The equilibrium is typically characterized by delay. The nature of the equilibrium depends on key parameters such as the number of groups and their size. More competition between groups reduces delay, whereas in larger groups members of a given cost type are more reluctant to act but may yield an earlier resolution of the conflict. We analyze asymmetries across groups, focusing on group size and strength of the externalities within groups. |
| Keywords: | preemption, free riding, dynamic conflict, inter-group conflict, dynamic conflict, incomplete information, waiting |
| JEL: | D74 H41 L13 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2019-09&r=all |
| By: | Mistree, Dinsha; Loyalka, Prashant; Fairlie, Robert; Bhuradia, Ashutosh; Angrish, Manyu; Lin, Jason; Karoshi, Amar; Yen, Sara J; Mistri, Jamsheed; Bayat, Vafa |
| Abstract: | Seeking ways to encourage broad compliance with health guidelines during the pandemic, especially among youth, we test two hypotheses pertaining to the optimal design of instructional interventions for improving COVID-19-related knowledge, attitudes, and behaviors. We randomly assigned 8376 lower-middle income youth in urban India to three treatments: a concentrated and targeted fact-based, instructional intervention; a longer instructional intervention that provided the same facts along with underlying scientific concepts; and a control. Relative to existing efforts, we find that both instructional interventions increased COVID-19-related knowledge immediately after intervention. Relative to the shorter fact-based intervention, the longer intervention resulted in sustained improvements in knowledge, attitudes, and self-reported behavior. Instead of reducing attention and comprehension by youth, the longer scientific based treatment appears to have increased understanding and retention of the material. The findings are instrumental to understanding the design of instruction and communication in affecting compliance during this and future pandemics. |
| Keywords: | Attitudes, Behavioral interventions, Health beliefs, Health economics, Health education, India, Randomized controlled trials, Public Health, Medical and Health Sciences, Economics, Studies in Human Society |
| Date: | 2021–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucscec:qt6qv9j440&r=all |
| By: | Bursztyn, Leonardo (University of Chicago and NBER); Haaland, Ingar (University of Bergen and CESifo); Rao, Aakaash (Harvard University); Roth, Christopher (University of Warwick, briq, CEPR, CESifo, and CAGE,) |
| Abstract: | We study how popular rationales enable public anti-minority actions. Rationales to oppose minorities genuinely persuade some people. But they also provide “excuses” that may reduce the stigma associated with anti-minority expression, thereby increasing anti-minority behavior. In a first experiment, participants learn that a previous respondent authorized a donation to an anti-immigrant organization and then make an inference about the respondent’s underlying motivations. Participants informed that their matched respondent learned about a study claiming that immigrants increase crime rates before authorizing the donation see the respondent as less intolerant. In a second experiment, participants learn about that same study and then choose whether to authorize a public donation to the anti-immigrant organization. Participants informed that their exposure to the rationale will be publicly observable are substantially more likely to make the donation than participants who are informed that their exposure will remain private. A final experiment shows that people are more willing to post anti-immigrant content on social media when they can use an anti-immigrant video clip from Fox News as an excuse. Our findings suggest that prominent public figures can lower the social cost of intolerant expression by popularizing rationales, increasing anti-minority expression. |
| Keywords: | Social image ; xenophobia ; propaganda ; political attitudes JEL Classification: D83 ; D91 ; P16 ; J15 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1340&r=all |
| By: | Christiane B. Haubitz (Department of Supply Chain Management and Management Science, University of Cologne, 50923 Cologne, Germany); Cedric A. Lehmann (Department of Supply Chain Management and Management Science, University of Cologne, 50923 Cologne, Germany); Andreas Fügener (Department of Supply Chain Management and Management Science, University of Cologne, 50923 Cologne, Germany); Ulrich W. Thonemann (Department of Supply Chain Management and Management Science, University of Cologne, 50923 Cologne, Germany) |
| Abstract: | Algorithmic decision support is omnipresent in many managerial tasks, but human judgment often makes the final call. A lack of algorithm transparency is often stated as a barrier to successful human-machine collaboration. In this paper, we analyze the effects of algorithm transparency on the use of advice from algorithms with different degrees of complexity. We conduct a preregistered laboratory experiment where participants receive identical advice from algorithms with different levels of transparency and complexity. The results of the experiment show that increasing the transparency of a simple algorithm reduces the use of advice, while increasing the transparency of a complex algorithm increases it. Our results also indicate that the individually perceived appropriateness of algorithmic complexity moderates the effects of transparency on the use of advice. While perceiving an algorithm as too simple severely harms the use of its advice, the perception of an algorithm being too complex has no significant effect on it. Our results suggest that managers do not have to be concerned about revealing complex algorithms to decision makers, even if the decision makers do not fully comprehend them. However, making simple algorithms transparent bears the risk of disappointing people’s expectations, which can reduce the use of algorithms' advice. |
| Keywords: | Algorithm Transparency; Decision Making; Decision Support; Use of Advice |
| JEL: | C91 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:078&r=all |
| By: | Andrea F.M. Martinangeli; Marina Povitkina; Sverker C. Jagers; Bo Rothstein |
| Abstract: | Social trust underlies virtually any social and economic interaction and is a crucial ingredient for successful collective action. What causes social trust to develop, however, remains poorly understood. Institutional quality has been proposed as a candidate driver and has been shown to correlate with social trust. We provide experimental evidence for the causal direction of this relationship. We ï¬ rst exogenously expose the participants to institutions of different quality, deï¬ ned as their ability to prevent corrupt behaviours on behalf of administrators. We then measure social trust among the participants using a trust game. We ï¬ nd that individuals exposed to settings with low institutional quality trust others signiï¬ cantly less. Moreover, using novel survey data we show that our experimental results correspond to correlational patterns usually found across countries. The paper makes a step forward in the decades-long search for the causality between institutional quality and social trust. |
| Keywords: | Social trust, quality of government, corruption, embezzlement |
| JEL: | D63 D73 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2020-04&r=all |
| By: | Clare Leaver; Owen Ozier; Pieter Serneels; Andrew Zeitlin |
| Abstract: | This paper reports on a two-tiered experiment designed to separately identify the selection and effort margins of pay-for-performance (P4P). At the recruitment stage, teacher labor markets were randomly assigned to a 'pay-for-percentile' or fixed-wage contract. Once recruits were placed, an unexpected, incentive-compatible, school-level re-randomization was performed, so that some teachers who applied for a fixed-wage contract ended up being paid by P4P, and vice versa. By the second year of the study, the within-year effort effect of P4P was 0.16 standard deviations of pupil learning, with the total effect rising to 0.20 standard deviations after allowing for selection. |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2102.00444&r=all |
| By: | de Janvry, Alain; He, Guojun; Sadoulet, Elisabeth; Wang, Shaoda; Zhang, Qiong |
| Abstract: | Subjective performance evaluation is widely used by firms and governments toprovide work incentives. However, delegating evaluation power to local seniorleadership could induce influence activities: agents might devote much effortsto please their supervisors, rather than focusing on productive tasks that benefittheir organizations. We conduct a large-scale randomized field experimentamong Chinese local government employees and provide the first rigorousempirical evidence on the existence and implications of influence activities. Wefind that employees do engage in evaluator-specific influence to affectevaluation outcomes, and that this process can be partly observed by their coworkers.However, introducing uncertainty in the identity of the evaluatordiscourages evaluator-specific influence activities and significantly improves thework performance of local government employees. |
| Keywords: | Social and Behavioral Sciences, influence activities, subjective evaluation, civil servants, work performance, China |
| Date: | 2020–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:qt30z1q8nw&r=all |
| By: | Gianmarco Daniele; Andrea F.M. Martinangeli; Francesco Passarelli; Willem Sas; Lisa Windsteiger |
| Abstract: | To investigate how a unique combination of health and economic crises can shape political attitudes, we conducted a large online survey experiment during the ï¬ rst wave of the Covid-19 epidemic (June). With a randomised survey flow we varied whether respondents are given Covid-related treatment questions. This design allows us to analyse health and economic effects separately, as well as a national unity component. We ï¬ nd that the crisis has severely undermined trust in politicians, the media and the EU, and has sapped support for social welfare spending ï¬ nanced by taxes. We also uncover a rallying effect around (scientiï¬ c) expertise and competence, combined with populist policies losing ground. Lastly, we show that the negative effects are mostly due to economic insecurity, whilst the rallying effects are due to health concerns and beliefs in the importance of national unity to navigate the crisis. |
| Keywords: | Covid-19, Institutional Trust, Political Attitudes, Online Survey Experiment, European Union, Welfare, Taxation, Populism |
| JEL: | D72 H51 H53 H55 O52 P52 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2020-18_2&r=all |
| By: | Benoit Chèze (ECO-PUB - Economie Publique - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IFPEN - IFP Energies nouvelles - IFPEN - IFP Energies nouvelles, EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Maia David (ECO-PUB - Economie Publique - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Vincent Martinet (ECO-PUB - Economie Publique - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Despite reducing the use of pesticides being a major challenge in developed countries, dedicated agri-environmental policies have not yet proven successful in doing so. We analyze conventional farmers' willingness to reduce their use of synthetic pesticides. To do so, we conduct a discrete choice experiment that includes the risk of large production losses due to pests. Our results indicate that this risk strongly limits farmers' willingness to change their practices, regardless of the consequences on average profit. Furthermore, the administrative burden has a significant effect on farmers' decisions. Reducing the negative health and environmental impacts of pesticides is a significant motivator only when respondents believe that pesticides affect the environment. Farmers who earn revenue from outside their farms and/or believe that yields can be maintained while reducing the use of pesticides are significantly more willing to adopt low-pesticide practices. Policy recommendations are derived from our results. |
| Keywords: | Pesticides,Agricultural practices,Production risk,Discrete choice experiment |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03192158&r=all |
| By: | Marianne Bertrand; Bruno Crépon; Alicia Marguerie; Patrick Premand |
| Abstract: | Workfare programs are one of the most popular social protection and employment policy instruments in the developing world. They evoke the promise of efficient targeting, as well as immediate and lasting impacts on participants’ employment, earnings, skills and behaviors. This paper evaluates contemporaneous and post-program impacts of a public works intervention in Côte d’Ivoire. The program was randomized among urban youths who self-selected to participate and provided seven months of employment at the formal minimum wage. Randomized subsets of beneficiaries also received complementary training on basic entrepreneurship or job search skills. During the program, results show limited impacts on the likelihood of employment, but a shift toward wage jobs, higher earnings and savings, as well as changes in work habits and behaviors. Fifteen months after the program ended, savings stock remain higher, but there are no lasting impacts on employment or behaviors, and only limited impacts on earnings. Machine learning techniques are applied to assess whether program targeting can improve. Significant heterogeneity in impacts on earnings is found during the program but not post-program. Departing from self-targeting improves performance: a range of practical targeting mechanisms achieve impacts close to a machine learning benchmark by maximizing contemporaneous impacts without reducing post-program impacts. Impacts on earnings remain substantially below program costs even under improved targeting. |
| JEL: | C93 H53 I38 J24 O12 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28664&r=all |