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on Experimental Economics |
| By: | Angrisani, Marco; Cipriani, Marco; Guarino, Antonio; Kendall, Ryan; Ortiz de Zarate Pina, Julen |
| Abstract: | We study whether the COVID-19 pandemic has impacted risk preferences, comparing the results of experiments conducted before and during the outbreak. In each experiment, we elicit risk preferences from two sample groups: professional traders and undergraduate students. We find that, on average, risk preferences have remained constant for both pools of participants. Our results suggest that the increases in risk premia observed during the pandemic are not due to changes in risk appetite; rather, they are solely due to a change in beliefs by market participants. The findings of our paper support the traditional view that, at least on average, risk preferences are not affected by economic or social circumstances. |
| Keywords: | COVID-19; Experimental economics; financial markets professional; risk aversion |
| JEL: | D81 D91 N0 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15108&r= |
| By: | Tamás Keller (Centre for Social Sciences: Research Center for Educational and Network Studies Research Center for Economic and Regional Studies: Institute of Economics TÁRKI Social Research Institute, Budapest); Péter Szakál (University of Szeged) |
| Abstract: | Motivated by the self-determination theory of psychology, we ask how simple school practices can forge students’ engagement with the academic aspect of school life. We carried out a large-scale preregistered randomized field experiment with a crossover design, involving all the students of the University of Szeged in Hungary. Our intervention consisted of an automated encouragement message that praised students’ past achievements and signaled trust in their success. The treated students received encouragement messages before their exam via two channels: e-mail and SMS message. Control students did not receive any encouragement. Our primary analysis compared the end-of-semester exam grades of the treated and control students, obtained from the university’s registry. Our secondary analysis explored the difference between the treated and control students’ self-efficacy, motivation, and test anxiety, obtained from an online survey before students’ exams. In the whole sample, we did not find an average treatment effect on students’ exam grades. However, in the subsample of those who answered the endline survey, the treated students reported higher self-efficacy than the control students. The treatment affected students’ motivation before their first exam—but not before their second—and did not affect students’ test anxiety. Our results indicate that automated encouragement messages sent shortly before exams do not boost students’ exam grades. Nevertheless, since occasionally received light-touch encouragement messages instantly increased students’ self-efficacy even before an academically challenging exam situation, we conclude that encouraging students systematically and not just shortly before their exams might lead to positive emotional involvement and help create a school climate that engages students with the academic aspect of school life. |
| Keywords: | Preregistered randomized field experiment, encouragement message, exam grades, test anxiety, self-efficacy, motivation |
| JEL: | I23 I21 C93 D91 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2121&r= |
| By: | Ek, Claes (Department of Economics, School of Business, Economics and Law, Göteborg University); Söderberg, Magnus (bDepartment of Sociology, Environmental and Business Economics, University of Southern Denmark,) |
| Abstract: | We conduct separate randomized controlled trials of norm-based feedback nudges on household waste in two municipalities in western Sweden. Our main treatment presents recipients with accurate, household-specific feedback highly similar to the standard Home Energy Report design, but with residual (unsorted) waste as the object of comparison. We also test a novel `dynamic' norm design informed by psychological research. Post-experimental reductions are on the order of 7-12% in both municipalities, substantially larger than in most previous studies. We estimate that the reduction corresponds to a 30-60% increase in unit-based waste fees. Effect differences between our main treatment and the dynamicnorm treatment are not significant. We find that feedback nudges are highly cost-effective compared to alternative means for reducing household residual waste. However, net social benefits depend on whether existing waste fees internalize the marginal social cost of residual waste. Our results have implications for the usefulness of feedback interventions as well as for unit-based pricing of waste, on which our feedback materials rely. |
| Keywords: | Field experiments; household waste; norm-based feedback; unit-based pricing; pay-as-you-throw |
| JEL: | D13 I21 Q53 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0804&r= |
| By: | Felfe, Christina (University of Würzburg); Kocher, Martin G. (University of Munich); Rainer, Helmut (Ifo Institute for Economic Research); Saurer, Judith (University of Würzburg); Siedler, Thomas (University of Potsdam) |
| Abstract: | Inequality of opportunity, particularly when overlaid with socioeconomic, ethnic, or cultural differences, may limit the scope of cooperation between individuals. A central question, then, is how to overcome such obstacles to cooperation. We study this question in the context of Germany, by asking whether the propensity of immigrant youth to cooperate with native peers was affected by a major integration reform: the introduction of birthright citizenship. Our unique setup exploits data from a large-scale lab-in-the-field experiment in a quasi-experimental evaluation framework. We find that the policy caused male, but not female, immigrants to significantly increase their cooperativeness toward natives. We show that the increase in out-group cooperation among immigrant boys is an outcome of more trust rather than a reflection of stronger other-regarding preferences towards natives. In exploring factors that may explain these behavioral effects, we present evidence that the policy also led to a near-closure of the educational achievement gap between young immigrant men and their native peers. Our results highlight that, through integration interventions, governments can modify prosocial behavior in a way that generates higher levels of efficiency in the interaction between social groups. |
| Keywords: | cooperation, in-group/out-group behavior, lab-in-the-field experiment, birthright citizenship |
| JEL: | C93 D90 J15 K37 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14384&r= |
| By: | Flory, Jeffrey A. (Claremont McKenna College); Leibbrandt, Andreas (Monash University); Rott, Christina (Vrije Universiteit Amsterdam); Stoddard, Olga B. (Brigham Young University) |
| Abstract: | We conduct a large-scale natural field experiment with a Fortune 500 company to test several approaches to attract minorities to high-profile positions. 5,000 prospective applicants were randomized into treatments varying a portion of recruiting materials. We find that self-selection at two early-career stages exhibits a substantial race gap. Importantly, we show that this gap can be strongly influenced by several treatments, with some increasing application rates by minorities by 40 percent and others being particularly effective for minority women. The heterogeneities we find by gender, race, and career stage shed light on the underlying drivers of self-selection barriers among minorities. |
| Keywords: | diversity, race, gender, labor, experiment, field experiment |
| JEL: | J15 J16 C93 D22 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14383&r= |
| By: | Karlan, Dean S.; List, John |
| Abstract: | We conducted a fundraising experiment with an international development nonprofit organization in which a matching grant offered by the Bill and Melinda Gates Foundation raised more funds than one from an anonymous donor. The effect is strongest for solicitees who previously gave to other BMGF-supported, poverty charities. With supporting evidence from two other fundraising experiments as well as a survey experiment, we argue this is consistent with a quality signal mechanism. Alternative mechanisms are discussed, and not ruled out. The results help inform theories about charitable giving decision-making, and provide guidance to organizations and large donors on how to overcome information asymmetries hindering fundraising. |
| Keywords: | asymmetric information; Charitable fundraising; Matching grant; Public Goods |
| JEL: | D12 D71 D82 H41 O12 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15221&r= |
| By: | Gill, Andrej; Heinz, Matthias; Schumacher, Heiner; Sutter, Matthias |
| Abstract: | The financial industry has been struggling with widespread misconduct and public mistrust. Here we argue that the lack of trust into the financial industry may stem from the selection of subjects with little, if any, trustworthiness into the financial industry. We identify the social preferences of business and economics students, and follow up on their first job placements. We find that during college, students who want to start their career in the financial industry are substantially less trustworthy. Most importantly, actual job placements several years later confirm this association. The job market in the financial industry does not screen out less trustworthy subjects. If anything the opposite seems to be the case: Even among students who are highly motivated to work in finance after graduation, those who actually start their career in finance are significantly less trustworthy than those who work elsewhere. |
| Keywords: | Experiment; Financial Industry; selection; social preferences; trustworthiness |
| JEL: | C91 G20 M51 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15147&r= |
| By: | John A. List; Ragan Petrie; Anya Samek |
| Abstract: | In the past several decades the experimental method has lent deep insights into economics. One perhaps 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. |
| JEL: | C9 D1 J1 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28825&r= |
| By: | He, Yinghua; Magnac, Thierry |
| Abstract: | A matching market often requires recruiting agents, or ``programs,'' to costly screen ``applicants,'' and congestion increases with the number of applicants to be screened. We investigate the role of application costs: Higher costs reduce congestion by discouraging applicants from applying to certain programs; however, they may harm match quality. In a multiple-elicitation experiment conducted in a real-life matching market, we implement variants of the Gale-Shapley Deferred-Acceptance mechanism with different application costs. Our experimental and structural estimates show that a (low) application cost effectively reduces congestion without harming match quality. |
| Keywords: | congestion; Costly Preference Formation; Gale-Shapley deferred acceptance mechanism; Matching Market Design; screening; Stable matching |
| JEL: | C78 D47 D50 D61 I21 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15082&r= |
| By: | Getik, Demid (Department of Economics, Lund University); Islam, Marco (Department of Economics, Lund University); Samahita, Margaret (School of Economics, University College Dublin) |
| Abstract: | We study the origins of support for gender-related affirmative action (AA) in two pre-registered online experiments (N = 1, 700). Participants act as employers who decide whether to use AA in hiring job candidates. We implement three treatments to disentangle the preference for AA stemming from i) perceived gender differences in productivity, ii) beliefs about AA effects on productivity, or iii) other non-material motives. To test i), we provide information to employers that there is no gender gap in productivity. To test ii), we inform the candidates about the hiring rule ex-ante, allowing us to observe how AA is expected to affect productivity. To test iii), we remove the payment to the employers based on the chosen candidates’ productiv- ity, thus making AA cheaper. We do not find significant differences in AA support across treatments, despite successfully altering beliefs about expected productivity differences. Our results suggest that AA choice reflects a more intrinsic and inelastic preference for advancing female candidates. |
| Keywords: | affirmative action; beliefs; gender; information; institution |
| JEL: | C91 D02 D83 J38 J71 |
| Date: | 2021–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2021_007&r= |
| By: | Lergetporer, Philipp (Ifo Institute for Economic Research); Woessmann, Ludger (University of Munich) |
| Abstract: | Higher education finance depends on the public's preferences for charging tuition, which may be partly based on beliefs about the university earnings premium. To test whether public support for tuition depends on earnings information, we devise survey experiments in representative samples of the German electorate (N>15,000). The electorate is divided, with a plurality opposing tuition. Providing information on the university earnings premium raises support for tuition by 7 percentage points, turning the plurality in favor. The opposition-reducing effect persists two weeks after treatment. Information on fiscal costs and unequal access does not affect public preferences. We subject the baseline result to various experimental tests of replicability, robustness, heterogeneity, and consequentiality. |
| Keywords: | tuition, higher education, information, earnings premium, public opinion, voting |
| JEL: | H52 I22 D72 D83 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14386&r= |
| By: | Albrecht, Sabine; Cettolin, Elena; Ghidoni, Riccardo; Suetens, Sigrid |
| Abstract: | Does exposure to ethnic minorities change the majority's attitudes towards them? We investigate this question using novel panel data on attitudes from a general-population sample in the Netherlands matched to geographical data on refugees. We find that people who live in neighborhoods of refugees for a sufficiently long time acquire a more positive attitude. Instead, people living in municipalities hosting refugees, but not in their close neighborhood, develop a more negative attitude. The positive neighborhood effect is particularly strong for groups that are likely to have personal contact with refugees suggesting that contact with minorities can effectively reduce prejudice. |
| Keywords: | attitudes to immigrants; discrimination; ethnic diversity; individual-level fixed-effects regressions; intergroup contact; lab-in-the-field experiment; prejudice; refugee crisis |
| JEL: | C23 D91 J15 R23 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15237&r= |
| By: | Eiji Yamamura |
| Abstract: | Internet survey experiment is conducted to examine how providing peer information of evaluation about progressive firms changed individual's evaluations. Using large sample including over 13,000 observations collected by two-step experimental surveys, I found; (1) provision of the information leads individuals to expect higher probability of rising of stocks and be more willing to buy it. (2) the effect on willingness to buy is larger than the expected probability of stock price rising, (3) The effect for woman is larger than for man. (4) individuals who prefer environment (woman's empowerment) become more willing to buy stock of pro-environment (gender-balanced) firms than others if they have the information. (5) The effect of the peer information is larger for individuals with "warm -glow" motivation. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2105.12292&r= |
| By: | Stolte, John Dr. |
| Abstract: | BACKGROUND. Experimental vignette research methods have been used to study a diverse range of theoretical and practical issues. Vignettes are designed to create hypothetical cultural/normative contexts for the study of variation in self-reported attitudes. A key problem in such research, however, is potential social desirability response bias. METHOD. A vignette experimental test of an hypothesis derived from a dual-process theory (the MODE framework initially developed by Fazio) linking explicit vs. implicit self-reported attitude measurement and social desirability response bias is reported here. RESULTS. The data show that measuring the social approval of a central vignette character explicitly results in greater social desirability responding than measuring such approval implicitly, supporting MODE theory. CONCLUSIONS. Vignette research methodologies provide a rich, flexible toolkit for studying many important social psychological topics, including issues of inequality and equity. However, researchers can and should design a measurement strategy that carefully manages inferences drawn in light of conditions likely to produce social desirability response bias. |
| Date: | 2021–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:osf:metaar:cp65t&r= |
| By: | Ismaël Rafaï (CEE-M - Centre d'Economie de l'Environnement - Montpellier - UMR 5211 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Arthur Ribaillier (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Dorian Jullien (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The aim of this article is to better understand how judgments about nudge acceptability are formed and whether they can be manipulated. We conducted a randomized experiment to test whether acceptability judgments could be (i) more favourable when the decision to implement the nudges was made following a consultation with the targeted population and (ii) influenced by the joint framing of the nudge's goal and effectiveness (in terms of an increase in desirable behaviour vs. decrease in undesirable behaviour). We tested these hypotheses on various nudge scenarios and obtained mixed results that do not clearly support our hypotheses. A surprising result that calls for further work is that by mentioning that a nudge had been implemented through a consultation with the targeted population its acceptability could be lowered. |
| Keywords: | behavioural public policies,nudges,acceptability,framing |
| Date: | 2021–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-03228638&r= |
| By: | Ismaël Rafaï (CEE-M - Centre d'Economie de l'Environnement - Montpellier - UMR 5211 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Arthur Ribaillier (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Dorian Jullien (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The aim of this article is to better understand how judgments about nudge acceptability are formed and whether they can be manipulated. We conducted a randomized experiment to test whether acceptability judgments could be (i) more favourable when the decision to implement the nudges was made following a consultation with the targeted population and (ii) influenced by the joint framing of the nudge's goal and effectiveness (in terms of an increase in desirable behaviour vs. decrease in undesirable behaviour). We tested these hypotheses on various nudge scenarios and obtained mixed results that do not clearly support our hypotheses. A surprising result that calls for further work is that by mentioning that a nudge had been implemented through a consultation with the targeted population its acceptability could be lowered. |
| Keywords: | behavioural public policies,nudges,acceptability,framing |
| Date: | 2021–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03228638&r= |
| By: | Casella, Alessandra; Macé, Antonin |
| Abstract: | Voters have strong incentives to increase their influence by trading votes, a practice indeed believed to be common. But is vote trading welfare-improving or welfare-decreasing? We review the theoretical literature and, when available, its related experimental tests. We begin with the analysis of logrolling -- the exchange of votes for votes, considering both explicit vote exchanges and implicit vote trades engineered by bundling issues in a single bill. We then focus on vote markets, where votes can be traded against a numeraire. We cover competitive markets, strategic market games, decentralized bargaining, and more centralized mechanisms, such as quadratic voting, where votes can be bought at a quadratic cost. We conclude with procedures allowing voters to shift votes across decisions -- to trade votes with oneself only -- such as storable votes or a modified form of quadratic voting. We find that vote trading and vote markets are typically inefficient; more encouraging results are obtained by allowing voters to allocate votes across decisions. |
| Keywords: | bundling; logrolling; quadratic voting; storable votes; vote markets; voting |
| JEL: | D6 D71 D72 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15201&r= |
| By: | Macchiavello, Rocco; Menzel, Andreas; Rabbani, Atonu; Woodruff, Christopher |
| Abstract: | Women remain disadvantaged in access to management positions around the world. We conduct a field experiment with 24 large garment factories in Bangladesh to test for inefficient representation of women among line supervisors. We identify the marginal female and male candidates for supervisory positions and randomly assign them to manage production lines. Three sets of results emerge: (i) extensive diagnostic testing at baseline reveal few skill differences between marginal female and male supervisor candidates; (ii) initially, marginal female candidates have lower productivity and evaluations from sub-ordinate workers, though after four to six months, these gaps disappear; and (iii) the share of the female candidates retained as line supervisor after the trial is significantly higher than the share of female supervisors in the factories at baseline. This suggests that factories previously promoted fewer women than would have been optimal. Additional surveys and a lab-in-the-field experiment suggest that the initially worse performance stems from negative beliefs of workers about the abilities of female supervisors.r. |
| Keywords: | Export Manufacturing; Gender Discrimination; productivity |
| JEL: | J16 J71 M51 M54 O14 O15 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15085&r= |
| By: | Silva, F. de F., R. K.Perrin, L. E. Fulginiti and M. E. Burbach |
| Abstract: | Groundwater use often has external effects on both the environment and future groundwater benefits, leading to over withdrawal. Ostrom’s research on common property resources (CPR) and related literature indicates that CPR management may improve if users have more information about the groundwater system, more opportunities for communication, and empowerment to regulate. In this paper, we conduct a computer laboratory experiment involving 180 students to evaluate the role of these components of engagement in reducing irrigation withdrawals from an aquifer. Our treatments, which consisted of different levels of information, communication and empowerment, resulted in decreases in groundwater extraction and increases in irrigation profits over nine-year extraction horizons. Enhanced information and communication also increased the fraction of subjects who voted for and complied with collective action in the form of quotas on pumping levels. |
| Keywords: | Institutional and Behavioral Economics, Resource /Energy Economics and Policy |
| Date: | 2021–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nbaesp:311051&r= |
| By: | Mueller-Dethard, Jan; Weber, Martin |
| Abstract: | Does the evaluation of a portfolio of stocks depend on its composition of winner and loser stocks? To test this, we define a simple, counting-based measure of performance - the number of winner relative to the number of loser stocks in a portfolio - and examine how this composition measure affects individuals' willingness to invest in a portfolio. We derive testable predictions for the proposed composition measure from a framework which combines category-based thinking with mental accounting. Consistent with our predictions, we find across all experiments that individuals allocate larger investments to portfolios with more winner than loser stocks relative to alternative portfolios with more loser than winner stocks, although both portfolios (1) have realized identical overall portfolio returns and (2) show identical expected risk-return characteristics. Building on our experimental findings, we analyze fund flows of exchange-traded funds on leading equity market indices. We identify that the proposed portfolio composition measure is positively related to future net fund flows. |
| Keywords: | investment behavior; Mental accounting; Portfolio composition; risk preferences |
| JEL: | D84 G11 G12 G40 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15012&r= |
| By: | Timothy N. Cason; Daniel Woods; Mustafa Abdallah; Saurabh Bagechi; Shreyas Sundaram |
| Abstract: | Classification- |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1328&r= |
| By: | Chowdhury, Shyamal; Sutter, Matthias; Zimmermann, Klaus F |
| Abstract: | Economic preferences are important for lifetime outcomes such as educational achievements, health status, or labor market success. We present a holistic view of how economic preferences are related within families. In an experiment with 544 families (and 1,999 individuals) from rural Bangladesh we find a large degree of intergenerational persistence of economic preferences. Both mothers' and fathers' risk, time and social preferences are significantly (and largely to the same degree) positively correlated with their children's economic preferences, even when controlling for personality traits and socio-economic background data. We discuss possible transmission channels for these relationships within families and find indications that there is more than pure genetics at work. Moving beyond an individual level analysis, we are the first to classify a whole family into one of two clusters, with either relatively patient, risk-tolerant and pro-social members or relatively impatient, risk averse and spiteful members. Socio-economic background variables correlate with the cluster to which a family belongs to. |
| Keywords: | Bangladesh; Economic preferences within families; Experiment; family clusters; Intergenerational Transmission of Preferences; risk preferences; social preferences; socio-economic status; Time preferences |
| JEL: | C90 D1 D64 D81 D90 J13 J24 J62 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14998&r= |
| By: | Marcelo Bérgolo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Gabriel Burdín (University of Leeds); Santiago Burone (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Mauricio de Rosa (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Matías Giaccobasso (University of California. Anderson School of Management); Martín Leites (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | Although different approaches and methods have been used to measure inequality aversion, there remains no consensus about its drivers at the individual level. We conducted an experiment on a sample of more than 1815 first-year undergraduate economics and business students in Uruguay to understand why people are inequality averse. We elicited inequality aversion by asking participants to make a sequence of choices between hypothetical societies characterized by varying levels of average income and income inequality. In addition, we use randomized information treatments to prime participants into competing narratives regarding the sources of inequality in society. The main findings are that (1) the prevalence of inequality aversion is high: most participants’ choices revealed inequality-averse preferences; (2) the extent of inequality aversion depends on the individual’s position in the income distribution; (3) individuals are more likely to accept inequality when it comes from effort rather than luck regardless of their income position; (4) the effect of social mobility on inequality aversion is conditional on individual’s income position: preferences for mobility reduces inequality aversion for individuals located at the bottom of the income distribution, where risk aversion cannot play any role. |
| Keywords: | Inequality aversion, fairness, risk, effort, luck, redistribution, questionnaire-experiments |
| JEL: | D63 D64 D81 C13 C91 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-19-20&r= |
| By: | Endre Kildal Iversen; Kristine Grimsrud (Statistics Norway); Yohei Mitani; Henrik Lindhjem |
| Abstract: | Altruistic preferences of various forms may cause difficulties in welfare economics. In the valuation of public goods, such preferences are believed to help explain the substantial non-use values found in many stated preference (SP) valuation surveys. However, studies analysing the effect of altruism on willingness to pay (WTP) have underappreciated the challenges in measuring altruism by the stated measures typically used. Instead, we exploit a naturally occurring decision domain to investigate the role of altruism in SP. We make use of an Internet survey company’s data on respondents’ donations of earned survey coins to charities to analyse the effect of donation behaviour on WTP across two contingent valuation (CV) surveys on different environmental topics. Hence, donators in our data are proven givers of their own money in an anonymous and unrelated setting, a decision much like the anonymous dictator game with earned resources. We find that respondents’ past donations are associated with higher WTP in the CV surveys, also when controlling for stated altruism, ecological and environmental attitudes, and respondent characteristics. The strong association between past donations and higher WTP imply that altruism is an even more important factor in explaining the substantial non-use values found in SP than assumed. The results also support prior research finding altruistic behaviour in one decision domain to be a good predictor of altruistic behaviour in other domains. Combining past behaviour with preference elicitation opens new avenues of research to better understand and handle altruistic preferences in SP and welfare economics. |
| Keywords: | Prosocial behaviour; altruism; contingent valuation; donations; willingness to pay |
| JEL: | Q51 Q53 Q54 Q57 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:952&r= |
| By: | John J. Conlon; Malavika Mani; Gautam Rao; Matthew W. Ridley; Frank Schilbach |
| Abstract: | We study social learning between spouses using an experiment in Chennai, India. We vary whether individuals discover information themselves or must instead learn what their spouse discovered via a discussion. Women treat their 'own' and their husband's information the same. In sharp contrast, men's beliefs respond less than half as much to information that was discovered by their wife. This is not due to a lack of communication: husbands put less weight on their wife's signals even when perfectly informed of them. In a second experiment, when paired with mixed- and same-gender strangers, both men and women heavily discount their teammate's information relative to their own. We conclude that people have a tendency to underweight others' information relative to their own. The marital context creates a countervailing force for women, resulting in a gender difference in learning (only) in the household. |
| JEL: | D1 D8 D9 O1 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28844&r= |
| By: | Rodemeier, Matthias |
| Abstract: | Can firms exploit behavioral biases to increase profits? Does consumer sophistication about these biases limit the scope of exploitation? To answer these questions, I run a series of natural field experiments with over 600,000 consumers and estimate novel sufficient statistics of consumer sophistication. The empirical application is a ubiquitous and widely regulated form of price discrimination: rebates that need to be actively claimed by consumers. These promotions are suspected of boosting sales even though many consumers eventually fail to claim the rebate-a phenomenon marketers refer to as "slippage." I show theoretically that consumers' subjective redemption probabilities can be inferred from how demand responds to rebates as opposed to simple price reductions. I identify these elasticities in three natural field experiments with a major online retailer, in which I randomize prices, redemption requirements, and reminders. Results reveal that claimable rebates in fact increase sales substantially even though 47% of consumers do not redeem the rebate. However, consumers exhibit a remarkable degree of sophistication: the demand response to a rebate is only 76% of the demand response to an equivalent price reduction. Structural estimates imply that consumers almost perfectly anticipate their inattention but vastly underestimate the hassle of redemption by 20 EUR per consumer. Exploiting this misperception increases the profitability of rebates by up to 260%. |
| Keywords: | consumer sophistication,price discrimination,field experiments,behavioral public economics |
| JEL: | D18 D61 D83 D49 D90 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:124&r= |
| By: | Almås, Ingvild; Somville, Vincent; Vandewalle, Lore |
| Abstract: | Women are the primary recipients of many welfare programs around the world. Despite frequent claims that targeting women induces beneficial consumption shifting and gender equality, the empirical evidence on the effect of targeting is relatively scarce. We report on a highly powered intervention that randomly allocates weekly transfers to a man or woman within the household. We use detailed financial diaries to look at the impact of the recipient's gender on expenditure, income, saving, nutrition and measures of decision-making. Our results show little evidence for consumption shifting at the household level but indicate that targeted transfers empower female recipients. |
| Keywords: | Consumption; Development; Gender Inequality; Households |
| JEL: | D13 I14 O10 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15218&r= |