|
on Experimental Economics |
|
Issue of 2021‒06‒14
thirty-six papers chosen by |
| By: | Luis Santos Pinto; Paola Colzani |
| Abstract: | We use a laboratory experiment to study the causal impact of self-confidence on bargaining with joint production. We exogenously manipulate the self-confidence of subjects regarding their relative performance by employing easy and hard tasks. Subjects are randomly matched into pairs and each pair bargains over a joint surplus which can be either high or low. The size of the joint surplus depends on the pair’s relative performance on the task. Our main experimental findings are as follows. First, the percentage of bargaining failures when subjects perform the easy task is more than triple than when they perform the hard task. Second, there is a remarkably high percentage of bargaining failures when subjects perform the easy task and bargain over a low surplus. Third, when subjects perform the easy task and bargain over a high surplus, all pairs reach an agreement and most settle on the equal split. Our findings shed light on the conditions and mechanisms under which overconfidence causes bargaining failures. |
| Keywords: | Overconfidence, Bargaining, Joint Production, Laboratory Experiment |
| JEL: | C79 C91 C92 D91 |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:21.07&r= |
| By: | Kyung Hwan Baik (Sungkyunkwan University); Subhasish M. Chowdhury (University of Bath); Abhijit Ramalingam (Appalachian State University) |
| Abstract: | We investigate the effects of group size and matching protocol in Tullock contest experiments. In a 2x2 factorial design we implement partner and random stranger matching protocols in contests between two and between three players. Group size does not affect overall absolute bid levels, but the rate of overbidding is lower in two-player groups across matching protocols. Matching protocol does not affect bidding behavior for three-player groups, but a partner matching reduces both the level and dispersion of bids in two-player groups. These results show the joint effect of group size and matching protocol, and suggest that identifiability in repeated play facilitates tacit collusion. |
| Keywords: | Contest; Experiment; Matching protocol; Group size; Experimental methodology |
| JEL: | B41 C72 C91 |
| Date: | 2021–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:cth:wpaper:gru_2021_020&r= |
| By: | Takehito Masuda; Ryo Mikami; Toyotaka Sakai; Shigehiro Serizawa; Takuma Wakayama |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1109r&r= |
| By: | Victor Klockmann (Goethe University Frankfurt, Theodor-W.-Adorno-Platz 4, 60323 Frankfurt, Germany. Center for Humans & Machines, Max Planck Institute for Human Development, Lentzeallee 94, 14195 Berlin, Germany); Alicia von Schenk (Goethe University Frankfurt, Theodor-W.-Adorno-Platz 4, 60323 Frankfurt, Germany. Center for Humans & Machines, Max Planck Institute for Human Development, Lentzeallee 94, 14195 Berlin, Germany.); Marie Claire Villeval (Univ Lyon, CNRS, GATE UMR 5824, 93 Chemin des Mouilles, F-69130, Ecully, France. IZA, Bonn, Germany) |
| Abstract: | Humans shape the behavior of artificially intelligent algorithms. One mechanism is the training these systems receive through the passive observation of human behavior and the data we constantly generate. In a laboratory experiment with a sequence of dictator games, we let participants’ choices train an algorithm. Thereby, they create an externality on future decision making of an intelligent system that affects future participants. We test how information on training artificial intelligence affects the prosociality and selfishness of human behavior. We find that making individuals aware of the consequences of their training on the well-being of future generations changes behavior, but only when individuals bear the risk of being harmed themselves by future algorithmic choices. Only in that case, the externality of artificially intelligence training induces a significantly higher share of egalitarian decisions in the present. |
| Keywords: | Artificial Intelligence, Morality, Prosociality, Generations, Externalities |
| JEL: | C49 C91 D10 D62 D63 O33 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:2110&r= |
| By: | Bittschi, Benjamin; Dwenger, Nadja; Rincke, Johannes |
| Abstract: | We study donor loyalty in the context of church membership in Germany. Church members have to make substantial payments to their church but can opt out at any time. In a large-scale field experiment, we examine how private recognition for past payments affects church members' loyalty. We find that recognizing past payments in a letter significantly reduces opt-outs. This effect is driven by members in the bottom quartile of baseline payments to the church. Consistent with optimization frictions prior to the experiment, we observe a spike in opt-outs immediately after treatment for particularly costly memberships. |
| Keywords: | Charitable Giving; donor loyalty; field experiment; Private recognition; recurring donors |
| JEL: | C93 D64 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14996&r= |
| By: | Willinger, Marc (CEE-M, Univ Montpellier, CNRS, INRAE, SupAgro, Montpellier, France); Rhouma, Oussama (Université de Jendouba); Puzon, Klarizze Anne (CERE - the Center for Environmental and Resource Economics) |
| Abstract: | We propose a five-player common-pool resource (CPR) game with endogenous coalition formation. We show that the level of extraction from the CPR depends on the size of each coalition that is formed and on the final coalition structure. These predictions are tested in a laboratory experiment. We consider two treatments: dictator vs. veto. In the dictator treatment, at each stage of the coalition formation game, a randomly chosen player imposes the coalition size and selected members cannot refuse to become a member. In the veto treatment, players have the right to refuse joining the current coalition if they want to and make counter-proposals. We observe that the formation of the grand coalition is more frequent in the dictator treatment. However, with the repetition of the coalition formation game, the grand coalition becomes more frequent under both treatment, and past experience of a grand coalition increases the likelihood that the current coalition structure is the grand coalition. Finally, the possibility to form coalitions is beneficial at reducing CPR extractions, compared to the singleton structure, in both treatments |
| Keywords: | coalition formation; laboratory experiment; veto power; common pool resource |
| JEL: | C71 C92 H41 Q01 |
| Date: | 2021–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2021_009&r= |
| By: | Antonia Grohmann; Jana Hamdan |
| Abstract: | This paper examines the effect of reduced self-control on impulsive borrowing in a laboratory experiment. We manipulate self-control using an ego depletion task and show that it is effective. Following the ego depletion task, participants can anonymously buy hot drinks on credit. We find no significant average effects, but find that treated individuals that have low financial literacy are more likely to borrow impulsively. We complement our experimental analysis with survey evidence that suggests that people with low self-control have more problems with the repayment of consumer debt. This relationship is, in line with the experimental results, weaker for individuals with high financial literacy. |
| Keywords: | Debt, consumption, borrowing, self-control, ego depletion |
| JEL: | D14 G51 C91 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1950&r= |
| By: | Felix Klimm; Martin G. Kocher; Timm Optiz; Simeon Andreas Dermot Schudy |
| Abstract: | Perceived urgency and regret are common in many sequential search processes; for example, sellers often pressure buyers in search of the best offer, both time-wise and in terms of potential regret of forgoing unique purchasing opportunities. Theoretically, these strategies result in anticipated and experienced regret, which systematically affect search behavior and thereby distort optimal search. In addition, urgency may alter decision-making processes and thereby the salience of regret. To understand the empirical relevance of these aspects, we study the causal effects of regret, urgency, and their interaction on search behavior in a pre-registered, theory-based, and well-powered experiment. We find that urgency reduces decision times and perceived decision quality but does not alter search length. Only very inexperienced decision-makers buy earlier when pressured. Anticipated regret does not affect search length (neither with nor without time pressure), while experienced regret leads to systematic adjustments in search length. Thus, we recommend that consumer protection policies should particularly focus on markets with inexperienced first-time buyers. |
| Keywords: | sequential search, time pressure, regret, anticipated regret, experienced regret |
| JEL: | C91 D01 D03 D18 D83 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9122&r= |
| By: | Abhijit Ramalingam (Appalachian State University); Brock V. Stoddard (Appalachian State University); James M. Walker (Indiana University) |
| Abstract: | In a laboratory setting, we study team production of group-level public goods, where two teams compete for the resources of a common-member who can benefit from and provide effort in both teams. Intrinsically, the common-member faces divided loyalties. We examine such competition in settings in which the common-member has productive abilities equal to that of the other team members and in which he/she has greater relative potential. In the homogeneous setting, we find evidence that competition increases when the common-member must choose team membership across decision rounds, instead of sharing membership within a round. In the heterogeneous setting, we find the largest increase in team effort when the common-member has sufficient resources to match that of team members in both teams. When the common-member’s productivity increases, so his/her capabilities are equivalent to the setting where resources increase, team performance is not equally increased. Further treatments explore possible explanations for these latter findings. |
| Keywords: | public goods; experiment; divided loyalties; competition; group choice; heterogeneity |
| JEL: | C72 C91 C92 H41 |
| Date: | 2021–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:cth:wpaper:gru_2021_021&r= |
| By: | Koffi Serge William Yao (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); Emmanuelle Lavaine (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); Marc Willinger (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) |
| Abstract: | We investigate the approval mechanism (AM) for a common pool resource (CPR) game with three players, underlining the role of unanimity and majority rules. The game involves two stages. In stage 1, players simultaneously and privately choose a proposed level of extraction from the CPR. In the second stage, they simultaneously decide whether to approve or disapprove others' choices. If the group approves, players' first stage proposed extractions are implemented. Otherwise, a uniform extraction level, called disapproval benchmark (DB), is implemented onto each group member. We combine two approval rules, majority and unanimity, with two DBs, the minimum extraction level (MIN DB) and the Nash extraction level (NASH DB). These combinations offer four different treatments for testing the approval mechanism (AM). Our experimental findings show that the AM reduces signi cantly over-extraction in each treatment, and that the unanimity rule is more effective than the majority rule to lower extractions. The MIN DB reduces more group extractions than the NASH DB. Finally, only the MIN DB with unanimity implements the Pareto-effcient extraction level. |
| Keywords: | Approval mechanism,lab experiment,common pool resource,majority/unanimity,dference in difference |
| Date: | 2021–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:hal-03234786&r= |
| By: | Castro, M.F.; Romeo, D. |
| Abstract: | Coordination is the key to the success of any organization such as the healthcare sector, where higher level of coordination result in greater promptness and quality of care and lower mortality rates. In a framed field experiment, we assess the level of coordination among healthcare providers and monitor whether common practices are adopted in a metropolitan hospital in Italy, by using the Krupka-Weber norm elicitation task. Upon being provided with three clinical vignettes, physicians have been asked to evaluate the appropriateness of each of the possible actions to match the modal judgement. Afterwards, physicians may ask for information on the actions corresponding to national guidelines and eventually change decisions. Data show that the average frequency of coordination across the experiment is 52% and that coordination increases when physicians often exchange opinions and share positive feedbacks with colleagues. Only 23% of participants changed their appropriateness judgment, after realizing they were in contrast with guidelines. In addition, the presence of a leader in the ward facilitates coordination. Finally, the more physicians consult scientific sources, the more willing to accept guidelines suggestions have been. Since guidelines knowledge significantly increases the coordination between physicians, hospitals should implement effective programs to spread guidelines contents. |
| Keywords: | coordination game; framed field experiment; vignette; guidelines; physicians’behavior; |
| JEL: | C72 C93 D83 I12 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:21/09&r= |
| By: | Yana Gallen (The University of Chicago); Melanie Wasserman (University of California, Los Angeles) |
| 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: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2021-025&r= |
| By: | Demid Getik; Marco Islam; Margaret Samahita |
| 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’ productivity, 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 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:202112&r= |
| By: | Aksoy, Cevat Giray (European Bank for Reconstruction and Development); Cabrales, Antonio (University College London); Dolls, Mathias (Ifo Institute for Economic Research); Durante, Ruben (CEPR); Windsteiger, Lisa (Max Planck Institute for Tax Law and Public Finance) |
| Abstract: | We conduct a large-scale survey experiment in nine European countries to study how priming a major crisis (COVID-19), common economic interests, and a shared identity influences altruism, reciprocity and trust of EU citizens. We find that priming the COVID-19 pandemic increases altruism and reciprocity towards compatriots, citizens of other EU countries, and non-EU citizens. Priming common European values also boosts altruism and reciprocity but only towards compatriots and fellow Europeans. Priming common economic interests has no tangible impact on behaviour. Trust in others is not affected by any treatment. Our results are consistent with the parochial altruism hypothesis, which asserts that because altruism arises out of inter-group conflict, humans show a tendency to favor members of their own groups. |
| Keywords: | COVID-19, Europe, altruism, reciprocity, survey experiment |
| JEL: | D72 H51 H53 H55 O52 P52 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14411&r= |
| By: | Silvia Angerer; Jana Bolvashenkova; Daniela Glätzle-Rützler; Philipp Lergetporer; Matthias Sutter |
| Abstract: | We present direct evidence on the link between children's patience and educational-track choices years later. Combining an incentivized patience measure of 493 primary-school children with their high-school track choices taken at least three years later at the end of middle school, we find that patience significantly predicts choosing an academic track. This relationship remains robust after controlling for a rich set of covariates, such as family background, school-class fixed effects, risk preferences, and cognitive abilities, and is not driven by sample attrition. Accounting for middle-school GPA as a potential mediating factor suggests a direct link between patience and educational-track choice. |
| Keywords: | patience, education, school track choice, children, lab-in-the-field experiment |
| JEL: | C91 D90 I21 J2 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2021-17&r= |
| By: | Abhijit Ramalingam (Appalachian State University); Brock V. Stoddard (Appalachian State University) |
| Abstract: | Inequality reduces the ability of communities to work together. The theory of reciprocity suggests reducing inequality allows groups to increase cooperation. We experimentally test if, after experiencing inequality, unconditional income transfers to the poor increase contributions to public goods. Both pure redistribution to eliminate inequality and additional resources directed to the poor without reducing resources of the rich fail to raise cooperation beyond levels observed in groups that were always equal. The rich do not respond to additional resources available to the group, and continue keeping most of their resources for private consumption. After receiving additional resources, the poor mimic the contribution behaviour of the rich. This shift of the majority of additional resources towards private consumption renders transfers ineffective in raising cooperation. |
| Keywords: | reciprocity; inequality reduction; income transfers; cooperation; public goods; experiment |
| JEL: | C91 C92 D31 D63 H41 |
| Date: | 2021–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:cth:wpaper:gru_2021_022&r= |
| By: | Anmina Murielle Djiguemde (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); Dimitri Dubois (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); Alexandre Sauquet (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); Tidball Mabel (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) |
| Abstract: | We study the impact of discrete versus continuous time on the behavior of agents in the context of a dynamic common pool resource game. To this purpose, we consider a linear quadratic model in which agents exploit a renewable resource with an infinite horizon and conduct a lab experiment. We use a differential game for continuous time and derive its discrete time approximation. When the agent is the sole owner of the resource, we fail to detect on a battery of indicators any difference between discrete and continuous time. Conversely, in the two-player setting, significantly more agents can be classified as myopic and end up with a low resource level in discrete time. Continuous time seems to allow for better cooperation and thus greater sustainability of the resource than does discrete time. Also, payoffs are more equally distributed in the continuous time setting. |
| Keywords: | Common Pool Resource,Differential Games,Experimental Economics,Continuous Time,Discrete Time |
| Date: | 2021–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:hal-03214973&r= |
| By: | Carlos Alós-Ferrer; Alexander Ritschel |
| Abstract: | We investigate the implications of Salience Theory for the classical preference reversal phenomenon, where monetary valuations contradict risky choices. It has been stated that one factor behind reversals is that monetary valuations of lotteries are inflated when elicited in isolation, and that they should be reduced if an alternative lottery is present and draws attention. We conducted two preregistered experiments, an online choice study (N = 256) and an eye-tracking study (N = 64), in which we investigated salience and attention in preference reversals, manipulating salience through the presence or absence of an alternative lottery during evaluations. We find that the alternative lottery draws attention, and that fixations on that lottery influence the evaluation of the target lottery as predicted by Salience Theory. The effect, however, is of a modest magnitude and fails to translate into an effect on preference reversal rates in either experiment. We also use transitions (eye movements) across outcomes of different lotteries to study attention on the states of the world underlying Salience Theory, but we find no evidence that larger salience results in more transitions. |
| Keywords: | Preference reversals, eye-tracking, Salience Theory |
| JEL: | D01 D81 D87 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:389&r= |
| By: | Rawley Heimer (Carroll School of Management, Boston College); Zwetelina Iliewa (University of Bonn); Alex Imax (Booth School of Business, University of Chicago); Martin Weber (Department of Finance, University of Mannheim, and the Centre for European Policy Research) |
| 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: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:094&r= |
| By: | Lambrecht, Marco; Sofianos, Andis; Xu, Yilong |
| Abstract: | The massive price bubbles of decentralized cryptocurrencies, such as Bitcoin, have created a puzzle for economists. How can a non-revenue-generating asset exhibit such extreme price dynamics, forming multiple episodes of bubbles and crashes since its creation? The answer is not straightforward, since cryptocurrencies differ in several important aspects from other conventional assets. In this paper, we investigate how key features associated with the Proof-of-Work consensus mechanism affect pricing. In a controlled laboratory experiment, we observe that the formation of price bubbles can be causally attributed to mining. Moreover, bubbles are more pronounced if the mining capacity is centralized to a small group of individuals. Analysis of the order book data reveals that miners seem to play a crucial role in bubble formation. The results demonstrate that high price volatility is an inherent feature of cryptocurrencies based on a mining protocol, which seriously limits any prospects for such assets truly becoming a medium of exchange. |
| Keywords: | bubbles; cryptocurrency; financial market experiment; Bitcoin |
| Date: | 2021–06–09 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0703&r= |
| By: | Blattman, Christopher; Larreguy, Horacio; Marx, Benjamin; Reid, Otis |
| Abstract: | We estimate the effects of one of the largest anti-vote-buying campaigns ever studied---half a million voters exposed across 1427 villages---in Uganda's 2016 elections. Working with civil society organizations, we designed the study to estimate how voters and candidates responded to their campaign in treatment and spillover villages, and how impacts varied with treatment intensity. Despite its heavy footprint, the intervention did not reduce offers of gifts in exchange for votes. However, it had sizable effects in the polling booth. Votes swung from well-funded incumbents (who buy most votes) towards their poorly-financed challengers. Qualitative and quantitative evidence suggests the swing arose from tactical responses by candidates as well as changes in village norms. Specifically, while the campaign struggled to instill norms of refusing gifts, it convinced some voters to abandon reciprocity---to accept gifts but vote for their preferred candidate. This leveling of the electoral playing field led challengers to buy votes in markets where they had previously been deterred from entering. |
| Keywords: | Africa; Elections; field experiment; voting behavior |
| JEL: | C93 D72 O55 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14919&r= |
| By: | Lippens, Louis; Baert, Stijn; Derous, Eva |
| Abstract: | Using a choice experiment, we test whether taste-based employee discrimination against ethnic minorities is susceptible to loss aversion. In line with empirical evidence from previous research, our results indicate that introducing a hypothetical wage penalty for discriminatory choice behaviour lowers discrimination and that higher penalties have a greater effect. Most notably, we find that the propensity to discriminate is significantly lower when this penalty is loss-framed rather than gain-framed. From a policy perspective, it could therefore be more effective to financially penalise taste-based discriminators than to incentivise them not to discriminate. |
| Keywords: | taste-based discrimination,employee discrimination,loss aversion,ethnicity |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:856&r= |
| By: | Elias Bouacida |
| Abstract: | We introduce a general method for identifying the sets of best alternatives of decision makers in each choice sets, i.e., their choice correspondences, experimentally. In contrast, most experiments force the choice of a single alternative in each choice set. The method allow decision makers to choose several alternatives, provide a small incentive for each alternative chosen, and then randomly select one for payment. We derive two conditions under which the method may recover the choice correspondence. First, when the incentive to choose several alternative becomes small. Second, we can at least partially identifies the choice correspondence, by obtaining supersets and subsets for each choice set. We illustrate the method with an experiment, in which subjects choose between four paid tasks. In the latter case, we can retrieve the full choice correspondence for 18% of subjects and bind it for another 40%. Using the limit result, we show that 40% of all observed choices can be rationalized by complete, reflexive and transitive preferences in the experiment, i.e., satisfy the Weak Axiom of Revealed Preferences – WARP hereafter. Weakening the classical model, incomplete preferences or just-noticeable difference preferences do not rationalize more choice correspondences. Going beyond, however, we show that complete, reflexive and transitive preferences with menu-dependent choices rationalize 96% of observed choices. Having elicited choice correspondences allows to conclude that indifference is widespread in the experiment. These results pave the way for exploring various behavioral models with a unified method. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:327800275&r= |
| By: | Takeshi Ojima; Manami Tsuruta; Reona Hayashi; So Morikawa |
| Abstract: | The injustice caused by public-sector workers can cause great harm to society. In this study, we conducted an experiment to investigate the misconduct of public-sector workers. We divided prospective public servants into two groups: treatment and control groups. To measure their cheating behaviors in the treatment group, participants were required to carry out a priming task to strengthen their awareness as future public servants, before conducting a cheating task (20 rounds). In the control group, participants conducted a cheating task after carrying out a task unrelated to public service. We found a non-monotonic effect of the treatment on misbehavior. We believe that our treatment had an effect on mitigating dishonest behaviors as well as promoting loss-averse behaviors. We infer that the priming effect promoted the dishonest behavior in future public servants in the loss domain. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:toh:tupdaa:4&r= |
| By: | Berg, Gerard van den; Dauth, Christine; Homrighausen, Pia; Stephan, Gesine |
| Abstract: | We mailed brochures to 10,000 randomly chosen employed German workers eligible for a subsizided occupational training program called WeGebAU, informing them about the importance of skill-upgrading occupational training in general and about WeGebAU in particular. Using survey and register data, we estimate effects of the information treatment brochure on awareness of the program, on take-up of WeGebAU and other training, and on subsequent employment. The brochure more than doubles awareness of the program. There are no effects on WeGebAU take-up but participation in other (unsubsidized) training increases among employees aged below 45. Short-term labor market outcomes are not affected. |
| Keywords: | employment; information treatment; randomized controlled trial; skills; wages |
| JEL: | J24 J65 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15035&r= |
| By: | Camuffo, Arnaldo; Gambardella, Alfonso; Spina, Chiara |
| Abstract: | Identifying the most promising business ideas is key to the introduction of novel firms, but predicting their success can be difficult. We argue that if entrepreneurs adopt a scientific approach by formulating problems clearly, developing theories about the implications of their actions, and testing these theories, they make better decisions. In particular, this approach helps entrepreneurs make more precise predictions of the value of their idea and to spot new ideas with higher expected returns. We also examine the mechanisms with which the scientific approach works. Specifically, we posit that scientific entrepreneurs are more precise initially, and less precise later on because they envision new version of their business idea that are worth assessing. Using a field experiment with 250 nascent entrepreneurs attending a pre-acceleration program, we provide evidence consistent with these mechanisms. We teach the treated group to formulate the problem scientifically and to develop and test theories about their actions, while the control group follows a standard training approach. We collect 18 data points on the decision-making and performance of all entrepreneurs for 14 months. Results show that increased precision in the assessment of the value of the business idea of treated entrepreneurs raises the probability that they close their start-ups. Scientific entrepreneurs are also more likely to see new opportunities with higher positive outcomes which prompt them to pivot to these new ideas and perform better. |
| Keywords: | entrepreneurship; field experiment; RCT; scientific approach |
| JEL: | L21 L26 M13 M21 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14909&r= |
| By: | Andor, Mark; Gerster, Andreas; Goette, Lorenz |
| Abstract: | Novel information technologies hold the promise to improve decision making. In the context of smart metering, we investigate the impact of providing households with appliance-level electricity feedback. In a randomized controlled trial, we find that the provision of appliance-level feedback creates a conservation effect of an additional 5% relative to a group receiving standard (aggregate) feedback. These conservation effects are largely driven by reductions in electricity use of 10% to 15% during peak hours. Consumers with appliance-level feedback hold more accurate beliefs about the energy consumption of different appliances, consistent with the mechanism in our accompanying model. Our result suggests that conservation effects from a smart-meter rollout will be much larger if appliance-level feedback can be provided. Based on a sufficient statistics approach, we estimate that appliance-level feedback could raise consumer surplus by about 570 to 600 million Euro per annum for German households. |
| Keywords: | consumption feedback; Disaggregation; energy conser- vation; randomized controlled trial |
| JEL: | D12 D83 L94 Q41 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14954&r= |
| By: | Yukihiko Funaki (Waseda University); Emmanuel Sol (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); Marc Willinger (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) |
| Abstract: | We study experimentally a three player sequential and symmetric coalition formation game with empty core. In each round a randomly chosen proposer must choose between a two players coalition or a three players coalition and decide about the payoff division among the coalition members. Players who receive a proposition can accept or reject it. In case of acceptance the game ends. If it is rejected, a new proposer is randomly selected. The game was played repeatedly, with randomly rematched groups. We observe that over 86% of the realized coalitions are two-players coalitions. Three players coalitions are often observed in early rounds but are frequently rejected. Equal splits are the most frequently observed divisions among coalition members, and their frequency increases sharply over time. We propose an extension of von Neumann and Morgenstern (1944)'s notion of stable set to account for our results. |
| Date: | 2021–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:hal-03227388&r= |
| By: | Pugatch, Todd (Oregon State University); Schroeder, Elizabeth (Oregon State University) |
| Abstract: | We assess whether a light-touch intervention can increase socioeconomic and racial diversity in undergraduate Economics. We randomly assigned over 2,200 students a message with basic information about the Economics major; the basic message combined with an emphasis on the rewarding careers or financial returns associated with the major; or no message. Messages increased the proportion of first generation and underrepresented minority (URM) students majoring in Economics by five percentage points. This effect size was sufficient to reverse the gap in Economics majors between first generation/URM students and students not in these groups. Effect sizes were larger and more precise for better-performing students and first generation students. Extrapolating to the full sample, the treatment would double the proportion of first generation and underrepresented minority students majoring in Economics. |
| Keywords: | college major choice, diversity in economics, higher education, nudges, randomized control trial |
| JEL: | I21 I23 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14418&r= |
| By: | Mototsugu Shintani; Kozo Ueda |
| Abstract: | Coibion and Gorodnichenko (2015) provide a useful framework to test the null hypothesis of full-information rational expectations against two popular classes of information rigidities, sticky information (SI) and noisy information (NI). However, the observational equivalence of SI and NI in average forecast errors gives no power in the test for one against the other. We identify the source of information rigidities by estimating the equations for the average forecast errors and variance of forecasts. The results show the importance of both SI and NI, but favor a type of NI in which agents quickly learn the underlying state. |
| Keywords: | imperfect information, heterogeneity, sticky information, noisy information, observational equivalence |
| JEL: | C53 D83 D84 E13 E31 E37 |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2021-48&r= |
| By: | Rabl, Vincent A.; Basso, Frédéric |
| Abstract: | Cultured meat is an emerging food innovation that promises to be a more sustainable alternative to conventional meat. However, despite its potential health, environmental and animal welfare benefits, research suggests that consumer acceptance of cultured meat is not assured. Across two pre-registered experimental studies (N = 456), this article investigates the extent to which two different credence characteristics, namely corporate social responsibility (Study 1) and food safety (Study 2), lead to halo-based inferences that may affect the consumer acceptance of cultured meat. Results indicate that, whereas the halo effect of positive corporate behavior is negligible, negative corporate behavior yields a substantial negative halo effect on consumers’ attitudes towards cultured meat, which in turn decreases acceptance of cultured meat. Findings also reveal that these negative halo-based inferences are heightened among consumers who value highly corporate social responsibility (Study 1) and food safety (Study 2). Overall, this article reveals an asymmetric halo effect by showing that people tend to react strongly to negative, but not to positive, information about a cultured meat company. The implications of the present research are discussed in the conclusion. |
| Keywords: | consumer acceptance; credence characteristics; cultured meat; halo effects; sustainability; corporate behavior |
| JEL: | R14 J01 |
| Date: | 2021–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:110789&r= |
| By: | John List; Azeem Shaikh; Atom Vayalinkal |
| Abstract: | List et al. (2019) provides a framework for testing multiple null hypotheses simultaneously using experimental data in which simple random sampling is used to assign treatment status to units. As in List et al. (2019), we rely on general results in Romano and Wolf (2010) to develop under weak assumptions a procedure that (i) asymptotically controls the familywise error rate - the probability of one or more false rejections - and (ii) is asymptotically balanced in that the marginal probability of rejecting any true null hypothesis is approximately equal in large samples. Our analysis departs from List et al. (2019) in that it further exploits observed, baseline covariates. The precise way in which these covariates are incorporated is based upon results in Lin (2013) in order to ensure that inferences are typically more powerful in large samples. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00732&r= |
| By: | Poulissen, Davey (Maastricht University); de Grip, Andries (ROA, Maastricht University); Fouarge, Didier (ROA, Maastricht University); Künn-Nelen, Annemarie (ROA, Maastricht University) |
| Abstract: | Various studies have shown that temporary workers participate less in training than those on permanent contracts. Human resources practices are considered to be an important explanation for this difference. We develop a theoretical framework for employers' provision of training that explicitly incorporates the costs and benefits associated with training investments in employees with different types of employment contracts. Our framework not only predicts employers to be less willing to invest in temporary workers due to the shorter time horizon associated with such an investment, but it also provides insights into how this willingness depends on characteristics of the training that are related to the expected costs and benefits of the training investment. A discrete choice experiment is used to empirically test the predictions from our theoretical framework. In line with our theoretical framework, we find that employers are less likely to invest in the training of temporary workers. This particularly holds when temporary workers do not have the prospect of a permanent contract with their current employer. Furthermore, we show that employers' likelihood of investing in temporary workers indeed depends on aspects related to the costs and benefits of training, that is, a financial contribution to the training costs made by employees, a repayment agreement that applies when workers leave the organisation prematurely, and the transferability of the skills being trained. Our findings can be used to increase employers' willingness to invest in temporary workers. However, similar effects are observed when looking at employers' willingness to invest in permanent workers, suggesting that it will be difficult to decrease the gap in employers' willingness to invest between temporary and permanent workers. |
| Keywords: | flexible contracts, human capital investments, stated preference experiment, cost–benefit assessment |
| JEL: | J24 J41 J62 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14395&r= |
| By: | Alfonsi, Livia; Bandiera, Oriana; Bassi, Vittorio; Burgess, Robin; Rasul, Imran; Sulaiman, Munshi; Vitali, Anna |
| Abstract: | We design a labor market experiment to compare demand- and supply-side policies to tackle youth unemployment, a key issue in low-income countries. The experiment tracks 1700 workers and 1500 firms over four years to compare the effect of offering workers either vocational training (VT) or firm-provided training (FT) for six months in a common setting where youth unemployment is above 60%. Relative to control workers we find that averaged over three post-intervention years, FT and VT workers: (i) enjoy large and similar upticks in sector-specific skills, (ii) significantly improve their employment rates, and, (iii) experience marked improvements in an index of labor market outcomes. These averages, however, mask differences in dynamics: FT gains materialize quickly but fade over time, while VT gains emerge slowly but are long-lasting, leading VT worker employment and earning profiles to rise above those of FT workers. Estimating a job ladder model of worker search reveals the key reason for this: VT workers receive significantly higher rates of job offers when unemployed thus hastening their movement back into work. This likely stems from the fact that the skills of VT workers are certified and therefore can be demonstrated to potential employers. Tackling youth unemployment by skilling youth using vocational training pre-labor market entry, therefore appears to be more effective than incentivizing firms through wage subsidies to hire and train young labor market entrants. |
| Keywords: | Apprenticeship; Human Capital; Labor Mobility; Training |
| JEL: | J2 M5 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14973&r= |
| By: | Luis Santos Pinto |
| Abstract: | This paper investigates whether an overconfident player is more likely to win a competition against a rational player. The two players are identical, except that the overconfident player overestimates his productivity of effort and, as a consequence, his probability of winning. The competition can take the form of either a tournament or a contest. The paper shows that the overconfident player is the Nash winner (loser) of a tournament with monotonic best responses when his effort and overconfidence are complements (substitutes). The overconfident player is the Nash winner (loser) of a tournament with non-monotonic best responses when he is slightly (significantly) overconfident. In contrast, the overconfident player is always the Nash loser of a contest. The paper also discusses the welfare implications of overconfidence. |
| Keywords: | Overconfidence, Tournaments, Contests, Welfare |
| JEL: | D60 D69 D91 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:21.06a&r= |
| By: | Islam, Mahnaz; Beg, Sabrin |
| Abstract: | Heavy government subsidies have led to inefficient application and overuse of fertilizer in Bangladesh. This results in higher than optimal costs to farmers and environmental and public costs. In a randomized controlled trial, we provide farmers with a simple tool (leaf color chart) and basic `rule-of-thumb' instructions to guide the timing and quantity of urea (nitrogen) application. Treatment farmers reduce urea use by 8\% without compromising yield, suggesting significant scope for improving urea management. The results are mainly driven by farmers delaying urea application as returns to urea are low early on in the season and urea applied is likely to be wasted. Cost-effectiveness estimates suggest that each dollar spent on this intervention produces a return of \$2.8 dollars due to reduction of urea use over three seasons, as well as significant environmental benefits. We also find suggestive evidence that optimizing the timing of urea application affects farmers' yields, plausibly as the intervention allows farmers to reallocate urea application to times when returns to urea are highest. |
| Keywords: | Technology Adoption, Farm Management, Environmental Economics, Resource Management |
| JEL: | H50 O12 O13 |
| Date: | 2020–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:108117&r= |