|
on Experimental Economics |
|
Issue of 2021‒10‒11
eighteen papers chosen by |
| By: | Aj Bostian (University of Tampere - University of Tampere); Christoph Heinzel (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - AGROCAMPUS OUEST - 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: | Participants in an experiment can engage in unobservable asset integration, mentally incorporating their own non-experimental "field" resources into an otherwise controlled scenario. This paper extends asset integration to include intertemporal tradeoffs like consumption smoothing. A model of "lifecycle asset integration" shows that exogenous and endogenous field resources cause different interference patterns. Exogenous resources cannot be affected by the experiment, and so their interference can be controlled by accounting for their level. Endogenous resources, by contrast, are highly substitutable with the experiment, and their interference can be controlled only by modeling the entire experiment-field interaction. The model's practical implications are investigated in the context of three classic laboratory experiments on risk and time: one static (Holt and Laury, 2002) and two dynamic (Andersen et al., 2008; Andreoni and Sprenger, 2012). As interference worsens, decisions in these tasks tend to exhibit a kind of attenuation bias toward less risk aversion and more patience. Interference occurs reliably when field resources are on household scales, but amounts on the scale of pocket change can also cause problems. |
| Keywords: | Risk aversion,Consumption smoothing,Discount rate,Asset integration,Experiment |
| Date: | 2019–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03359016&r= |
| By: | Brice Corgnet (Univ Lyon, emlyon business school, GATE UMR 5824, F-69130 Ecully, France); Camille Cornand (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69130 Ecully, France); Nobuyuki Hanaki (Institute for Social and Economic Research, Osaka University) |
| Abstract: | We study the reaction of investors to tail events across trading institutions. We conduct experiments in which investors bid on a financial asset that delivers a small positive reward in more than 99% of the cases and a large loss otherwise. The baseline treatment uses a repeated BDM mechanism whereas the market treatment replaces the uniform draw of the BDM mechanism by a uniform draw over the bids of the other participants. Our design is such that bids should not differ across treatments in normal times while allowing for potential differences to emerge after tail events have occurred. We find that markets tend to exacerbate the reaction of investors to tail losses and we attribute this effect to emotions. |
| Keywords: | Tail events, trading institutions, experimental finance, emotions and risk |
| JEL: | C91 C92 G41 D91 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:2117&r= |
| By: | Qi, Danyi; Li, Ran; Penn, Jerrod; Houghtaling, Bailey; Prinyawiwatkul, Witoon; Roe, Brian E. |
| Keywords: | Marketing, Research Methods/Statistical Methods, Institutional and Behavioral Economics |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea21:313980&r= |
| By: | Chernulich, Aleksei; Horowitz, John; Rabanal, Jean Paul (University of Stavanger); Rud, Olga A (University of Stavanger); Sharifova , Manizha |
| Abstract: | We design an experiment to study how reversible entry decisions are affected by public and private payoff disclosure policies. In our environment, subjects choose between a risky payoff, which evolves according to an autoregressive process, and a constant outside option payoff. The treatments vary the information disclosure rule on the risky payoff, such that in the public information treatment the risky payoff is always observable, while in the private information treatment, the risky payoff is observable only to the participants who enter the market. We find that under private information, market entry is higher, which suggests that subjects engage in exploration and place value on information. |
| Keywords: | experiment; entry and exit decisions; bandit problems; information pro- vision; forecasting |
| JEL: | C91 D81 D83 D84 G11 |
| Date: | 2021–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2021_003&r= |
| By: | Adeniran, Adedeji; Ekeruche, Mma Amara; Onywkwena, Chukwuka |
| Abstract: | Economic development is linked with increased state capacity including the ability to mobilise domestic tax resources. For many developing countries, high levels of informality are a major constraint in this regard. Yet, economic incentives like changing the tax rate or increasing the filling and audit rate can be ineffective in a highly informal economic structure. In this paper, we explore possible roles for behavioural interventions such as sharing information about peers’ tax behaviour to engineer higher tax compliance. Based on an artefactual field experiment among own account workers in Nigeria, we find that information interventions can play an important role in ensuring tax compliance. Specifically, targeting information around what people can directly observe can be a way to improve tax compliance. Providing information on punishment or good practices that appeal to feelings of morality yields higher tax compliance. |
| Keywords: | Finance, Social Protection, |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:idq:ictduk:16711&r= |
| By: | Duffy, John (University of California); Rabanal, Jean Paul (University of Stavanger); Rud, Olga (University of Stavanger) |
| Abstract: | We report on an experiment studying market reactions to stock splits and reverse splits. In the first environment, two assets have increasing fundamental values, and one asset is subject to a 2-for-1 share split while the other is not. In the second environment, the fundamental values of both assets are decreasing, and one asset is subject to a 1-for-2 reverse split while the other is not. We find that share prices do not fully adjust to changes in fundamental values per share following both types of splits and we relate this phenomenon to difficulties that traders have with proportional thinking. |
| Keywords: | Stock splits; behavioral finance; |
| JEL: | C92 G10 G40 G41 |
| Date: | 2021–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2021_001&r= |
| By: | Gerald Eisenkopf; Torben Kölpin |
| Abstract: | We provide a parsimonious model of leadership in social dilemma situations and test it with a meta-analysis of experimental studies. We focus on studies with treatments that allow for sequential contributions to a public good (as in Güth et al. (2007)). The group members observe the contribution of a leader before contributing themselves. We compare the results with simultaneous contribution treatments from the same studies. Our results confirm that the establishment of a leader indeed leads to persistently higher and more coordinated contributions. As predicted, the aggregate effect remains stable over time and increases in group size even though leaders and followers have more divergent contribution patterns in larger groups. We also find empirical support for an explanation of the observed 'leader’s curse'. |
| Keywords: | Leading-by-Example, Cooperation, Meta-analysis, Voluntary contribution |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:twi:respas:0125&r= |
| By: | Sandro Ambuehl; B. Douglas Bernheim |
| Abstract: | We investigate how individuals think groups should aggregate members’ ordinal preferences -that is, how they interpret “the will of the people.” In an experiment, we elicit revealed attitudes toward ordinal preference aggregation and classify subjects according to the rules they apparently deploy. Majoritarianism is rare. Instead, people employ rules that place greater weight on compromise options. The classification’s fit is excellent, and clustering analysis reveals that it does not omit important rules. We ask whether rules are stable across domains, whether people impute cardinal utility from ordinal ranks, and whether attitudes toward aggregation differ across countries with divergent traditions. |
| Keywords: | preference aggregation, experiment, social welfare analysis |
| JEL: | C91 D71 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9317&r= |
| By: | Tsigkou, Stavroula; Messer, Kent D.; Kecinski, Maik; Li, Tongzhe |
| Keywords: | Research Methods/Statistical Methods, Environmental Economics and Policy, Marketing |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea21:313940&r= |
| By: | Adena, Maja; Harke, Julian |
| Abstract: | Has the COVID-19 pandemic affected pro-sociality among individuals? After the onset of the pandemic, many charitable appeals were updated to include a reference to COVID-19. Did donors increase their giving in response to such changes? In order to answer these questions, we conducted a real-donation online experiment with more than 4,200 participants from 149 local areas in England and over 21 weeks. First, we varied the fundraising appeal to either include or exclude a reference to COVID-19. We found that including the reference to COVID-19 in the appeal increased donations. Second, in a natural experiment-like approach, we studied how the relative local severity of the pandemic and media coverage about local COVID-19 severity affected giving in our experiment. We found that both higher local severity and more related articles increased giving of participants in the respective areas. This holds for different specifications, including specifications with location fixed effects, time fixed effects, a broad set of individual characteristics to account for a potentially changing composition of the sample over time and to account for health- and work-related experiences with and expectations regarding the pandemic. While negative experiences with COVID-19 correlate negatively with giving, both approaches led us to conclude that the pure effect of increased salience of the pandemic on pro-sociality is positive. Despite the shift in public attention toward the domestic fight against the pandemic and away from developing countries' challenges, we found that preferences did not shift toward giving more to a national project and less to developing countries. |
| Keywords: | COVID-19,charitable giving,online experiments,natural experiments |
| JEL: | C93 D64 D12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2021304&r= |
| By: | Ernesto Mesa-Vazquez (Universidad de Valencia, ERICES); Ismael Rodriguez-Lara (Department of Economics, Universidad de Granada & Economic Science Institute (ESI), Chapman University); Amparo Urbano (Universidad de Valencia, ERICES) |
| Abstract: | We show that generosity is affected when we vary the level of role uncertainty, i.e., the probability that the dictator’s decision will be implemented. We also show that framing matters for generosity in that subjects are less generous when they are told that their choices will be implemented with a certain probability, compared with a setting in which they are told that their choices will not be implemented with certain probability. |
| Keywords: | dictator games, generosity, role uncertainty, framing effects |
| JEL: | C91 D3 D6 D81 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:21-17&r= |
| By: | Friedman, Dan; Rabanal, Jean Paul (University of Stavanger); Rud, Olga A (University of Stavanger); Zhao, Shuchen |
| Abstract: | Can an efficient correlated equilibrium emerge without any exogenous benevolent agent providing coordinating signals? Theoretical work in adaptive dynamics suggests a positive answer, which we test in a laboratory experiment. In the well-known Chicken game, we observe time average play that is close to the asymmetric pure Nash equilibrium in some treatments, and in other treatments we observe collusive play. In a game resembling rock-paper-scissors or matching pennies, we observe time average play close to a correlated equilibrium that is more efficient than the unique Nash equilibrium. Estimates and simulations of adaptive dynamics capture much of the observed regularities. |
| Keywords: | Correlated equilibrium; Laboratory experiment; Adaptive dynamics |
| JEL: | A00 |
| Date: | 2021–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2021_002&r= |
| By: | Chengyi Tu; Paolo DOdorico; Zhe Li; Samir Suweis |
| Abstract: | The sustainable use of common-pool resources (CPRs) is a major environmental governance challenge because of their possible over-exploitation. Research in this field has overlooked the feedback between user decisions and resource dynamics. Here we develop an online game to perform a set of experiments in which users of the same CPR decide on their individual harvesting rates, which in turn depend on the resource dynamics. We show that, if users share common goals, a high level of self-organized cooperation emerges, leading to long-term resource sustainability. Otherwise, selfish/individualistic behaviors lead to resource depletion ("Tragedy of the Commons"). To explain these results, we develop an analytical model of coupled resource-decision dynamics based on optimal control theory and show how this framework reproduces the empirical results. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.00474&r= |
| By: | Tianshu Sun (Marshall School of Business, University of Southern California, Los Angeles, CA 90089 United States); Zhe Yuan (School of Economics, Zhejiang University, Hangzhou 310000 China); Chunxiao Li (Alibaba Group); Kaifu Zhang (Alibaba Group); Jun Xu (Alibaba Group) |
| Abstract: | Personal data has become a key input in Internet Commerce, facilitating the matching between millions of customers and merchants. Recent data regulations in China, Europe and US restricts Internet platforms' ability to collect and use personal data for personalized recommendation and may fundamentally impact Internet Commerce. In collaboration with the world's largest E-commerce platform, we conduct a large-scale field experiment to measure the potential impact of data regulation policy, and to understand the value of personal data in Internet Commerce. For a random subset of 555,800 customers on Alibaba platform, we simulate the regulation by banning the use of personal data in the homepage recommendation algorithm and record the matching process and outcomes between these customers and merchants. Compared to the control group with personal data, we observe a significant higher concentration in the algorithmic recommendation of products in the treatment group and a very sharp decrease in the matching outcomes as measured by both customer engagement (clickthrough rate and product browsing) and market transaction (GMV). The negative effect is disproportionate and more pronounced for niche merchants and customers who would benefit most from E-commerce. We discuss the economic impact of data regulation on Internet Commerce, as well as the role of personal data in generating value and fostering innovations. |
| Keywords: | Personal Data, Privacy Regulation, E-commerce, Field experiments, Personalization, Market Structure |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:2110&r= |
| By: | Nadine Chlaß (Department of Economics, Friedrich Schiller University Jena, Germany.); Lata Gangadharan (Department of Economics, Monash University,); Kristy Jones (Senior Economist, Australian Council of Trade Unions Behavioural Insights Team, Queensland,) |
| Abstract: | Donations are often made through charitable intermediaries that can fund themselves from these same donations. After intermediation, only a fraction of the amount donated may reach the intended beneficiary. The price of charitable output is therefore higher after intermediation than if donors donated directly toward the end cause. At the same time, this price is hidden from donors since they cannot verify how much intermediaries pass on. We show that while donors reduce their donation in intermediation itself and also reduce their donation because they expect the price of charitable output to increase, both reactions are either fully or partly compensated by their ethical preferences for the recipient’s rights. Charitable output, therefore, can be a Giffen-good. |
| Keywords: | charitable giving; altruism; intermediation; charitable institutions; moral judgment reasoning; experiment |
| JEL: | C91 D64 L31 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2021-14&r= |
| By: | Tiet, Tuyen; Nguyen-Van, Phu; Pham, Thi Kim Cuong; Stenger, Anne; To-The, Nguyen; Boun My, Kene; Nguyen, Huy |
| Keywords: | Environmental Economics and Policy, Agricultural and Food Policy, Research Methods/Statistical Methods |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea21:313946&r= |
| By: | Lecoutere, Els; Chu, Lan |
| Abstract: | This study assesses the impact of an intervention that challenges gender relations by introducing a more participatory way of intrahousehold decision making on women’s empowerment in monogamous agricultural households in Tanzania. Participatory intrahousehold decision making is introduced through (i) awareness raising couple seminars in which couples go through a self-assessment and group discussion about their intrahousehold division of roles and resources; and through (ii) a subsequent intensive coaching package of activities in which couples are coached by gender officers on how to implement participatory decision making in their household.The study adopts a mixed methods approach, which consists of (i) a quantitative impact assessment of the introduction of participatory intrahousehold decision making on different domains of women’s empowerment, through respectively the couple seminars and randomly encouraged intensive coaching, and (ii) a qualitative component to understand how the changes caused by the interventions fit into women’s own valued aspects and processes of empowerment, by which the study embraces the inherently subjective dimensions of empowerment.The study shows that awareness-raising couple seminars catalysed women’s access to livestock, but not their access to personal income while this is highly valued by women for independently taking minor expenditure decisions for their household’s wellbeing. In line with women’s priorities, intensive coaching in participatory intrahousehold decision making increased women’s control over and accuracy of information about household income earned with coffee. Both couple seminars and intensive coaching increased women’s involvement in strategic farm decisions, which fits women’s wish for effective decision-making power in this domain. Couple seminars contributed to a fairer division of productive and reproductive labour among spouses, which is advantageous to women, even if this was not a key priority from women’s perspective. |
| Keywords: | Tanzania; intra-household decision making; women empowerment |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iob:dpaper:202106&r= |
| By: | Lordan, Grace; Pischke, Jorn-Steffen |
| Abstract: | Occupational segregation and pay gaps by gender remain large, while many of the constraints traditionally believed to be responsible for these gaps seem to have weakened over time. We explore the possibility that women and men have different tastes for the content of the work that they do. We relate job satisfaction and job mobility to measures that proxy for the content of the work in an occupation, which we label ‘people’, ‘brains’ and ‘brawn’. The results suggest that women value jobs high on ‘people’ content and low on ‘brawn’. Men care about job content in a similar fashion, but have much weaker preferences. High school students show similar preferences in a discrete choice experiment and indicate that they make their choices based mainly on preferences for the work itself. We argue that the more pronounced preferences of women can account for occupational sorting, which often leads them into careers with large pay penalties for interruptions due to childbearing. |
| Keywords: | ES/M010341/1 |
| JEL: | R14 J01 |
| Date: | 2021–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:111928&r= |