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on Experimental Economics |
| By: | Yuta Kittaka; Ryo Mikami; Natsumi Shimada |
| Abstract: | While search experiments are available in several designs, accumulating experimental evidence suggests that individual search behavior depends on design details. This paper reports the first classification and comparison of several search experiment designs widely accepted in search studies. These designs can be categorized as passive, quasi-active, and active. We found individual- and aggregate-level significant differences in the results across designs, despite identical models. In the passive design, subjects tended to be more reluctant to search than in the active design, and risk-averse subjects quickly terminated their search. Our results highlight the importance and potentials of designing search environments in practice. |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1148&r= |
| By: | Dohmen, Thomas (University of Bonn and IZA); Non, Arjan (Erasmus University Rotterdam); Stolp, Tom (SEO Amsterdam) |
| Abstract: | We conduct laboratory experiments to investigate basic predictions of principal-agent theory about the choice of piece rate contracts in the presence of output risk, and provide novel insights that reference dependent preferences affect the tradeoff between risk and incentives. Subjects in our experiments choose their compensation for performing a real-effort task from a menu of linear piece rate and fixed payment combinations. As classical principal-agent models predict, more risk averse individuals choose lower piece rates. However, in contrast to those predictions, we find that low-productivity risk averse workers choose higher piece rates when the riskiness of the environment increases. We hypothesize that reference points affect piece rate choice in risky environments, such that individuals whose expected earnings would exceed (fall below) the reference point in a risk-free environment behave risk averse (seeking) in risky environments. In a second experiment, we exogenously manipulate reference points and confirm this hypothesis. |
| Keywords: | incentive, piece-rate, risk, reference point, laboratory experiment |
| JEL: | D81 D91 M52 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14835&r= |
| By: | Evan M. Calford; Timothy N. Cason |
| Abstract: | Individuals often possess private information about the common value of a public good. Their contributions toward funding the public good can therefore reveal information that is useful to others who are considering their own contributions. This experiment compares static and dynamic contribution decisions to determine how hypothetical contingent reasoning differs in dynamic decisions. The timing of individuals’ sequential contribution decisions is endogenous. Funding the public good is more efficient with dynamic than static decisions in equilibrium, but this requires decision-makers to understand that in the future they can learn from past events. Our results indicate that a substantial fraction of subjects appreciate the benefits of deferring choice to learn about and condition their behavior on the contribution decisions of others. Many subjects, however, exhibit a bias away from rational choices in the direction of Cursed equilibrium, and some appear to extract information only from prior, and not concurrent, behavior. |
| Keywords: | Cursed equilibrium; Voluntary contributions; Club goods; Laboratory experiment |
| JEL: | C91 D71 D91 H41 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2021-679&r= |
| By: | Maria, Gracia; Ibañez, Marcela; Wollni, Meike; Vorlaufer, Miriam |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315925&r= |
| By: | McCann, Laura; Michler, Jeffrey; Carmona, Natalia Estrada; Raneri, Jessica |
| Keywords: | Food Consumption/Nutrition/Food Safety, Resource /Energy Economics and Policy |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315883&r= |
| By: | Christoph Engel (Max Planck Institute for Research on Collective Goods) |
| Abstract: | Most of the time most individuals do not commit crime. Why? One explanation is deonto-logical. People abide by legal rules just because these are the rules. In this perspective, the power of normativity is critical. It is supported by experimental evidence. To an im-pressive degree, participants even abide by arbitrary, costly rules, in the complete absence of enforcement. Yet do they also do that if they learn that some of their peers violate the rule? The experiment shows that rule following is conditional on social information. The more peers violate the rule, the more participants are likely to do so as well, and the more severely the violation. This main finding replicates in a vignette study. The effect is most pronounced with speeding, weaker with tax evasion, and absent with littering. In the lab, social information has an effect whether it is framed as the incidence of rule violation or of rule following. If they have no explicit social information, participants condition choices on their beliefs. Even merely knowing that they are part of a group, without knowing how others behave, has an effect. |
| Keywords: | decision to engage in criminal behavior, normativity, deontological motives, rule following, social context, social information, conditional rule following |
| Date: | 2021–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2021_20&r= |
| By: | Daniela Del Boca; Chiara Daniela Pronzato; Lucia Schiavon |
| Abstract: | This paper investigates the impact of parenting courses on fragile families' time use with their children. Courses aimed at raising parental awareness of the importance of educational activities are offered in four Italian cities (Naples, Reggio Emilia, Teramo and Palermo) within the framework of the social program "FA.C.E. Farsi Comunità Educanti" and with the cooperation of the institution "Con i Bambini". To conduct the impact evaluation, we designed a randomized controlled trial involving random assignment of the families (mostly mothers). At the end of the intervention, we administered an assessment questionnaire both to the treatment group, which took the course, and to the control group, which did not. Comparing the outcomes, we find attending the course increased families' awareness of the importance of educational activities for children, the frequency with which they read to the child, and their desire to spend more time with the child. |
| Keywords: | parenting, use of time, randomized controlled trial |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wchild:93&r= |
| By: | Werner, Tobias |
| Abstract: | As self-learning pricing algorithms become popular, there are growing concerns among academics and regulators that algorithms could learn to collude tacitly on non-competitive prices and thereby harm competition. I study popular reinforcement learning algorithms and show that they develop collusive behavior in a simulated market environment. To derive a counterfactual that resembles traditional tacit collusion, I conduct market experiments with human participants in the same environment. Across different treatments, I vary the market size and the number of firms that use a self-learned pricing algorithm. I provide evidence that oligopoly markets can become more collusive if algorithms make pricing decisions instead of humans. In two-firm markets, market prices are weakly increasing in the number of algorithms in the market. In three-firm markets, algorithms weaken competition if most firms use an algorithm and human sellers are inexperienced. |
| Keywords: | Artificial Intelligence,Collusion,Experiment,Human-Machine Interaction |
| JEL: | C90 D83 L13 L41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:372&r= |
| By: | Jha, Saumitra (Stanford University); Shayo, Moses (Hebrew University of Jerusalem) |
| Abstract: | Many studies document low rates of financial literacy and suboptimal levels of participation in financial markets. These issues are particularly acute among women. Does this reflect a self-reinforcing trap? If so, can a nudge to participate in financial markets generate knowledge, confidence, and further increase informed participation? We conduct a large field experiment that enables and incentivizes working-age men and women--a challenging group to reach with standard financial training programs--to trade stocks for four to seven weeks. We provide no additional educational content. We find that trading significantly improves financial confidence, as reflected in stock market participation, objective and subjective measures of financial knowledge, and risk tolerance. These effects are especially strong among women. Participants also become more self-reliant and consult others less when making financial decisions. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3933&r= |
| By: | Hensel, Lukas (Peking University); Tekleselassie, Tsegay (Policy Studies Institute); Witte, Marc (IZA) |
| Abstract: | Firms often use social networks to find workers, limiting the pool of potential applicants. We conduct a field experiment subsidizing firms' formal vacancy posting. The subsidies increase non-network employee search and shift vacancies towards high-skilled positions. Post-treatment, firms continue searching for high-skilled workers despite reverting to network-based search. This change in skill requirements does not increase vacancy posting or hiring, suggesting substitutability between workers of different skill levels. Finally, we experimentally show that information asymmetries about applicants' skills do not limit firms' formal search. Our results highlight that exposure to different labor market segments can permanently change firms' labor demand. |
| Keywords: | firms, hiring, social networks, formalization, field experiments |
| JEL: | D22 J23 J46 C93 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14839&r= |
| By: | Stefan Meyer (Monash University); Paulo Santos (Monash University); Chitpasong Kousonsavath (National University of Laos) |
| Abstract: | We experimentally evaluate the effect of competing for a prize on the coordinated control of invasive species in the presence of externalities. We offered prizes (merit, monetary and a combination of both) to the best performer in a contest aimed at promoting the control of rodent pests, an invasive species that is responsible for large losses in stored grain. Only monetary prizes are capable of promoting behavioral change, with relatively large effects: households in villages where prizes were offered reported losses in storage that are 25% lower than in control villages. The effect is a non-linear function of prize, with only intermediate size prizes leading to reductions in storage losses. Spillovers matter greatly, with non-participants in the contest benefiting almost as much as participants, highlighting the importance of externalities. Avoided losses are large enough to drive a reduction in rice prices in seasonally isolated markets. |
| Keywords: | contests, invasive species, spillovers, food security |
| JEL: | Q56 Q12 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2021-16&r= |
| By: | Nindi, Tabitha; Ricker-Gilbert, Jacob; Bauchet, Jonathan |
| Keywords: | Food Security and Poverty, Food Consumption/Nutrition/Food Safety |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315303&r= |
| By: | Akaichi, Faical; Ciera, Nichola; Revoredo-Giha, Cesar |
| Keywords: | Consumer/Household Economics |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315371&r= |
| By: | Non, Arjan (Erasmus University Rotterdam); Rohde, Ingrid M.T. (Istanbul Bilgi University); de Grip, Andries (ROA, Maastricht University); Dohmen, Thomas (University of Bonn and IZA) |
| Abstract: | We conduct a discrete choice experiment to investigate how the mission of high-tech companies affects job attractiveness and contributes to self-selection of science and engineering graduates who differ in prosocial attitudes. We characterize mission by whether or not the company combines its profit motive with a mission on innovation or corporate social responsibility (CSR). Furthermore, we vary job design (e.g. autonomy) and contractible job attributes (e.g. job security). We find that companies with a mission on innovation or CSR are considered more attractive. Women and individuals who are more altruistic and less competitive feel particularly attracted to such companies. |
| Keywords: | mission of the company, sorting, discrete choice experiment, job characteristics, social preferences |
| JEL: | J81 J82 M52 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14836&r= |
| By: | Agurto, M.; Bazan, M.; Hari, S.; Sarangi, S. |
| Abstract: | Gender disparities in STEM fields participation are a major cause of concern for policymakers around the world. In addition to talent misallocation, low female enrollment rates in STEM careers contribute to gender-based inequalities in earnings and wealth, given the higher average level of earnings in these fields. This paper studies the effects of exposure to role models on female preferences for STEM majors. We conduct a randomized control trial where female senior students currently enrolled in engineering programs at an elite private university in Peru give talks about their experiences at randomly selected high schools. We find that exposure to this treatment increases high ability female students' preferences for engineering programs by 14 percentage points. The effect is only statistically significant for the subgroup of female students with baseline math scores in the top 25 percentile, and who reside close to the city where the role models' university is located. We also find positive but smaller effects on "low ability" male students. In a context where females are discouraged from enrolling in STEM fields, our results have important policy implications. |
| Keywords: | Enrollment gender gap,field experiment,role models,Higher Education,career choices,stereotypes |
| JEL: | C93 I23 I24 J16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:975&r= |
| By: | Sarfo, Yaw; Musshoff, Oliver; Weber, Ron; Danne, Michael |
| Keywords: | Farm Management |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315029&r= |
| By: | Hossein Babaei; Sina Alemohammad; Richard Baraniuk |
| Abstract: | The first step towards investigating the effectiveness of a treatment is to split the population into the control and the treatment groups, then compare the average responses of the two groups to the treatment. In order to ensure that the difference in the two groups is only caused by the treatment, it is crucial for the control and the treatment groups to have similar statistics. The validity and reliability of trials are determined by the similarity of two groups' statistics. Covariate balancing methods increase the similarity between the distributions of the two groups' covariates. However, often in practice, there are not enough samples to accurately estimate the groups' covariate distributions. In this paper, we empirically show that covariate balancing with the standardized means difference covariate balancing measure is susceptible to adversarial treatment assignments in limited population sizes. Adversarial treatment assignments are those admitted by the covariate balance measure, but result in large ATE estimation errors. To support this argument, we provide an optimization-based algorithm, namely Adversarial Treatment ASsignment in TREatment Effect Trials (ATASTREET), to find the adversarial treatment assignments for the IHDP-1000 dataset. |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2110.13262&r= |
| By: | Christopher Roth (University of Cologne, ECONtribute, C-SEB, briq, CESifo, CEPR, CAGE); Mirko Wiederholt (LMU Munich and Sciences Po, CESifo, CEPR); Johannes Wohlfart (Department of Economics and CEBI, University of Copenhagen, CESifo, Danish Finance Institute) |
| Abstract: | We study the effects of forward guidance with an approach that combines theory with experimental estimates of counterfactual expectation adjustments. Guided by the model, we conduct experiments with representative samples of the US population to study how households adjust their expectations in response to changes in the Fed’s projections about future interest rates. Respondents significantly downward-adjust their inflation expectations in response to learning about an increase in the Fed’s pro-jection about the federal funds rate three years in the future, and they expect inflation to respond most strongly immediately after the announcement. By contrast, respon-dents do not adjust their nominal income expectations. Our model-based estimates highlight a small average consumption response to forward guidance due to oppos-ing effects from intertemporal substitution and changes in expected real income. |
| Keywords: | Expectation Formation, Information, Updating |
| JEL: | D12 D14 D83 D84 E32 G11 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:126&r= |
| By: | Kelishomi, Ali Moghaddasi (Loughborough University); Sgroi, Daniel (University of Warwick, ESRC CAGE Centre & IZA Bonn) |
| Abstract: | Iran has the world’s only government-regulated kidney market, in which around 1000 individuals go through live kidney-removal surgery annually. We report the results of the first field study of donor behavior in this unique and controversial market. Those who enter the market have low income, typically entering to raise funds. They have lower risk tolerance and higher patience levels than the Iranian average. There is no di erence in rationality from population averages. There is evidence of altruism among participants. This might shed light on the sort of people likely to participate if other nations were to operate such markets. |
| Keywords: | kidney donation ; Iranian kidney market ; risk ; patience ; rationality ; altruism ; generalized axiom of revealed preference ; field experiment JEL Classification: I11 ; I12 ; I18 ; C93 ; D03 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1381&r= |
| By: | Moritz, Laura; Kuhn, Lena; Bobojonov, Ihtiyor; Glauben, Thomas |
| Keywords: | Risk and Uncertainty |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315266&r= |
| By: | Giacomo Bonanno (Department of Economics, University of California Davis) |
| Abstract: | We argue in favor of a departure from the standard equilibrium approach in game theory in favor of the less ambitious goal of describing only the actual behavior of rational players. We investigate the notion of rationality in behavioral models of extensive-form games (allowing for imperfect information), where a state is described in terms of a play of the game instead of a strategy profile. The players' beliefs are specified only at reached decision histories and are modeled as pre-choice beliefs, allowing us to carry out the analysis without the need for (objective or subjective) counterfactuals. The analysis is close in spirit to the literature on self-confirming equilibrium, but it does not rely on the notion of strategy. We also provide a characterization of rational play that is compatible with pure-strategy Nash equilibrium. |
| Keywords: | Rationality, extensive-form game, self-confirming equilibrium, Nash equilibrium, behavioral model |
| JEL: | C7 |
| Date: | 2021–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:cda:wpaper:344&r= |