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on Experimental Economics |
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Issue of 2022‒01‒17
twenty papers chosen by |
| By: | Graham Beattie; Iza Ding; Andrea La Nauze |
| Abstract: | We provide evidence of an energy efficiency gap in China. Using an incentivized field experiment, we document that providing information to consumers on the energy costs of lightbulbs significantly affects their willingness to pay for energy efficient bulbs. Unlike previous literature, we do not find evidence that this gap is driven by biased beliefs. Further our experimental design allows us to rule out that changes in willingness to pay are driven purely by the salience of the monetary or environmental costs of lightbulbs. We argue that the results are consistent with consumers being risk averse and uncertain about the benefits of more energy efficient appliances. |
| Keywords: | energy-efficiency, lightbulbs, information experiment |
| JEL: | Q40 H23 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9435&r= |
| By: | Halla, Martin (University of Linz); Kah, Christopher (Mercedes-Benz AG); Sausgruber, Rupert (Wirtschaftsuniversität Wien) |
| Abstract: | To test for ethnic discrimination in access to outpatient health care services, we carry out an email-correspondence study in Germany. We approach 3,224 physician offices in the 79 largest cities in Germany with fictitious appointment requests and randomized patients' characteristics. We find that patients' ethnicity, as signaled by distinct Turkish versus German names, does not affect whether they receive an appointment or wait time. In contrast, patients with private insurance are 31 percent more likely to receive an appointment. Holding a private insurance also increases the likelihood of receiving a response and reduces the wait time. This suggests that physicians use leeway to prioritize privately insured patients to enhance their earnings, but they do not discriminate persons of Turkish origin based on taste. Still, their behavior creates means-based barriers for economically disadvantaged groups. |
| Keywords: | discrimination, immigrants, ethnicity, health care markets, health insurance, inequality, correspondence experiment, field experiment |
| JEL: | I11 J15 I14 I18 H51 C93 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14886&r= |
| By: | Aydin, Deniz |
| Abstract: | I design a debt relief experiment that randomizes forbearance term and interest rates independently in a 2-by-2-by-2 design for delinquent borrowers. Forbearance take-up prevents one in three defaults in the first month with no long-run effects beyond expiration. Before expiration forbearance reduces payments by twice as much compared with rate reductions but reduces defaults by less. Using the experimental assignment as an instrument to decompose the effect of future payments entailed by a rate reduction from current liquidity a dollar change in the present value of future payments has a similar effect on defaults as a 30 cent change in current payments. Whether forbearance or rate reductions are relatively more effective the relative sensitivity of behavior to future payments and whether interest rates affect behavior to the extent that they affect current payments are all tightly linked to balance sheets. Influencing interest rates has benefits through the present value of future payments which is difficult to replicate using rescheduling policies. |
| Keywords: | forbearance,interest rates,debt relief,present value,randomized field experiment |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:248467&r= |
| By: | Assenza, Tiziana |
| Abstract: | Employing a representative US online panel, we document strong imprecision in people’s beliefs about their ability to assess the accuracy of news headlines. With a randomized information experiment, we show that revelation of the true abil- ity causally adjusts beliefs and improves their precision. The effect is stronger for subjects who are overconfident about own ability and this is driven by gender dif- ferences in the reaction to this information. Finally, we also find that the provision of information on ability increases the willingness to pay for an insurance against the risk of being harmed by misinformation, among risk-averse participants. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:126335&r= |
| By: | Kristin Asdal (UiO - University of Oslo); Béatrice Cointe (CSI i3 - Centre de Sociologie de l'Innovation i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | While there is a wealth of research on the history, philosophy and epistemology of economics, few studies approach economics as a practical and material endeavour in the way STS and ethnographies of science have approached natural sciences. To explore how objectivity is practically accomplished in laboratory economic experiments, we focus on a, at the face of it, modest and mundane thing: the written instructions that guide experimental subjects in the lab. In a material-semiotic perspective, these instructions can be understood as text-devices. We follow this text-device 'on the move' from its very writing, through the lab, the review process and out into the journal article. To do so, we analyse "text-author ensembles": journal articles together with practice-oriented interviews with their authors. We show that the instructions act not simply as a text, but as an experimental instrument that also performs the procedure of experimental economics. They draw together the procedural, material and rhetorical dimensions of experimental work in economics, and link the lab setting to collective validation procedures within the discipline of economics. To achieve this, experimental economists rely on qualitative writing skills refined in collective writing and reviewing practices. This particular text-device 'on the move' alert us not only to the role of writing and writing skills in the production of scientific knowledge, but to the role of texts as material and semiotic objects that can produce not only facts, but labs and disciplines too, and that are key to the accomplishment of objectivity in experimental economics. |
| Keywords: | economics,experiments,texts,performativity,laboratory |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03429169&r= |
| By: | Johannes Jarke-Neuert; Grischa Perino; Henrike Schwickert |
| Abstract: | We test the hypothesis that protest participation decisions in an adult population of potential climate protesters are interdependent. Subjects (n=1,510) from the four largest German cities were recruited two weeks before protest date. We measured participation (ex post) and beliefs about the other subjects' participation (ex ante) in an online survey, used a randomized informational intervention to induce exogenous variance in beliefs, and estimated the causal effect of a change in belief on the probability of participation using a control function approach. Participation decisions are found to be strategic substitutes: a one percentage-point increase of belief causes a .67 percentage-point decrease in the probability of participation in the average subject. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.09478&r= |
| By: | Simon Gaechter; Kyeongtae Lee; Martin Sefton; Till O. Weber |
| Abstract: | The prisoner’s dilemma (PD) is arguably the most important model of social dilemmas, but our knowledge about how a PD’s material payoff structure affects cooperation is incomplete. In this paper we investigate the effect of variation in material payoffs on cooperation, focussing on one-shot PD games where efficiency requires mutual cooperation. Following Mengel (2018) we vary three payoff indices. Indices of risk and temptation capture the unilateral incentives to defect against defectors and co-operators respectively, while an index of efficiency captures the gains from cooperation. We conduct two studies: first, varying the payoff indices over a large range and, second, in a novel orthogonal design that allows us to measure the effect of one payoff index while holding the others constant. In the second study we also compare a student and non-student subject pool, which allows us to assess generalizability of results. In both studies we find that temptation reduces cooperation. In neither study, nor in either subject pool of our second study, do we find a significant effect of risk. |
| Keywords: | prisoner’s dilemma, cooperation, temptation, risk, efficiency |
| JEL: | A13 C91 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9449&r= |
| By: | Albert J. et al. Menkveld |
| Abstract: | In statistics, samples are drawn from a population in a data-generating process (DGP). Standard errors measure the uncertainty in sample estimates of population parameters. In science, evidence is generated to test hypotheses in an evidence-generating process (EGP). We claim that EGP variation across researchers adds uncertainty: non-standard errors. To study them, we let 164 teams test six hypotheses on the same sample. We find that non-standard errors are sizeable, on par with standard errors. Their size (i) co-varies only weakly with team merits, reproducibility, or peer rating, (ii) declines significantly after peer-feedback, and (iii) is underestimated by participants. |
| Keywords: | non-standard errors, multi-analyst approach, liquidity |
| JEL: | C12 C18 G10 G14 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9453&r= |
| By: | Frederico Finan; Demian Pouzo |
| Abstract: | This paper presents a framework for how to incorporate prior sources of information into the design of a sequential experiment. This information can come from many sources, including previous experiments, expert opinions, or the experimenter's own introspection. We formalize this problem using a multi-prior Bayesian approach that maps each source to a Bayesian model. These models are aggregated according to their associated posterior probabilities. We evaluate our framework according to three criteria: whether the experimenter learns the parameters of the payoff distributions, the probability that the experimenter chooses the wrong treatment when deciding to stop the experiment, and the average rewards. We show that our framework exhibits several nice finite sample properties, including robustness to any source that is not externally valid. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.09170&r= |
| By: | Luise Görges (Leuphana University of Lüneburg) |
| Abstract: | To investigate the role of gender norms in household specialisation choices, I conduct a lab experiment with real hetero-sexual couples playing a battle of the sexes game. The salience of gender norms varies across treatments: the Norm group chooses between strategies labelled as a family specialisation game (Career vs. Family), the Neutral group chooses A vs. B. Women respond strongly to the salience of Norms; they opt for Career at a significantly lower rate compared to Neutral, regardless of familiarity with their partner. By contrast, men’s response is weak and heterogeneous across partner and stranger pairings. Additional analyses suggest that the pattern is not explained by differential beliefs, but is consistent with marriage market motives, i.e. some men may want to signal progressive gender attitudes to their partner. |
| Keywords: | Experiment, labour division, battle of the sexes, norms, gender |
| JEL: | D13 J16 J22 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:400&r= |
| By: | Thomas Epper (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, IÉSEG School Of Management [Puteaux]); Helga Fehr-Duda (University of Zurich, Department of Banking and Finance) |
| Abstract: | Standard economic models view risk taking and time discounting as two independent dimensions of decision making. However, mounting experimental evidence demonstrates striking parallels in patterns of risk taking and time discounting behavior and systematic interaction effects, which suggests that there may be common underlying forces driving these interactions. Here we show that the inherent uncertainty associated with future prospects together with individuals' proneness to probability weighting generates a unifying framework for explaining a large number of puzzling behavioral regularities: delay-dependent risk tolerance, aversion to sequential resolution of uncertainty, preferences for the timing of the resolution of uncertainty, the differential discounting of risky and certain outcomes, hyperbolic discounting, subadditive discounting, and the order dependence of prospect valuation. Furthermore, all these phenomena can be predicted simultaneously with the same set of preference parameters. |
| Keywords: | risk preferences,time preferences,preference interaction,increasing risk tolerance |
| Date: | 2021–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03473431&r= |
| By: | Te Bao; Brice Corgnet; Nobuyuki Hanaki; Katsuhiko Okada; Yohanes E. Riyanto; Jiahua Zhu |
| Abstract: | We compare the performance of financial professionals (CFAs) with university students in four financial forecasting tasks ranging from simple lab prediction tasks to longitudinal field tasks. Although students and professionals performed similarly in the artificial forecasting tasks, their performance differed in the more realistic tasks. Yet, increasing the ‘representativeness of the situation’ in the lab tasks did not systematically benefit financial professionals as students outperformed CFAs when forecasting historical series. However, professionals outperformed students in the field task. Our results imply that the expertise of financial professionals might have been underestimated in previous works that focused on lab tasks. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1156&r= |
| By: | Lidia Farré; Cristina Felfe; Libertad González Luna; Patrick Schneider |
| Abstract: | Direct exposure to counter-stereotypical behaviors early in life has been put forward as a promising way to change gender norms across generations. We ask to which extent public policy designed to promote counter-stereotypical behavior among parents influences gender norms for their children. Specifically, we combine the national-level introduction of paternity leave in Spain with a unique, large-scale lab-in-the-field experiment conducted with children born around the policy change. We provide causal evidence that, at age 12, children whose fathers were eligible for paternity leave exhibit more egalitarian attitudes towards gender roles and are more supportive of mothers and fathers being equally engaged in the labor market and in the home. They also engage more in counter-stereotypical day-to-day behaviors and expect to deviate from the male-breadwinner model in the future. |
| Keywords: | Gender role attitudes, paternity leave, social norms |
| JEL: | J08 J13 J16 J18 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1812&r= |
| By: | Alessandra Casella (Columbia University [New York]); Antonin Macé (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Voters have strong incentives to increase their influence by trading votes, acquiring others' votes when preferences are strong in exchange for giving votes away when preferences are weak. But is vote trading welfare-improving or welfare-decreasing? For a practice long believed to be central to collective decisions, the lack of a clear answer is surprising. 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. We then focus on vote markets, where votes can be traded against a numeraire. We conclude with procedures allowing voters to shift votes across decisions - to trade votes with oneself only. 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,quadratic voting,vote trading,storable votes,logrolling,Vote markets,Storable votes,Vote trading,Logrolling,Quadratic voting,Bundling,vote markets |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02922012&r= |
| By: | Matthew Lowe; Madeline McKelway |
| Abstract: | Joint household decision-making may be prevented by the incentives of individuals to withhold information or avoid bargaining. We study whether these barriers to joint decision-making keep female labor force participation low in India. In partnership with one of India’s largest carpet producers, we offered a weaving job to 495 married women. We randomized whether job information and a ticket enabling enrollment were given to the wife or to the husband, and cross-randomized the non-ticketed spouse to one of three information sets. With no information, the ticketed spouse could plausibly deny the existence of the job ticket to prevent enrollment. With information, the non-ticketed spouse was also informed about the job opportunity. With discussion, both spouses were given three minutes to discuss the job opportunity together. Our motivating model predicts that both information and discussion should raise enrollment, and nearly all intra-household experts we surveyed gave the same qualitative predictions. In reality, information had no effect on enrollment, and discussion reduced enrollment by as much as 50%. We sketch an alternative model in which interventions that make household decision-making more joint give both spouses veto power and reduce enrollment. Supporting this model, the negative effects on enrollment are driven by couples that disagree about the appropriateness of women working as weavers. |
| Keywords: | intra-household, gender, bargaining, expert survey, India |
| JEL: | D13 O12 J22 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9446&r= |
| By: | James Mabli; Martha Bleeker; Mary Kay Fox; Betina Jean-Louis; Marlene Fox |
| Abstract: | This article estimates the effect of Healthy Harlem's Get Fit—a 12-week after-school program aimed at helping students improve physical activity and eating habits—on BMI and weight status of adolescents. |
| Keywords: | high school, middle school, obese, overweight, randomized controlled trial |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:ff43eb73b0d74398af9e2ceb214fc24e&r= |
| By: | Christina Korting; Carl Lieberman; Jordan Matsudaira; Zhuan Pei; Yi Shen |
| Abstract: | Despite the widespread use of graphs in empirical research, little is known about readers' ability to process the statistical information they are meant to convey ("visual inference"). We study visual inference within the context of regression discontinuity (RD) designs by measuring how accurately readers identify discontinuities in graphs produced from data generating processes calibrated on 11 published papers from leading economics journals. First, we assess the effects of different graphical representation methods on visual inference using randomized experiments. We find that bin widths and fit lines have the largest impacts on whether participants correctly perceive the presence or absence of a discontinuity. Incorporating the experimental results into two decision theoretical criteria adapted from the recent economics literature, we find that using small bins with no fit lines to construct RD graphs performs well and recommend it as a starting point to practitioners. Second, we compare visual inference with widely used econometric inference procedures. We find that visual inference achieves similar or lower type I error rates and complements econometric inference. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.03096&r= |
| By: | Batsaikhan, Mongoljin (Georgetown University); Gørtz, Mette (University of Copenhagen); Kennes, John (Aarhus University); Lyng, Ran Sun (University of Toronto); Monte, Daniel (Sao Paulo School of Economics); Tumennasan, Norovsambuu (Dalhousie University) |
| Abstract: | We use a randomized survey to study how discrimination affects parenting choices. In our survey, parents with young children choose between two public daycares, which are described by testimonials from other (fictitious) parents. The testifying parents in the first daycare describe a free play institution, which reflects a pro-typical Scandinavian 'permissive parenting' approach to childcare. The testifying parents in the second daycare describe a more structured daycare, which reflects an alternative approach to child care that is broadly consistent with 'paternalistic parenting'. We randomize the fictitious names of the testifying parents across respondents. We find bias against ethnic minorities among parents who prefer a structured child care institution but not among parents who prefer free play one. These biases are not reduced when we provide additional information on testifiers' professions. Our findings offer validation for a model of parenting where biases regarding discrimination are likely to come from parents preferring less permissive/more authoritarian methods of parenting. |
| Keywords: | discrimination, survey experiment, parenting style, daycare choice |
| JEL: | D15 D63 J15 I24 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14874&r= |
| By: | Pham, Vinh |
| Abstract: | Incentives, such as funeral expense reimbursements and direct payments for surviving families, have been suggested to increase organ supply from post-mortem donors. Following Heyman and Ariely’s 2004 findings on the impact of gift labeling and reward magnitude on behaviors in altruistic environments, this study utilizes a full factorial survey design to examine subjects’ moral assessment of funeral benefits and cash prizes, and the effects these incentives had on the willingness to provide family consent (WTC). Regression analysis showed that funeral aids, when presented as gifts, outperformed direct payments in all ethical principles. Furthermore, a full funeral service without a revealed value was found to increase WTC by 8.5% from the current system. |
| Keywords: | organ donation, incentives, prosocial behavior, factorial survey |
| JEL: | C9 C91 D12 D64 I18 |
| Date: | 2021–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111047&r= |
| By: | Grimm, Michael (University of Passau); Soubeiga, Sidiki (University of Passau); Weber, Michael (World Bank) |
| Abstract: | Most support programs targeted at small firms in low- and middle-income countries fail to generate transformative effects at a large scale due to bad targeting, too little flexibility, and the limited size of the support, among others. This paper assesses the short-term effects of a randomized targeted Government support program to small and medium-size firms that have been selected based on a business plan competition. One group received large cash grants of up to US$8,000, with flexible conditions of use. A second group received grants of an equally important size but earmarked to business development services and thus less flexible and with a required own contribution of 20 percent. A third group serves as a control group. All firms operate in agribusiness or related activities in a semi-urban area. An assessment of the short-term impacts shows that beneficiaries of cash grants engage in better business practices, such as formalization and bookkeeping. They also invest more. Yet, this does not translate into higher profits and employment. There is no effect on investment and business practices among beneficiaries of grants for business development services. Yet, both treatment groups show a higher ability to innovate relative to the control group. The results also show that cash grants cushioned the adverse effects of the COVID-19 pandemic. A further round of data collection will soon allow to assess the longer-term effects of both interventions which may differ from the short-term effects analyzed here as both interventions may need time to unfold their full effects. |
| Keywords: | firm support programs, cash grants, finance, matching grants, business development services, agribusiness, randomized controlled trial |
| JEL: | D22 O12 Q13 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14892&r= |