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on Experimental Economics |
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Issue of 2022‒01‒24
33 papers chosen by |
| By: | Stefania Ottone (University of Milan Bicocca); Ferruccio Ponzano (University of Eastern Piedmont); Margherita Saraceno (University of Pavia); Luca Zarri (Department of Economics (University of Verona)) |
| Abstract: | In this paper, we investigate – both theoretically and by means of a controlled lab experiment – judges’ decisions when either “type-I” errors (i.e. convicting an innocent defendant) or “type-II” errors (i.e. acquitting a guilty defendant) can occur. Addressing this issue with field data is extremely challenging. Taken together, our findings indicate that participants are sensitive to both types of error, rather than to type-I avoidance only. Next, in both scenarios we interestingly detect “compensatory leniency” in judicial decision making, with participants seeming to balance the inherent trade-off between the errors by jointly managing the two key levers they are provided wiggle room on by our design: decision over (i) conviction/acquittal and (ii) severity of punishment. Finally, we show that participants are willing to pay to get further evidence and eliminate both type-I and type-II errors. We discuss implications of our core results for the design of behaviorally informed deterrence policies. |
| Keywords: | Judicial Errors, Miscarriage of Justice, Economic Experiments, Law and Economics |
| JEL: | K42 K49 C91 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:03/2022&r= |
| By: | Kene Boun My (BETA - Bureau d'Économie Théorique et Appliquée - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Camille Cornand (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon); Rodolphe dos Santos Ferreira (BETA - Bureau d'Économie Théorique et Appliquée - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, Universidade Católica Portuguesa [Porto]) |
| Abstract: | In the standard beauty contest game of Morris and Shin (2002), agents have to choose actions in accordance with an expected fundamental value and with the conventional value expected to be set by the market. In doing so, agents respond to fundamental and coordination motives, respectively, the prevalence of either motive being set exogenously. Our contribution is to consider whether agents favor the fundamental or the coordination motive as the result of a strategic choice. First, we extend the generic beauty contest game by endogenizing the weight put on the coordination motive and show that the mere presence of public information theoretically leads agents to fully favor the coordination motive. The prevalence of the coordination motive over the fundamental one yields a disconnection of average actions from the fundamental. Second, we test this game through a laboratory experiment. Subjects tend to conform to theoretical predictions, except when private information is very precise in comparison to public information, qualifying the focal role of public information. |
| Keywords: | Experiment,Coordination,Beauty contest,Public information,Dispersed information |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03468870&r= |
| By: | Raja R Timilsina (School of Economics and Management, Kochi University of Technology); Yutaka Kobayashi (School of Economics and Management, Kochi University of Technology); Koji Kotani (School of Economics and Management, Kochi University of Technology) |
| Abstract: | Rural societies with unique resources, such as indigenous culture and natural capitals, have suffered from aging residents and lack of successors due to youth outmigration by industrialization, urbanization and globalization. Little literature has studied resource transfers when successors are present or absent in such an aging society. This paper experimentally examines resource dynamics and sustainability when resource users may die with and without successors. We design a dynamic common pool resource (CPR) game and implement the field experiments in Nepalese rural areas where an aging factor of resource users with presence or absence of successors is incorporated by probabilistic exit and entry of members in a group. In the experiments, three treatments are prepared: (i) fixed group member (FGM) treatment where group members are fixed without exit, (ii) probabilistic replacement member (PRM) treatment where each group member shall stochastically exit, but a successor exists to fill the spot as a replacement and (iii) probabilistic exit member (PEM) treatment where each group member shall stochastically exit in each period. The results show that groups in FGM and PRM treatments sustain resources 3.13 and 2.52 times longer than do groups in PEM (baseline), demonstrating that resource users tend to maintain resources and cooperate for sustainability when they have successors or live long together in one place. The results also suggest that an existence of non-kinship successors can be key to trigger people’s altruistic motives for outliving themselves or leaving something behind even in an aging society, affecting how resource users behave for not only intragenerational peers but also intergenerational resource sustainability. |
| Keywords: | resource sustainability, successor, field experiment |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2022-2&r= |
| By: | Ozan Isler; Simon Gaechter |
| Abstract: | Peer observation can influence social norm perceptions as well as behavior in various moral domains, but is the tendency to be influenced by and conform with peers domain-general? In an online experiment (N = 815), we studied peer effects in honesty and cooperation and tested the individual-level links between these two moral domains. Participants completed both honesty and cooperation tasks after observing their peers. Consistent with the literature, separate analysis of the two domains indicated both negative and positive peer influences in honesty and in cooperation, with negative influences tending to be stronger. Behavioral tests linking the two domains at the individual-level revealed that cooperative participants were also more honest—a link that was associated with low Machiavellianism scores. While standard personality trait measures showed no links between the two domains in the tendency to conform, individual-level tests suggested that conformism is a domain-general behavioral trait observed across honesty and cooperation. Based on these findings, we discuss the potential of and difficulties in using peer observation to influence social norm compliance as an avenue for further research and as a tool to promote social welfare. |
| Keywords: | honesty, cooperation, peer influence, conformism, social norms |
| JEL: | C91 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9493&r= |
| By: | Pëllumb Reshidi; Alessandro Lizzeri; Leeat Yariv; Jimmy Chan; Wing Suen |
| Abstract: | Many committees—juries, political task forces, etc.—spend time gathering costly information before reaching a decision. We report results from lab experiments focused on such information-collection processes. We consider decisions governed by individuals and groups and compare how voting rules affect outcomes. We also contrast static information collection, as in classical hypothesis testing, with dynamic collection, as in sequential hypothesis testing. Several insights emerge. Static information collection is excessive, and sequential information collection is non-stationary, producing declining decision accuracies over time. Furthermore, groups using majority rule yield especially hasty and inaccurate decisions. Nonetheless, sequential information collection is welfare enhancing relative to static collection, particularly when unanimous rules are used. |
| Keywords: | information acquisition, collective choice, experiments |
| JEL: | C91 C92 D72 D83 D87 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9468&r= |
| By: | Braut, Beatrice (University of Turin) |
| Abstract: | This work investigates the stability of the gender gap in competitiveness and tests a possible mechanism that influences it. Subjects play bargaining games where the two roles differ by decision contest - one has an advantageous position - and by the extreme values of their possible payment - the more advantaged can earn more. For all the experiment subjects are randomly assigned to be in the advantaged role or not. Competition takes place between subjects who are in the same role and it is based on their payoff in the bargaining. By comparing competitive behaviour of subjects assigned to the advantaged role or not, the experiment identifies the effect of having advantages, given the remaining factors. The main result is that when in the advantaged position, behaviour is more rational and does not differ by gender, while when not the gender gap in competitiveness exists and it causes inefficiencies. Giving an advantageous role makes men with low performances in the game competing less and women with high performances doing it more, closing down the total gender gap. This finding helps to explain the competitiveness gap and provides insights on which are the characteristics of the context that make competition detrimental for gender parity and also for efficiency. |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:202121&r= |
| By: | Bartels, Lara; Kesternich, Martin; Löschel, Andreas |
| Abstract: | With the increasing recognition of the use of reforestation measures as a complement to conventional carbon emissions avoidance technologies it is important to understand the market valuation of local forest carbon sinks for climate change mitigation. We conducted a framed-field experiment among a Germany-wide sample to provide a revealed preference study on the individual willingness to pay (WTP) for carbon sequestration through forests. Our particular focus is on the role of local co-benefits of climate protection activities. In addition, we add geo-data to our experimental data to analyze the impact of spatial variation on the individual WTP. We find that the WTP for carbon removal exceeds the WTP for mitigation efforts found in previous studies. While spatial distances does affect the likelihood to contribute to a local carbon sink, it does not affect the average amount given. Additional survey data finds that trust in forest measures is higher compared to mitigation via an emissions trading scheme, whichcould explain the comparably high WTP. |
| Keywords: | voluntary provision of environmental public goods,climate change mitigation,carbon sequestration,willingness to pay,co-benefits,revealed preferences,framed-field experiment |
| JEL: | Q51 Q54 C93 Q23 H41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21088&r= |
| By: | Andrey Fradkin; David Holtz |
| Abstract: | Online reviews are typically written by volunteers and, as a consequence, information about seller quality may be under-provided in digital marketplaces. We study the extent of this under-provision in a large-scale randomized experiment conducted by Airbnb. In this experiment, buyers are offered a coupon to review listings that have no prior reviews. The treatment induces additional reviews and these reviews tend to be more negative than reviews in the control group, consistent with selection bias in reviewing. Reviews induced by the treatment result in a temporary increase in transactions but these transactions are for fewer nights, on average. The effects on transactions and nights per transaction cancel out so that there is no detectable effect on total nights sold and revenue. Measures of transaction quality in the treatment group fall, suggesting that incentivized reviews do not improve matching. We show how market conditions and the design of the reputation system can explain our findings. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.09783&r= |
| By: | Takanori Ida; Takunori Ishihara; Koichiro Ito; Daido Kido; Toru Kitagawa; Shosei Sakaguchi; Shusaku Sasaki |
| Abstract: | Identifying who should be treated is a central question in economics. There are two competing approaches to targeting - paternalistic and autonomous. In the paternalistic approach, policymakers optimally target the policy given observable individual characteristics. In contrast, the autonomous approach acknowledges that individuals may possess key unobservable information on heterogeneous policy impacts, and allows them to self-select into treatment. In this paper, we propose a new approach that mixes paternalistic assignment and autonomous choice. Our approach uses individual characteristics and empirical welfare maximization to identify who should be treated, untreated, and decide whether to be treated themselves. We apply this method to design a targeting policy for an energy saving programs using data collected in a randomized field experiment. We show that optimally mixing paternalistic assignments and autonomous choice significantly improves the social welfare gain of the policy. Exploiting random variation generated by the field experiment, we develop a method to estimate average treatment effects for each subgroup of individuals who would make the same autonomous treatment choice. Our estimates confirm that the estimated assignment policy optimally allocates individuals to be treated, untreated, or choose themselves based on the relative merits of paternalistic assignments and autonomous choice for individuals types. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.09850&r= |
| By: | Hernán Bejarano (CIDE / ESI Chapman University); Joris Gillet (Middlesex University London); Ismael Rodriguez-Lara (Universidad de Granada) |
| Abstract: | We study behavior in a trust game where first-movers initially have a higher endowment than second-movers but the occurrence of a positive random shock can eliminate this inequality by increasing the endowment of the second-mover before the decision of the first-mover. We find that second-movers return less (i.e., they are less trustworthy) when they have a lower endowment than first-movers, compared with the case in which first and second-movers have the same endowment. Second-movers who have experienced the positive shock return more than those who did not; in fact, second-movers who have experienced the positive shock return more than secondmovers who had the same endowment as the first-mover from the outset. First-movers do not seem to anticipate this behavior from second-movers. They send less to secondmovers who benefited from a shock. These findings suggest that in addition to the distribution of the endowments the source of this distribution plays an important role in determining the levels of trust and trustworthiness. This, in turn, implies that current models of inequality aversion should be extended to accommodate for reference points if random positive shocks are possible in the trust game. |
| Keywords: | Trust game, endowment heterogeneity, random shocks, luck, inequality, aversion, reference-dependent utility, reference points. |
| JEL: | C91 D02 D03 D69 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:aoz:wpaper:96&r= |
| By: | Tergiman, Chloe (Pennsylvania State University); Villeval, Marie Claire (CNRS, GATE) |
| Abstract: | In a finitely repeated game with asymmetric information, we experimentally study how individuals adapt the nature of their lies when settings allow for reputation-building. While some lies can be detected ex post by the uninformed party, others remain deniable. We find that traditional market mechanisms such as reputation generate strong changes in the way people lie and lead to strategies in which individuals can maintain plausible deniability: people simply hide their lies better by substituting deniable lies for detectable lies. Our results highlight the limitations of reputation to root out fraud when a Deniable Lie strategy is available. |
| Keywords: | lying, deniability, reputation, financial markets, experiment |
| JEL: | C91 D01 G41 M21 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14931&r= |
| By: | Adam Zylbersztejn (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon); Zakaria Babutsidze (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur, OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po); Nobuyuki Hanaki (Osaka University [Osaka]) |
| Abstract: | We contribute to the ongoing debate in the psychological literature on the role of thin slices of observable information in predicting others' social behavior, and its generalizability to cross-cultural interactions. We experimentally assess the degree to which subjects, drawn from culturally dierent populations (France and Japan), are able to predict strangers' trustworthiness based on a set of visual stimuli (mugshot pictures, neutral videos, loaded videos, all recorded in an additional French sample) under varying cultural distance to the target agent in the recording. Our main nding is that cultural distance is not detrimental for predicting trustworthiness in strangers, but that it may aect the perception of dierent components of communication in social interactions. |
| Keywords: | laboratory experiment,cross-cultural comparison,hidden action game,Trustworthiness,communication |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03432600&r= |
| By: | Ciril Bosch-Rosa; Daniel Gietl; Frank Heinemann |
| Abstract: | This paper investigates whether limited liability and moral hazard affect risk-taking through motivated beliefs. On the one hand, limited liability pushes investors towards taking excessive risks. On the other, such excesses make it hard for investors to maintain a positive self-image when moral hazard is present. Using a novel experimental design, we show that subjects form motivated beliefs to self-justify their excessive risk-taking. For the same investment opportunity, subjects invest more and are significantly more optimistic about the success of the investment if their failure can harm others. We show that more than one third of the investment increase under limited liability can be explained through motivated beliefs. Moreover, using a treatment with limited liability but no moral hazard, we show that motivated beliefs are formed subconsciously and can lead to the paradoxical result of investors taking larger risks when their investment can harm a third party than when it cannot. These results underscore the importance of motivated beliefs in regulatory policy as they show that one should target not only bad incentives but also “bad beliefs.” |
| JEL: | C91 D84 G11 G41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9477&r= |
| By: | Suanna Oh |
| Abstract: | Does identity influence economic behavior in the labor market? I investigate this question in rural India, focusing on the effect of caste identity on job-specific labor supply. In a field experiment, laborers choose whether to take up various job offers, which differ in associations with specific castes. Workers are less willing to accept offers that are linked to castes other than their own, especially when those castes rank lower in the social hierarchy. Workers forego large payments to avoid job offers that conflict with their caste identity, regardless of whether these decisions are made in private. |
| Keywords: | identity, labor supply, caste, occupational choice |
| JEL: | D91 J24 O10 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9487&r= |
| By: | Heinz, Nicolai; Koessler, Ann Kathrin |
| Abstract: | Pro-environmental behaviour (PEB) is often promoted by reinforcing or highlighting own benefits. However, considering that actors also care about the outcomes for others (i.e. they hold other-regarding preferences), PEB may also be encouraged by addressing these other-regarding preferences. In this paper, we review the results from social science experiments where interventions addressing other-regarding preferences were used to promote PEB. Based on our synthesis, we conclude that addressing other-regarding preferences can be effective in promoting (various types of) PEB in some, but not in all instances. Whether an intervention was effective depended inter alia on the pre-established preferences, cost structures and the perceived cooperation of others. Effective interventions included the provision of information on behavioural consequences, perspective-taking, direct appeals, framing and re-categorization. The interventions worked by activating other-regarding preferences, raising awareness about adverse consequences, evoking empathic concern and expanding the moral circle. We propose to take these findings as an impulse to examine policy instruments and institutions in terms of whether they activate and strengthen other-regarding preferences, thereby enabling collective engagement in PEB. |
| Keywords: | empathic concern; experiments; other-regarding preferences; preference activation; pro-environmental behaviour; review |
| JEL: | D90 Q56 Y80 |
| Date: | 2021–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112984&r= |
| By: | Albert J. Menkveld (Vrije Universiteit Amsterdam, Tinbergen Institute); Anna Dreber (Stockholm School of Economics); Félix Holzmeister (University of Innsbruck); Juergen Huber (University of Innsbruck); Magnus Johannesson (Stockholm School of Economics); Michael Kirchler (University of Innsbruck); Sebastian Neusüss (Aalto University); Michael Razen (University of Innsbruck); Utz Weitzel (Vrije Universiteit Amsterdam, Radboud University); Gunther Capelle-Blancard (University of Paris I Panthéon-Sorbonne, Centre d'Economie de la Sorbonne) |
| 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 G1 G14 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:21033&r= |
| By: | Romain Baeriswyl (Swiss National Bank); Kene Boun My (BETA - Bureau d'Économie Théorique et Appliquée - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Camille Cornand (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon) |
| Abstract: | Central banks' disclosures, such as forward guidance, have a weaker effect on the economy in reality than in theoretical models. The present paper contributes to understanding how people pay attention and react to various sources of information. In a beauty-contest with information acquisition, we show that strategic complementarities give rise to a double overreaction to public disclosures by increasing agents equilibrium attention, which, in turn, increases the weight assigned to them in equilibrium action. A laboratory experiment provides evidence that the effect of strategic complementarities on the realised attention and the realised action is qualitatively consistent with theoretical predictions, though quantitatively weaker. Both the lack of attention to public disclosures and a limited level of reasoning by economic agents account for the weaker realised reaction. This suggests that it is just as important for a central bank to control reaction to public disclosures by swaying information acquisition by recipients as it is by shaping information disclosures themselves. |
| Keywords: | Overreaction,Information acquisition,Beauty-contest,Central bank communication |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03468857&r= |
| By: | Antinyan, Armenak (Cardiff University); Bellio, Stefania (Regione Veneto); Bertoni, Marco (University of Padova); Corazzini, Luca (Ca' Foscari University of Venice); Narne, Elena (Regione Veneto) |
| Abstract: | An Italian region introduced a web portal allowing women to manage online their appointment in the public cervical cancer screening program, besides the standard possibility of doing it via phone. We report quasi-experimental evidence on how access to the portal changes screening behaviour. We find that eligible women do manage their appointment online. The introduction of the portal also reduces attendance of the screening program. Two factors contribute to explain this finding. First, by encouraging women not to take a screening test if they performed an analogous one in the previous three years, the portal reduces overly-frequent screening. Second, the portal induces procrastination in rescheduling the appointment. We also find that, when they cancel their appointment online, women are more likely to share information about their screening episodes in the private health sector, that is useful to schedule future screening appointments. |
| Keywords: | ICT intervention, cervical cancer, screening uptake, quasi-experiment |
| JEL: | H51 O33 I12 D91 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14916&r= |
| By: | Arno Apffelstaedt (University of Cologne and ECONtribute); Jana Freundt (University of Fribourg, Department of Economics and University of Pennsylvania, School of Arts and Sciences) |
| Abstract: | Allegations of voter fraud accompany many real-world elections. How does electoral malpractice affect the acceptance of elected institutions? Using an online experiment in which people distribute income according to majority-elected rules, we show that those who experience vote buying or voter disenfranchisement during the election are subsequently less willing to comply with the rule. On average, the detrimental impact of electoral malpractice on compliance is of the same magnitude as removing the election altogether and imposing a rule exogenously. Our experiment shows how corrupting democratic processes can impact economic behavior and sheds light on the behavioral mechanisms underlying "rule legitimacy". |
| Keywords: | rule compliance, endogenous institutions, corruption, procedural fairness, legitimacy |
| JEL: | D02 D72 D91 C92 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:137&r= |
| By: | Malani, Anup (University of Chicago); Holtzman, Phoebe; Imai, Kosuke (Harvard University); Kinnan, Cynthia (NBER); Miller, Morgen (University of Chicago); Swaminathan, Shailender (Sai University); Voena, Alessandra (Stanford University); Woda, Bartosz (University of Chicago); Conti, Gabriella (University College London) |
| Abstract: | We report on a large randomized controlled trial of hospital insurance for above-poverty-line Indian households. Households were assigned to free insurance, sale of insurance, sale plus cash transfer, or control. To estimate spillovers, the fraction of households offered insurance varied across villages. The opportunity to purchase insurance led to 59.91% uptake and access to free insurance to 78.71% uptake. Access increased insurance utilization. Positive spillover effects on utilization suggest learning from peers. Many beneficiaries were unable to use insurance, demonstrating hurdles to expanding access via insurance. Across a range of health measures, we estimate no significant impacts on health. |
| Keywords: | health insurance, health, randomized controlled trial, spillovers |
| JEL: | O10 I13 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14924&r= |
| By: | Malani, Anup (University of Chicago); Holtzman, Phoebe; Imai, Kosuke (Harvard University); Kinnan, Cynthia (NBER); Miller, Morgen (University of Chicago); Swaminathan, Shailender (Sai University); Voena, Alessandra (Stanford University); Woda, Bartosz (University of Chicago); Conti, Gabriella (University College London) |
| Abstract: | We report on a large randomized controlled trial of hospital insurance for above-poverty-line Indian households. Households were assigned to free insurance, sale of insurance, sale plus cash transfer, or control. To estimate spillovers, the fraction of households offered insurance varied across villages. The opportunity to purchase insurance led to 59.91% uptake and access to free insurance to 78.71% uptake. Access increased insurance utilization. Positive spillover effects on utilization suggest learning from peers. Many beneficiaries were unable to use insurance, demonstrating hurdles to expanding access via insurance. Across a range of health measures, we estimate no significant impacts on health. |
| Keywords: | health insurance, health, randomized controlled trial, spillovers |
| JEL: | O10 I13 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14913&r= |
| By: | Michalis Drouvelis; Johannes Jarke-Neuert; Johannes Lohse |
| Abstract: | Many modern organisations employ methods which involve monitoring of employees' actions in order to encourage teamwork in the workplace. While monitoring promotes a transparent working environment, the effects of making monitoring itself transparent may be ambiguous and have received surprisingly little attention in the literature. Using a novel laboratory experiment, we create a working environment in which first movers can (or cannot) observe second mover's monitoring at the end of a round. Our framework consists of a standard repeated sequential Prisoner's Dilemma, where the second mover can observe the choices made by first movers either exogenously or endogenously. We show that mutual cooperation occurs significantly more frequently when monitoring is made transparent. Additionally, our results highlight the key role of conditional cooperators (who are more likely to monitor) in promoting teamwork. Overall, the observed cooperation enhancing effects are due to monitoring actions that carry information about first movers who use it to better screen the type of their co-player and thereby reduce the risk of being exploited. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.12621&r= |
| By: | Korting, Christina (University of Delaware); Lieberman, Carl (U.S. Census Bureau); Matsudaira, Jordan (Columbia University); Pei, Zhuan (Cornell University); Shen, Yi (University of Waterloo) |
| 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. |
| Keywords: | graphical methods, visual inference, regression discontinuity design, expert prediction, statistical decision theory, scientific communication |
| JEL: | A11 C10 C40 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14923&r= |
| By: | Antonio M. Espin (Department of Social Anthropology, University of Granada and Loyola Behavioral Lab, Loyola Andalucía University); Valerio Capraro (Department of Economics, Middlesex University Business School); Brice Corgnet (Emlyon Business School); Simon Gachter (University of Nottingham and IZA and CESifo); Roberto Hernan-Gonzalez (Burgundy School of Business, Universite Bourgogne Franche-Comte); Praveen Kujal (Department of Economics, Middlesex University); Stephen Rassenti (Economic Science Institute, Chapman University) |
| Abstract: | Previous studies have shown that women tend to be more egalitarian and less self-interested than men whereas men tend to be more concerned with social efficiency motives. The roots of such differences, however, remain unknown. Since different cognitive styles have also been associated with different distributional social preferences, we hypothesise that gender differences in social preferences can be partially explained by differences in cognitive styles (i.e., women rely more on intuition whereas men are more reflective). We test this hypothesis meta-analytically using data from seven studies conducted in four countries (USA, Spain, India, and UK; n=6,910) where cognitive reflection and social preferences were measured for men and women. In line with our hypothesis, differences in cognitive reflection scores explain up to 41% of the gender differences in social preferences. The mediation is barely affected by variables such as cognitive ability or study-level characteristics. These results suggest that the socio-ecological or cultural pressures that influence gender differences in cognitive styles are also partially responsible for gender differences in social preferences. |
| Keywords: | gender differences; cognitive reflection; social preferences; self-interest; social efficiency; egalitarianism |
| JEL: | B55 C91 C93 D31 D63 J16 Z13 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:21-22&r= |
| By: | Anup Malani; Phoebe Holtzman; Kosuke Imai; Cynthia Kinnan; Morgen Miller; Shailender Swaminathan; Alessandra Voena; Bartosz Woda; Gabriella Conti |
| Abstract: | We report on a large randomized controlled trial of hospital insurance for above-poverty-line Indian households. Households were assigned to free insurance, sale of insurance, sale plus cash transfer, or control. To estimate spillovers, the fraction of households offered insurance varied across villages. The opportunity to purchase insurance led to 59.91% uptake and access to free insurance to 78.71% uptake. Access increased insurance utilization. Positive spillover effects on utilization suggest learning from peers. Many beneficiaries were unable to use insurance, demonstrating hurdles to expanding access via insurance. Across a range of health measures, we estimate no significant impacts on health. |
| JEL: | I13 O1 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29576&r= |
| By: | Tatsuyoshi Saijo (Research Institute for Future Design, Kochi University of Technology) |
| Abstract: | Let us create a society for future generations, but how can we do that? Future Design (FD), introduced in 2015 in Japan, is a new approach to addressing this question by formulation of new theories, verifying them through experiments, and then practicing them in real communities, municipalities, and private companies. FD is "the design and implementation of social systems that activate participants’ futurability. Futurability refers to “the possibility that the present generation will put the interests of the future generations ahead of its own.†However, the society in which we live today based upon markets and democracy is one that suppresses our futurability. For this reason, FD concerns with designing a society where people can change their behavior by activating their own futurability. It seems that we have focused only on making our generation better that we have been making future failures that likely cause excessive burden for future generations. Such examples are disruption of carbon cycle, nitrogen cycle, phosphorus cycle, and so on, and then the concept of Imaginary Future Person (IFP) is introduced to cope with myopia and optimism of human beings. Think about flying to the future, becoming an IFP, imagining the future society, and giving advice to the present from the future. This system works quite well in laboratory and field experiments. It also works well in real cities and towns and several examples are introduced. |
| Keywords: | Future Design, Futurability, Sustainability, Deliberation |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2022-1&r= |
| By: | Sara B. Heller; Judd B. Kessler |
| Abstract: | Youth employment has been near historic lows in recent years, and racial gaps persist. This paper tests whether information frictions limit young people's labor market success with a field experiment involving over 43,000 youth in New York City. We build software that allows employers to quickly and easily produce letters of recommendation for randomly selected youth who worked under their supervision during a summer youth employment program. We then send these letters to nearly 9,000 youth over two years. Being sent a letter generates a 3 percentage point (4.5 percent) increase in employment the following year, with both employment and earnings increases persisting over the two-year follow-up period. By posting our own job advertisement, we document that while treatment youth do use the letters in applications, there is no evidence of other supply-side responses (i.e., no increased job search, motivation, or confidence); effects appear to be driven by the demand side. Labor market benefits accrue primarily to racial and ethnic minorities, suggesting frictions may contribute to racial employment gaps. But improved employment may also hamper on-time high school graduation. Additional evidence indicates that letters help improve job match quality. Results suggest that expanding the availability of credible signals about young workers—particularly for those not on the margin of graduating high school—could improve the efficiency of the youth labor market. |
| JEL: | C93 I21 J2 J48 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29579&r= |
| By: | David Sungho Park; Shilpa Aggarwal; Dahyeon Jeong; Naresh Kumar; Jonathan Robinson; Alan Spearot |
| Abstract: | Women may under-report intimate partner violence (IPV) in surveys due to a variety of social and psychological factors. To understand if anonymized interviewing can allay this concern, we conduct a measurement experiment in rural Liberia and Malawi in which women were asked IPV questions via either self-interviewing (SI) or face-to-face interviewing (FTFI) with an enumerator. We find that about a third of women incorrectly answer basic screening questions over SI, and that it generates placebo effects on innocuous questions even for those who "pass" screening. Because the probability of responding "yes" to any specific IPV question is less than 50%, and that IPV is typically reported as an index (reporting yes to at least one question in a category of violence), such misunderstanding will tend to increase IPV reporting. In Malawi, we find that SI dramatically increases reported IPV, with the incidence of any type of IPV increasing by 13 percentage points on a base of 20%; in Liberia, we find an insignificant and modest increase of 4 percentage points on a base of 39%. Our results suggest SI may spuriously increase reported IPV rates. |
| JEL: | C93 I32 J16 O12 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29584&r= |
| By: | Sabiou M. Inoua (Economic Science Institute, Chapman University); Vernon L. Smith (Economic Science Institute, Chapman University) |
| Abstract: | Although various typologies of goods are commonly adopted in economics, one stood out in market experiment results contrasting market stability and efficiency with market instability: non-durable, or perishable, goods versus durable re-tradable assets. This dichotomy of goods also proved central for understanding macroeconomic instability more broadly: about 75% of consumer spending is bought for final consumption, and is a rock of stability; instability arises from the other 25% re-tradable goods, most prominently, houses. In this chapter, we revisit this well-known but underappreciated dichotomy of goods in the light of our theory of classical competitive price formation. We also emphasize the fundamental and unifying nature of the concept of asset re-tradability as a general concept in finance: the concept of asset re-tradability allows for a simple, transparent, and unified treatment of the no-arbitrage and no-trade theorems of neoclassical finance. |
| Keywords: | perishable goods, re-tradable assets, market experiments, speculation, no-trade theorems, no-arbitrage principle, excess volatility, clustered volatility, trend following, power-law distribution |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:22-01&r= |
| By: | Ajzenman, Nicolas (São Paulo School of Economics-FGV); Luna, Laura Becerra (World Bank); Hernández-Agramonte, Juan Manuel (Innovation for Poverty Action, Lima); Boo, Florencia Lopez (Inter-American Development Bank); Vásquez-Echeverría, Alejandro (Universidad de Montevideo); Diaz, Mercedes Mateo (Inter-American Development Bank) |
| Abstract: | This paper presents the results of a nationwide very low-cost behavioral intervention aimed at increasing preschool attendance in Uruguay. Specifically, behaviorally-informed messages were delivered through the government's official mobile app. We document a large reduction in absenteeism, as well as an increase in some measures of cognitive development, though only for children around the median of the attendance rate baseline distribution (between deciles 4 and 6). The intervention was ineffective for children with very high or very low pre-treatment absenteeism levels. Our results, although encouraging, emphasize the limits of these types of interventions, especially for children in families where barriers to reduce absenteeism might be structural rather than behavioral. |
| Keywords: | preschool attendance, behavioral, cognitive development |
| JEL: | D9 I2 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14921&r= |
| By: | Wikle, Jocelyn (Brigham Young University); Wilson, Riley (Brigham Young University) |
| Abstract: | We explore how access to Head Start impacts maternal labor supply. By relaxing child care constraints, public preschool options like Head Start might lead mothers to reallocate time between employment, child care, and other activities. Using the 1990s enrollment and funding expansions and the 2002 Head Start Impact Study randomized control trial, we show that Head Start increases short-run employment and wage earnings of single mothers. The increase in labor supply does not appear to reduce quality parent-child interactions. Viewing Head Start as a bundle of family-level treatments can shed new light on the impacts of the program beyond children. |
| Keywords: | Head Start, child care subsidies, maternal labor supply |
| JEL: | J13 J22 H4 I28 H52 I38 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14880&r= |
| By: | Benjamin Enke; Thomas Graeber |
| Abstract: | This paper studies the relevance of cognitive uncertainty – subjective uncertainty over one's utility-maximizing action – for understanding and predicting intertemporal choice. The main idea is that when people are cognitively noisy, such as when a decision is complex, they implicitly treat different time delays to some degree alike. By experimentally measuring and manipulating cognitive uncertainty, we document three economic implications of this idea. First, cognitive uncertainty explains various core empirical regularities, such as why people often appear very impatient, why per-period impatience is smaller over long than over short horizons, why discounting is often hyperbolic even when the present is not involved, and why choices frequently violate transitivity. Second, impatience is context-dependent: discounting is substantially more hyperbolic when the decision environment is more complex. Third, cognitive uncertainty matters for choice architecture: people who are nervous about making mistakes are twice as likely to follow expert advice to be more patient. |
| JEL: | D01 D03 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29577&r= |
| By: | Krauss, Alexander |
| Abstract: | In the biomedical, behavioural and social sciences, the leading method used to estimate causal effects is commonly randomised controlled trials (RCTs) that are generally viewed as both the source and justification of the most valid evidence. In studying the foundation and theory behind RCTs, the existing literature analyses important single issues and biases in isolation that influence causal outcomes in trials (such as randomisation, statistical probabilities and placebos). The common account of biased causal inference is described in a general way in terms of probabilistic imbalances between trial groups. This paper expands the common account of causal bias by distinguishing between the range of biases arising between trial groups but also within one of the groups or across the entire sample during trial design, implementation and analysis. This is done by providing concrete examples from highly influential RCT studies. In going beyond the existing RCT literature, the paper provides a broader, practice-based account of causal bias that specifies the between-group, within-group and across-group biases that affect the estimated causal results of trials – impacting both the effect size and statistical significance. Within this expanded framework, we can better identify the range of different types of biases we face in practice and address the central question about the overall validity of the RCT method and its causal claims. A study can face several smaller biases (related simultaneously to a smaller sample, smaller estimated effect, greater unblinding etc.) that generally add up to greater aggregate bias. Though difficult to measure precisely, it is important to assess and provide information in studies on how much different sources of bias, combined, can explain the estimated causal effect. The RCT method is thereby often the best we have to inform our policy decisions – and the evidence is strengthened when combined with multiple studies and other methods. Yet there is room for continually improving trials and identifying ways to reduce biases they face and to increase their overall validity. Implications are discussed. |
| Keywords: | philosophy of science; philosophy of medicine; randomised controlled trials; RCTs; bias; validity; internal validity; Marie Curie programme; T&F deal |
| JEL: | C1 |
| Date: | 2021–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:112576&r= |