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on Experimental Economics |
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Issue of 2022‒01‒31
23 papers chosen by |
| By: | Boris Ginzburg; José-Alberto Guerra |
| Abstract: | We study the implications of participation in political collective action on identity and on interpersonal interactions using a laboratory experiment. We offer subjects the possibility to sign an online petition, which was either related to animal rights or the right to bear firearms. Before and after the petition, we measure subjects' altruism and willingness to trust by asking them to play a dictator game and a trust game in pairs. The results show that there is considerably more altruism and more trust when both subjects had signed the petition than when one or both had not signed. The same behaviour is observed when we analyse high-cost political participation, namely, joining a street protest. This suggests that the experience of common participation in political collective action creates an identity that produces in-group favouritism. These results also suggest a reason why individuals choose to participate in political action despite private costs and a low probability of affecting the outcome: participation creates private benefits in subsequent interactions with fellow participants. |
| Keywords: | political identity, collective action, social preferences, laboratory experiment, petitions, street protests |
| JEL: | C91 D64 D79 D91 |
| Date: | 2021–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:019932&r= |
| By: | Karen Evelyn Hauge; Snorre Kverndokk; Andreas Lange |
| Abstract: | We investigate how moral considerations, background conditions and risk can trigger resistance to implement trading institutions. We provide survey results on moral opposition to trade on several goods and services like body organs, sex services, surrogate mothers, trade with developing nations, and trade with carbon emissions. Complementary experimental evidence allows identifying reasons for opposing trade going beyond pure moral considerations. We relate the opposition to trade in experimental and field contexts to an aversion to imposing risks on others. We then vary both background conditions and the riskiness from engaging in actual trade in the experiment. We show that distributional concerns primarily drive opposition to trade. Providing less information about individual background conditions and distributing gains from trade more equally alleviates opposition to trade. |
| Keywords: | trade, morality, fairness, distribution, experiment |
| JEL: | C90 D63 I14 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9456&r= |
| By: | Kamei, Kenju; Ashworth, John |
| Abstract: | A novel field experiment shows that learning activities in pairs with a greater spread in abilities lead to better individual work performance, relative to those in pairs with similar abilities. The positive effect of the former is not limited to their performance in peer learning material, but it also spills over to their performance in other areas. The underlying improvement comes from the stronger increased performance of those whose achievements were weak prior to peer learning. This implies that exogenously determining learning partners with different abilities helps improve productivity through knowledge sharing and potential peer effects. |
| Keywords: | peer effects, dilemma, knowledge sharing, field experiment, teamwork |
| JEL: | C93 I23 J24 M54 |
| Date: | 2021–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111157&r= |
| By: | Martin Halla (Johannes Kepler University Linz); Christopher Kah (Mercedes-Benz AG); Rupert Sausgruber (Department of Economics, Vienna University of Economics and Business) |
| 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: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp319&r= |
| By: | Halla, Martin; Kah, Christopher; Sausgruber, Rupert |
| 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 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wus005:8527&r= |
| By: | Kresova, Svetlana; Gutjahr, Daijana; Hess, Sebastian |
| Keywords: | Food Consumption/Nutrition/Food Safety, Marketing |
| Date: | 2020–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi20:305611&r= |
| By: | Fredrik Carlsson; Claes Ek; Andreas Lange |
| Abstract: | We report experimental evidence on the voluntary provision of public goods under threshold uncertainty. By explicitly comparing two prominent technologies, summation and weakest link, we show that uncertainty is particularly detrimental to threshold attainment under weakest link, where low contributions by one subject cannot be compensated by others. In contrast, threshold uncertainty does not affect contributions under summation. We demonstrate non-binding pledges as one mechanism to improve chances of threshold attainment under both technologies, yet in particular under weakest link. |
| Keywords: | public goods, threshold uncertainty, weakest link, coordination, experiment |
| JEL: | C91 H41 Q54 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9457&r= |
| By: | Cary D. Frydman; Salvatore Nunnari |
| Abstract: | We propose and experimentally test a theory of strategic behavior in which players are cognitively imprecise and perceive a fundamental parameter with noise. We focus on 2 x 2 coordination games, which generate multiple equilibria when perception is precise. When adding a small amount of cognitive imprecision to the model, we obtain a unique equilibrium where players use a simple cutoff strategy. The model further predicts that behavior is context-dependent: players implement the unique equilibrium strategy with noise, and the noise decreases in fundamental volatility. Our experimental data strongly support this novel prediction and reject several alterna-tive game-theoretic models that do not predict context-dependence. We also find that subjects are aware of other players’ imprecision, which is key to generating strategic uncertainty. Our framework has important implications for the literature on global games and, more broadly, illuminates the role of perception in generating both random and context-dependent behavior in games. |
| Keywords: | perception, efficient coding, coordination, global games |
| JEL: | C72 C92 D91 E71 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9483&r= |
| By: | Gächter, Simon (University of Nottingham); Lee, Kyeongtae (Bank of Korea); Sefton, Martin (University of Nottingham); Weber, Till O. (Newcastle University) |
| 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: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14895&r= |
| By: | Evan M. Calford; Anujit Chakraborty |
| Abstract: | Do experimental subjects have consistent first and higher-order beliefs about other’s preferences? How does any inconsistency affect strategic decisions? We introduce a simple four-player sequential social dilemma where actions reveal first and higher-order beliefs. The unique sub game perfect Nash equilibrium (SPNE) is observed less than 5% of the time, even though our diagnostic treatments show that a majority of our subjects are self-interested, higher-order rational and have accurate first-order beliefs. In our data, strategic play vastly deviates from Nash predictions because first-order and higher-order beliefs are inconsistent for most subjects. |
| Keywords: | Experimental economics, Higher-order beliefs, Social dilemma |
| JEL: | F02 F13 F15 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2022-681&r= |
| By: | Kamei, Kenju |
| Abstract: | The transfer paradox, whereby a transfer of resources that influences the equilibrium price benefits the donor while harming the recipient, is a classic paradox in general equilibrium theory. This paper pursues an experimental investigation of the transfer paradox using a three-agent pure exchange economy that is predicted to have such a paradox. The results indicate that an endowment adjustment among agents influences the market price, and consequently the donors benefit from the transfer, consistent with the competitive equilibrium theory. When given an option to make a transfer, half of donor agents voluntarily decide to adjust the endowment distribution. |
| Keywords: | experiments, transfer paradox, general equilibrium, equilibrium effects |
| JEL: | C92 D51 |
| Date: | 2021–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111307&r= |
| By: | Barron, Kai; Becker, Anna; Huck, Steffen |
| Abstract: | We study the causal relationship between moral values ("ought" statements) and factual beliefs ("is" statements) and show that, contrary to predictions of orthodox Bayesian models, values exert an influence on beliefs. This effect is mediated by prior political leanings and, thus, contributes to increasing polarization in beliefs about facts. We study this process of motivated political reasoning in a preregistered online experiment with a nationally representative sample of 1,500 individuals in the US. Additionally, we show that subjects do not distort their beliefs in response to financial incentives to do so, suggesting that deep values exert a stronger motivational force. |
| Keywords: | Motivated Beliefs,Values,Polarization,Experiment |
| JEL: | C90 D72 D74 D83 P16 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2021306&r= |
| By: | Belot, Michele; Kircher, Philipp (Université catholique de Louvain, LIDAM/CORE, Belgium); Muller, Paul |
| Abstract: | We propose a simple method for eliciting individual time preferences without estimating utility functions even in settings where background consumption changes over time. It relies on eliciting preferences for receiving high stakes lottery tickets at different points in time. In a standard intertemporal choice model high rewards decouple lottery choices from variation in background consumption. We validate our elicitation method experimentally on a student sample split into two groups: one asked in December when their current budget is reduced by extraordinary expenditures for Christmas gifts; the other asked in February when no such extra constraints exist. We illustrate an application of our method with unemployed job seekers which naturally have income/consumption variation. |
| Keywords: | Time preferences ; experimental elicitation ; job search ; hyperbolic discounting |
| JEL: | D90 J64 |
| Date: | 2021–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021035&r= |
| By: | Vincent Meisner; Jonas von Wangenheim |
| Abstract: | Evidence suggests that participants in direct student-proposing deferred-acceptance mechanisms (DA) play dominated strategies. To explain the data, we introduce expectation-based loss aversion into a school-choice setting and characterize choice-acclimating personal equilibria in DA. We find that non-truthful preference submissions can be strictly optimal if and only if they are top-choice monotone. In equilibrium, DA may implement allocations with justified envy. Specifically, it discriminates against students who are more loss averse or less confident than their peers, and amplifies already existing discrimination. To level the playing field, we propose sequential mechanisms as alternatives that are robust to these biases. |
| Keywords: | market design, matching, school choice, reference-dependent preferences, loss aversion, deferred acceptance |
| JEL: | C78 D47 D78 D81 D82 D91 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9479&r= |
| By: | Maibom, Jonas (Aarhus University) |
| Abstract: | This paper estimates a structural model of job search which accounts for utility costs and benefits linked to mandatory reemployment programs. The estimation uses data from a randomized experiment which generates exogenous variation in the threat of program participation. I use the compensating variation (CV) as a measure of the impact of the experimental treatment on worker welfare, the welfare costs. I find that participants would be willing to give up 1.5–1.7 weeks of UI on average to avoid participation in the program, although the program has a positive effect on the job finding rate. Welfare costs vary across workers and are found to be larger for workers with weaker employment prospects. Overall, the analysis shows that the welfare costs are substantial and therefore necessary to take into account when evaluating the case for mandatory reemployment programs. |
| Keywords: | active labor market program, activation, job search, unemployment |
| JEL: | C9 I3 J64 J65 J68 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14866&r= |
| By: | Horton, John J.; Johari, Ramesh; Kircher, Philipp (Université catholique de Louvain, LIDAM/CORE, Belgium) |
| Abstract: | In a model with cheap talk, employers can send messages about their willingness to pay for higher ability workers, which job-seekers can use to direct their search and tailor their wage bid. Introducing such messages leads—under certain conditions—to an informative separating equilibrium which affects the number of applications, types of applications, and wage bids across firms. This model is used to interpret an experiment conducted in a large online labor market: employers were given the opportunity to state their relative willingness to pay for more experienced workers, and workers can easily condition their search on this information. Preferences were collected for all employers, but only treated employers had their signal revealed to job-seekers. In response to revelation of the cheap talk signal, job-seekers targeted their applications to employers of the right “type” and they tailored their wage bids, affecting who was matched to whom and at what wage. The treatment increased measures of match quality through better sorting, illustrating the power of cheap talk to improve market outcomes. |
| Keywords: | Labor market |
| Date: | 2021–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021033&r= |
| By: | Francesco Franzoni (Università della Svizzera italiana and Swiss Finance Institute); Roxana Mihet (University of Lausanne and Swiss Finance Institute); Per Ostberg (University of Zurich and Swiss Finance Institute); Olivier Scaillet (University of Geneva and Swiss Finance Institute); Norman Schürhoff (University of Lausanne and Swiss Finance Institute); Oksana Bashchenko (University of Lausanne and Swiss Finance Institute); Nicola Mano (Università della Svizzera italiana and Swiss Finance Institute); Michele Pelli (University of Zurich and Swiss Finance Institute) |
| 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: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2209&r= |
| By: | Jakub Drapal; Michal Soltes |
| Abstract: | We study the implications of the structure of criminal codes on sentencing decisions. To limit sentencing disparities, criminal codes typically divide offenses into subsections with specific sentencing ranges. The classification into corresponding subsections often depends on exceeding a given quantity threshold, such as drug amount. We study the consequences of these quantity thresholds on sentencing decisions and argue that the threshold effect can be decomposed into two opposing mechanisms: the severity mechanism and the reference one. An experiment with Czech prosecutors shows that thresholds drive substantial increases in sentences, leading to sentencing disparities. We further introduce empirical measures of (in)justice and quantify the consequences of quantity thresholds on the probability of imposing a just sentence. |
| Keywords: | sentencing; quantity threshold; sentencing disparities; |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp715&r= |
| By: | Benjamin Enke; Thomas W. 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. |
| Keywords: | cognitive uncertainty, intertemporal choice, complexity |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9472&r= |
| By: | Nikoloz Kudashvili; Gega Todua |
| Abstract: | Students may hold inaccurate beliefs about earnings and employment opportunities when making their education decisions. This paper analyzes the effects of information provision on student’s intended and actual college major choices in Georgia. Secondary school students in our experiment systematically overestimated the earnings and unemployment rates of college graduates. We find that 10 percent more students who received information on actual earnings and unemployment changed their actual college major choices than others. The changes in their majors are partly driven by differences in the perceived and actual unemployment rates, whereas the earning differences do not appear to play a role. We also estimate spillover effects on students who do not receive information directly, and show that they matter, but only for older students who are closer to high school graduation. Importantly, we find that the immediate changes in the intended choices are not linked to the final major choices, suggesting that measuring the effects of information on immediately expressed intentions may not be sufficient to understand how information affects actual real-life decisions. We find that both direct and indirect information provision have sizable effects on student college major choices. |
| Keywords: | college major; perceived unemployment; perceived earnings; information; |
| JEL: | C93 D84 I26 J24 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp717&r= |
| By: | Maria Mercanti-Guérin (IAE Paris - Sorbonne Business School) |
| Abstract: | Digital twins are a digital representation of the physical world. Among the multiple applications of digital twins, housing is one of the first sectors concerned. The objective of this re-search is to determine whether interior designs conceived by digital twins are more readable by artificial intelligence than human-designed designs (1) and whether these designs generate more consumer preference (2). Our first experiment shows that AI generates fewer annotation or classification errors when analyzing designs conceived via digital twins. Our second experiment shows that consumers' attitudes are more favorable towards designs conceived by digital twins. Aesthetics and complexity, which are two dimensions of object creativity, are perceived negatively. Only the "novelty" dimension which can be assimilated to modernity ex-plains a strong preference for this type of interior. A discussion on AI as a possible brake on creativity and reinforcement of the status quo bias is proposed. |
| Keywords: | status quo,creativity,AI,digital twins |
| Date: | 2021–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03450262&r= |
| By: | Lauterbach, Josephine; Risius, Antje; Bantle, Christina |
| Keywords: | Marketing, Agribusiness |
| Date: | 2020–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi20:305625&r= |
| By: | Mary D. Naylor; Karen B. Hirschman; Kathleen McCauley; Elizabeth C. Shaid; Alexandra L. Hanlon; Christina R. Whitehouse; Arkadipta Ghosh; Randall Brown; Brianna Sullivan; Mark V. Pauly |
| Abstract: | In the U.S., older adults hospitalized with acute episodes of chronic conditions often are rehospitalized within 30 days of discharge. Numerous studies reveal that poor management of the complex needs of this population remains the norm. |
| Keywords: | Older adults, Transitional care, Rehospitalization, Intervention protocol, Outcomes |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:3e9ad9ed6a2944de96779ae37a847936&r= |