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on Experimental Economics |
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Issue of 2022‒02‒07
thirteen papers chosen by |
| By: | Matthias Stefan; Martin Holmén; Felix Holzmeister; Michael Kirchler; Erik Wengström |
| Abstract: | To study whether clients benefit from delegating financial investment decisions to an agent, we run an investment allocation experiment with 408 finance professionals (agents) and 550 participants from the general population (clients). In several between-subjects treatments, we vary the mode of decision-making (investment on one's own account vs. investments on behalf of clients) and the agents' incentives (aligned vs. fixed). We find that finance professionals show higher decision-making quality than participants from the general population when investing on their own account. However, when deciding on behalf of clients, professionals' decision-making quality does not significantly differ from their clients', neither when compensated with a fixed payment nor when facing aligned incentives. Our results further identify a considerable challenge in risk communication between agents and clients: While finance professionals tend to take into account principals' desired risk levels, the constructed portfolios by professionals show considerable overlaps in portfolio risk across different risk levels requested by principals. We argue that this result is due to differences in risk perception. |
| Keywords: | Experimental finance, finance professionals, delegated decision-making, risk communication |
| JEL: | C93 G11 G41 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2022-02&r= |
| By: | Yegbemey, Rosaine Nérice; Bensch, Gunther; Vance, Colin |
| Abstract: | Weather conditions are an important determinant of agricultural factor input, particularly labor allocation. The availability of weather forecasts can therefore lead to efficiency gains in the form of cost decreases and productivity increases. We test the practical feasibility, the uptake, and the effect of providing basic weather forecasts in the rainy season on the labor productivity of smallholder farmers. For this purpose, we conducted a Randomized Controlled Trial as a pilot with monthly data collections involving 331 farmers across six villages in north Benin. We find that most farmers subscribe to the intervention and report satisfaction with the service. The impact estimates indicate positive and economically significant intention-to-treat and local average treatment effects on labor productivity for maize and cotton cultivation. These findings suggest that weather-related information and mobile phone outreach help smallholder farmers to better adapt to changing weather. |
| Keywords: | Pilot field experiment,climate and weather information,labor productivity,smallholder farming,information technology,impact evaluation |
| JEL: | D13 O12 Q12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:930&r= |
| By: | Nickolas Gagnon (Aarhus University); Riccardo D. Saulle (University of Padova); Henrik W. Zaunbrecher (Maastricht University) |
| Abstract: | We use a controlled laboratory experiment to study the causal impact of income decreases within a time period on redistribution decisions at the end of that period, in an environment where we keep fixed the sum of incomes over the period. First, we inves-tigate the effect of a negative income trend (intra-personal decrease), which means a decreasing income compared to one’s recent past. Second, we investigate the effect of a negative income trend relative to the income trend of another person (inter-personal decrease). If intra-personal or inter-personal decreases create dissatisfaction for an individual, that person may become more selfish to obtain compensation. We formal-ize both effects in a multi-period model augmenting a standard model of inequality aversion. Overall, conditional on exhibiting sufficiently-strong social preferences, we find that individuals indeed behave more selfishly when they experience decreasing incomes. While many studies examine the effect of income inequality on redistribution decisions, we delve into the history behind one’s income to isolate the effect of income changes. |
| Keywords: | Income Inequality, Income Change, Social Preferences, Social Comparison, Income Redistribution |
| JEL: | C91 D31 D63 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2021.33&r= |
| By: | Herman, Biz; Panin, Amma (Université catholique de Louvain, LIDAM/CORE, Belgium); Owlsley, Nicholas; , e.a. |
| Abstract: | Randomized controlled trials (RCTs) have emerged as a leading methodological tool to strengthen causal inference in the social sciences. Yet RCTs carry significant risks for ev- eryone involved, from participants to researchers themselves, especially in the Global South. In this article, we explore how researchers’ identities and power influence the conduct of research and their positionality within the research contexts—especially when conducting RCTs in the Global South. Our goal is to center local contexts and demands at each stage of the research process. Overall, we argue that centering local contexts, stakeholders, and de- mands at each stage of the research process is key to ensuring that RCTs in the Global South are ethically sound and generate insights that can serve the communities they investigate. |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021025&r= |
| By: | Grimalda, Gianluca; Buchan, Nancy R.; Ozturk, Orgul G.; Pinate, Adriana C.; Urso, Giulia; Brewer, Marilynn B. |
| Abstract: | Theory posits that situations of existential threat will enhance prosociality in general and particularly toward others perceived as belonging to the same group as the individual (parochial altruism). Yet, the global character of the COVID-19 pandemic may blur boundaries between ingroups and outgroups and engage altruism at a broader level. In an online experiment, participants from the U.S. and Italy chose whether to allocate a monetary bonus to a charity active in COVID-19 relief efforts at the local, national, or international level. The purpose was to address two important questions about charitable giving in this context: first, what influences the propensity to give, and second, how is charitable giving distributed across different levels of collective welfare? We found that personal exposure to COVID-19 increased donations relative to those not exposed, even as levels of environmental exposure (numbers of cases locally) had no effect. With respect to targets of giving, we found that donors predominantly benefitted the local level; donations toward country and world levels were half as large. Social identity was found to influence charity choice in both countries, although an experimental manipulation of identity salience did not have any direct effect. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkie:248645&r= |
| By: | Adrian Chadi; Manuel Hoffmann |
| Abstract: | Watching television is the most time-consuming human activity besides work but its role for individual well-being is unclear. Negative consequences portrayed in the literature raise the question whether this popular pastime constitutes an economic good or bad, and hence serves as a prime example of irrational behavior reducing individual health and happiness. Using rich panel data, we are the first to comprehensively address this question by exploiting a large-scale natural experiment in West Germany, where people in geographically restricted areas received commercial TV via terrestrial frequencies. Contrary to previous research, we find no health impact when TV consumption increases. For life satisfaction, we even find positive effects. Additional analyses support the notion that TV is not an economic bad and that non-experimental evidence seems to be driven by negative self-selection. |
| Keywords: | Health; Happiness; Well-being; Natural experiment; Television consumption; Time-use; Entertainment; CSPT; ArcGIS; Mass media |
| JEL: | C26 D12 I31 H12 J22 L82 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1148&r= |
| By: | B. Douglas Bernheim; Daniel Bjorkegren; Jeffrey Naecker; Michael Pollmann |
| Abstract: | This paper explores methods for inferring the causal effects of treatments on choices by combining data on real choices with hypothetical evaluations. We propose a class of estimators, identify conditions under which they yield consistent estimates, and derive their asymptotic distributions. The approach is applicable in settings where standard methods cannot be used (e.g., due to the absence of helpful instruments, or because the treatment has not been implemented). It can recover heterogeneous treatment effects more comprehensively, and can improve precision. We provide proof of concept using data generated in a laboratory experiment and through a field application. |
| JEL: | C13 D12 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29616&r= |
| By: | Maya Haran Rosen (Bank of Israel); Orly Sade |
| Abstract: | We use an experiment in Israel to compare the effect of short text messages sent via mobile phones on the actions of minority groups versus the general population regarding the âSavings for Every Childâ program. Financial institutions and regulators are increasingly using digital text messages to raise awareness or encourage participation in programs and initiatives. We study the effect of these messages on individual behavior, and the size of this effect for different segments of the population. Our unique setting and proprietary data reveal that the text message had an overall positive effect, but a significantly smaller effect on minority groups. By combining our proprietary data with a dedicated survey, we provide additional insights on potential barriers (low digital literacy, low financial literacy, and low trust) that contribute to the differential effect. The research points to the importance of using specific measures that focus on minorities in order to raise the success of government initiatives. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:boi:wpaper:2021.21&r= |
| By: | Bandiera, Oriana (London School of Economics); Parekh, Nidhi (J-PAL Africa); Petrongolo, Barbara (University of Oxford); Rao, Michelle (London School of Economics) |
| Abstract: | Gender differences in self-confidence could explain women's under representation in high-income occupations and glass-ceiling effects. We draw lessons from the economic literature via a survey of experts and a Bayesian hierarchical model that aggregates experimental findings over the last twenty years. The experts' survey indicates beliefs that men are overconfident and women under-confident. Yet, the literature reveals that both men and women are typically overconfident. Moreover, the model cannot reject the hypothesis that gender differences in self-confidence are equal to zero. In addition, the estimated pooling factor is low, implying that each study contains little information over a common phenomenon. The discordance can be reconciled if the experts overestimate the pooling factor or have priors that are biased and precise. |
| Keywords: | gender gaps, over-confidence, Bayesian meta-analysis |
| JEL: | C91 J16 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14950&r= |
| By: | Douadia Bougherara (CEE-M - Centre d'Economie de l'Environnement - Montpellier - UMR 5211 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Pierre Courtois (CEE-M - Centre d'Economie de l'Environnement - Montpellier - UMR 5211 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Maia David (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech); Joakim Weill (UC Davis - University of California [Davis] - University of California) |
| Abstract: | If individuals have spatially dierentiated preferences for sites or areas im- 8 pacted by an invasive alien species, eective management must take this 9 heterogeneity into account and target sites or areas accordingly. In this 10 paper, we estimate spatially dierentiated preferences for the management 11 of primrose willow (Ludwigia grandiora), an invasive weed spreading in a 12 French regional park. We use an original spatially explicit discrete choice 13 experiment to evaluate individuals' willingness to pay (WTP) to control the 14 invasion in dierent areas of the regional park. Our results indicate that 15 WTP for management highly depends on the area considered, with areas 16 where it is three times higher than others. We analyze the main factors 17 explaining the heterogeneity of preferences and show that the closer respo n-18 dents live to the park, the more they visit and/or practice activities in it, the 19 higher their WTP and spatial preferences. Park residents and regular users 20 have highWTP and unambiguous preferences for targeting control to specic 21 areas. Non-residents and occasional users have much lower WTP and more 22 homogeneous spatial preferences. These results suggest that implementing 23 management strategies that spatially target invasion control according to 24 public preferences is likely to produce signicant utility gains. These gains 25 are all the more important as the preferences taken into account are those of the stakeholders directly concerned by the invasion, the residents and reg-27 ular park users. Ignoring these spatial preferences will lead to sub-optimal 28 invasion management. |
| Keywords: | Public preferences.,Discrete choice experiments,Spatial heterogeneity,Cost assess- 30 ment,Primrose willow,Invasive weed |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03476692&r= |
| By: | Ciotti, Fabrizio (Université catholique de Louvain, LIDAM/CORE, Belgium); Hornuf, Lars; Stenzhorn, Eliza |
| Abstract: | This article reports on an investigation of the role of lock-in exploitation and the impact of reputation portability on workers’ switching behaviors in online labor markets. Online platforms using reputation mechanisms typically prevent users from transferring their ratings to other platforms, inducing lock-in effects and high switching costs and leaving users vulnerable to platform exploitation. With a theoretical model, in which workers in online labor markets are locked-in by their reputational data, we test the effects using an online lab-in-the-field decision experiment. In addition to comparing a policy regime with and without reputation portability, we vary lock-in exploitation using platform fees to consider how switching behavior might differ according to monetary motives and fairness preferences. Theoretically, this study reveals how reputational investments can produce switching costs that platforms can exploit. Experimentally, the results suggest that reputation portability mitigates lock-in effects, making users less susceptible to lock-in exploitation. The data further show that switching is driven primarily by monetary motives, but perceiving the fee as unfair also has a significant role. |
| Keywords: | Crowdsourcing, online markets, online labor, reputation portability, switch- ing costs |
| JEL: | J24 D91 L51 |
| Date: | 2021–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2021014&r= |
| By: | Reshmaan Hussam (Harvard Business School); Abu S. Shonchoy (Department of Economics, Florida International University); Chikako Yamauchi (GRIPS); Kailash Pandey (Harvard Business School) |
| Abstract: | While models of technology adoption posit learning as the basis of behavior change, information campaigns in public health frequently fail to change behavior. We design an information campaign embedding hand-hygiene edutainment within popular dramas using mobile phones, randomly distributed to households in Bangladesh. We document no change in hygiene knowledge, yet substantial improvements in handwashing and health. Employing machine learning techniques with temporal data on media exposure and handwashing, we ï¬ nd that a combination of cumulative and immediate exposure predicts washing, consistent with cue-based habituation. Results highlight how behavior change may be induced by tacit, rather than explicit, knowledge acquisition. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:2127&r= |
| By: | Daniel Clark; Drew Fudenberg; Kevin He |
| Abstract: | Learning models do not in general imply that weakly dominated strategies are irrelevant or justify the related concept of "forward induction," because rational agents may use dominated strategies as experiments to learn how opponents play, and may not have enough data to rule out a strategy that opponents never use. Learning models also do not support the idea that the selected equilibria should only depend on a game's normal form, even though two games with the same normal form present players with the same decision problems given fixed beliefs about how others play. However, playing the extensive form of a game is equivalent to playing the normal form augmented with the appropriate terminal node partitions so that two games are information equivalent, i.e., the players receive the same feedback about others' strategies. |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2201.00776&r= |