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on Experimental Economics |
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Issue of 2022‒04‒04
fourteen papers chosen by |
| By: | Puppe, Clemens; Rollmann, Jana |
| Abstract: | We study the effect on the participation rate of employing different voting rules in the context of the problem to allocate a fixed monetary budget to two different public projects. Specifically, we compare the mean rule according to which the average of the individually proposed allocations is implemented with the median rule which chooses the allocation proposed by the median voter as the social outcome. We report the results of a field experiment in which subjects (students of KIT) could allocate money to fund two different public projects, the student's bike shop and a campus garden project. The treatment variable was the collective decision rule employed. While the mean and median rules have very different properties in theory, we found no significant treatment effect on the participation rate. Our results nevertheless shed important light on the use of different voting rules in the context of budget allocation in practice. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitwps:155&r= |
| By: | Tom Coupé (University of Canterbury); W. Robert Reed (University of Canterbury); Christian Zimmerman |
| Abstract: | Are users of a bibliographic database interested in learning about replications? Can they be induced to learn? To answer these questions, we performed an experiment at the online research bibliography, RePEc (Research Papers in Economics). RePEc is the main research bibliography for pre-prints and published papers in economics. Using randomized stratification, we allocated 324 replications and their corresponding original studies to clusters. We then drew from those clusters to construct treatment and control groups. Brightly colored tabs were added to the relevant webpages to alert visitors to the existence of a replication study. We then monitored traffic over three phases lasting several months: a) no treatment, b) treatment on one group, c) treatment on both groups. Our estimates indicate that this intervention generated an average click-through-rate (CTR) of 1.6%, resulting in a 13% increase in the visits to replication webpages, though only the former estimate was statistically significant. |
| Keywords: | Replications, RePEc, Experiment, Online Research Bibliography, Webpages, Click-throughs |
| JEL: | A11 B41 Z00 |
| Date: | 2022–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:22/05&r= |
| By: | Haucap, Justus; Heldman, Christina; Rau, Holger A. |
| Abstract: | Many cartels are formed by individual managers of different firms, but not by firms as collectives. However, most of the literature in industrial economics neglects individuals' incentives to form cartels. Although oligopoly experiments reveal important insights on individuals acting as firms, they largely ignore individual heterogeneity, such as gender differences. We experimentally analyze gender differences in prisoner's dilemmas, where collusive behavior harms a passive third party. In a control treatment, no externality exists. To study the influence of social distance, we compare subjects' collusive behavior in a within-subjects setting. In the first game, subjects have no information on other players, whereas they are informed about personal characteristics in the second game. Results show that guilt-averse women are significantly less inclined to collude than men when collusion harms a third party. No gender difference can be found in the absence of a negative externality. Interestingly, we find that women are not sensitive to the decision context, i.e., even when social distance is small they hardly behave collusively when collusion harms a third party. |
| Keywords: | Collusion,Cartels,Competition Policy,Antitrust,Gender Differences |
| JEL: | C92 D01 D43 J16 K21 L13 L41 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:380&r= |
| By: | Luca Henkel (University of Bonn) |
| Abstract: | Observed individual behavior in the presence of ambiguity is characterized by insufficient responsiveness to changes in subjective likelihoods. Such likelihood insensitivity under ambiguity is integral to theoretical models and predictive of behavior in many important domains such as financial decision-making. However, there is little empirical evidence on its causes and determining factors. This paper investigates the role of beliefs in the form of ambiguity perception - the extent to which a decision-maker has difficulties assigning a single probability to each possible event - as a potential determinant. Using an experiment, I exogenously vary the degree of ambiguity while eliciting measures of likelihood insensitivity and ambiguity perception. The results provide strong support for an ambiguity perception based explanation of likelihood insensitivity. Not only are the two measures highly correlated on the individual level, but changes in ambiguity perception due to the exogenous variation also directly induce changes in likelihood insensitivity. My evidence thus substantiates the perception based interpretation of likelihood insensitivity brought forward by multiple prior models in contrast to preference based explanations of other commonly used models. |
| Keywords: | Ambiguity, decision-making under uncertainty, likelihood insensitivity, multiple prior models |
| JEL: | D81 D83 D91 C91 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:151&r= |
| By: | Vincent Laferriere; David Staubli; Christian Thoeni |
| Abstract: | We report experimental data from standard market entry games and winner-take-all games. At odds with traditional decision making models with risk aversion, the winner-take-all condition results in substantially more entry than the expected-payoff-equivalent market entry game. We explore three candidate explanations for excess entry: blind spot, illusion of control, and joy of winning, none of which receive empirical support. We provide a novel theoretical explanation for excess entry based on Cumulative Prospect Theory and test it empirically. Our results suggest that excess entry into highly competitive environments is not caused by a genuine preference for competing, but driven by probability weighting. Market entrants overweight the small probabilities associated with the high payoff outcomes in winner-take-all markets, while they underweight probable failures. |
| Keywords: | Winner-take-all market, Market entry game, Excess entry, Cumulative Prospect Theory, Probability weighting, Experiment |
| JEL: | C92 D81 D91 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:22.02&r= |
| By: | Sarah Cohodes; Sean P. Corcoran; Jennifer Jennings; Carolyn Sattin-Bajaj |
| Abstract: | This paper reports the results of a large, school-level randomized controlled trial evaluating a set of three informational interventions for young people choosing high schools in 473 middle schools, serving over 115,000 8th graders. The interventions differed in their level of customization to the student and their mode of delivery (paper or online); all treated schools received identical materials to scaffold the decision-making process. Every intervention reduced likelihood of application to and enrollment in schools with graduation rates below the city median (75 percent). An important channel is their effect on reducing nonoptimal first choice application strategies. Providing a simplified, middle-school specific list of relatively high graduation rate schools had the largest impacts, causing students to enroll in high schools with 1.5-percentage point higher graduation rates. Providing the same information online, however, did not alter students’ choices or enrollment. This appears to be due to low utilization. Online interventions with individual customization, including a recommendation tool and search engine, induced students to enroll in high schools with 1-percentage point higher graduation rates, but with more variance in impact. Together, these results show that successful informational interventions must generate engagement with the material, and this is possible through multiple channels. |
| Keywords: | Informational interventions; Inequality; Decision-making; School choice |
| JEL: | I24 D83 I21 |
| Date: | 2022–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:93794&r= |
| By: | Marina Chugunova (Max Planck Insitute for Innovation and Competion); Wolfgang J. Luhan (University of Portsmouth) |
| Abstract: | As technology-assisted decision-making is becoming more widespread, it is important to understand how the algorithmic nature of the decision-maker affects how decisions are perceived by the affected people. We use a laboratory experiment to study the preference for human or algorithmic decision makers in re-distributive decisions. In particular, we consider whether algorithmic decision maker will be preferred because of its unbiasedness. Contrary to previous findings, the majority of participants (over 60%) prefer the algorithm as a decision maker over a human—but this is not driven by concerns over biased decisions. Yet, despite this preference, the decisions made by humans are regarded more favorably. Participants judge the decisions to be equally fair, but are nonetheless less satisfied with the AI decisions. Subjective ratings of the decisions are mainly driven by own material interests and fairness ideals. For the latter, players display remarkable flexibility: they tolerate any explainable deviation between the actual decision and their ideals, but react very strongly and negatively to redistribution decisions that do not fit any fairness ideals. Our results suggest that even in the realm of moral decisions algorithmic decision-makers might be preferred, but actual performance of the algorithm plays an important role in how the decisions are rated. |
| Keywords: | delegation; algorithm aversion; redistribution; fairness |
| JEL: | C91 D31 D81 D9 O33 |
| Date: | 2022–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:pbs:ecofin:2022-03&r= |
| By: | Shi, Chengchun; Wang, Xiaoyu; Luo, Shikai; Zhu, Hongtu; Ye, Jieping; Song, Rui |
| Abstract: | A/B testing, or online experiment is a standard business strategy to compare a new product with an old one in pharmaceutical, technological, and traditional industries. Major challenges arise in online experiments of two-sided marketplace platforms (e.g., Uber) where there is only one unit that receives a sequence of treatments over time. In those experiments, the treatment at a given time impacts current outcome as well as future outcomes. The aim of this paper is to introduce a reinforcement learning frame- work for carrying A/B testing in these experiments, while characterizing the long-term treatment effects. Our proposed testing procedure allows for sequential monitoring and online updating. It is generally applicable to a variety of treatment designs in different industries. In addition, we systematically investigate the theoretical properties (e.g., size and power) of our testing procedure. Finally, we apply our framework to both simulated data and a real-world data example obtained from a technological company to illustrate its advantage over the current practice. A Python implementation of our test is available at https://github.com/callmespring/CausalRL . |
| Keywords: | A/B testing; online experiment; reinforcement learning; causal inference; sequential testing; online updating; Research Support Fund; NSF-DMS-1555244; NSF-DMS-2113637; T&F deal |
| JEL: | C1 |
| Date: | 2022–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:113310&r= |
| By: | Eline Moens; Elsy Verhofstadt; Luc Van Ootegem; Stijn Baert (-) |
| Abstract: | This research adds to the literature on the attractiveness of telework to employees. To this end, we set up an innovative factorial survey experiment in which a high-quality sample of employees evaluates job offers with diverging characteristics, among which a wide variation in telework possibilities. We find that the relationship between the possibility to telework and job attractiveness is approximately linear: 10 percentage points more telework hours yield a rise of 2.2 percentage points in job attractiveness and, therefore, the willingness to give up an increase of 2.3 pp in wage in the new job. Our experimental design also allows us to investigate the underlying mechanisms of this relationship as well as its moderators. We find that the attractiveness of telework is particularly explained by expectations of an improved work-life balance, more work scheduling autonomy, a higher job satisfaction, and more work methods autonomy in jobs with a greater possibility to telework. In addition, our analyses show that less conscientious employees are on average more attracted to jobs with greater telework possibilities, so that it is important that self-selection in jobs with more telework is well-monitored. |
| Keywords: | telework, job attractiveness, factorial survey experiment |
| JEL: | J24 J81 J31 J63 I31 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:22/1042&r= |
| By: | Anna Custers (World Bank); Prathap Kasina (Innovations for Poverty Action); Deepak Saraswat (University of Connecticut); Anjali P. Verma (University of Texas at Austin) |
| Abstract: | This paper analyses the role of technology in reducing heat-induced labor productivity losses. For this, we use a field experiment in India which randomized the use of productivity-augmenting digital mode versus classic paper-and-pen mode for conducting 2000 household surveys. Combining this experimentally induced variation in survey mode with day-to-day variation in temperature, we estimate the impact of survey mode on surveyor productivity as temperature rises. We find that as temperature rises and working conditions start to deteriorate, using digital-mode results in 5 per-cent higher surveyor-productivity compared to paper surveys. These relative productivity gains are mainly concentrated in extremely hot days - where the adverse impact of heat is likely at its peak. Further analysis shows that these impacts are not driven by differences in effort of surveyors or differences in the characteristics of respondents, thereby pointing to the role of technology in reducing the adverse effects of heat. |
| Keywords: | Temperature, Labor Productivity, Mode of Survey, Productivity Augmenting Technology |
| JEL: | J24 M11 Q51 Q55 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2022-10&r= |
| By: | Crossley, Thomas F.; Fisher, Paul; Levell, Peter; Low, Hamish |
| Abstract: | Private transfers can affect the spending response to stimulus payments, as those receiving income windfalls may transfer resources to other households in greater financial need. We report a survey experiment where individuals were asked how they would respond to a £500 payment, with a randomly selected subset of individuals explicitly told that all households would receive the same payments (a ‘public windfall’ scenario). This additional information increased MPCs by 11%. Reported transfer intentions in response to windfalls suggest that public payments crowd out private transfers, partly accounting for the higher MPCs in the public windfall case. |
| Date: | 2022–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:ese:ukhlsp:2022-02&r= |
| By: | Rahul Chandan (University of California, Santa Barbara); Keith Paarporn (University of California, Santa Barbara); Dan Kovenock (Economic Science Institute, Chapman University); Mahnoosh Alizadeh (University of California, Santa Barbara); Jason R. Marden (University of California, Santa Barbara) |
| Abstract: | Success in adversarial environments often requires investment into additional resources in order to improve one’s competitive position. But, can intentionally decreasing one’s own competitiveness ever provide strategic benefits in such settings? In this paper, we focus on characterizing the role of “concessions†as a component of strategic decision making. Specifically, we investigate whether a player can gain an advantage by either conceding budgetary resources or conceding valuable prizes to an opponent. While one might na¨ıvely assume that the player cannot, our work demonstrates that – perhaps surprisingly – concessions do offer strategic benefits when made correctly. In the context of General Lotto games, we first show that neither budgetary concessions nor value concessions can be advantageous to either player in a 1-vs.-1 scenario. However, in settings where two players compete against a common adversary, we find opportunities for one of the two players to improve her payoff by conceding a prize to the adversary. We provide a set of sufficient conditions under which such concessions exist. |
| Keywords: | General Lotto; Colonel Blotto; game; system security; defense; strategic pre-commitment; concession |
| JEL: | C72 D74 H56 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:21-24&r= |
| By: | Hager, Anselm (Humbodt-Universität); Valasek, Justin (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | In this paper, we study how forced migration impacts the in-group and out-group social capital of Syrian refugees and the host population in Northern Lebanon by administering a novel survey experiment in which we manipulate the salience of the migration experience (for refugees) and the refugee crisis (for the host population). Additionally, we study the social spillovers to Palestinians, an established refugee population in Lebanon. We find that the impact of forced migration is largely restricted to the Syrian refugee-Lebanese host population channel, and that it increases the relative disparity between in-group and out-group social capital. This may cause refugees to favor in-group interactions and therefore forgo more economically advantageous interactions with out-group members. |
| Keywords: | Refugees; Migration; Social Capital; Experiment; Ethnicity |
| JEL: | C90 D91 J15 |
| Date: | 2022–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhheco:2022_005&r= |
| By: | Federica Alberti (University of Portsmouth); Karen Johnston (University of Portsmouth); Foteini Kravari (University of Portsmouth) |
| Abstract: | We draw on the theory of representative bureaucracy to examine as to whether there is symbolic effects of a passively representative public organization. In this study we experimentally examine whether the gender representation of a police department affects the extent to which citizens find the department as an attractive place of employment. The results of the study show that there are no significant effects overall. |
| Date: | 2022–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:pbs:ecofin:2022-02&r= |