|
on Experimental Economics |
| By: | Sarah Necker; Fabian Paetzel |
| Abstract: | Competitive rewards are often assigned on a regular basis, e.g., in annual salary negotiations or employee-of-the-month schemes. The repetition of competitions can imply that opponents are matched based on earlier outcomes. Using a real-effort experiment, we examine how cheating and effort evolve in two rounds of competitions in which subjects compete with different types of opponents in the second round (random/based on first-round outcome). We find that (i) losing causes competitors to increase cheating in the second round while winning implies a tendency to reduce cheating. A similar effect is found with regard to effort, which losers increase to a larger extent than winners. (ii) Competitor matching does not significantly affect behavior. |
| Keywords: | cheating, effort, competition, competitor, social recognition, laboratory experiment |
| JEL: | C91 C92 M52 J28 J33 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9744&r= |
| By: | Kevin Boudreau; Nilam Kaushik |
| Abstract: | Prior research, primarily based on lab experiments, suggests that females might be more averse to competition than males and could be more inclined towards collaboration, instead. Were these findings to generalize to adults across the workforce, there could be profound implications for organizational design and personnel management. We report on a field experiment in which 97,678 adults from a wide range of fields and ages were invited to join a product development opportunity. Individuals were randomly assigned to treatments framing the opportunity as either involving competitive or collaborative interactions with other participants. Among those outside of science, technology, engineering, and math fields (STEM), we find significant gender differences in willingness to participate under competition. Among those in STEM fields, we detect no statistical gender differences. These results and broader patterns documented in the study are consistent with significant heterogeneity in competitiveness across both men and women, with field and career sorting resulting in differences (in gender differences) across fields. |
| JEL: | D02 D03 D9 D91 J0 J01 J2 M0 M12 M5 O3 O31 O32 O36 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30062&r= |
| By: | Lustenhouwer, Joep; Salle, Isabelle |
| Abstract: | We conduct a laboratory experiment in a fully-fledged macroeconomic model where participants receive information about future government spending shocks and are tasked with repeatedly forecasting output over a given horizon. By eliciting several-period-head predictions, we investigate forecast reaction to news and revision. The lab forecasts are consistent with stylized facts on reaction to news established in the survey literature. We find that subjects steadily learn the magnitude of the effect of the shocks on output, albeit not to full extent. We further find little support for fully backward-looking expectations. We rationalize the experimental data in the context of a Bayesian updating model, which provides a better description of the behaviors in longer-horizon environments and among more attentive and experienced subjects. |
| Date: | 2022–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0714&r= |
| By: | Christoph Huber; Christian König-Kersting |
| Abstract: | Financial professionals play a key role in financial markets and the financial industry as a whole. Researchers in experimental economics and finance have therefore started to employ financial professionals as experimental participants. We examine this recent development in the field by reviewing 40 studies from the time period 1986--2022 which compare experimental results from samples of professionals in the finance industry to those from other samples. The considered studies cover a wide array of issues relating to the finance industry, such as risk and uncertainty, asset markets, and financial forecasting, among others. With this comprehensive review, we contribute to recent discussions about external validity and generalizability, aim to synthesize the relevant experimental results, and discuss the key methodological considerations in experimenting with financial professionals. |
| Keywords: | Experimental finance, experimental methodology, external validity, generalizability, finance industry |
| JEL: | B40 B41 C83 C90 C93 G41 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2022-07&r= |
| By: | Gächter, Simon (University of Nottingham); Kölle, Felix (University of Cologne); Quercia, Simone (University of Verona) |
| Abstract: | We study two generic versions of public goods problems: in Provision problems, the public good does not exist initially and needs to be provided; in Maintenance problems, the public good already exists and needs to be maintained. In five lab and online experiments (n=2,584), we document a robust asymmetry in preferences and perceptions in two incentive-equivalent versions of these public good problems. We find fewer conditional cooperators and more free riders in Maintenance than Provision, a difference that is replicable, stable, and reflected in perceptions of kindness. Incentivized control questions administered before gameplay reveal dilemma-specific misperceptions but controlling for them neither eliminates game-dependent conditional cooperation, nor differences in perceived kindness of others' cooperation. Thus, even when sharing the same game form, Maintenance and Provision are different social dilemmas that require separate behavioral analyses. Despite some inconsistencies, a theory of revealed altruism comes closest to explaining our results. |
| Keywords: | maintenance and provision social dilemmas, conditional cooperation, kindness, misperceptions, experiments, revealed altruism |
| JEL: | C92 H41 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15322&r= |
| By: | Hikaru Kawarazaki (Graduate school in Economics at University College London); Minhaj Mahmud (Asian Development Bank); Yasuyuki Sawada (Faculty of Economics, The University of Tokyo); Mai Seki (Ritsumeikan University); Kazuma Takakura (Graduate School of Economics, The University of Tokyo) |
| Abstract: | In the already very rich and crowded literature on education interventions, the use of test scores to capture students’cognitive abilities has been the norm when measuring the impact. We show that even in randomized controlled trials (RCTs), estimated treatment effects on the true latent abilities can still be biased towards zero, because test scores are often censored outside of zero and full marks. This paper employs sui generis data from a field experiment in Bangladesh as well as data sets from existing highly-cited studies in developing countries to illustrate theoretically and empirically that this remaining classical sample selection problem exists. We suggest three concrete ways to correct such bias: First, to employ the conventional sample selection correction methods; second, to use tests that are designed with an extensive set of questions from easy to challenging levels which allow students to answer the maximum they could; and third, to incorporate each student’s completion time in estimation. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2022cf1194&r= |
| By: | Adams, Paul; Guttman-Kenney, Benedict; Hayes, Lucy; Hunt, Stefan; Laibson, David; Stewart, Neil |
| Abstract: | We study nudges that turn out to have precise null effects in reducing long-run credit card debt. We test nudges across two field experiments covering 183,441 UK cardholders. Our first experiment studies nudges added to monthly credit card statements. Our second experiment studies letters and email nudges (separate from monthly statements) sent to cardholders who signed up to automatically pay the minimum required payment.In a follow-up survey to our second experiment, we find that 96% of respondents underestimate the time it would take to fully repay a debt if the cardholder made only the minimum required payment. The nudges reduce this confusion, but underestimation remains overwhelmingly common. |
| Keywords: | ES/K002201/1; ES/V004867/1; ES/P008976/1; ES/N018192/1; RP2012-V-022 |
| JEL: | F3 G3 N0 J1 |
| Date: | 2022–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:115093&r= |
| By: | Amrit Amirapu; Irma Clots-Figueras; Bansi Malde; Anirban Mitra; Debayan Pakrashi; Zaki Wahhaj |
| Abstract: | The COVID-19 pandemic has adversely a ected the livelihoods of hundreds of millions of households, resulting in widespread poverty and food insecurity. To mitigate these e ects, many governments have introduced additionalbenefits as part of their existing welfare schemes. However, there is often a gap between the introduction of these programs and access to the benefits. To shed light on the source of these gaps, we conduct a field experiment with just over 1,000 slum-dwelling households in Uttar Pradesh, India during the COVID-19 pandemic. The intervention randomly exposed individuals to personalised information about government benefits via cell phones. We find that the simple and low-cost provision of personalised information i) increased the accuracy and precision of participants' knowledge about their entitled benefits, ii) increased access to and utilization of benefits, and iii) improved wellbeing (as measured through consumption, food insecurity and mental health). We do not find significant differences in effects based on whether males or females are targeted. Our findings show that there are large gaps in knowledge of and access to government benefits (despite widespread publicity about the programs) which can be reduced via a simple and low-cost information intervention. |
| Keywords: | COVID-19; Government Benefits; Emergency Aid; Information Intervention |
| JEL: | D10 H53 I38 O12 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:2201&r= |
| By: | Eric Auerbach; Yong Cai |
| Abstract: | We are interested in the distribution of treatment effects for an experiment where units are randomized to treatment but outcomes are measured for pairs of units. For example, we might measure risk sharing links between households enrolled in a microfinance program, employment relationships between workers and firms exposed to a trade shock, or bids from bidders to items assigned to an auction format. Such a double randomized experimental design may be appropriate when there are social interactions, market externalities, or other spillovers across units assigned to the same treatment. Or it may describe a natural or quasi experiment given to the researcher. In this paper, we propose a new empirical strategy based on comparing the eigenvalues of the outcome matrices associated with each treatment. Our proposal is based on a new matrix analog of the Fr\'echet-Hoeffding bounds that play a key role in the standard theory. We first use this result to bound the distribution of treatment effects. We then propose a new matrix analog of quantile treatment effects based on the difference in the eigenvalues. We call this analog spectral treatment effects. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.01246&r= |
| By: | Jérôme Hergueux (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - 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); Nicolas Jacquemet (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Stéphane Luchini (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Jason Shogren (UW - University of Wyoming) |
| Abstract: | Public good games are at the core of many environmental challenges. In such social dilemmas, a large share of people endorse the norm of reciprocity. A growing literature complements this finding with the observation that many players exhibit a self-serving bias in reciprocation: "weak reciprocators" increase their contributions as a function of the effort level of the other players, but less than proportionally. In this paper, we build upon a growing literature on truth-telling to argue that weak reciprocity might be best conceived not as a preference, but rather as a symptom of an internal trade-off at the player level between (i) the truthful revelation of their private reciprocal preference, and (ii) the economic incentives they face (which foster free-riding). In truth-telling experiments, many players misrepresent private information when this is to their material benefit, but to a significantly lesser extent than what would be expected based on the profit-maximizing strategy. We apply this behavioral insight to strategic situations, and test whether the preference revelation properties of the classic voluntary contribution game can be improved by offering players the possibility to sign a classic truth-telling oath. Our results suggest that the honesty oath helps increase cooperation (by 33% in our experiment). Subjects under oath contribute in a way which is more consistent with (i) the contribution they expect from the other players and (ii) their normative views about the right contribution level. As a result, the distribution of social types elicited under oath differs from the one observed in the baseline: some free-riders, and many weak reciprocators, now behave as pure reciprocators. |
| Keywords: | Cooperation,Reciprocity,Social preferences,Public goods,Truth-telling oath |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:pseptp:halshs-03666626&r= |
| By: | Takashi Hayashi (University of Glasgow); Ryoko Wada (Keiai University) |
| Abstract: | This paper experimentally studies comparative properties of risk aversion and ambiguity aversion in the way that the role of heterogeneity is allowed for. We examine correlation between the degrees of risk aversion and the degree of ambiguity aversion, how the latter changes across geometric properties of objective sets of possible probability distributions and how ambiguous information is generated. |
| Keywords: | Ambiguity aversion, risk aversion, comparative definitions, choice experiments |
| JEL: | C91 D81 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:1079&r= |
| By: | Arroyos-Calvera, Danae (University of Birmingham); Powdthavee, Nattavudh (University of Warwick) |
| Abstract: | We examine whether a company's corporate reputation gained from their CSR activities and a company leader's reputation, one that is unrelated to his or her business acumen, can impact economic action fairness appraisals. We provide experimental evidence that good corporate reputation causally buffers individuals' negative fairness judgment following the firm's decision to profiteer from an increase in the demand. Bad corporate reputation does not make the decision to profiteer as any less acceptable. However, there is evidence that individuals judge as more unfair an ill-reputed firm's decision to raise their product's price to protect against losses. Thus, our results highlight the importance of a good reputation in protecting a firm against severe negative judgments from making an economic decision that the public deems unfair. |
| Keywords: | fairness, corporate reputation, CEO reputation, CSR, Halo effect |
| JEL: | C90 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15256&r= |
| By: | David Huber; Leonie Kühl; Nora Szech |
| Abstract: | Many societies report an increasingly divergent development of managers’ salaries compared to that of their workforce. Moreover, there is often a lack in diversity amongst managerial boards. We investigate the role of managers’ gender and incentive scheme on wages chosen for workers by conducting two experimental studies. The data reveal male managers respond in more self-oriented ways to their incentive scheme. Further, we find that experience with the workers’ task can increase appreciation of workers. Effects are strongest when the managers’ compensation scheme rules out self-orientation. Overall, female managers display more consistency in choosing adequate wages for workers, i.e. their choices are less affected by incentives. An increase in diversity may thus help reducing salary disparities and foster work atmosphere. |
| Keywords: | adequate wages, real work experiment, gender |
| JEL: | D01 J16 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9713&r= |
| By: | Masaki Aoyagi; Guillaume Frechette; Sevgi Yuksel |
| Abstract: | This paper uses a laboratory experiment to study beliefs and their relationship to action and strategy choices in finitely and indefinitely repeated prisoners' dilemma games. We find subjects' beliefs about the other player's action are accurate despite some systematic deviations corresponding to early pessimism in the indefinitely repeated game and late optimism in the finitely repeated game. The data reveals a close link between beliefs and actions that differs between the two games. In particular, the same history of play leads to different beliefs, and the same belief leads to different action choices in each game. Moreover, we find beliefs anticipate the evolution of behavior within a supergame, changing in response to the history of play (in both games) and the number of rounds played (in the finitely repeated game). We then use the subjects' beliefs over actions in each round to identify their beliefs over supergame strategies played by the other player. We find these beliefs correctly capture the different classes of strategies used in each game. Importantly, subjects using different strategies have different beliefs, and for the most part, strategies are subjectively rational given beliefs. The results also suggest subjects tend to overestimate the likelihood that others use the same strategy as them, while underestimating the likelihood that others use less cooperative strategies. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1119rr&r= |
| By: | Lewandowski, Piotr (Institute for Structural Research (IBS)); Lipowska, Katarzyna (Institute for Structural Research (IBS)); Smoter, Mateusz (Institute for Structural Research (IBS)) |
| Abstract: | The COVID-19 pandemic has transformed working from home from a rarity to a widely adopted job amenity. We study workers' willingness to pay for working from home, and how it may be affected by subjective and objective assessments of COVID-19-related risks. We conducted a discrete choice experiment with more than 10,000 workers in Poland. We randomised wage differences between otherwise identical home- and office-based jobs. We also randomised an information provision treatment in which we informed 50% of workers about the level of exposure to contagion in their occupation, and how it may be reduced by working from home. We found that the demand for working from home was substantial – the majority of participants would prefer to work from home if they were offered the same wage for a home-based job as they would earn in an office-based job. On average, workers would sacrifice 5.1% of their earnings for the option to work from home, especially for 2-3 days a week (7.3%) rather than 5 days a week (2.8%). We also found that the perception of COVID-19 mattered, as workers who perceived it as a threat were willing to give up a much higher share of their earnings than those who did not. However, the willingness to pay did not differ significantly between individuals depending on whether their occupation had a high or a low level of exposure, or between individuals treated in the information experiment and those in the control group. |
| Keywords: | working from home, discrete choice, information provision experiment, occupational exposures, COVID-19 |
| JEL: | J21 J44 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15251&r= |
| By: | Van Borm, Hannah (Ghent University); Baert, Stijn (Ghent University) |
| Abstract: | We investigate the drivers of gender differentials in hiring chances. More concretely, we test (i) whether recruiters perceive job applicants in gender stereotypical terms when making hiring decisions and (ii) whether the activation of these gender stereotypes in recruiters’ minds varies by the salience of gender in a particular hiring context and the gender prototypicality of a job applicant, as hypothesised in Ridgeway and Kricheli-Katz (2013). To this end, we conduct an innovative vignette experiment in the United States with 290 genuine recruiters who evaluate fictitious job applicants regarding their hireability and 21 statements related to specific gender stereotypes. Moreover, we experimentally manipulate both the gender prototypicality of a job applicant and the salience of gender in the hiring context. We find that employers perceive women in gender stereotypical terms when making hiring decisions. In particular, women are perceived to be more social and supportive than men, but also as less assertive and physically strong. Furthermore, our results indicate that the gender prototypicality of job applicants moderates these perceptions: the less prototypical group of African American women, who are assumed to be less prototypical, are perceived in less stereotypical terms than white women, while some stereotypes are more outspoken when female résumés reveal family responsibilities. |
| Keywords: | hiring, gender discrimination, stereotypes, race, motherhood |
| JEL: | J71 J16 J15 J13 J24 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15261&r= |
| By: | Michela Chessa; Nobuyuki Hanaki; Aymeric Lardon; Takashi Yamada |
| Abstract: | We experimentally compare two well-known mechanisms inducing the Shapley value as an ex ante equilibrium outcome of a noncooperative bargaining procedure: the demand-based Winter's demand commitment bargaining mechanism and the offer-based Hart and Mas-Colell procedure. Our results suggest that the offer-based Hart and Mas-Colell mechanism better induces players to cooperate and to agree on an efficient outcome, whereas the demand-based Winter mechanism better implements allocations that reflect players' effective power. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1175&r= |
| By: | Esteban, Steffanny Romero; Mantilla, Cesar |
| Abstract: | We create a dual labor market in the laboratory with participants selecting where to perform a real effort task: one with higher piece-rate and taxed labor income, resembling a formal market; or another without tax contributions, resembling an informal one. Although the tax revenue is divided among all participants, regardless of their chosen market, our parameterization yields two coordination equilibria. We thus explore whether feedback regarding labor market composition (i.e., how many group-mates chose each market) and relative earnings in each market increase the selection of the formal labor market. This feedback increases the choice of the formal labor market by six percentage points (from 64% to 70%) and increases the accuracy of beliefs regarding labor market composition. Informing the average earnings in both markets seems to work as a focal point that increases participation in the formal market. |
| Date: | 2022–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:q2x8d&r= |
| By: | Gill, David (Purdue University); Prowse, Victoria L. (Purdue University) |
| Abstract: | Response times are a simple low-cost indicator of the process of reasoning in strategic games. In this paper, we leverage the dynamic nature of response-time data from repeated strategic interactions to measure the strategic complexity of a situation by how long people think on average when they face that situation (where we categorize situations according to the characteristics of play in the previous round). We find that strategic complexity varies significantly across situations, and we find considerable heterogeneity in how responsive subjects' thinking times are to complexity. We also study how variation in response times at the individual level across rounds affects strategic behavior and success: when a subject thinks for longer than she would normally do in a particular situation, she wins less frequently and earns less. The behavioral mechanism that drives the reduction in performance is a tendency to move away from Nash equilibrium behavior. Finally, cognitive ability and personality have no effect on average response times. |
| Keywords: | response time, decision time, deliberation time, thinking time, complexity, level-k, game theory, strategic game, repeated games, beauty contest, cognitive ability, personality |
| JEL: | C72 C91 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15275&r= |
| By: | Philippe Sterkens (-) |
| Abstract: | Studies have shown that workers with a history of burnout are penalised in the labour market through lower hiring and promotion probabilities. The current study contributes to this body of literature by analysing how the formerly burned-out fare in the setting of a layoff. To do so, a vignette experiment is conducted among 197 managers who rated employees varying, amongst others characteristics, in their employment history at the organisation. Hence, I find that employees who have experienced burnout are more likely to be selected for a layoff than workers without an interruption in their working record, regardless of their current performance level and current health. In addition, the effect of burnout on the likeliness to be selected for layoff is more pronounced among older managers and varies by the respondents’ socially desirable response tendencies. |
| Keywords: | Burnout, Layoff, Vignette experiment, Social desirability |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:22/1047&r= |
| By: | Fabian Brunner; Fabian Gamm; Wladislaw Mill |
| Abstract: | Creating your own financial portfolio has never been easier than today. While recent literature shows that people overvalue self-built consumer goods ("IKEA effect") we ask the following question: How do investors value and trade a self-built versus a not self-built financial portfolio? Our pre-registered experimental design allows us to rule out any confounding customization, actual ownership, or learning effects. We find that self-building a portfolio significantly increases corresponding attachment. However, neither valuation of the portfolio nor trading decisions are affected. Thus, our precise estimates suggest that there is no economically relevant "IKEA effect" in Financial investment decisions. These results indicate that common portfolio self-building opportunities per se do not directly distort financial markets. |
| Keywords: | IKEA Effect, Self-Building Financial Portfolios, Self-directed Investing, Investment Decisions, Psychological Ownership, Belief Formation, Experimental Finance |
| JEL: | C91 G11 G41 G50 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2022_349&r= |
| By: | Oriana Bandiera; Nidhi Parekh; Barbara Petrongolo; Michelle Rao |
| 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, overconfidence, Bayesian hierarchical mode |
| Date: | 2021–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1820&r= |
| By: | Miquel-Florensa, Josepa; Joseph, George |
| Abstract: | We present a lab-in-the-field experiment with employees of the Addis Ababa Water and Sanitation Authority with the aim to understand how to improve coordination and collaboration in their daily crew work. Par-ticipants play a series of public good games under different rules: standard game, with identifiable set of partners, game with threshold, and game with a randomly selected anonymous leader with the power to punish. We show that a common goal, in the form of a threshold to be attained for the group success, is significantly more effective than a potentially pun-ishing leader to increase individual effort and ultimately group outcomes. This result advocates for the introduction of team goals as coordination and motivation devices in settings where tasks are performed by groups and are subject to free-riding and coordination challenges. |
| JEL: | J45 M50 O12 |
| Date: | 2022–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:126939&r= |
| By: | Galanis, Giorgos; Kollias, Iraklis; Leventidis, Ioanis; Lustenhouwer, Joep |
| Abstract: | The growing literature in behavioral finance and macroeconomics that uses dynamic discrete choice models has overwhelmingly assumed that individual choices are made on the basis of a logit framework. While this assumption allows for analytical tractability, it comes with a number of restrictions with regards to the economic environments it can represent. These restrictions are lifted if a probit framework is used instead. In this paper we compare the two approaches and show that, due to its ability to allow for correlations between the random part of different choice alternatives as well as random taste variation, the probit-based model can better fit actual choice data from an existing laboratory experiment, especially if there are more choice alternatives. On the other hand, for the case of two choice alternatives without random taste variation, the probit-based and logit-based models result in very similar dynamics. But even in that case, we find that important qualitative differences arise - in terms of an additional region of chaos - in the cobweb model of the seminal work of Brock and Hommes (1997). Our work highlights the usefulness of using the probit framework for extensions of existing theoretical models and as a way to better fit dynamic experimental or real world choice data. |
| Date: | 2022–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0715&r= |
| By: | Bhargava, Iti |
| Abstract: | This paper evaluates the impact of unconditional transfers on an individual’s psychological well-being. Based on a randomized experiment conducted in Kenya, 50 villages in Rarieda received unconditional cash transfers. The variables of interest were consumption expenditure, spending on temptation goods, education expenses, assets and investments, and psychological well-being. Through this paper, I further examine the factors that lead to an increase in psychological well-being. According to my analysis, an unconditional cash transfer is agnostic to the initial level of well-being. |
| Date: | 2022–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:eutwb&r= |
| By: | Bhargav Bhat; Jonathan de Quidt; Johannes Haushofer; Vikram H. Patel; Gautam Rao; Frank Schilbach; Pierre-Luc P. Vautrey |
| Abstract: | We revisit two clinical trials that randomized depressed adults in India (n=775) to a brief course of psychotherapy or a control condition. Four to five years later, the treatment group was 11 percentage points less likely to be depressed than the control group. The more effective intervention averted 9 months of depression on average over five years and cost only $66 per recipient. Therapy changed people’s beliefs about themselves in three ways. First, it reduced their likelihood of seeing themselves as a failure or feeling bad about themselves. Second, when faced with a novel work opportunity, therapy reduced over-optimistic belief updating in response to feedback and thus reduced overconfidence. Third, it increased self-assessed levels of patience and altruism. Therapy did not increase levels of employment or consumption, possibly because of other constraints on employment in the largely female study sample. |
| JEL: | D03 D91 I15 O12 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30011&r= |
| By: | Christopher Adjaho; Timothy Christensen |
| Abstract: | We consider the problem of learning treatment (or policy) rules that are externally valid in the sense that they have welfare guarantees in target populations that are similar to, but possibly different from, the experimental population. We allow for shifts in both the distribution of potential outcomes and covariates between the experimental and target populations. This paper makes two main contributions. First, we provide a formal sense in which policies that maximize social welfare in the experimental population remain optimal for the "worst-case" social welfare when the distribution of potential outcomes (but not covariates) shifts. Hence, policy learning methods that have good regret guarantees in the experimental population, such as empirical welfare maximization, are externally valid with respect to a class of shifts in potential outcomes. Second, we develop methods for policy learning that are robust to shifts in the joint distribution of potential outcomes and covariates. Our methods may be used with experimental or observational data. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.05561&r= |
| By: | Tverskoi, Denis; Guido, Andrea (Institute for Futures Studies); Andrighetto, Giulia; Sánchez, Angel; Gavrilets, Sergey |
| Abstract: | In social interactions, human decision-making, attitudes, and beliefs about others coevolve. Their dynamics are affected by cost-benefit considerations, cognitive processes (such as cognitive dissonance, social projecting, and logic constraints), and social influences by peers (via descriptive and injunctive social norms) and by authorities (e.g., educational, cultural, religious, political, administrative, individual or group, real or fictitious). Here we attempt to disentangle some of this complexity by using an integrative mathematical modeling and a 35-day online behavioral experiment. We utilize data from a Common Pool Resources experiment with or without messaging promoting a group-beneficial level of resource extraction. We first show that our model provides a better fit than a wide variety of alternative models. Then we directly estimate the weights of different factors in decision-making and beliefs dynamics. We show that material payoffs accounted only for about 20\% of decision-making. The remaining 80\% was due to different cognitive and social forces which we evaluated quantitatively. Without messaging, personal norms (and cognitive dissonance) have the largest weight in decision-making. Messaging greatly influences personal norms and normative expectations. Between-individual variation is present in all measured characteristics and notably impacts observed group behavior. At the same time, gender differences are not significant. We argue that one can hardly understand social behavior without understanding the dynamics of personal beliefs and beliefs about others and that cognitive, social, and material factors all play important roles in these processes. Our results have implications for understanding and predicting social processes triggered by certain shocks (e.g., social unrest, a pandemic, or a natural disaster) and for designing policy interventions aiming to change behavior (e.g. actions aimed at environment protection or climate change mitigation). |
| Date: | 2022–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:z5m9h&r= |
| By: | Fei, Jennifer (Stanford University); Wolff, Jessica Sadye (Stanford University); Hotard, Michael (Stanford University); Ingham, Hannah (Emergant, LLC); Khanna, Saurabh (Stanford University); Lawrence, Duncan (Stanford University); Tesfaye, Beza (Mercy Corps Nepal); Weinstein, Jeremy (Stanford University); Yasenov, Vasil (Stanford University); Hainmueller, Jens (Stanford University) |
| Abstract: | We present a method to conduct automated surveys over WhatsApp, a globally popular messaging service. WhatsApp surveys offer potential advantages since they incur relatively low costs to respondents and researchers, are easy to use for respondents who are already familiar with WhatsApp chat features, and facilitate continued engagement with mobile populations as users can retain their WhatsApp number even if they change SIM cards and phone numbers. Yet, there is limited knowledge on how well WhatsApp surveys perform empirically. We test the WhatsApp method using two original panel surveys of refugees in Colombia and the U.S. and find satisfactory response rates and retention over a nine-month follow-up period in these mobile populations. We also conduct a mode experiment in Colombia comparing WhatsApp to short message service (SMS) and interactive voice response (IVR) surveys. We find that WhatsApp had a 12 and 27 percentage points higher response rate than IVR and SMS, respectively, resulting from higher initial engagement and lower break-off. We conclude by discussing advantages and limitations of the WhatsApp method and offer documentation and a public code repository to support researchers and practitioners in applying the method in other contexts. |
| Keywords: | survey methods, panel data, mobile populations, mode experiment |
| JEL: | F22 J15 K42 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15263&r= |
| By: | Michela Chessa; Nobuyuki Hanaki; Aymeric Lardon; Takashi Yamada |
| Abstract: | We experimentally compare a simplified version of two mechanisms that implement the Shapley value as an (ex ante) equilibrium outcome of a noncooperative bargaining procedure: one proposed by Hart and Mas-Colell (1996, H-MC) and the other by Pérez-Castrillo and Wettstein (2001, PC-W). While H-MC induces the Shapley value only on average, PC-W does so as a unique equilibrium outcome by introducing an additional bidding stage on top of H-MC. We investigate the effect of this additional complexity that PC-W introduces on the resulting outcomes such as the frequency of grand coalition formation, efficiency, and the distance between the realized allocation and the Shapley value. Our experiment shows that H-MC not only results in significantly greater efficiency than PC-W, but also the average allocation is closer to the Shapley value for those groups that formed the grand coalition. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1176&r= |