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on Experimental Economics |
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Issue of 2022‒06‒27
nineteen papers chosen by |
| By: | Antonio Acconcia; Sergio Beraldo; Carlo Capuano; Marco Stimolo |
| Abstract: | We implement an experimental design based on a duopoly game in which subjects choose whether to cooperate in Research and Development (R&D) activities. We first conduct six experimental markets that differ in both the levels of knowledge spillovers and the intensity of competition. Consistently with the theory, we find that the probability of cooperation increases in the level of spillovers and decreases in that of market competition. We then replicate the experimental markets by providing subsidies to subjects who cooperate. Subsidies relevantly increase the probability of cooperation in focus markets, causing, however, a sensible reduction of R&D investments. Overall, our evidence suggests that, depending on the characteristics of the market, the use of public subsidies might be redundant, for firms would anyway joined their R&D efforts; or counterproductive, inducing firms to significantly reduce R&D investments compared to the non-cooperative scenario. |
| Keywords: | Cooperation in R&D; Public subsidies; knowledge spillovers; market competition. |
| JEL: | L24 O3 |
| Date: | 2022–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:eei:rpaper:eeri_rp_2022_04&r= |
| By: | Lambrecht, Marco; Oechssler, Jörg |
| Abstract: | A risky skill game is a game in which skill plays an important role but outcomes are also strongly influenced by random factors. Examples are poker or blackjack but also many economic activities like trading on financial markets. In an online experiment we let subjects choose how often they want to play a risky skill game. We find that women play only half as many rounds in risky skill games if the influence of chance is large. There is no gender difference if the influence of chance is small or if outcomes depend exclusively on chance. |
| Keywords: | gender; risk; competitiveness |
| Date: | 2022–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0717&r= |
| By: | Fourberg, Niklas; Taş, Serpil; Wiewiorra, Lukas |
| Abstract: | Ad-avoidance technologies such as ad-blocking add-ons in browsers and supplemental mobile applications have become mainstream tools in recent years. Over time they surpassed their niche role as applications only for the technically savvy and became an essential tool for many internet users. While the technical impact of these tools has been well researched, their effects on actual consumer behavior is still unclear. In an experimental setting this study provides first evidence on the effect of ad-blocking on users' ability to acquire information in the form of an online reading task. We find that ad-blocking leads to more effort being exerted and increases social welfare by reducing inefficient searching. Additionally, ad-blocking induces users' visit duration on websites to be more elastic in the experienced intensity of advertisement. Hence, gains in user visit duration from reducing the ad-load are larger, which consequences a more competitive environment among publishers. The results provide new perspectives on ad-blocking and inform the current debate on looming ad-tech regulations in the light of DMA and DSA initiatives. |
| Keywords: | ad-blocking,consumer behavior,lab experiment,online advertising,welfare,privacy |
| JEL: | L82 L86 M37 C91 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wikwps:1&r= |
| By: | Hassan, Hashibul; Islam, Asad; Siddique, Abu; Wang, Liang Choon |
| Abstract: | Using a randomized experiment in 200 Bangladeshi villages, we evaluate the impact of an over-the-phone learning support intervention (telementoring) among primary school children and their mothers during Covid-19 school closures. Following the intervention, treated children scored 0.75 SD (35%) higher on a standardized test, and the homeschooling involvement of treated mothers increased by 22 minutes per day (26%). We returned to the participants one year later, after schools briefly reopened, and find that impacts on learning gains and homeschooling had persisted. Academically weaker children benefitted the most from the intervention that only cost $20 per child. |
| Date: | 2021–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:mhyq5&r= |
| By: | Christine L. Exley (Harvard Business School, Harvard University); Oliver P. Hauser (Department of Economics, University of Exeter); Molly Moore (Harward Kennedy School, Harvard University); John-Henry Pezzuto (Harvard Business School, Harvard University) |
| Abstract: | While there is a vast (and mixed) literature on gender differences in social preferences, little is known about believed gender differences in social preferences. This paper documents robust evidence for believed gender differences in social preferences. Across a wide range of contexts that vary in terms of strategic considerations, selfish motives, fairness concepts and applications, we find that individuals robustly expect that women are more generous and more equality-oriented. Despite the robustness of these beliefs, the believed gender gap in social preferences - in the range of contexts we consider - is largely inaccurate. |
| Keywords: | experiments, gender, altruism |
| JEL: | C91 D64 D91 |
| Date: | 2022–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:exe:wpaper:2204&r= |
| By: | Kelishomi, Moghaddasi Ali (Loughborough University); Sgroi, Daniel (University of Warwick) |
| Abstract: | We find a strong relationship between risk-loving preferences and cognitive ability which becomes stronger as adherence to the generalized axiom of revealed preference (a proxy for rationality) increases. Our results are taken from a field study of individuals at the very bottom of the income distribution in a developing nation. Our results for some of the poorest in the world support recent findings drawn from subjects in wealthy Western nations, suggesting there may be a stable relationship between risk preferences and cognitive ability for the human population as a whole irrespective of socio-economic status. |
| Keywords: | risk, cognitive ability, rationality, generalized axiom of revealed preference, field experiment, low incomes, developing nation |
| JEL: | I11 I12 I18 C93 D03 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15266&r= |
| By: | Gary Charness; Giovanni Di Bartolomeo; Stefano Papa |
| Abstract: | Social identity and communication are topics of increasing interest in management science. One's social identity tends to lead one to favor those belonging to one's group; this in-group bias may lead to problematic relationships. At the same time, communication has been found to have beneficial social consequences in controlled laboratory experiments. An important question is whether communication, by signaling a meeting of the minds, can improve trust and therefore outcomes between out-group members. We construct a simple weak mechanism of group favoritism that does in fact show in-group favoritism. When both paired individuals, one of whom will become the dictator, promise to make the pro-social dictator choice if they become dictator, favorable behavior is much more likely in all cases. But there is an intriguing pattern across group membership concerning the degree of improvement: Without mutual promises, people make more favorable choices for in-group members. Interestingly, this gap is eliminated by such promises. In this sense, strangers become partners. |
| Keywords: | Social identity; In-group bias; Communication; Exogenous variation |
| JEL: | A13 C91 D03 D64 D90 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:sap:wpaper:wp221&r= |
| By: | De Chiara, Alessandro; Engl, Florian (Universität Regensburg); Herz, Holger; Manna, Ester (Universitat de Barcelona) |
| Abstract: | Companies typically control various aspects of their workers' behaviors. In this paper, we investigate whether the hierarchical distance of the superior who imposes such control measures matters for the workers' ensuing reaction. In particular, we test, in a laboratory experiment, whether potential negative behavioral reactions to imposed control are larger when they are implemented by a direct superior rather than a hierarchically more distant superior. We find that hierarchical proximity indeed magni es such control aversion and discuss several potential channels for this result. |
| Keywords: | Control Aversion; Hierarchies; Delegation; Principal-Agent-Problem |
| JEL: | C92 D23 M12 |
| Date: | 2022–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00527&r= |
| By: | Polipciuc, Maria (ROA / Health, skills and inequality, RS: GSBE other - not theme-related research) |
| Abstract: | Betrayal aversion is an important factor in the decision to trust. Trust in members of one’s own social group (ingroup members) is often higher than that in members of other groups (outgroup members). In this paper, I study (i) how betrayal aversion contributes to in-/outgroup discrimination in trust and (ii) how this contribution evolves as social groups solidify. |
| JEL: | C72 C91 J15 J16 |
| Date: | 2022–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2022005&r= |
| By: | Polipciuc, Maria (ROA / Health, skills and inequality, RS: GSBE other - not theme-related research) |
| Abstract: | Betrayal aversion is an important factor in the decision to trust. Trust in members of one’s own social group (ingroup members) is often higher than that in members of other groups (outgroup members). In this paper, I study (i) how betrayal aversion contributes to in-/outgroup discrimination in trust and (ii) how this contribution evolves as social groups solidify. |
| JEL: | C72 C91 J15 J16 |
| Date: | 2022–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umaror:2022002&r= |
| By: | Maximilian Andres; Lisa Bruttel; Jana Friedrichsen |
| Abstract: | This paper sheds new light on the role of communication for cartel formation. Using machine learning to evaluate free-form chat communication among firms in a laboratory experiment, we identify typical communication patterns for both explicit cartel formation and indirect attempts to collude tacitly. We document that firms are less likely to communicate explicitly about price fixing and more likely to use indirect messages when sanctioning institutions are present. This effect of sanctions on communication reinforces the direct cartel-deterring effect of sanctions as collusion is more difficult to reach and sustain without an explicit agreement. Indirect messages have no, or even a negative, effect on prices. |
| Keywords: | cartel, collusion, communication, machine learning, experiment |
| JEL: | C92 D43 L41 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp2000&r= |
| By: | Blattman, Christopher (University of Chicago); Sheridan, Margaret A. Ph.D.; Jamison, Julian C.; Chaskel, Sebastian |
| Abstract: | In most societies, a small number of people commit most of the serious crimes and violence. Short-term studies have shown that cognitive behavioral therapy (CBT) can reduce such antisocial behaviors. There are some signs that these behavior changes may be temporary, however, especially from therapy on its own. This is unsettled, however, for there has been little randomized and long-term research on the question. We follow 999 high-risk men in Liberia 10 years after randomization into one of four arms: 8 weeks of a low-cost therapy; a \$200 cash grant; both therapy and cash; or a control group. Together, the two interventions cost just \$530 to deliver. We find that, a decade later, both therapy alone and therapy with economic assistance produce dramatic reductions in antisocial behaviors. Reported drug-selling and participation in thefts and robberies, for example, fall by about half. These impacts are greatest among the very highest-risk men. The effects of therapy alone, however, are somewhat smaller and more fragile. The effects of therapy plus economic assistance are more sustained and precise. Since the cash did not increase earnings for more than a few months after the grants, we hypothesize that the grant, and those few months of legitimate business activity, reinforced the learning-by-doing and habit formation embodied in CBT. Overall, the results suggest that highly-targeted CBT plus economic assistance could be an inexpensive and effective way to prevent violence, especially when policymakers are searching for alternatives to aggressive policing and incarceration. |
| Date: | 2022–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:q85ux&r= |
| By: | Sterkens, Philippe; Dalle, Axana; Wuyts, Joey; Pauwels, Ines; Durinck, Hellen; Baertf, Stijn |
| Abstract: | To explain the mixed findings on hiring discrimination against homosexual applicants, we explore the perceptual drivers behind employers' evaluations of gay men and lesbian women. Therefore, we conduct an extensive vignette experiment among 404 genuine recruiters, for which we test systematically-selected perceptions theoretically associated with homosexual job candidates in earlier studies. We find causal evidence for distinct effects of sexual identities on candidate perceptions and interview probabilities. In particular, interview probabilities are positively (negatively) associated with the perception of lesbian women (gay men) as being more (less) pleasant to work with compared to heterosexual candidates. In addition, interview chances are negatively associated with the perception of gay men and lesbian women as being more outspoken. Furthermore, our data align well with the idea of a concentrated discrimination account, whereby a minority of employers who privately hold negative attitudes towards homosexual individuals are responsible for most instances of hiring discrimination. |
| Keywords: | homosexuality,signalling,statistical discrimination,taste-based discrimination,hiring experiment |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1090&r= |
| By: | Christopher Blattman; Sebastian Chaskel; Julian C. Jamison; Margaret Sheridan |
| Abstract: | In most societies, a small number of people commit the most serious violence. Short-term studies have shown that cognitive behavioral therapy (CBT) can reduce such antisocial behaviors. These behavior changes may be temporary, however, especially from therapy on its own. This is unsettled, however, for there has been little randomized, long-term research. We follow 999 high-risk men in Liberia 10 years after randomization into either: 8 weeks of a therapy; a $200 grant; both; or a control group. A decade later, both therapy alone and therapy with economic assistance produce dramatic reductions in antisocial behaviors. Drug-selling and participation in thefts and robberies, for example, fall by about half. These impacts are greatest among the highest-risk men. The effects of therapy alone, however, are smaller and more fragile. The effects of therapy plus economic assistance are more sustained and precise. Since the cash did not increase earnings for more than a few months, we hypothesize that the grant, and the brief legitimate business activity, reinforced the habit formation embodied in CBT. Overall, results suggest that targeted CBT plus economic assistance is an inexpensive and effective way to prevent violence, especially when policymakers are searching for alternatives to aggressive policing and incarceration. |
| JEL: | D83 K42 O15 O17 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30049&r= |
| By: | Evan M. Calford; Anujit Charkraborty |
| Abstract: | We study the value of and the demand for instrumentally-valuable information in a simple decision environment where signals are transparently biased. We observe remarkable sophistication in information aggregation and acquisition. A majority of our subjects (63%) made unbiased reports even when faced with biased signals and the few subjects who made biased reports were split between under- and over-correcting for the signal bias. When allowed to buy pairs of opposite or similarly biased information sources, subjects actively shopped for diverse information at personal costs, and their demand for diverse information reacted rationally to its value and cost. Subjects who were worse at aggregating information, were more likely to purchase diverse signals, perhaps in an attempt to make their inference problem easier. Our results advocate for greater transparency in media bias, so that individuals can choose the right portfolio of information to make better choices. |
| JEL: | D85 D91 D81 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2022-688&r= |
| By: | Aars, Ole Kristian (Department of Health Management and Health Economics); Godager, Geir (Health Services Research Unit, Akershus University Hospital, Oslo, Norway); Kaarboe, Oddvar (Department of Global Public Health and Primary Care and Department of Economics, University of Bergen, Norway); Moger, Tron Anders (Department of Health Management and Health Economics) |
| Abstract: | Audit and feedback is used as a strategy to guide practices of health care professionals towards certain targets. The outcome of interest can be quality improvements, but also ensuring that health care workers adhere to relevant regulations. We conducted a nationwide field experiment in the Norwegian primary care sector to study the behavioral responses from giving general practitioners feedback (GPs) on their claiming of fees. The email-based feedback intervention targeted GPs who most frequently claimed fees for double consultations and provided them with a reminder of the formal regulations for double consultations. The intervention caused a 2-5 percentage point reduction in the use of the double-consultation fee, reducing the yearly health care spending of the Norwegian government by approximately 000 (or 1 270 per GP). |
| Keywords: | Physician payment system; Field experiment; Performance disclosure; Fee-for service; Information and product quality |
| JEL: | C93 H40 I11 J33 L15 |
| Date: | 2022–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oslohe:2022_001&r= |
| By: | Herz, Holger; Kistler, Deborah (ETH Zurich); Zehnder, Christian (Université de Lausanne); Zihlmann, Christian |
| Abstract: | We empirically assess whether hindsight bias has consequences on how citizens evaluate their political actors. Using an incentivized elicitation technique, we demonstrate that people systematically misremember their past policy preferences regarding how to best fight the Covid-19 pandemic. At the peak of the first wave in the United States, the average respondent mistakenly believes they supported significantly stricter restrictions at the onset of the first wave than they actually did. Exogenous variation in the extent of hindsight bias, induced through random assignment to survey structures, allows us to show that hindsight bias causally reduces trust in government. |
| Keywords: | Hindsight bias; Trust in Government; Evaluation distortion; Biased Beliefs |
| JEL: | D72 D83 D91 |
| Date: | 2022–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00526&r= |
| By: | Gwen-Jiro Clochard; Guillaume Hollard; Julia Wirtz |
| Abstract: | Relative performance feedback (RPF) allows agents to compare their performance to that of others. Current theory assumes that RPF affects performance by changing the optimal level of effort. We introduce a technology channel in which agents use RPF to improve their technologies. We compare the effort and technology channels by combining three elements: an extensive review, an original model and two field experiments. Under the technology channel, we highlight that RPF increases performance even at the bottom of the distribution and has a cumulative effect across periods. We draw implications for education and social norms. |
| Date: | 2022–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:bri:uobdis:22/767&r= |
| By: | Chlond, Bettina; Goeschl, Timo; Kesternich, Martin |
| Abstract: | We contribute to the literature on how program design affects program performance among vulnerable groups by studying the effects of varying the subsidy level and program procedures in an energy efficiency assistance program targeting low-income households in Germany. Eligible households receive, upon enrolment, a voucher to subsidize refrigerator replacement. The voucher is redeemed against cash following replacement. Observing the decisions of 77,305 eligible households, our RDD design exploits two quasi-exogenous temporal discontinuities in voucher value and program procedures. We find that a switch from automatic to elective enrolment and more rigid voucher terms reduces the number of vouchers in circulation, but raises the replacement rate among eligible households, the key performance metric, by 4 to 10 percentage points, consistent with psychological theories of goal setting and time management. A subsidy increase of €50 raises replacement rates by 9 to 16 percentage points. The effect of procedural changes is equivalent to an additional €34 in subsidy. Back-of-the-envelope calculations highlight that low-cost changes in procedures that target the behavioral responses of low-income households represent plausible areas of unexploited economies in program design and merit systematic investigation. |
| Keywords: | public behavioral economics; low-income households; durable replacement; energy poverty; technology adoption; energy efficiency; Energieeffizienz |
| Date: | 2022–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0716&r= |