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on Experimental Economics |
| By: | Yuta Kittaka; Ryo Mikami; Natsumi Shimada |
| Abstract: | While search experiments are available in several designs, growing experimental evidence suggests that individual search behavior depends on design details. We conduct an experiment providing the first categorization and comparison of several search experiment designs widely accepted in search studies. These designs can be categorized as passive, quasi-active, and active, according to the degree of flexibility in decision-making regarding the search. Despite the experiment being based on an identical model, we found significant differences at the aggregate- and individual-level in the results across designs. The average number of searches was the highest and closest to the theoretical value in the active design. Compared with the active design, subjects searched significantly less in the quasiactive and passive designs. The results indicate that the widely accepted design, wherein subjects make decisions based on a given offer rather than choosing among potential alternatives themselves, may have unexpected effects on subjects’ behavior. Furthermore, subjects’ risk aversion has a significant effect only in the passive design, suggesting that out-of-model factors specific to that design may influence behavior through risk preferences. Other methodological implications for search experiments are also provided. |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1148r&r= |
| By: | Nobuyuki Hanaki; Takahiro Hoshino; Kohei Kubota; Fabrice Murtin; Masao Ogaki; Fumio Ohtake; Naoko Okuyama |
| Abstract: | This paper compares the results of an experiment conducted both in the laboratory and online with participants recruited from the same subject pool using the Trustlab platform. This platform has been used to obtain incentivized and internationally comparable behavioral economics measures of altruism, cooperation, reciprocity, trust, and trustworthiness, employing representative samples in many countries. We find little significant difference between the results from sessions conducted in the laboratory and online. While the existing literature shows that the choice between laboratory and online experiments can cause differences in results in some cases, our findings support the hypothesis that they do not cause differences in the behavioral economics measures when using the Trustlab platform. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1168r&r= |
| By: | Giovanni Di Bartolomeo; Martin Dufwenberg; Stefano Papa; Laura Razzolini |
| Abstract: | Our study contributes to a large literature in experimental economics that explores gender differences in how people are motivated. We focus on guilt aversion (GA), a surprisingly rather unexplored issue. Our experiment supports the idea that men are more GA than women. Our results also support different rationales to explain observed similar behaviors, like promise keeping. We provide a potential intuition for our findings, which is based on the pregnancy-related biological asymmetry between genders. |
| Keywords: | gender; guilt aversion; promises; evolutionary psychology |
| JEL: | A13 C91 D03 D64 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:sap:wpaper:wp220&r= |
| By: | Alfarano, Simone; Camacho-Cuena, Eva; Colasante, Annarita; Ruiz-Buforn, Alba |
| Abstract: | Inspired by macroeconomic scenarios, we aim to experimentally investigate the evolution of short- and long-run expectations under different specifications of the fundamentals. We collect individual predictions for the future prices in a series of Learning to Forecast Experiments with a time-varying fundamental value. In particular, we observe how expectations evolve in markets where the fundamental value follows either a V-shaped or an inverse V-shaped pattern. These conditions are compared with markets characterized by a constant and a slightly linear increasing fundamental value. We assess whether minor but systematic variations in the fundamentals affect individual short- and long-run expectations by considering positive and negative feedback-expectation systems. Even though such variations in the fundamentals turn out not to strongly affect the way subjects form their expectations in positive feedback markets, we observe significant changes in negative feedback markets. |
| Keywords: | Long-run expectations; Coordination; Convergence; Heterogeneous expectations; Expectations feedback; Experimental economics |
| JEL: | C91 D03 G12 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113086&r= |
| By: | Rafael Jimenez-Duran |
| Abstract: | Social media platforms ban users and remove posts to moderate their content. This "speech policing" remains controversial because little is known about its consequences and the costs and benefits for different individuals. I conduct two field experiments on Twitter to examine the effect of moderating hate speech on user behavior and welfare. Randomly reporting posts for violating the rules against hateful conduct increases the likelihood that Twitter removes them. Reporting does not affect the activity on the platform of the posts' authors or their likelihood of reposting hate, but it does increase the activity of those attacked by the posts. These results are consistent with a model in which content moderation is a quality decision for platforms that increases user engagement and hence advertising revenue. The second experiment shows that changing users' perceived content removal does not change their willingness to pause using social media, a measure of consumer surplus. My results imply that content moderation does not necessarily moderate users, but it marginally increases advertising revenue. It can be consistent with both profit- and welfare-maximization if out-of-platform externalities are small |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:feb:natura:00754&r= |
| By: | Baranski, Andrzej; Geraldes, Diogo; Kovaliukaite, Ada; Tremewan, James |
| Abstract: | Women are underrepresented in political and business decision-making bodies across the world. To investigate the causal effect of gender representation on multilateral negotiations, we experimentally manipulate the composition of triads in a majoritarian, divide-the-dollar game. First, we find that inclusive splits and unanimous agreement rates are highest in all-female groups and lowest in all-male groups suggesting that female representation increases fairness. Second, we document a robust gender gap in earnings, driven largely by the exclusion of women from coalitions rather than differential shares within coalitions. Interestingly, we find that distinct bargaining dynamics can underlie the same inequitable outcomes: While gender-biased outcomes are sometimes caused by outright discrimination, they can also be driven by more complex dynamics related to gender differences in bargaining strategies. These different dynamics manifest in mixed-gender coalitions being less stable when the excluded party is male rather than female. |
| Keywords: | multilateral bargaining, gender gap, lab experiment |
| JEL: | C72 J16 J31 |
| Date: | 2022–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:113063&r= |
| By: | Thomas Epper (IÉSEG School Of Management [Puteaux], LEM - Laboratoire d'Economie et de Management - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur, KU - University of Copenhagen = Københavns Universitet); Ernst Fehr (KU - University of Copenhagen = Københavns Universitet); Kristoffer Balle Hvidberg (KU - University of Copenhagen = Københavns Universitet); Claus Thustrup Kreiner (KU - University of Copenhagen = Københavns Universitet); Soren Leth-Petersen (KU - University of Copenhagen = Københavns Universitet); Gregers Nytoft Rasmussen (KU - University of Copenhagen = Københavns Universitet) |
| Abstract: | Understanding who commits crime and why is a key topic in social science and important for the design of crime prevention policy. In theory, people who commit crime face different social and economic incentives for criminal activity than other people, or they evaluate the costs and benefits of crime differently because they have different preferences. Empirical evidence on the role of preferences is scarce. Theoretically, risk-tolerant, impatient, and self-interested people are more prone to commit crime than risk-averse, patient, and altruistic people. We test these predictions with a unique combination of data where we use incentivized experiments to elicit the preferences of young men and link these experimental data to their criminal records. In addition, our data allow us to control extensively for other characteristics such as cognitive skills, socioeconomic background, and self-control problems. We find that preferences are strongly associated with actual criminal behavior. Impatience and, in particular, risk tolerance are still strong predictors when we include the full battery of controls. Crime propensities are 8 to 10 percentage points higher for the most risk-tolerant individuals compared to the most risk averse. This effect is half the size of the effect of cognitive skills, which is known to be a very strong predictor of criminal behavior. Looking into different types of crime, we find that preferences significantly predict property offenses, while self-control problems significantly predict violent, drug, and sexual offenses. |
| Keywords: | crime,risk preference,time preference,self-control,altruism |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03550163&r= |
| By: | Gill, Andrej; Hett, Florian; Tischer, Johannes |
| Abstract: | Households regularly fail to make optimal financial decisions. But what are the underlying reasons for this? Using two conceptually distinct measures of time inconsistency based on bank account transaction data and behavioral measurement experiments, we show that the excessive use of bank account overdrafts is linked to time inconsistency. By contrast, there is no correlation between a survey-based measure of financial literacy and overdraft usage. Our results indicate that consumer education and information may not suffice to overcome mistakes in households' financial decision-making. Rather, behaviorally motivated interventions targeting specific biases in decision-making should also be considered as effective policy tools. |
| Keywords: | Household Finance,Paycheck Sensitivity,Fintech,Time Inconsistency,Time Preferences,Experiment,Behavioral Measurement |
| JEL: | D14 D90 G51 G53 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdps:182022&r= |
| By: | Shan, Xiaoyue (University of Pennsylvania); Zölitz, Ulf (University of Zurich) |
| Abstract: | Do the people around us influence our personality? To answer this question, we conduct an experiment with 543 university students who we randomly assign to study groups. Our results show that students become more similar to their peers along several dimensions. Students with more competitive peers become more competitive, students with more open-minded peers become more open-minded, and students with more conscientious peers become more conscientious. We see no significant effects of peers’ extraversion, agreeableness, or neuroticism. To explain these results, we propose a simple model of personality development under the influence of peers. Consistent with the model’s prediction, personality spillovers are concentrated in traits predictive of performance. Students adopt personality traits that are productive in the university context from their peers. Our findings highlight that socialization with peers can influence personality development. |
| Keywords: | peer effects, malleability, personality, experiment |
| JEL: | I21 I24 J24 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15257&r= |
| By: | Pugatch, Todd; Schroeder, Elizabeth; Wilson, Nicholas |
| Abstract: | We design a commitment contract for college students, "Study More Tomorrow," and conduct a randomized control trial testing a model of its demand. The contract commits students to attend peer tutoring if their midterm grade falls below a prespecified threshold. The contract carries a financial penalty for noncompliance, in contrast to other commitment devices for studying tested in the literature. We find demand for the contract, with take-up of 10% among students randomly assigned a contract offer. Contract demand is not higher among students randomly assigned to a lower contract price, plausibly because a lower contract price also means a lower commitment benefit of the contract. Students with the highest perceived utility for peer tutoring have greater demand for commitment, consistent with our model. Contrary to the model's predictions, we fail to find evidence of increased demand among presentbiased students or among those with higher self-reported tendency to procrastinate. Our results show that college students are willing to pay for study commitment devices. The sources of this demand do not align fully with behavioral theories, however. |
| Keywords: | economics of education,higher education,commitment contracts,randomized control trials |
| JEL: | D91 I21 I23 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1115&r= |
| By: | KUROKAWA Hirofumi; IGEI Kengo; KITSUKI Akinori; KURITA Kenichi; MANAGI Shunsuke; NAKAMURO Makiko; SAKANO Akira |
| Abstract: | We ran randomized controlled trials to evaluate the effectiveness of our environmental education class and the impact of the nudge and boost on students’ attitudes and behaviors toward environmental issues. We found that our environmental education class significantly improves the students’ basic knowledge of the environment and concerns about plastic waste. Although there is no evidence that nudges and boosts amplify the effect of environmental education on basic knowledge of the environment, nudges are successful in making students who received environmental education more concerned about plastic waste. Our results also show that nudges and boosts can change students’ pro-environmental behaviors. Students who were assigned to treatment groups with nudges or boosts are more likely to refuse free wet wipes provided at convenience stores. These results indicate that our interventions change students’ pro-environmental behaviors only if the cost of changing their behaviors is low. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:22047&r= |
| By: | Patrick Carlin; Brian E. Dixon; Kosali I. Simon; Ryan Sullivan; Coady Wing |
| Abstract: | Two discrete choice experiments conducted early in the Covid-19 vaccination campaign show that people dramatically undervalue the Covid-19 vaccine, relative to benchmarks implied by the value of a statistical life (VSL). Our first experiment found that median willingness to pay (WTP) for initial vaccination is around $50, only 2 percent of the WTP implied by standard VSL calculations. Our second experiment found the median person was willing to accept (WTA) about $200 to delay the second dose, only 32 percent of the WTA implied by standard VSL calculations. While standard economic models imply that vaccines are undervalued because of their large externalities, we interpret the finding that WTP estimates are well below the VSL benchmarks as evidence that internalities play a substantial role. This evidence that people undervalue even the private benefits of vaccination suggests that there may be a role for government beyond conventional efforts to correct externalities. |
| JEL: | H0 I0 I12 I18 I28 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30118&r= |
| By: | Paul Goldsmith-Pinkham; Peter Hull; Michal Kolesár |
| Abstract: | We study the interpretation of regressions with multiple treatments and flexible controls. Such regressions are often used to analyze stratified randomized control trials with multiple intervention arms, to estimate value-added (for, e.g., teachers) with observational data, and to leverage the quasi-random assignment of decision-makers (e.g. bail judges). We show that these regressions generally fail to estimate convex averages of heterogeneous treatment effects, even when the treatments are conditionally randomly assigned and the controls are sufficiently flexible to avoid omitted variables bias. Instead, estimates of each treatment’s effects are generally contaminated by a non-convex average of the effects of other treatments. Thus, recent concerns about heterogeneity-induced bias in regressions leveraging potential outcome restrictions (e.g. parallel trends assumptions) also arise with “design-based” identification strategies. We discuss solutions to the contamination bias and propose a new class of efficient estimators of weighted average effects that avoid bias. In a re-analysis of the Project STAR trial, we find minimal bias because treatment effect heterogeneity is largely idiosyncratic. But sizeable contamination bias arises when effect heterogeneity becomes correlated with treatment propensity scores. |
| JEL: | C14 C21 C22 C90 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30108&r= |
| By: | Kevin Carney; Michael Kremer; Xinyue Lin; Gautam Rao |
| Abstract: | Collateral requirements play an important role in credit markets. This paper shows that the endowment effect—the phenomenon where owing a good increases one's valuation of it—inhibits demand for loans which use a borrower's existing assets as collateral. Using a field experiment in Kenya, we show that borrowers instead strongly prefer loans collateralized using the new durable assets being financed by the loans themselves. They are willing to pay 9% per month higher interest for such Same-Asset Collateralized Loans (SACLs) despite the endowed and new assets being randomized, and thus similarly valued before ownership. Our findings imply that assets which are difficult to use as collateral—which cannot be financed by SACLs—will be invested in less, even if the borrower has other collateral. We argue that borrowers' preference for SACLs is driven by naivete: they initially perceive that they have little to lose when offered a SACL, but subsequently come to develop an attachment to the new asset, resulting in high repayment effort. Consistent with this, borrowers underestimate their future attachment to an asset before owning it, and SACLs do not have higher default rates despite having higher demand. We derive the conditions under which offering consumers SACLs increases or conversely decreases borrower welfare. |
| JEL: | D14 D25 D9 D91 D92 O1 O16 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30073&r= |
| By: | Yash Deshpande; Elchanan Mossel; Youngtak Sohn |
| Abstract: | Bayesian models of group learning are studied in Economics since the 1970s and more recently in computational linguistics. The models from Economics postulate that agents maximize utility in their communication and actions. The Economics models do not explain the "probability matching" phenomena that are observed in many experimental studies. To address these observations, Bayesian models that do not formally fit into the economic utility maximization framework were introduced. In these models individuals sample from their posteriors in communication. In this work, we study the asymptotic behavior of such models on connected networks with repeated communication. Perhaps surprisingly, despite the fact that individual agents are not utility maximizers in the classical sense, we establish that the individuals ultimately agree and furthermore show that the limiting posterior is Bayes optimal. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.11561&r= |
| By: | Nathan Kallus |
| Abstract: | The fundamental problem of causal inference -- that we never observe counterfactuals -- prevents us from identifying how many might be negatively affected by a proposed intervention. If, in an A/B test, half of users click (or buy, or watch, or renew, etc.), whether exposed to the standard experience A or a new one B, hypothetically it could be because the change affects no one, because the change positively affects half the user population to go from no-click to click while negatively affecting the other half, or something in between. While unknowable, this impact is clearly of material importance to the decision to implement a change or not, whether due to fairness, long-term, systemic, or operational considerations. We therefore derive the tightest-possible (i.e., sharp) bounds on the fraction negatively affected (and other related estimands) given data with only factual observations, whether experimental or observational. Naturally, the more we can stratify individuals by observable covariates, the tighter the sharp bounds. Since these bounds involve unknown functions that must be learned from data, we develop a robust inference algorithm that is efficient almost regardless of how and how fast these functions are learned, remains consistent when some are mislearned, and still gives valid conservative bounds when most are mislearned. Our methodology altogether therefore strongly supports credible conclusions: it avoids spuriously point-identifying this unknowable impact, focusing on the best bounds instead, and it permits exceedingly robust inference on these. We demonstrate our method in simulation studies and in a case study of career counseling for the unemployed. |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2205.10327&r= |
| By: | Felix Chopra; Ingar K. Haaland; Christopher Roth; Andreas Stegmann |
| Abstract: | We examine how the evaluation of research studies in economics depends on whether a study yielded a null result. Studies with null results are perceived to be less publishable, of lower quality, less important, and less precisely estimated than studies with significant results, even when holding constant all other study features, including the precision of estimates. The null result penalty is of similar magnitude among PhD students and journal editors. The penalty is larger when experts predict a large effect and when statistical uncertainty is communicated with p-values rather than standard errors. Our findings highlight the value of pre-results review. |
| Keywords: | null results, publication bias, learning, information, scientific communication |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9776&r= |