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on Experimental Economics |
| By: | Evans, Alecia; Sesmero, Juan Pablo |
| Keywords: | Research Methods/Statistical Methods, Institutional and Behavioral Economics |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:322434&r= |
| By: | Backhaus, Teresa; Huck, Steffen; Leutgeb, Johannes Josef; Oprea, Ryan |
| Abstract: | We demonstrate in a laboratory experiment in which subjects play a two-player Cournot-Tullock game over hundreds of periods of varying length that full accounts of subjects' learning requires the consideration of, both, 'period time' and 'physical time.' |
| Keywords: | Cournot oligopoly,Laboratory experiment,Learning,Time |
| JEL: | C73 C92 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2022302&r= |
| By: | Gabriele Camera (Economic Science Institute, Chapman University) |
| Abstract: | Central banks may soon issue currencies that are entirely digital (CBDCs) and possibly interest-bearing. A strategic analytical framework is used to investigate this innovation in the laboratory, contrasting a traditional “plain†tokens baseline to treatments with “sophisticated†interest-bearing tokens. In the experiment, this theoretically beneficial innovation precluded the emergence of a stable monetary system, reducing trade and welfare. Similar problems emerged when sophisticated tokens complemented or replaced plain tokens. This evidence underscores the advantages of combining theoretical with experimental investigation to provide insights for payments systems innovation and policy design. |
| Keywords: | digital currency, endogenous institutions, repeated games, CBDC |
| JEL: | C70 C90 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:22-11&r= |
| By: | Sirikarn Phuchada; Phumsith Mahasuweerachai |
| Abstract: | While many factors have been proven to affect eating behavior in all-you-can-eat restaurants, little attention has been paid to the influence of reference dependence on the quantity of food consumed in this context. This study conducted an experiment with 224 customers (90 tables) in a Korean BBQ buffet restaurant that had 2 menu options, a premium option and a standard option, with a price difference of about $3. Customers were randomly assigned to one of 3 experimental groups based on the option they initially chose: (1) participants who chose a premium option and paid a premium option price (2) participants who chose a premium option and were given a discount to pay at the standard option price and (3) participants who chose a standard option and were awarded a free upgrade from the standard to the premium option. The results indicate that when participants initially chose a premium option and were given a discount to pay at the standard option price, they had higher consumption volume as compared to those who chose a standard option and were awarded a free upgrade from the standard to the premium options. This study reveals that consumers set their reference point on how much to consume by factoring in their perceived meal characteristics. Consumers with the greater reference point end up consuming a significantly larger amount of food than those with a lower reference point. Our research provides compelling evidence that the reference-dependent preference affects consumers’ decisions on how much to consume in an “all-you-can-eat†context. |
| Keywords: | All-you-can-eat buffet; Reference point; Randomized control trial; Behavior economics |
| JEL: | C93 D12 D91 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:pui:dpaper:185&r= |
| By: | Saskia Opitz (University of Cologne, Faculty of Management, Economics and Social Sciences, Department of Corporate Development); Dirk Sliwka (University of Cologne, Faculty of Management, Economics and Social Sciences, Department of Corporate Development); Timo Vogelsang (Frankfurt School of Finance & Management,Department of Accounting); Tom Zimmermann (University of Cologne, Faculty of Management, Economics and Social Sciences, Department of Corporate Development) |
| Abstract: | A central question in designing optimal policies concerns the assignment of individuals with different observable characteristics to different treatments. We study this question in the context of increasing workers’ performance by using targeted incentives based on measurable worker characteristics. To do so, we ran two large-scale experiments. The key results are that (i) performance can be predicted by accurately measured personality traits, (ii) a machine learning algorithm can detect such heterogeneity in worker responses to different schemes, and (iii) a targeted assignment of schemes to individual workers increases performance in a second experiment significantly above the level achieved by the single best scheme. |
| Keywords: | Randomized Controlled Trial, Incentives, Heterogeneity, Treatment Effects, Selection, Algorithm |
| JEL: | C21 C93 M52 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:187&r= |
| By: | Belot, Michèle (Cornell University); Kircher, Philipp (Cornell University); Muller, Paul (Vrije Universiteit Amsterdam) |
| Abstract: | In a randomized field experiment, we provide personalized suggestions about suitable alternative occupations to long-term unemployed job seekers in the UK. The suggestions are automatically generated, integrated in an online job search platform, and fed into actual search queries. Effects on the primary pre-registered outcomes of “finding a stable job” and “reaching a cumulative earnings threshold” are positive, are significant among those who searched at least once, and are more pronounced for those who are longer unemployed. Treated individuals include more occupations in their search and find more jobs in recommended occupations. |
| Keywords: | online advice, job search, long-term unemployment, occupational mobility, field experiment |
| JEL: | D83 J62 C93 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15452&r= |
| By: | Alt, Marius |
| Abstract: | To adequately design and implement effective environmental policies, it is paramount for policymakers to understand preferences for regulatory instruments as well as their individual level determinants. In this study, I experimentally investigate the demand for three environmental policies, comprising nudges, monetary incentives, and punishments. I elicit the demand for these interventions through decisions in a pro-environmental real effort task. The experiment introduces exogenous variation along two dimensions to analyze, whether interventions are (1) demanded as commitment devices to commit to future pro-environmental behavior, and (2) how demand changes when regulation affects not only the self but also others. The results show that a large fraction of individuals demands regulation, which is, however, heterogeneously distributed across participants, being dependent on individual characteristics. Moreover, particularly participants who are sophisticated about their time-inconsistent prosocial preferences demand interventions to commit to pro-environmental behavior. When the intervention is also imposed on other participants, this leads to an increase in the demand, driven by conditionally cooperative individuals who are not averse to constraining others' behavior. Finally, I provide evidence that the experimentally elicited demand for interventions can serve as a predictor of preferences for actual environmental policies. |
| Keywords: | Pro-environmental behavior,Nudges,Economic incentives,Real effort |
| JEL: | Q58 D04 C91 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:22028&r= |
| By: | Liza Charroin (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Bernard Fortin (ULaval - Université Laval [Québec]); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics) |
| Abstract: | If individuals tend to behave like their reference group, is it because of peer effects, selfselection, or both? Using a peer effect model allowing for conformity and link formation, we designed a real-effort laboratory experiment in which individuals could misreport their performance and select their peers. Our results reveal both a preference for conformity and homophilous link formation, but only among individuals cheating in isolation. This suggests that such link formation was not motivated by a taste for similarity but by acquiring self-serving information. Importantly, we reject the presence of a self-selection bias in the peer effect estimates by showing that the size of peer effects is similar when identical peers were randomly assigned and when individuals selected them. |
| Keywords: | Peer effects,Self-selection,Homophily,Dishonesty,Experiment |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03712450&r= |
| By: | Koppensteiner, Martin Foureaux (University of Surrey); Oliveira, Tania (University of Leicester); Rohith, Nikitha (Coventry University) |
| Abstract: | In this paper we provide novel insights on discrimination against immigrants in the UK rental market. We conducted a randomized-controlled trial close to a real-world setting where inquiries to view a property were made via phone inquiries with rental agencies and immigration background was signalled through non-UK accents. We document substantial discrimination against non-UK applicants with non-UK applicants having a 13 percent lower chance of securing a viewing for a rental. We also document substantial heterogeneous effects, with much more pronounced effects in local areas with a lower share of immigrants. We find that the background of agency managers or the composition of agency staff does not attenuate the effects. |
| Keywords: | discrimination, rental market, immigration, right-to-rent, UK |
| JEL: | J15 K37 R30 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15460&r= |
| By: | Gary Charness (Department of Economics, University of California); Alessandro Sontuoso (Smith Institute for Political Economy and Philosophy, Chapman University) |
| Abstract: | We investigate how strategic behavior is affected by the set of notions (frames) used when thinking about the game. In our games, the action set consists of visual objects: each player must privately choose one, trying to match the counterpart’s choice. We propose a model where different player-types are aware of different attributes of the action set (hence, different frames). One of the novelties is an epistemic structure that allows players to think about new frames, after initial unawareness of some attributes. To test the model, our experimental design brings about multiple frames by varying subjects’ awareness of several attributes. |
| Keywords: | unawareness, awareness, interactive epistemology, rationalizability, coordination |
| JEL: | C72 C91 D83 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:22-10&r= |
| By: | John List; Rohen Shah |
| Abstract: | In organizations, teams are ubiquitous. "Weakest Link" and "Best Shot" are incentive schemes that tie a group member's compensation to the output of their group's least and most productive member, respectively. In this paper, we test the impact of these incentive schemes by conducting two pilot RCTs (one in-person, one online), which included more than 250 graduate students in a graduate math class. Students were placed in study groups of three or four students, and then groups were randomized to either control, Weakest Link, or Best Shot incentives. We find evidence that such incentive approaches can affect test scores, both in-person and online. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:feb:framed:00760&r= |
| By: | Cantner, Fabienne; Rolvering, Geske |
| Abstract: | To study how different economic information affect people's perceptions and attitudes towards carbon prices, we conduct an online survey experiment in a representative sample of the German voting population. We find that providing information about the efficiency of carbon prices as well as on international emission levels and carbon price initiatives changes people's perceptions and their support. Information about the possibility and benefits of revenue recycling, however, only affect the views of very specific subgroups of the population, such as individuals with low income or high trust in the government. Moreover, we find that none of the information affects the perceptions and support of climate change skeptics. |
| Keywords: | climate change,climate policies,carbon pricing,information,surveyexperiment |
| JEL: | D72 D83 D91 H23 Q58 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:upadvr:v9122&r= |
| By: | Renée, Laëtitia |
| Abstract: | I study the effects of the Future to Discover Project, a randomized experiment in which Canadian high school students were either invited to participate in career planning workshops or were made eligible for an $8,000 college grant. By matching the experimental data to post-secondary institution records and income tax files, I am able to examine the effects of the interventions on college enrollment, graduation, and earnings in adulthood. I show that the career education intervention greatly improved students' outcomes in the long run by improving academic matching. In contrast, the college grant had no long-term monetary benefits despite increasing college enrollment, which is consistent with classical models of human capital investment in the absence of credit constraints. My findings suggest that informational frictions and behavioral obstacles-rather than financial constraints-represent the primary barrier to four-year college enrollment faced by low-income students. And that they explain a large part of the gap in four-year college enrollment between high- and low-income students. |
| JEL: | I22 I23 I24 D8 D31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:clefwp:46&r= |
| By: | Galanis, Giorgos (School of Business and Management, Queen Mary, University of London; Centre for Research in Economic Theory and its Applications, University of Warwick); Kollias, Iraklis (Department of Economics, University of Athens); Leventidis, Ioanis (Department of Economics, University of Athens); Lustenhouwer, Joep (Department of Economics, Heidelberg University) |
| 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 dierent 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 dierences 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 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:wcreta:73&r= |
| By: | Jonathan Chapman; Erik Snowberg; Stephanie W. Wang; Colin Camerer |
| Abstract: | We measure individual-level loss aversion using three incentivized, representative surveys of the U.S. population (combined N=3,000). We find that around 50% of the U.S. population is loss tolerant, with many participants accepting negative-expected-value gambles. This is counter to earlier findings—which mostly come from lab/student samples—and expert predictions that 70-90% of participants are loss averse. Consistent with the difference between our study and the prior literature, loss aversion is more prevalent in people with high cognitive ability. Loss-tolerant individuals are more likely to report recent gambling and to have experienced financial shocks. These results support the general hypothesis that individuals value gains and losses differently, although the tendency in a large proportion of the population to emphasize gains over losses is an overlooked behavioral phenomenon. |
| JEL: | C81 C9 D03 D81 D9 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30243&r= |
| By: | Darija Barak; Edoardo Gallo; Ke Rong; Ke Tang; Wei Du |
| Abstract: | On 11th Jan 2020, the first COVID-19 related death was confirmed in Wuhan, Hubei. The Chinese government responded to the outbreak with a lockdown that impacted most residents of Hubei province and lasted for almost three months. At the time, the lockdown was the strictest both within China and worldwide. Using an interactive web-based experiment conducted half a year after the lockdown with participants from 11 Chinese provinces, we investigate the behavioral effects of this `shock' event experienced by the population of Hubei. We find that both one's place of residence and the strictness of lockdown measures in their province are robust predictors of individual social distancing behavior. Further, we observe that informational messages are effective at increasing compliance with social distancing throughout China, whereas fines for noncompliance work better within Hubei province relative to the rest of the country. We also report that residents of Hubei increase their propensity to social distance when exposed to social environments characterized by the presence of a superspreader, while the effect is not present outside of the province. Our results appear to be specific to the context of COVID-19, and are not explained by general differences in risk attitudes and social preferences. |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2208.04117&r= |
| By: | Salvatore Nunnari; Massimiliano Pozzi |
| Abstract: | We conduct an interdisciplinary meta-analysis to aggregate the knowledge from empirical estimates of inequality aversion reported from 1999 to 2022. In particular, we examine 85 estimates of disadvantageous inequality aversion (or envy) and advantageous inequality aversion (or guilt) from 26 articles in economics, psychology, neuroscience and computer science that structurally estimate the Fehr and Schmidt (1999) model of social preferences. Our meta-analysis supports the presence of inequality concerns: the mean envy coefficient is 0:426 with a 95% probability that the true value lies in the interval [0:240; 0:620]; the mean guilt coefficient is 0:290 with a 95% probability that the true value lies in the interval [0:212; 0:366]. Moreover, we observe high levels of heterogeneity, both across studies and across individuals, with estimated parameters sensitive to the experimental task and the subject population. |
| Keywords: | social preferences, inequality aversion, inequity aversion, envy, guilt, meta-analysis, multi-level random-effects model, Bayesian hierarchical model |
| JEL: | C90 C11 D63 D91 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9851&r= |
| By: | Dillon Bowen |
| Abstract: | How accurately can behavioral scientists predict behavior? To answer this question, we analyzed data from five studies in which 640 professional behavioral scientists predicted the results of one or more behavioral science experiments. We compared the behavioral scientists' predictions to random chance, linear models, and simple heuristics like "behavioral interventions have no effect" and "all published psychology research is false." We find that behavioral scientists are consistently no better than - and often worse than - these simple heuristics and models. Behavioral scientists' predictions are not only noisy but also biased. They systematically overestimate how well behavioral science "works": overestimating the effectiveness of behavioral interventions, the impact of psychological phenomena like time discounting, and the replicability of published psychology research. |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2208.01167&r= |
| By: | Isabelle Brocas; Juan Carrillo |
| Abstract: | Adults do not play the Nash equilibrium in the well known centipede game. While Palacios-Huerta and Volij (2009) argued that behavior results from the failure of backward induction logic, Levitt et al. (2011) found that players who know how to backward induct still do not play Nash. Here, we ask children and adolescents (ages 8 to 16) to play the centipede game in the laboratory and we leverage knowledge about developing abilities to assess the contribution of backward induction logic. In line with the literature, we find that the ability to perform backward induction increases with age. However, it predicts behavior only in elementary school children: those with advanced logical abilities over-apply their skills. Starting in middle school, students who reason logically know that the unraveling argument should not be applied blindly. They utilize Theory-of-Mind (ToM) abilities to form beliefs about others' play and (optimally) refrain from stopping immediately. Their behavior is in line with the deviations observed in adults. Interestingly, developing ToM leads to a gradual decrease in stopping stages with age, which is accompanied by a decrease in payoffs with age. The results indicate that ToM is the key contributor of behavior that helps departing from backward induction when beneficial. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00761&r= |