nep-exp New Economics Papers
on Experimental Economics
Issue of 2022‒10‒17
29 papers chosen by

  1. Can Communication Mitigate Strategic Delays in Investment Timing? By Ay?e Gül Mermer; Sander Onderstal; Joep Sonnemans
  2. See it to believe it. Experimental evidence on status consumption among the youth. By Alves, Guillermo; Leites, Martín; Salas, Gonzalo
  3. The Effect of Self-Control on Borrowing: Experimental Evidence By Grohmann, Antonia; Hamdan, Jana S.
  4. Closing the Gender STEM Gap - A Large-Scale Randomized-Controlled Trial in Elementary Schools By Kerstin Grosch; Simone Haeckl; Martin G. Kocher
  5. Positive and Negative Selection in Bargaining: An Experiment By Dongkyu Chang; Duk Gyoo Kim; Wooyoung Lim
  6. The Effect of Chosen or Given Luck on Honesty By Diogo Geraldes; Franziska Heinicke; Duk Gyoo Kim
  7. Selecting Names for Experiments on Ethnic Discrimination By Baert, Stijn; Lippens, Louis; Van Borm, Hannah
  8. Causal Responsibility Attribution: Theory and Experimental Evidence By Florian Engl
  9. Aiding Applicants: Leveling the Playing Field within the Immediate Acceptance Mechanism By Basteck, Christian; Mantovani, Marco
  10. Social Preferences and the Variability of Conditional Cooperation By Malte Baader; Simon Gaechter; Kyeongtae Lee; Martin Sefton
  11. Choosing Who Chooses: Selection-Driven Targeting in Energy Rebate Programs By Takanori Ida; Takunori Ishihara; Koichiro Ito; Daido Kido; Toru Kitagawa; Shosei Sakaguchi; Shusaku Sasaki
  12. Pictures are Worth Many Words: Effectiveness of Visual Communication in Dispelling the Rent–Control Misconception By Jordi Brandts; Isabel Busom; Cristina Lopez-Mayan; Judith Panadés
  13. Face Mask Use and Physical Distancing Before and After Mandatory Masking: No Evidence on Risk Compensation in Public Waiting Lines By Seres, Gyula; Balleyer, Anna; Cerutti, Nicola; Friedrichsen, Jana; Süer, Müge
  14. Malleability of Preferences for Honesty By Abeler, Johannes; Falk, Armin; Kosse, Fabian
  15. The Origins of Gender Differences in Competitiveness and Earnings Expectations: Causal Evidence from a Mentoring Intervention By Boneva, Teodora; Buser, Thomas; Falk, Armin; Kosse, Fabian
  16. Changing Gender Norms across Generations: Evidence from a Paternity Leave Reform By Lídia Farré; Cristina Felfe; Libertad González; Patrick Schneider
  17. The Banker's Oath And Financial Advice By Utz Weitzel; Michael Kirchler
  18. Cognitive Imprecision and Stake-Dependent Risk Attitudes By Mel Win Khaw; Ziang Li; Michael Woodford
  19. Work Comparative Regression Discontinuity and Regression Discontinuity as Alternatives to RCT for Estimating Average Treatment Effects By Duncan Chaplin; Charles Tilley; Denise Hoffman; John T. Jones
  20. Understanding Labor Market Discrimination against Transgender People: Evidence from a Double List Experiment and a Survey By Aksoy, Billur; Carpenter, Christopher S.; Sansone, Dario
  21. Mismatch in preferences for working from home - evidence from discrete choice experiments By Piotr Lewandowski; Katarzyna Lipowska; Mateusz Smoter
  22. The Human Perils of Scaling Smart Technologies: Evidence from Field Experiments By Alec Brandon; Christopher M. Clapp; John A. List; Robert D. Metcalfe; Michael Price
  23. Can Information and Alternatives to Irregular Migration Reduce “Backway” Migration from The Gambia? By Tijan L. Bah; Catia Batista; Flore Gubert; David McKenzie
  24. Price Formation in Field Prediction Markets: the Wisdom in the Crowd By Frederik Bossaerts; Nitin Yadav; Peter Bossaerts; Chad Nash; Torquil Todd; Torsten Rudolf; Rowena Hutchins; Anne-Louise Ponsonby; Karl Mattingly
  25. Biased Beliefs about Immigration and Economic Concerns: Evidence from Representative Experiments By Patrick Dylong; Silke Uebelmesser
  26. How Do Humans Respond to Huge Financial Losses? By Mujcic, Redzo; Powdthavee, Nattavudh
  27. How To Start a Grassroots Movement By David Ehrlich; Nora Szech
  28. Nudging in the workplace: increasing participation in employee EDI wellness events By Diane Pelly; Orla Doyle
  29. Skills and Liquidity Barriers to Youth Employment: Medium-term Evidence from a Cash Benchmarking Experiment in Rwanda By Craig McIntosh; Andrew Zeitlin

  1. By: Ay?e Gül Mermer (Tilburg University); Sander Onderstal (University of Amsterdam); Joep Sonnemans (University of Amsterdam)
    Abstract: In economic environments, decision-makers may strategically delay irreversible investments to learn from the actions of others creating socially suboptimal outcomes. We investigate if and how communication mitigates the strategic delay in investment timings. Players choose when to invest in a nonrival project with uncertain returns. The earliest investor bears the costs of investment and all players learn whether the project is of good or bad quality. Informational externalities create free-riding incentives resulting in strategic delays in investment timings. Our theoretical analysis suggests that introducing communication into this setting reduces strategic delay. We implement our model in a laboratory experiment utilizing a 2x2 design, where we vary the availability of communication and the number of agents. We find that communication significantly reduces the strategic delay and leads to earlier investment timings in the two-player case. In the case of four players, communication helps subjects to coordinate and reduce strategic delay significantly in the first period of the experiment, while coordination failures emerge in the following periods sweeping away the beneficial effect of communication at the aggregate level.
    Keywords: Investment Timing, Strategic Delay, Communication, Coordination, Informational, Externalities, Experiments
    JEL: C71 C92 D83 L40
    Date: 2022–09–20
  2. By: Alves, Guillermo; Leites, Martín; Salas, Gonzalo
    Abstract: We ran a field experiment in which a 20-year-old chooses be-tween a socially visible and a non-socially visible good after a friend randomly received one of these goods or an unknown good. We find no differences in choices when the friend received the nonvisible good instead of the unknown one. However, decision-makers significantly changed their choices when their friend received the visible good. Consistent with choices driven by status concerns, those in a disadvantaged position consumed more and those in an advantaged position consumed less of the visible good. These findings constitute the first experimental evidence of Dusenberry’s demonstration effects.
    Keywords: Investigación socioeconómica, Jóvenes,
    Date: 2022
  3. By: Grohmann, Antonia (Aarhus University and DIW Berlin); Hamdan, Jana S. (HU Berlin and DIW Berlin)
    Abstract: This paper examines the effect of reduced self-control on debt-taking in a laboratory experiment. We manipulate self-control using an ego depletion task and show that it is effective. Following the ego depletion task, participants can anonymously buy hot drinks on credit. We find no significant average effects, but find that treated individuals that have low financial literacy are more likely to buy drinks. We complement our experimental analysis with survey evidence that suggests that people with low self-control have more problems with the repayment of consumption debt, but this relationship is, in line with the experimental results, weaker for individuals with high financial literacy.
    Keywords: debt; consumption; borrowing; self-control; ego depletion;
    JEL: D14 G51 C91
    Date: 2020–12–22
  4. By: Kerstin Grosch; Simone Haeckl; Martin G. Kocher
    Abstract: We examine individual-level determinants of interest in STEM and analyze whether a digital web application for elementary-school children can increase children’s interest in STEM with a specific focus on narrowing the gender gap. Coupling a randomized-controlled trial with experimental lab and survey data, we analyze the effect of the digital intervention and shed light on the mechanisms. We confirm the hypothesis that girls demonstrate a lower overall interest in STEM than boys. Moreover, girls are less competitive and exhibit less pronounced math confidence than boys at the baseline. Our treatment increases girls’ interest in STEM and decreases the gender gap via an increase in STEM confidence. Our findings suggest that an easy-to-implement digital intervention has the potential to foster gender equality for young children and can potentially contribute to a reduction of gender inequalities in the labor market such as occupational sorting and the gender wage gap later in life.
    Keywords: STEM, digital intervention, gender equality, field experiment
    JEL: C93 D91 I24 J16 J24
    Date: 2022
  5. By: Dongkyu Chang; Duk Gyoo Kim; Wooyoung Lim
    Abstract: We consider infinite-horizon bargaining in which an uninformed seller sequentially makes a price offer to a privately informed buyer who decides whether to accept or reject it in every bargaining round. Existing theories suggest that the presence (absence) of an arbitrarily small outside option available to the buyer in this dynamic screening problem leads the seller (buyer) to enjoy a substantial surplus, and we examine the validity of the differences in the share of the surplus theoretically and experimentally. We first show that the theoretical differences collapse if an arbitrarily small fraction of optimistic buyers would believe that the sellers sometimes ask for a lower price in the subsequent rounds. We then present experimental evidence that the earnings of both the buyers and the sellers when the buyer has an outside option are not significantly different from those without the outside option. We find supporting evidence that some buyers reject the current-round offers, optimistically believing that the next offer would be more favorable to them.
    Keywords: positive selection, outside options, laboratory experiments
    JEL: C78 C91 D03
    Date: 2022
  6. By: Diogo Geraldes; Franziska Heinicke; Duk Gyoo Kim
    Abstract: Does being lucky (or unlucky) affect honest decision-making? We examine (1) whether luck-based income strengthens or erodes the moral value of honesty; (2) whether the perceived level of agency over an uncertain event affects the relationship between luck and honesty; and (3) whether accumulated luck affects honesty. To this end, we conducted a lab experiment where participants self-report a dice roll outcome, which is associated with effort-based income, after having received luck-based income. We manipulated the participants’ perceptions regarding their influence on luck-based income. In the exogenous luck treatment, computerized coin tosses determines the luck-based income, whereas in the endogenous luck treatment, the participants choose the coin’s winning side before the computerized coin toss. Our results are as follows: (1) lying behaviour increases when contemporaneous luck-based income is high, (2) lying is not affected by the perceived level of agency, and (3) lying is not affected by the previous outcomes of the luck-based income. Our observations challenge the relative importance of context that may render moral justification. Therefore, our findings indicate that differences in dishonest behavior may be largely due to individual-specific heterogeneity.
    Keywords: laboratory experiment, lying, luck, honesty, agency
    JEL: C91 D03 D82
    Date: 2022
  7. By: Baert, Stijn (Ghent University); Lippens, Louis (Ghent University); Van Borm, Hannah (Ghent University)
    Abstract: In recent decades, researchers have found compelling evidence of discrimination in the labor and housing market toward ethnic minorities based on field experiments using fictitious applications. However, these findings may be exaggerated as the names used for ethnic minorities in various experiments may have also signaled low socioeconomic class. Therefore, in this study, we perform a name categorization experiment in the United States that yields 56 names associated with six ethnicity groups, which signal different ethnicities and genders but similar social classes. These names should greatly improve the validity of future experiments on ethnic discrimination.
    Keywords: ethnic discrimination, social class, experiments
    JEL: C91 C93 J71
    Date: 2022–08
  8. By: Florian Engl
    Abstract: People often act out of a desire to be responsible for good and not for bad events. Similarly, people frequently reward and punish other people if they perceive them to be responsible for the implementation of events that they like or dislike. When the implementation of an event depends on the interaction of multiple persons and, potentially, moves of nature, the determinants of such responsibility perceptions are not well understood. In this paper, I propose a notion of causal responsibility which attempts to objectively capture the causal importance of a person’s action for the implementation of an event in such situations. A laboratory experiment shows that the notion successfully predicts people’s responsibility perceptions. Furthermore, I incorporate the notion in a framework of responsibility preferences and study its implications for worker motivation and the design of voting rules. Finally, I show that the notion can explain experimentally elicited behavior and punishment and reward patterns in multi-agent situations that are not well-explained by existing social preference theories.
    Keywords: responsibility, causal reasoning, social preferences
    JEL: C72 D03 D63 D70
    Date: 2022
  9. By: Basteck, Christian (WZB Berlin); Mantovani, Marco (University of Milan-Bicocca)
    Abstract: In school choice problems, the widely used manipulable Immediate Acceptance mechanism (IA) disadvantages unsophisticated applicants, but may ex-ante Pareto dominate any strategy-proof alternative. In these cases, it may be preferable to aid applicants within IA, rather than to abandon it. In a laboratory experiment, we first document a substantial gap in strategy choices and outcomes between subjects of higher and lower cognitive ability under IA. We then test whether disclosing information on past applications levels the playing field. The treatment is effective in partially reducing the gap between applicants of above- and below-median cognitive ability and in curbing ability segregation across schools, but may leave the least able applicants further behind.
    Keywords: laboratory experiment; school choice; immediate acceptance; strategy-proofness; cognitive ability; mechanism design;
    JEL: C78 C91 D82 I24
    Date: 2021–11–29
  10. By: Malte Baader; Simon Gaechter; Kyeongtae Lee; Martin Sefton
    Abstract: We experimentally examine how the incentive to defect in a social dilemma affects conditional cooperation. In our first study we conduct online experiments in which subjects play eight Sequential Prisoner’s Dilemma games with payoffs systematically varied across games. We find that few second movers are conditionally cooperative (i.e., cooperate if and only if the first mover cooperates) in all eight games. Instead, most second-movers change strategies between games. The rate of conditional cooperation is higher when the own gain from defecting is lower and when the loss imposed on the first mover from defecting is higher. This pattern is consistent with both social preference models and stochastic choice models. To explore which model explains our findings we employ a second study to jointly estimate noise and social preference parameters at the individual level. The majority of our subjects place significantly positive weight on others’ payoffs, supporting the underlying role of social preferences in conditional cooperation.
    Keywords: sequential prisoner’s dilemma, conditional cooperation, social preferences
    JEL: A13 C91
    Date: 2022
  11. By: Takanori Ida; Takunori Ishihara; Koichiro Ito; Daido Kido; Toru Kitagawa; Shosei Sakaguchi; Shusaku Sasaki
    Abstract: We develop an optimal policy assignment rule that integrates two distinctive approaches commonly used in economics—targeting by observables and targeting through self-selection. Our method can be used with experimental or quasi-experimental data to identify who should be treated, be untreated, and self-select to achieve a policymaker’s objective. Applying this method to a randomized controlled trial on a residential energy rebate program, we find that targeting that optimally exploits both observable data and self-selection outperforms conventional targeting for a utilitarian welfare function as well as welfare functions that balance the equity-efficiency trade-off. We highlight that the Local Average Treatment Effect (LATE) framework (Imbens and Angrist, 1994) can be used to investigate the mechanism behind our approach. By estimating several key LATEs based on the random variation created by our experiment, we demonstrate how our method allows policymakers to identify whose self-selection would be valuable and harmful to social welfare.
    JEL: C01 Q4 Q48 Q5 Q58
    Date: 2022–09
  12. By: Jordi Brandts; Isabel Busom; Cristina Lopez-Mayan; Judith Panadés
    Abstract: The popular belief that rent–control leads to an increase in the amount of affordable housing is in contradiction with ample empirical evidence and congruent theoretical explanations. It can therefore be qualified as a misconception. We present the results of a preregistered on–line experiment in which we study how to dispel this misconception using a refutational approach both in a video and in a text format. Communication in a video format comes closer to how citizens are typically exposed to information. We find that the refutational video has a significantly higher positive impact on revising the misconception than a refutational text, an effect that is driven by the departure from the misconception by individuals who initially agreed with it. The refutational text, in turn, does not have a significant impact relative to a non–refutational baseline text. Higher cognitive reflective ability positively affects the impact on beliefs of all interventions. Our research shows that visual communication effectively reduces the gap between scientific economic knowledge and the views of citizens.
    Keywords: misconceptions, written and visual communication, refutation, persuasion, online experiment
    JEL: A12 A2 D9 I2
    Date: 2022–02
  13. By: Seres, Gyula (HU Berlin); Balleyer, Anna (University of Groningen); Cerutti, Nicola (Mercator Research Institute on Global Commons and Climate Change)); Friedrichsen, Jana (HU Berlin, FU Berlin, WZB Berlin and DIW Berlin); Süer, Müge (HU Berlin)
    Abstract: During the COVID-19 pandemic, the introduction of mandatory face mask usage triggered a heated debate. A major point of controversy is whether community use of masks creates a false sense of security that would diminish physical distancing, counteracting any potential direct benefit from masking. We conducted a randomized field experiment in Berlin, Germany, to investigate how masks affect distancing and whether the mask effect interacts with the introduction of an indoor mask mandate. Joining waiting lines in front of stores, we measured distances kept from the experimenter in two treatment conditions – the experimenter wore a mask in one and no face covering in the other – in two time spans – before and after mask use becoming mandatory in stores. We find no evidence that mandatory masking has a negative effect on distance kept toward a masked person. To the contrary, masks significantly increase distancing and the effect does not di↵er between the two periods. However, we show that after the mandate distances are shorter in locations where more non-essential stores, which were closed before the mandate, had reopened. We argue that the relaxations in general restrictions that coincided with the mask mandate led individuals to reduce other precautions, like keeping a safe distance.
    Keywords: COVID-19; face masks; social distancing; risk compensation; field experiment; health policy;
    JEL: I12 C93
    Date: 2021–11–16
  14. By: Abeler, Johannes (University of Oxford, IZA and CESifo); Falk, Armin (briq and University of Bonn); Kosse, Fabian (LMU Munich and briq)
    Abstract: Reporting private information is a key part of economic decision making. A recent literature has found that many people have a preference for honest reporting, contrary to usual economic assumptions. In this paper, we investigate whether preferences for honesty are malleable and what determines them. We experimentally measure preferences for honesty in a sample of children. As our main result, we provide causal evidence on the effect of the social environment by randomly enrolling children in a year-long mentoring programme. We find that, about four years after the end of the programme, mentored children are significantly more honest.
    Keywords: honesty; lying; truth-telling; formation of preferences; experiments with children;
    JEL: C90 D90 D64 D82 H26 J13
    Date: 2021–11–15
  15. By: Boneva, Teodora (University of Bonn); Buser, Thomas (University of Amsterdam and Tinbergen Institute); Falk, Armin (briq and University of Bonn); Kosse, Fabian (LMU Munich and briq)
    Abstract: We present evidence on the role of the social environment for the development of gender differences in competitiveness and earnings expectations. First, we document that the gender gap in competitiveness and earnings expectations is more pronounced among adolescents with low socioeconomic status (SES). We further document that there is a positive association between the competitiveness of mothers and their daughters, but not between the competitiveness of mothers and their sons. Second, we show that a randomized mentoring intervention that exposes low-SES children to predominantly female role models causally affects girls' willingness to compete and narrows both the gender gap in competitiveness as well as the gender gap in earnings expectations. Together, the results highlight the importance of the social environment in shaping willingness to compete and earnings expectations at a young age.
    Keywords: competitiveness; gender; socioeconomic status; inequality; earnings expectations;
    Date: 2021–11–15
  16. By: Lídia Farré; Cristina Felfe; Libertad González; Patrick Schneider
    Abstract: Direct exposure to counter-stereotypical behaviors early in life has been put forward as a promising way to change gender norms across generations. We ask to which extent public policy designed to promote counter-stereotypical behavior among parents influences gender norms for their children. Specifically, we combine the national-level introduction of paternity leave in Spain with a unique, large-scale lab-in-the-field experiment conducted with children born around the policy change. We provide causal evidence that, at age 12, children whose fathers were eligible for paternity leave exhibit more egalitarian attitudes towards gender roles and are more supportive of mothers and fathers being equally engaged in the labor market and in the home. They also engage more in counter-stereotypical day-to-day behaviors and expect to deviate from the male-breadwinner model in the future.
    Keywords: gender role attitudes, paternity leave, Social Norms
    JEL: J08 J13 J16 J18
    Date: 2022–01
  17. By: Utz Weitzel; Michael Kirchler
    Abstract: Financial misbehavior is widespread and costly. The Dutch government legally requires every employee in the financial sector to take a Hippocratic oath, the so-called "banker's oath." We investigate whether nudges that (in)directly remind financial advisers of their oath affect their service. In a large-scale audit study, professional auditors confronted 201 Dutch financial advisers with a conflict of interest. We find that when auditors apply a nudge that directly refers to the banker's oath, advisers are less likely to prioritize bank's interests. In additional prediction tasks, we find that Dutch regulators expect stronger effects of the oath than observed.
    Keywords: experimental finance, audit study, banker's oath, nudges, financial advice
    JEL: C92 D84 G02 G14
    Date: 2022
  18. By: Mel Win Khaw; Ziang Li; Michael Woodford
    Abstract: In an experiment that elicits subjects’ willingness to pay (WTP) for the outcome of a lottery, we confirm the fourfold pattern of risk attitudes described by Kahneman and Tversky. In addition, we document a systematic effect of stake sizes on the magnitude and sign of the relative risk premium, holding fixed both the probability that a lottery pays off and the sign of its payoff (gain vs. loss). We further show that in our data, there is a log-linear relationship between the monetary payoff of the lottery and WTP, conditional on the probability of the payoff and its sign. We account quantitatively for this relationship, and the way in which it varies with both the probability and sign of the lottery payoff, in a model in which all departures from risk-neutral bidding are attributed to an optimal adaptation of bidding behaviour to the presence of cognitive noise. Moreover, the cognitive noise required by our hypothesis is consistent with patterns of bias and variability in judgments about numerical magnitudes and probabilities that have been observed in other contexts.
    Keywords: prospect theory, fourfold pattern, endogenous precision, cognitive noise
    JEL: C91 D03 D81 D87
    Date: 2022
  19. By: Duncan Chaplin; Charles Tilley; Denise Hoffman; John T. Jones
    Abstract: In this paper we use data from an evaluation of the Benefit Offset National Demonstration (BOND) to evaluate the efficacy of using comparative regression discontinuity (CRD) and regression discontinuity (RD) relative to a randomized controlled trial (RCT). BOND is a large demonstration intended to promote return to work among people with disabilities who receive Social Security Disability Insurance (DI). RD is known as a relatively rigorous non-experimental method but produces imprecise results that apply to small populations. CRD is a promising enhancement that addresses these issues. The CRD and RD methods are potentially attractive because they can be used in contexts in which RCTs are challenging or infeasible. However, the bias of findings from CRD and RD studies is unknown in the context of DI. In this paper, we estimate CRD and RD models using simulated assignment to the BOND treatment group based on the duration of DI receipt at the start of BOND. We compare the CRD and RD estimates to RCT estimates. While the findings are not intended to revise the well-established evidence evaluating BOND, they can be used to help interpret the results from CRD and RD studies on other income support interventions for people with disabilities and to inform future study designs. Our paper has two key limitations. First, our RD models are far from ideal. This limits the degree to which our RD results generalize to what would be found with state-of-the art RD models. Second, our results may not generalize to other populations. Our analysis was based on BOND beneficiaries who were representative of the larger DI population at the time of BOND random assignment but may not reflect the DI population in more recent years.
    Date: 2022–08
  20. By: Aksoy, Billur (Rensselaer Polytechnic Institute); Carpenter, Christopher S. (Vanderbilt University); Sansone, Dario (University of Exeter)
    Abstract: Using a US nationally representative sample and a double list experiment designed to elicit views free from social desirability bias, we find that anti-transgender labor market attitudes are significantly underreported. After correcting for this concealment, we report that 73 percent of people would be comfortable with a transgender manager and 74 percent support employment non-discrimination protection for transgender people. We also show that respondents severely underestimate the population level of support for transgender individuals in the workplace, and we find that labor market support for transgender people is significantly lower than support for gay, lesbian, and bisexual people. Our results provide timely evidence on workplace-related views toward transgender people and help us better understand employment discrimination against them.
    Keywords: labor market discrimination, transgender people, double list experiment
    JEL: C90 J15 J71 K31
    Date: 2022–09
  21. By: Piotr Lewandowski; Katarzyna Lipowska; Mateusz Smoter
    Abstract: Working from home became widespread during the COVID-19 pandemic, but workers’ and employers’ preferences towards it may diverge when the world of work “returns to normal†. We study workers’ and employers’ willingness to pay for working from home using discrete choice experiments with more than 10,000 workers and more than 1,500 employers in Poland. We randomised wage differences between otherwise identical home- and office-based jobs and between otherwise identical job candidates. We found that demand for working from home was substantially higher among workers than among employers. Most workers would prefer to work from home if offered the same wage for a home-based job as for an office-based job, while most employers would prefer to hire an office-based worker. 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 five days a week (2.8%). On average, employers expect a wage cut of 40.7% from candidates who want to work from home. This gap in the valuations of WfH reflects mainly the additional effort required from managers, followed by their assessments of productivity loss resulting from WfH, and the discrepancy between employers’ and workers’ valuations of benefits that WfH offers workers. Only among the minority of employers who find that working from home brings productivity gains, managers’ valuation of working from home aligns with workers' willingness to pay for it.
    Keywords: working from home, willingness to pay, discrete choice experiment
    JEL: J21 J44
    Date: 2022–09
  22. By: Alec Brandon; Christopher M. Clapp; John A. List; Robert D. Metcalfe; Michael Price
    Abstract: Smart-home technologies have been heralded as an important way to increase energy conservation. While in vitro engineering estimates provide broad optimism, little has been done to explore whether such estimates scale beyond the lab. We estimate the causal impact of smart thermostats on energy use via two novel framed field experiments in which a random subset of treated households have a smart thermostat installed in their home. Examining 18 months of associated high-frequency data on household energy consumption, yielding more than 16 million hourly electricity and daily natural gas observations, we find little evidence that smart thermostats have a statistically or economically significant effect on energy use. We explore potential mechanisms using almost four million observations of system events including human interactions with their smart thermostat. Results indicate that user behavior dampens energy savings and explains the discrepancy between estimates from engineering models, which assume a perfectly compliant subject, and actual households, who are occupied by users acting in accord with behavioral economists’ conjectures. In this manner, our data document a keen threat to the scalability of new user-based technologies.
    JEL: D01 O10 Q4
    Date: 2022–09
  23. By: Tijan L. Bah; Catia Batista; Flore Gubert; David McKenzie
    Abstract: Irregular migration from West Africa to Europe across the Sahara and Mediterranean is extremely risky for migrants and a key policy concern. A cluster-randomized experiment with 3,641 young men from 391 settlements in The Gambia is used to test three approaches to reducing risky migration: providing better information and testimonials about the risks of the journey, facilitating migration to a safer destination by providing information and assistance for migration to Dakar, and offering vocational skill training to enhance domestic employment opportunities. Current migration to Senegal was increased by both the Dakar facilitation and vocational training treatments, partially crowding out internal migration. The vocational training treatment reduced intentions to migrate the backway and the number of steps taken toward moving. However, the backway migration rate from The Gambia collapsed, even in the control group, resulting in no space for a treatment effect on irregular migration from any of the three interventions.
    Keywords: Irregular migration, Migration deterrence, Information interventions, Vocational training, Cash transfer, Randomized experiment
    JEL: O15 F22 J61
    Date: 2022
  24. By: Frederik Bossaerts; Nitin Yadav; Peter Bossaerts; Chad Nash; Torquil Todd; Torsten Rudolf; Rowena Hutchins; Anne-Louise Ponsonby; Karl Mattingly
    Abstract: Prediction markets are a popular, prominent, and successful structure for a collective intelligence platform. However the exact mechanism by which information known to the participating traders is incorporated into the market price is unknown. Kyle (1985) detailed a model for price formation in continuous auctions with information distributed heterogeneously amongst market participants. This paper demonstrates a novel method derived from the Kyle model applied to data from a field experiment prediction market. The method is able to identify traders whose trades have price impact that adds a significant amount of information to the market price. Traders who are not identified as informed in aggregate have price impact consistent with noise trading. Results are reproduced on other prediction market datasets. Ultimately the results provide strong evidence in favor of the Kyle model in a field market setting, and highlight an under-discussed advantage of prediction markets over alternative group forecasting mechanisms: that the operator of the market does not need to have information on the distribution of information amongst participating traders.
    Date: 2022–09
  25. By: Patrick Dylong; Silke Uebelmesser
    Abstract: We investigate the link between biased beliefs about immigrants, economic concerns and policy preferences. Conducting representative survey experiments with more than 8000 respondents, we first document substantial biases in respondents’ beliefs about the immigrant population in various domains. Exposure to different types of signals about immigrants reduces concerns about adverse effects of immigration on the welfare state. On the contrary, different types of signals offset their effects on concerns about increasing labor market competition. Employing a data-driven approach to uncover systematic effect heterogeneity, we find that prior beliefs about immigration explain conditional average treatment effects. While attitudinal change is thus more pronounced among individuals with pre-intervention biases about immigrants, education and attitudes towards cultural diversity are additional drivers of heterogeneity. Treatment effects on welfare state concerns persist in a five to eight week follow-up.
    Keywords: immigration attitudes, biased perceptions, belief updating, welfare state, labor market, causal forest
    JEL: C90 D83 F22 H20 J15
    Date: 2022
  26. By: Mujcic, Redzo (University of Warwick); Powdthavee, Nattavudh (University of Warwick)
    Abstract: In a controlled field setting, in which the majority of people in our sample lose more than £90,000 ($120,000), we examine how human beings respond to major financial losses. University ethics boards would not allow this kind of huge-loss phenomenon to be studied with normal social-science experiments. Yet the scientific and practical issues at stake are unusually important ones. In our setting, individuals are handed £100,000 in cash. They then have to make risky decisions. Facing a sequence of seven questions, individuals are required to distribute their cash endowment over a set of possible answers. Participants lose any cash placed on a wrong answer. We find evidence of risk reduction after people suffer a loss in the previous decision round. A prior financial loss of £10,000 is estimated to increase the propensity to fully diversify by 6 percentage points. In terms of proportional losses, a loss of 50% or more of the remaining cash endowment increases diversification rates by approximately 13 percentage points. The fixed-effects panel data estimates are robust to the remaining cash endowment, previous diversification strategy, relative difficulty of questions, the ability level of participants, and other personal traits. The findings support a prospect theory-based model with a coefficient of loss aversion that is increasing in past losses. Our study appears to be the first to be able to calculate systematically how human beings react to enormous and unrecoverable financial losses.
    Keywords: risk taking, prior losses, diversification, large stakes, field evidence
    JEL: D81 G11 G40 G41
    Date: 2022–09
  27. By: David Ehrlich; Nora Szech
    Abstract: We study the influence of social messages that promote a digital public good, a COVID-19 tracing app. We vary whether subjects receive a digital message from another subject, and, if so, at what cost it came. Observed maximum willingness to invest in sending varies, from 1 cent up to 20 euros. Does this affect receivers' sending behavior? Willingness to invest in sending increases when previously receiving the message. Yet, cost signals have no impact. Thus, grassroots movements can be started at virtually no cost. App-support matters normatively as non-supporters are supposed to be punished in triage.
    Date: 2022–09
  28. By: Diane Pelly; Orla Doyle (University College Dublin School of Economics, and Geary Institute for Public Policy)
    Abstract: Organisations are investing significant resources in promoting the physical, emotional, and psychological well-being of their employees. In hybrid working environments, virtual worker wellness events are increasingly being used to combat social isolation and boost employee morale. Yet attendance at such events is often low. Using a randomised control trial, this study tests whether four behaviourally informed nudges (i) simplification, (ii) changing the messenger, (iii) using social proof and (iv) setting a default, can increase the registration and attendance rates of 6,998 public sector employees at three EDI (Equality Diversity Inclusion) wellness events. We find evidence that defaults matter. Pre-registering employees more than trebles the attendance rate, from 2.8% to 9.5%. While providing social proof and changing the messenger increase registration rates, they have no impact on attendance. We find little evidence of treatment heterogeneity, suggesting that defaults may have wide applicability. Our results have important implications for organisations seeking to enhance the impact and return on investment of their worker wellness initiatives.
    Keywords: behavioural economics; nudge; RCT; worker well-being; defaults
    JEL: D91 I31 C93 M14
    Date: 2022–10–04
  29. By: Craig McIntosh; Andrew Zeitlin
    Abstract: We present results of an experiment benchmarking a workforce training program against cash transfers for underemployed young adults in Rwanda. 3.5 years after treatment, the training program enhances productive time use and asset investment, while the cash transfers drive productive assets, livestock values, savings, and subjective well-being. Both interventions have powerful effects on entrepreneurship. But while labor, sales, and profits all go up, the implied wage rate in these businesses is low. Our results suggest that credit is a major barrier to self-employment, but deeper reforms may be required to enable entrepreneurship to provide a transformative pathway out of poverty.
    Date: 2022–09

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.