nep-exp New Economics Papers
on Experimental Economics
Issue of 2022‒11‒14
thirty-six papers chosen by

  1. The Effects of Communication in Social Dilemma Situations: Evidence from a Public Good Field Experiment By Hoenow, Christian
  2. More than just a Price Decrease: Field Experimental Evidence on the Mechanisms of an Energy Efficiency Subsidy By Bartels, Lara; Werthschulte, Madeline
  3. The Behavioral Effects of Carbon Taxes – Experimental Evidence By Grieder, Manuel; Baerenbold, Rebekka; Schmitz, Jan; Schubert, Renate
  4. Sexual identity and Gender Gap in Leadership. A political intention experiment By Mourelatos, Evangelos; Krimpas, George; Giotopoulos, Konstantinos
  5. Nudging the Nudger: A Field Experiment on the Effect of Performance Feedback to Service Agents on Increasing Organ Donor Registrations By Julian House; Nicola Lacetera; Mario Macis; Nina Mazar
  6. Exchange Asymmetry and Charitable Objects By Luxford, Anthony
  7. Aspirations and Financial Decisions : Experimental Evidence from the Philippines By Mckenzie,David J.; Mohpal,Aakash; Yang,Dean
  8. Social Media as a Recruitment and Data Collection Tool: Experimental Evidence on the Relative Effectiveness of Web Surveys and Chatbots By Beam, Emily A.
  9. Inequality of Opportunity and Income Redistribution By Preuss, Marcel; Reyes, Germán; Somerville, Jason; Wu, Joy
  10. Explicit and Implicit Belief-Based Gender Discrimination: A Hiring Experiment By Schweighofer-Kodritsch, Sebastian; Barron, Kai; Ditlmann, Ruth; Gehrig, Stefan
  11. Human-algorithm interaction: Algorithmic pricing in hybrid laboratory markets By Normann, Hans-Theo; Sternberg, Martin
  12. School Management, Grants, and Test Scores : Experimental Evidence from Mexico By Chicas Romero,Mauricio; Bedoya,Juan; Yanez Pagans,Monica; Silveyra De La Garza,Marcela Lucia; De Hoyos Navarro,Rafael E.
  13. Motivating Teams : Private Feedback and Public Recognition at Work By Delavallade,Clara Anne
  14. When Do Reminders Work? Memory Constraints and Medical Adherence By Kai Barron; Mette Trier Damgaard; Christina Gravert
  15. Trickle Down Tax Morale : A Cross Country Survey Experiment By Mellon,Jonathan; Peixoto,Tiago Carneiro; Sjoberg,Fredrik Matias; Gauri,Varun
  16. On the Doorstep of Adulthood: Empowering Economic and Fertility Choices of Young Women By Lars Ivar Oppedal Berge; Kjetil Bjorvatn; Fortunata Makene; Linda Helgesson Sekei; Vincent Somville; Bertil Tungodden
  17. Artificial Intelligence, Ethics, and Intergenerational Responsibility By Victor Klockmann; Alicia von Schenk; Marie Claire Villeval
  18. Macroeconomic Expectations and Credit Card Spending By Galashin,Mikhail; Kanz,Martin; Perez Truglia,Ricardo
  19. Poor Expectations : Experimental Evidence on Teachers' Stereotypes and Student Assessment By Farfan Bertran,Maria Gabriela; Holla,Alaka; Vakis,Renos
  20. Policy Learning with New Treatments By Samuel Higbee
  21. A Group Public Goods Game with Position Uncertainty By Chowdhury Mohammad Sakib Anwar; Jorge Bruno; Sonali SenGupta
  22. The Predictive Power of Luck: Luck and Risk-Taking in a Repeated Risky Investment Game By Holden, Stein T.; Tione, Sarah; Katengeza, Samson; Tilahun, Mesfin
  23. The Impact of Uncertainty on Customer Satisfaction By Back, Camila; Spann, Martin
  24. Assessing Response Fatigue in Phone Surveys : Experimental Evidence on Dietary Diversity in Ethiopia By Abay,Kibrom A.; Berhane,Guush; Hoddinott,John; Hirfrfot,Kibrom Tafere
  25. Enhancing Human Capital in Children : A Case Study on Scaling By Agostinelli,Francesco; Avitabile,Ciro; Bobba,Matteo
  26. Do Workfare Programs Live Up to Their Promises ? Experimental Evidence from Côte d’Ivoire By Bertrand,Marianne; Crepon,Bruno Jacques Jean Philippe; Marguerie,Alicia Charlene; Premand,Patrick
  27. Does Patient Demand Contribute to the Overuse of Prescription Drugs ? By Pereira Lopez,Carolina; Sautmann,Anja; Schaner,Simone Gabrielle
  28. The price of risk in residential solar investments By Petrovich, Beatrice; Carattini, Stefano; Wüstenhagen, Rolf
  29. Fair Effect Attribution in Parallel Online Experiments By Alexander Buchholz; Vito Bellini; Giuseppe Di Benedetto; Yannik Stein; Matteo Ruffini; Fabian Moerchen
  30. The Effect of Information and Subsidy Measures on Adoption of Solar Lanterns : An Application of the BDM Bidding Mechanism in Rural Ethiopia By Mekonnen,Alemu; Hassen,Sied; Jaime,Marcela; Toman,Michael A.; Zhang,Xiao-Bing
  31. Business Training and Mentoring : Experimental Evidence from Women-Owned Microenterprises in Ethiopia By Bakhtiar,M. Mehrab; Bastian,Gautam; Goldstein,Markus P.
  32. Mental Accounting and the Marginal Propensity to Consume By Bernard, René
  33. Improving Business Practices and the Boundary of the Entrepreneur : A Randomized Experiment Comparing Training, Consulting, Insourcing and Outsourcing By Anderson,Stephen J.; Mckenzie,David J.
  34. Political Leaders and Macroeconomic Expectations: Evidence from a Global Survey Experiment By Dorine Boumans; Klaus Gründler; Niklas Potrafke; Fabian Ruthardt
  35. Behavioral and Neuroeconomics of Environmental Values By Phoebe Koundouri; Barbara Hammer; Ulrike Kuhl; Alina Velias
  36. Improving Tax Compliance without Increasing Revenue : Evidence from Population-Wide Randomized Controlled Trials in Papua New Guinea By Hoy,Christopher Alexander; McKenzie,Luke; Sinning,Mathias Georg

  1. By: Hoenow, Christian
    JEL: C71 C93 D83 H41 Q5
    Date: 2022
  2. By: Bartels, Lara; Werthschulte, Madeline
    JEL: C93 D9 H23 Q40
    Date: 2022
  3. By: Grieder, Manuel; Baerenbold, Rebekka; Schmitz, Jan; Schubert, Renate
    JEL: C91 D01 D04 D62 D91 H23
    Date: 2022
  4. By: Mourelatos, Evangelos; Krimpas, George; Giotopoulos, Konstantinos
    Abstract: The underrepresentation of women and homosexuals in leadership positions has been well documented, but the grounds for this need further investigation. We conduct a field and an online experiment to test a prominent theory about the sources of the sexual and gender gap in political leadership ambition: women's and homosexuals' higher aversion to engage to competitive environments. Within an experimental political environment as a context for our research, we employ two distinct subject sample pools - highly politically active individuals and workers from an online labor market. By controlling for a variety of internal and external factors and preference-based indicators, we establish that there are fundamental sexual and gender behavioral differences, stemming from differences in underlying psychological abilities and differences due to the nature of electoral competition. We find that priming individuals to consider the competitive nature of politics has a strong negative effect on women's and homosexuals' interest to run for a political office, but not on men's and heterosexuals' interest, hence significantly increasing the gender and sexual gap in leadership ambition. While on the online experiment the gender gap holds, surprisingly, we found that homosexuals' intention to participate in politics follows the opposite course.
    Keywords: sexual gap,Gender gap,leadership,politics,experiment
    JEL: D01 D91 C93
    Date: 2022
  5. By: Julian House; Nicola Lacetera; Mario Macis; Nina Mazar
    Abstract: We conducted a randomized controlled trial involving nearly 700 customer-service representatives (CSRs) in a Canadian government service agency to study whether providing CSRs with performance feedback with or without peer comparison affected their subsequent organ donor registration rates. Despite having no tie to remuneration or promotion, the provision of individual performance feedback three times over one year resulted in a 25% increase in daily signups, compared to otherwise similar encouragement and reminders. Adding benchmark information that compared CSRs performance to average and top peer performance did not further enhance this effect. Registrations increased more among CSRs whose performance was already above average, and there was no negative effect on lower-performing CSRs. A post-intervention survey showed that CSRs found the information included in the treatments helpful and encouraging. However, performance feedback without benchmark information increased perceived pressure to perform.
    JEL: C93 D90 H41 I10 J45 M50
    Date: 2022–10
  6. By: Luxford, Anthony (Monash University)
    Abstract: This paper presents results from an online experiment to show whether exchange asymmetry exists with charitable objects; a novelty good not yet used in past experiments. The rationale of this novelty was to excavate the notion of ownership of the goods by reason that charitable objects cannot be kept. These experimental results show exchange asymmetry exists in this novel context, implicating that ownership of the object was not necessary for exchange asymmetry to occur. This supports literature which posits that experimental protocols underpin observed exchange asymmetries in laboratory experiments. This research, therefore, further demarcates a distinguishing line between (1) the increased valuation of an object due to idiosyncratic associations through its ownership over time and (2) an immediately instantiated sense of ownership proclaimed to be the same effect manifesting in laboratory experiments.
    Keywords: Exchange asymmetry ; Charitable objects ; Endowment effect JEL Classification: C91 ; D81 ; D82
    Date: 2022
  7. By: Mckenzie,David J.; Mohpal,Aakash; Yang,Dean
    Abstract: A randomized experiment among poor entrepreneurs tested the impact of exogenously inducing higher financial aspirations. In theory, raising aspirations could have positive effects by inducing higher effort, but could also reduce effort if unmet aspirations lead to frustration. Treatment resulted in more ambitious savings goals, but nearly all individuals fell far short of reaching these goals. Two years later, treated individuals had not saved more, and actually had lower borrowing and business investments. Treatment also reduced belief in the amount of control over one’s life. Setting aspirations too high can lead to frustration, leading individuals to reduce their economic investments.
    Keywords: Educational Sciences,Inequality,Rural Microfinance and SMEs,Microfinance,Financial Sector Policy,Financial Literacy
    Date: 2021–03–17
  8. By: Beam, Emily A. (University of Vermont)
    Abstract: Online technologies enable lower-cost, rapid data collection, but concerns about access and data quality impede their use in global research. I conduct a randomized experiment in the Philippines to test the effectiveness of web-form and chatbot surveys of K–12 teachers recruited through social media and compare their effectiveness with phone surveys of teachers recruited from a pre-existing frame. Chatbot surveys yield higher response rates and higher-quality data than web-form surveys in terms of missed question and item differentiation. The results suggest that chatbot responses match CATI responses on multiple dimensions of quality. Relative to CATI, online methods also yield higher rates or information disclosure on potentially sensitive topics, revealing substantially higher levels of distress among teachers. I show that social-media-based recruitment can be an attractive alternative for targeted sampling and that online surveys can be implemented effectively at a fraction of the cost of phone surveys.
    Keywords: remote surveys, survey experiments, chatbots, social media, remote education
    JEL: C81 C83 C93 O15 I21
    Date: 2022–09
  9. By: Preuss, Marcel; Reyes, Germán; Somerville, Jason; Wu, Joy
    Abstract: This paper examines how people redistribute income when there is uncertainty about the role luck plays in determining opportunities and outcomes. We introduce a portable experimental method that generates exogenous variation in the probability that real workers' earnings are due to luck, while varying whether luck interacts with effort in the earning process. Then, we elicit redistribution decisions from a U.S.-nationally representative sample who observe worker outcomes and whether luck magnified workers' effort ("lucky opportunities") or determined workers' income directly ("lucky outcomes"). We find that participants redistribute less and are less reactive to changes in the importance of luck in environments with lucky opportunities. We show that individuals rely on a simple heuristic when assessing the impact of unequal opportunities, which leads them to underappreciate the extent to which small differences in opportunities can have a large impact on outcomes. Our findings have implications for models that seek to understand and predict attitudes toward redistribution, while helping to explain the gap between lab evidence on preferences for redistribution and real-world inequality trends.
    JEL: C91 D63
    Date: 2022
  10. By: Schweighofer-Kodritsch, Sebastian; Barron, Kai; Ditlmann, Ruth; Gehrig, Stefan
    JEL: D90 J71 D83
    Date: 2022
  11. By: Normann, Hans-Theo; Sternberg, Martin
    Abstract: This paper investigates pricing in laboratory markets when human players interact with an algorithm. We compare the degree of competition when exclusively humans interact to the case of one firm delegating its decisions to an algorithm, an n-player generalization of tit-for-tat. We further vary whether participants know about the presence of the algorithm. When one of three firms in a market is an algorithm, we observe significantly higher prices compared to human-only markets. Firms employing an algorithm earn significantly less profit than their rivals. (Un)certainty about the actual presence of an algorithm does not significantly affect collusion, although humans do seem to perceive algorithms as more disruptive.
    Keywords: algorithms,collusion,human-computer interaction,labora-tory experiments
    JEL: C90 L41
    Date: 2022
  12. By: Chicas Romero,Mauricio; Bedoya,Juan; Yanez Pagans,Monica; Silveyra De La Garza,Marcela Lucia; De Hoyos Navarro,Rafael E.
    Abstract: This paper presents the results of a large-scale randomized experiment conducted across 1,496 public primary schools in Mexico. The experiment identifies the impact on schools’ managerial capacity and student test scores of providing schools with: (a) cash grants, (b) managerial training for school principals, or (c) both. The school principals’ managerial training focused on improving principals’ capacities to collect and use data to monitor students’ basic numeracy and literacy skills and provide feedback to teachers on their instruction and pedagogical practices. After two years of implementing these interventions, the study finds that: (a) the cash grant had no impact on the student’s test scores or the management capacity of school principals; (b) the managerial training improved school principals’ managerial capacity but had no impact on students’ test scores; and (c) the combination of cash grants and managerial training amplified the effect on the school principals’ managerial capacity and had a positive but statistically insignificant impact on students’ test scores.
    Keywords: null
    Date: 2021–02–03
  13. By: Delavallade,Clara Anne
    Abstract: Aside from money, what works best to incentivize teams? Using a randomized field experiment, this paper tests whether fixed-wage workers respond better to receiving private feedback on performance or to competing for public recognition. Female school feeding teams in 450 South African schools were randomly assigned to receiving (i) private feedback: information on performance and ranking using scorecards, (ii) public recognition: public ceremony award for top performers, (iii) both feedback and award, or (iv) no intervention. The analysis yields two main findings. First, while private feedback and public award are more effective when offered separately, receiving feedback on performance boosts teams’ effort more than public recognition. Second, image motivation crowds out intrinsic motivation, especially for low-ability teams. This suggests that providing performance feedback can be an effective policy for leveraging intrinsic motivation and improving service delivery, more so than mechanisms leveraging image motivation.
    Keywords: Health Service Management and Delivery,Wages, Compensation&Benefits,Educational Sciences,Gender and Development
    Date: 2021–04–12
  14. By: Kai Barron; Mette Trier Damgaard; Christina Gravert
    Abstract: An extensive literature shows that reminders can successfully change behavior. Yet, there exists substantial unexplained heterogeneity in their effectiveness, both: (i) across studies, and (ii) across individuals within a particular study. This paper investigates when and why re-minders work. We develop a theoretical model that highlights three key mechanisms through which reminders may operate. To test the predictions of the model, we run a nationwide field experiment on medical adherence with over 4000 pregnant women in South Africa and document several key results. First, we find an extremely strong baseline demand for reminders. This demand increases after exposure to reminders, suggesting that individuals learn how valuable they are for freeing up memory resources. Second, stated adherence is increased by pure reminders and reminders containing a moral suasion component, but interestingly, reminders containing health information reduce adherence in our setting. Using a structural model, we show that heterogeneity in memory costs (or, equivalently, annoyance costs) is crucial for explaining the observed behavior.
    Keywords: nudging, reminders, memory, attention, medication adherence, structural model
    JEL: D04 D91 C93 I12
    Date: 2022
  15. By: Mellon,Jonathan; Peixoto,Tiago Carneiro; Sjoberg,Fredrik Matias; Gauri,Varun
    Abstract: Studies have encouraged pro-social behavior by experimentally manipulating people's views of what others like them tend to do (descriptive norms). These studies positively change behaviors, including charitable giving, littering, organ donation, and tax compliance. This paper argues that these results may be explained by a tendency to reciprocate positive actions and avoid being taken advantage of. The descriptive norm account predicts that positively describing the behavior of ordinary people will be most effective at increasing citizens’ willingness to pay taxes, and messages describing the behavior of other groups should be less effective. However, reciprocity theory suggests that highlighting pro-social behavior by groups believed not to contribute their fair share, such as rich people, should be effective because it will reduce the subject's perception that they are being taken advantage of when they pay taxes. These theories are tested in an online experiment in Kenya, Australia, the United States, the Philippines, and South Africa. The findings show that the descriptive norms treatment is ineffective, while the rich people treatment significantly increases tax morale, supporting reciprocity theory. The findings suggest that tax agencies may increase tax compliance by visibly tackling tax avoidance among groups believed to avoid taxes, such as rich citizens.
    Keywords: Public Finance Decentralization and Poverty Reduction,Public Sector Economics,Tax Administration,Tax Law,Employment and Unemployment,Gender and Development
    Date: 2021–01–13
  16. By: Lars Ivar Oppedal Berge (Norwegian School of Economics); Kjetil Bjorvatn (Norwegian School of Economics); Fortunata Makene (Economic and Social Research Foundation); Linda Helgesson Sekei (NIRAS); Vincent Somville (Norwegian School of Economics and Chr. Michelsen Institute); Bertil Tungodden (Norwegian School of Economics)
    Abstract: We report from a large-scale randomized controlled trial of women empowerment in Tanzania investigating how two different empowerment strategies, economic empowerment and reproductive health empowerment, shape the economic and fertility choices of young women when they transition into adulthood. The analysis builds on a rich data set (survey, experimental, and medical data) collected over more than five years. The economic empowerment reduces poverty, while teenage pregnancy increases with both economic and reproductive health empowerment. The increase in fertility comes from a positive income effect and by women entering earlier into a relationship. We also provide evidence of the importance of social norms and labor market flexibility in explaining the income and relationship effects on fertility. The findings provide new insights on the economics of fertility, and show the importance of a comprehensive approach to women empowerment.
    Keywords: Tanzania, reproductive health, teenage pregnancy, positive income effect, Girl's Economic Empowerment: a Randomized Experiment in Tanzanian Schools
    JEL: J13 I15 I32
  17. By: Victor Klockmann (Goethe-University Frankfurt am Main, University of Würzburg = Universität Würzburg , Max Planck Institute for Human Development - Max-Planck-Gesellschaft); Alicia von Schenk (Goethe-University Frankfurt am Main, University of Würzburg = Universität Würzburg , Max Planck Institute for Human Development - Max-Planck-Gesellschaft); 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)
    Abstract: In the future, artificially intelligent algorithms will make more and more decisions on behalf of humans that involve humans' social preferences. They can learn these preferences through the repeated observation of human behavior in social encounters. In such a context, do individuals adjust the selfishness or prosociality of their behavior when it is common knowledge that their actions produce various externalities through the training of an algorithm? In an online experiment, we let participants' choices in dictator games train an algorithm. Thereby, they create an externality on future decision making of an intelligent system that affects future participants. We show that individuals who are aware of the consequences of their training on the payoffs of a future generation behave more prosocially, but only when they bear the risk of being harmed themselves by future algorithmic choices. In that case, the externality of artificially intelligence training increases the share of egalitarian decisions in the present.
    Keywords: Artificial Intelligence,Morality,Prosociality,Generations,Externalities
    Date: 2022
  18. By: Galashin,Mikhail; Kanz,Martin; Perez Truglia,Ricardo
    Abstract: How do macroeconomic expectations affect consumer decisions? This paper reports results from a natural field experiment with 2,872 credit card customers from a large commercial bank to answer this question. Participants of the experiment first completed as survey that measured consumer expectations about future inflation and the nominal exchange rate. This survey was combined with an information-provision experiment that generated exogenous variation in respondents’ macroeconomic expectations. The survey and experimental data were then merged with detailed administrative data on participants’ credit card transactions and balances. The experiment was designed to test three standard predictions from models of intertemporal consumption choice: inflation expectations should affect spending on durables; exchange rate expectations should affect spending on tradables; and, holding constant the nominal interest rate, inflation expectations should affect borrowing. The analysis finds that the information provided to participants strongly affects subjective expectations. However, no significant effects are found on actual consumer behavior (as measured in administrative data) or self-reported consumption plans (as measured in survey data). The preferred interpretation is that consumers are not sophisticated enough to factor inflation and exchange rate expectations into their consumption decisions. The absence of a link between consumer expectations and behavior has potentially important implications for macroeconomic policies such as forward guidance.
    Keywords: Inflation,Financial Sector Policy,Consumption,Fiscal&Monetary Policy,Educational Sciences,Financial Structures
    Date: 2021–01–25
  19. By: Farfan Bertran,Maria Gabriela; Holla,Alaka; Vakis,Renos
    Abstract: Do teachers’ stereotypes of social class bias their assessment of students? This study uses a lab-in-the-field experiment among primary school teachers to test whether they are biased against poor students. Teachers assessed a student in a video of an oral exam after watching one of two versions of an introductory video that portrayed the child’s home and playground. When the student in the exam video exhibited inconsistent performance, showing varying levels of scholastic aptitude and focus during the exam, teachers were far more likely to judge his scholastic aptitude as below grade-level if they had watched the introductory video portraying a poor background than if they had watched the introductory video portraying a middle-class background. The social class background portrayed in the introductory video did not affect teachers’ behavioral assessments of the student. When the student in the exam video was consistently high achieving, showing high levels of scholastic aptitude and focus throughout the exam, teachers who watched the introductory video depicting a poor background were more likely to assess the student as above grade-level than teachers who watched the video conveying a middle-class background. In this case, however, they had a more negative assessment of the child’s behavior when they thought he came from a poor background, deeming him to be less motivated and less emotionally mature than when the introductory video depicted a middle-class background. These findings suggest that stereotypes influence how teachers assess the scholastic aptitude and behavior of their students.
    Keywords: Effective Schools and Teachers,Educational Institutions&Facilities,Human Rights,Educational Sciences,Urban Housing,Urban Governance and Management,Urban Housing and Land Settlements,Municipal Management and Reform
    Date: 2021–03–22
  20. By: Samuel Higbee
    Abstract: I study the problem of a decision maker choosing a policy to allocate treatment to a heterogeneous population on the basis of experimental data that includes only a subset of possible treatment values. The effects of new treatments are partially identified based on shape restrictions on treatment response. I propose solving an empirical minimax regret problem to estimate the policy and show it has a tractable linear- and integer-programming formulation. I prove the maximum regret of the estimator converges to the lowest possible maximum regret at the rate at which heterogeneous treatment effects can be estimated in the experimental data or $N^{-1/2}$, whichever is slower. I apply my results to design targeted subsidies for electrical grid connections in rural Kenya, and estimate that $97\%$ of the population should be given a treatment not implemented in the experiment.
    Date: 2022–10
  21. By: Chowdhury Mohammad Sakib Anwar; Jorge Bruno; Sonali SenGupta
    Abstract: We model a dynamic public good contribution game, where players are (naturally) formed into groups. The groups are exogenously placed in a sequence, with limited information available to players about their groups' position in the sequence. Contribution decisions are made by players simultaneously and independently, and the groups' total contribution is made sequentially. We try to capture both inter and intra-group behaviors and analyze different situations where players observe partial history about total contributions of their predecessor groups. Given this framework, we show that even when players observe a history of defection (no contribution), a cooperative outcome is achievable. This is particularly interesting in the situation when players observe only their immediate predecessor groups' contribution, where we observe that players play an important role in motivating others to contribute.
    Date: 2022–10
  22. By: Holden, Stein T. (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Tione, Sarah (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Katengeza, Samson (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Tilahun, Mesfin (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: Can luck predict risk-taking behavior in games of chance? Economists have not widely studied this issue although overconfidence, optimism-, and pessimism bias have received substantial attention in recent years. In this study, we investigate how good and bad luck outcomes in a simple repeated risky investment game affect risk-taking behavior in the following rounds of the same game where the outcome (luck) in the game is determined by the throwing of a die after each round. The outcome of the previous round's die-throw is known when the subjects decide how risky their next choice in the game will be. A sample of 718 university students is used as subjects in the game in a recursive within-subject design. The results demonstrate a strong impact of luck on risk-taking behavior that lasts not only to the next round but also into another two follow-up rounds, with cumulative effects. A time delay of 1-2 months between Round 1 and Round 2 did not wipe out the luck effect and it was only slightly weaker than the luck effect from Round 2 to Rounds 3 and 4 that followed immediately after Round 2. Many recent studies have shown that risk preferences respond to recent shocks. This study indicates that random shocks such as luck in previous games (states of nature) influence risk-taking behavior. Our study suggests that the causal mechanism goes through subjective beliefs in luck based on past experiences that influence expectations and thereby risk-taking behavior.
    Keywords: Risky investment game; Luck; Illusion of control; Repeated game; Predictive power.
    JEL: D80 H51
    Date: 2022–10–29
  23. By: Back, Camila (LMU Munich); Spann, Martin (LMU Munich)
    Abstract: Customer satisfaction is an important metric to predict customer behavior and as a result firms' profitability. Expectations of a product's performance serve as a reference point against which customers evaluate their satisfaction with the products' actual performance. However, what is the effect of uncertainty in expectations? This paper develops a novel theoretical model of satisfaction, in which expectations reflect distributions of individual beliefs about performance outcomes. Based on this model, uncertainty shifts subjective reference points upward. That is, uncertainty increases the performance level at which customers switch from being dissatisfied to being satisfied. Furthermore, uncertainty has an attenuating effect on both positive and negative deviations of actual performance from subjective reference points. Put differently, a bad performance feels less bad and a good performance feels less good when it is expected, compared with unexpected. The authors find support for the model's predictions in an experimental study on product delivery as well as a field study based on online reviews. In addition, the authors develop a model-based tool that predicts the effect of uncertainty on customer satisfaction across different customizable scenarios. The paper's results carry implications for firms' communication, customer valuation and recovery strategies.
    Keywords: customer satisfaction; uncertainty; probabilistic beliefs; prospect theory;
    Date: 2022–10–24
  24. By: Abay,Kibrom A.; Berhane,Guush; Hoddinott,John; Hirfrfot,Kibrom Tafere
    Abstract: The COVID-19 pandemic has spurred interest in the use of remote data collection techniques, including phone surveys, in developing country contexts. This interest has sparked new methodological work focusing on the advantages and disadvantages of different forms of remote data collection, the use of incentives to increase response rates, and how to address sample representativeness. By contrast, attention given to associated response fatigue and its implications remains limited. This study designed and implemented an experiment that randomized the placement of a survey module on women’s dietary diversity in the survey instrument. The study also examines potential differential vulnerabilities to fatigue across food groups and respondents. The findings show that delaying the timing of mothers’ food consumption module by 15 minutes leads to 8-17 percent decrease in the dietary diversity score and a 28 percent decrease in the number of mothers who consumed a minimum of four dietary groups. This is driven by underreporting of infrequently consumed foods; the experimentally induced delay in the timing of mothers’ food consumption module led to decreases of 40 and 11 percent in the reporting of consumption of animal source foods and fruits and vegetables, respectively. The results are robust to changes in model specification and pass falsification tests. Responses by older and less educated mothers and those from larger households are more vulnerable to measurement error due to fatigue.
    Keywords: Nutrition,Food Security,Telecommunications Infrastructure,Educational Sciences
    Date: 2021–04–20
  25. By: Agostinelli,Francesco; Avitabile,Ciro; Bobba,Matteo
    Abstract: This paper provides new insights on the science of scaling. The authors study an educationalmentoring program with a home visit component implemented at scale in Mexico, under different modalities (original andenhanced training for mentors) and different situations (field experiment and policy implementation). While theprogram was ineffective when implemented by the government in its original modality, the enhanced modality boostschildren’s outcomes, both in the field experiment and during the government implementation. Higher-quality home visitsencourage parent/child and parent/community interactions, which in turn are found to promote the scalability of theprogram. The work provides new knowledge on the socially determined nature of scaling educational programs.
    Keywords: Educational Sciences,Lifelong Learning,Education For All,Educational Populations,Education for Development (superceded),Inequality
    Date: 2021–05–03
  26. By: Bertrand,Marianne; Crepon,Bruno Jacques Jean Philippe; Marguerie,Alicia Charlene; Premand,Patrick
    Abstract: Workfare programs are one of the most popular social protection and employment policy instruments in the developing world. They evoke the promise of efficient targeting, as well as immediate and lasting impacts on participants’ employment, earnings, skills and behaviors. This paper evaluates contemporaneous and post-program impacts of a public works intervention in Côte d’Ivoire. The program was randomized among urban youths who self-selected to participate and provided seven months of employment at the formal minimum wage. Randomized subsets of beneficiaries also received complementary training on basic entrepreneurship or job search skills. During the program, results show limited impacts on the likelihood of employment, but a shift toward wage jobs, higher earnings and savings, as well as changes in work habits and behaviors. Fifteen months after the program ended, savings stock remain higher, but there are no lasting impacts on employment or behaviors, and only limited impacts on earnings. Machine learning techniques are applied to assess whether program targeting can improve. Significant heterogeneity in impacts on earnings is found during the program but not post-program. Departing from self-targeting improves performance: a range of practical targeting mechanisms achieve impacts close to a machine learning benchmark by maximizing contemporaneous impacts without reducing post-program impacts. Impacts on earnings remain substantially below program costs even under improved targeting.
    Keywords: Labor Policies,Rural Labor Markets,Employment and Unemployment,Labor Markets
    Date: 2021–04–05
  27. By: Pereira Lopez,Carolina; Sautmann,Anja; Schaner,Simone Gabrielle
    Abstract: This study conducted an experiment in Mali to test whether patients pressure doctors to prescribe medical treatment they do not necessarily need. The experiment varied patients’ information about a discount for antimalarial tablets and measured demand for both tablets and costlier antimalarial injections. The study finds evidence of patient-driven demand: informing patients about the discount, instead of letting doctors decide to share this information, increased discount use by 35 percent and overall malaria treatment by 10 percent. These marginal patients rarely had malaria, worsening the illness-treatment match. Providers did not use the information advantage to sell injections -- their use fell in both information conditions.
    Keywords: Communicable Diseases,Cholera,Malaria,Leprosy,Health Care Services Industry,Taxation&Subsidies,Pharmaceuticals Industry,Health Service Management and Delivery
    Date: 2020–11–25
  28. By: Petrovich, Beatrice; Carattini, Stefano; Wüstenhagen, Rolf
    Abstract: Households are key actors in decarbonizing our economy, especially when it comes to investments in a decentralized energy system, such as solar photovoltaics (PV). The phasing-out of feed-in tariffs, and unexpected policy changes in the wake of an increasingly polarized climate debate, require residential PV investors to bear new risks. Conducting a discrete choice experiment coupled with a randomized informational treatment among potential residential solar investors in Switzerland, we test whether policy and market risks deter households from investing in solar. We find that salient policy risk reduces households' intention to invest in solar, especially for risk-averse individuals. Conversely, households seem less sensitive to market risk: residential solar investors accept volatile revenues, as long as a price floor for excess electricity sold to the grid is guaranteed. Our study suggests that keeping perceived policy uncertainty low is more important for residential solar investors than fully hedging against electricity market risk.
    Keywords: discrete choice experiment; information asymmetries; market risk; policy risk; residential solar investors; risk preferences
    JEL: D81 O33 Q42
    Date: 2021–02–01
  29. By: Alexander Buchholz; Vito Bellini; Giuseppe Di Benedetto; Yannik Stein; Matteo Ruffini; Fabian Moerchen
    Abstract: A/B tests serve the purpose of reliably identifying the effect of changes introduced in online services. It is common for online platforms to run a large number of simultaneous experiments by splitting incoming user traffic randomly in treatment and control groups. Despite a perfect randomization between different groups, simultaneous experiments can interact with each other and create a negative impact on average population outcomes such as engagement metrics. These are measured globally and monitored to protect overall user experience. Therefore, it is crucial to measure these interaction effects and attribute their overall impact in a fair way to the respective experimenters. We suggest an approach to measure and disentangle the effect of simultaneous experiments by providing a cost sharing approach based on Shapley values. We also provide a counterfactual perspective, that predicts shared impact based on conditional average treatment effects making use of causal inference techniques. We illustrate our approach in real world and synthetic data experiments.
    Date: 2022–10
  30. By: Mekonnen,Alemu; Hassen,Sied; Jaime,Marcela; Toman,Michael A.; Zhang,Xiao-Bing
    Abstract: Solar lanterns are a relatively inexpensive renewable-energy option for household lighting in developing countries. However, the transition to these lighting sources is slow. To understand why, this study uses the Becker-Degroot-Marschak bidding mechanism in a randomized field experiment to investigate the effect of information provision and subsidy policy instruments on the uptake of solar lanterns. Subjects’ willingness to pay tends to be low enough that most of them would purchase the solar lantern only if it is subsidized. Households with access to grid electricity have a lower willingness to pay and are less likely to adopt, while those using kerosene as a source of lighting are more likely to adopt. Access to credit also increases willingness to pay. Information treatments have limited impact: provision of different types of information about the private and public benefits of solar lantern use increases adoption only when it is combined with a high level of subsidies. Given the relatively low cost of solar lanterns, the results suggest that achieving universal electricity access under the United Nations’ Sustainable Development Goals by any means will require subsidizing access.
    Keywords: Energy and Mining,Energy and Environment,Energy Demand,Energy Technology&Transmission,Energy Policies&Economics,Renewable Energy,Rural and Renewable Energy
    Date: 2021–03–23
  31. By: Bakhtiar,M. Mehrab; Bastian,Gautam; Goldstein,Markus P.
    Abstract: Recent research shows that microenterprises in developing countries are constrained by their managerial capacity, especially in the areas of marketing, record keeping, financial planning, and stock control. In a stratified randomized controlled trial, experienced businesswomen in Ethiopia were given a formal business training that addressed these constraints. A second-stage mentoring component in which a random selection of female mentees within the social and business network of the trainees from the first-stage business training received customized mentoring from these “trained mentors.†Pooled results using three rounds of post-training surveys carried out over three years show that business training causes profit and sales to improve by 0.21 standard deviation, while business practices improve by 0.13 standard deviation. The overall impact of mentoring is muted—strong impacts are observed on the adoption of business practices among mentees, but there is no statistically significant impact on profits.
    Keywords: Gender and Development,Skills Development and Labor Force Training,Food&Beverage Industry,Plastics&Rubber Industry,Agribusiness,Pulp&Paper Industry,Common Carriers Industry,Business Cycles and Stabilization Policies,Textiles, Apparel&Leather Industry,Labor Markets
    Date: 2021–02–22
  32. By: Bernard, René
    Abstract: This paper studies how consumers respond to unexpected, transitory income shocks and why. In a randomized control trial, I elicit marginal propensities to consume (MPC) out of different hypothetical income shock scenarios, varying the payment mode, the shock size, and the source of income. The results show respondents exhibit a higher MPC when exposed to a windfall paid out in cash or without any specification of the payment mode, respectively, compared to a windfall deposited in an instant-access savings account, suggesting consumers violate fungibility. Further, the MPC falls with the shock size, whereas it does not vary with the source of income. Using causal machine learningmethods to explore treatment heterogeneity, I find that low liquidity, self-control problems, and a lack of cognitive sophistication contribute to MPC heterogeneity. The results are broadly in line with mental accounting theory.
    Keywords: Randomized control trial,marginal propensity to consume,fiscal policy,mental accounting,causal forest
    JEL: C90 D12 D14 D15 D91
    Date: 2022
  33. By: Anderson,Stephen J.; Mckenzie,David J.
    Abstract: Many small firms lack the finance and marketing skills needed for firm growth. The standard approach in many business support programs is to attempt to train the entrepreneur to develop these skills, through classroom-based training or personalized consulting. However, rather than requiring the entrepreneur to be a jack-of-all-trades, an alternative is to move beyond the boundary of the entrepreneur and link firms to these skills in a marketplace through insourcing workers with functional expertise or outsourcing tasks to professional specialists. A randomized experiment in Nigeria tests the relative effectiveness of these four different approaches to improving business practices. Insourcing and outsourcing both dominate business training; and do at least as well as business consulting at one-half of the cost. Moving beyond the entrepreneurial boundary enables firms to use higher quality digital marketing practices, innovate more, and achieve greater sales and profits growth over a two-year horizon.
    Keywords: Financial Sector Policy,ICT Applications,Information Technology,Financial Sector and Social Assistance
    Date: 2020–12–17
  34. By: Dorine Boumans; Klaus Gründler; Niklas Potrafke; Fabian Ruthardt
    Abstract: Can one single political leader influence macroeconomic expectations on a global scale? We design a large-scale survey experiment among influential economic experts working in more than 100 countries and use the 2020 US presidential election as a quasi-natural experiment to identify the effect of the US incumbent change on global macroeconomic expectations. We find large effects of Joe Biden’s election on growth expectations of international experts, working through more positive expectations about trade. The electoral outcome particularly affected the expectations of Western allies and increased global economic uncertainty. Our findings suggest important political spillover effects in the formation of macroeconomic expectations.
    Keywords: US presidential elections, politicians, economic expectations, economic experts, survey experiment, causal inference
    JEL: A11 D72 O11
    Date: 2022
  35. By: Phoebe Koundouri; Barbara Hammer; Ulrike Kuhl; Alina Velias
    Abstract: Identifying mechanisms of real-life human decision-making is central to inform effective, human-centric public policy. Here, we report larger trends and synthesize preliminary lessons from behavioral and neuroeconomic investigations focusing on environmental values. We review the currently available evidence at different levels of granularity, from insights of how individuals value natural resources (individual level), followed by evidence from work on group externalities, common pool resources, and social norms (social group level), to the study of incentives, policies, and their impact (institutional level). At each level, we identify viable directions for future scientific research and actionable items for policy-makers. Coupled with new technological and methodological advances, we suggest that behavioural and neuroeconomic insights may inform effective strategy to optimize environmental resources. We conclude that the time is ripe for action, to enrich policies with scientifically grounded insights, making an impact in the interest of current and future generations.
    Keywords: behavioural economics, neuroeconomics, environmental values,individual decision-making, common pool resources, policy
    Date: 2022–10–24
  36. By: Hoy,Christopher Alexander; McKenzie,Luke; Sinning,Mathias Georg
    Abstract: This paper studies the impact of “nudges†on taxpayers with varying tax compliance histories in Papua New Guinea. It presents the results from two population-wide randomized controlled trials in a setting that is characterized by low compliance rates and a lack of effective enforcement. The study tests the impact of text messages, flyers, and emails that remind taxpayers of declaration due dates and provide information about the public benefits of paying tax. The findings show that the treatments increased the number of tax declarations filed without increasing the amount of tax paid because the taxpayers who responded to the nudges were largely exempt from paying tax. This result is consistent across tax types, communication channels, and time periods. The findings also show that the treatments had no impact on previously non-filing taxpayers. Collectively, the results illustrate that taxpayers who face the lowest cost from complying are the most likely to respond to a nudge.
    Keywords: Tax Administration,Tax Law,Public Sector Economics,Public Finance Decentralization and Poverty Reduction,Mining&Extractive Industry (Non-Energy),Inequality,Educational Sciences,International Trade and Trade Rules
    Date: 2021–02–08

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.