nep-exp New Economics Papers
on Experimental Economics
Issue of 2022‒11‒21
twenty-one papers chosen by

  1. Aversion to Hiring Algorithms: Transparency, Gender Profiling, and Self-Confidence By Marie-Pierre Dargnies; Rustamdjan Hakimov; Dorothea Kübler
  2. Honesty in the City By Dufwenberg, Martin; Feldman, Paul; Servátka, Maroš; Tarrasó, Jorge; Vadovič, Radovan
  3. Financial Incentives and Performance: A Meta-Analysis of Economics Evidence By Petr Cala; Tomas Havranek; Zuzana Irsova; Jindrich Matousek; Jiri Novak
  4. Litigation with Negative Expected Value Suits: An Experimental Analysis By Cary Deck; Paul Pecorino; Michael Solomon
  5. Competition, Cooperation, and Social Perceptions By Jeanne Hagenbach; Rachel Kranton; Victoria Lee
  6. Misperceiving Economic Success: Experimental Evidence on Meritocratic Beliefs and Inequality Acceptance By Dietmar Fehr; Martin Vollmann
  7. You will receive your money next week! Experimental evidence on the role of Future-Time Reference for intertemporal decision-making By Niklas Ziemann
  8. An Arab, an Asian, and a Black guy walk into a job interview: ethnic stigma in hiring after controlling for social class By Hannah Van Borm; Louis Lippens; Stijn Baert
  9. How Narratives Impact Financial Behavior - Experimental Evidence from the COVID-19 Pandemic By Müller, Lara Marie; Harrs, Sören; Rockenbach, Bettina
  10. The Can Challenge: Understanding the best ways to incentive recycling through a diffusion approach By Michael Brock; Lucia Milena Murgia; Stefania Sitzia; Jiwei Zheng
  11. Improving Workers’ Performance in Small Firms : A Randomized Experiment on Goal Setting in Ghana By Cettolin, Elena; Cole, Kym; Dalton, Patricio
  12. Promoting Parental Involvement in Schools : Evidence from Two Randomized Experiments By Barrera-Osorio, Felipe; Gertler,Paul J.; Nakajima,Nozomi; Patrinos,Harry Anthony
  13. Choosing The Best Incentives for Belief Elicitation with an Application to Political Protests By Nathan Canen; Anujit Chakraborty
  14. Time Preferences and Medication Adherence: Evidence from Pregnant Women in South Africa By Mette Trier Damgaard; Christina Gravert; Lisa Norrgren
  15. Affecting Public Support for Economic Policies: Evidence from a Survey Experiment about Rent Control in Germany By Dolls, Mathias; Schüle, Paul; Windsteiger, Lisa
  16. The Can Challenge: How important are user-generated data for search result quality? Experimental evidence By Tobias J. Klein; Madina Kurmangaliyeva; Jens Prufer; Patricia Prufer
  17. Inequality as a Barrier to Economic Integration? An Experiment By Gabriele Camera; Lukas Hohl; Rolf Weder
  18. Nobel and Novice: Author Prominence Affects Peer Review By Jurgen Huber; Sabiou M. Inoua; Rudolf Kerschbamer; Christian Konig-Kersting; Stefan Palan; Vernon L. Smith
  19. A nation-wide experiment: fuel tax cuts and almost free public transport for three months in Germany -- Report 4 Third wave results By Allister Loder; Fabienne Cantner; Andrea Cadavid; Markus B. Siewert; Stefan Wurster; Sebastian Goerg; Klaus Bogenberger
  20. Hidden inefficiency: Strategic inflation of project schedules By Lorko, Matej; Servátka, Maroš; Zhang, Le
  21. The Direct and Spillover Effects of a Nationwide Socio-Emotional Learning Program for Disruptive Students By Clement De Chaisemartin; Nicolás Navarrete

  1. By: Marie-Pierre Dargnies; Rustamdjan Hakimov; Dorothea Kübler
    Abstract: We run an online experiment to study the origins of algorithm aversion. Participants are either in the role of workers or of managers. Workers perform three real-effort tasks: task 1, task 2, and the job task which is a combination of tasks 1 and 2. They choose whether the hiring decision between themselves and another worker is made either by a participant in the role of a manager or by an algorithm. In a second set of experiments, managers choose whether they want to delegate their hiring decisions to the algorithm. In the baseline treatments, we observe that workers choose the manager more often than the algorithm, and managers also prefer to make the hiring decisions themselves rather than delegate them to the algorithm. When the algorithm does not use workers’ gender to predict their job task performance and workers know this, they choose the algorithm more often. Providing details on how the algorithm works does not increase the preference for the algorithm, neither for workers nor for managers. Providing feedback to managers about their performance in hiring the best workers increases their preference for the algorithm, as managers are, on average, overconfident.
    Keywords: algorithm aversion, experiment, hiring discrimination, transparency
    Date: 2022
  2. By: Dufwenberg, Martin; Feldman, Paul; Servátka, Maroš; Tarrasó, Jorge; Vadovič, Radovan
    Abstract: Lab evidence on trust games involves more cooperation than conventional economic theory predicts. We explore whether this pattern extends to a field setting where we are able to control for (lack of) repeat-play and reputation: the taxi market in Mexico City. We find a remarkably high degree of trustworthiness, even with price-haggling which was predicted to reduce trustworthiness.
    Keywords: trustworthiness, honesty, reciprocity, field experiment, haggling, taxis, Mexico City
    JEL: C72 C90 C93
    Date: 2022–09–18
  3. By: Petr Cala (Charles University, Prague, Czech Republic); Tomas Havranek (Charles University, Prague, Czech Republic & Centre for Economic Policy Research, London); Zuzana Irsova (Charles University, Prague, Czech Republic & Anglo-American University, Prague); Jindrich Matousek (Charles University, Prague, Czech Republic); Jiri Novak (Charles University, Prague, Czech Republic)
    Abstract: Standard economics models require that financial incentives improve performance, while leading theories in psychology allow for the opposite. Experimental results are mixed, and so far have not been corrected for publication bias and model uncertainty. We collect 1,568 economics estimates together with 46 factors capturing the context in which the estimates were obtained. We use novel nonlinear techniques to correct for publication bias and em- ploy Bayesian model averaging to account for model uncertainty. The corrected estimates are zero or tiny across contexts of field experiments, including differences in performance measurement, task definition, reward size and framing, motivation beyond money, subject pool, and estimation technique. Laboratory experiments produce statistically significant estimates on average after correction for publication bias, but even there the effect is weak. Experimental economics evidence is inconsistent with standard economics models.
    Keywords: incentives, experiments, meta-analysis, model uncertainty, publi- cation bias
    JEL: C90 D91 M52
    Date: 2022–11
  4. By: Cary Deck (University of Alabama and Economic Science Institute, Chapman University); Paul Pecorino (University of Alabama); Michael Solomon (Colby College)
    Abstract: The existence of lawsuits providing plaintiffs a negative expected value (NEV) at trial has important theoretical implications for signaling models of litigation. The signaling equilibrium possible absent NEV suits breaks down with NEV suits because plaintiffs do not have a credible threat to proceed to trial undermining the ability to signal type. Using a laboratory experiment, we analyze behavior with and without the possibility of NEV suits. Absent NEV suits, behavior largely follows predicted patterns. However, the possibility of NEV suits does not cause the signaling equilibrium to unravel and does not cause the dispute rate to increase. Plaintiffs only drop NEV lawsuits three-fourths of the time, the rejection rate by defendants for revealing demands rises less than predicted and, contra theory, the rejection rate on demands in the semipooling range remains unchanged.
    Keywords: Dispute Resolution, Negative Expected Value Lawsuits, Laboratory Experiment
    JEL: C91 K41 D82
    Date: 2022
  5. By: Jeanne Hagenbach (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Rachel Kranton (Duke University [Durham]); Victoria Lee (Duke University [Durham])
    Abstract: Many empirical and experimental studies show that social divisions negatively impact economic outcomes. This experiment reverses the causal arrow and asks if economic settings affect individuals' social perceptions. Subjects receive information about counterparts' preferences and demographics and then work for bonus pay by completing a real-effort task. Subjects who compete for pay against their counterparts report having less in common with their counterparts than subjects in a cooperative setting. This effect emerges despite monetary incentives to report correctly the number of traits in common. The economic setting has little effect on the less precise evaluation of similarity to counterparts.
    Date: 2022–09
  6. By: Dietmar Fehr; Martin Vollmann
    Abstract: Meritocratic beliefs are often invoked as justification of inequality. We provide evidence on how meritocratic beliefs are shaped by economic status and how they contribute to the moral justification of inequality. In a large-scale survey experiment in the US, we show that success causes a change in beliefs about success depending on effort rather than luck. Exploiting exogenous variation in meritocratic beliefs in a two-stage analysis shows that beliefs affect how much inequality people accept. Successful people prefer to remain ignorant about the true underlying reasons for success and there is no evidence that beliefs are moderated by political orientation.
    Keywords: meritocratic beliefs, inequality acceptance, fairness, political views, survey experiment
    JEL: D31 D63 C93 H23 H24
    Date: 2022
  7. By: Niklas Ziemann (University of Potsdam)
    Abstract: Against the background of the increasingly discussed “Linguistic Saving Hypothesis” (Chen, 2013), I studied whether the targeted use of a present tense (close tense) and a future tense (distant tense) within the same language have an impact on intertemporal decision-making. In a monetarily incentivized laboratory experiment in Germany, I implemented two different treatments on intertemporal choices. The treatments differed in the tense in which I referred to future rewards. My results show that individuals prefer to a greater extent rewards which are associated with a present tense (close tense). This result is in line with my prediction and the first empirical support for the Linguistic Saving Hypothesis within one language. However, this result holds exclusively for males. Females seem to be unaffected by the linguistic manipulation. I discuss my findings in the context of “gender-as-culture” as well as their potential policy-implications.
    Keywords: Experiment, Intertemporal Choice, Language, Linguistic Saving Hypothesis
    JEL: C91 D15 D90 Z13
    Date: 2022–11
  8. By: Hannah Van Borm; Louis Lippens; Stijn Baert (-)
    Abstract: Over the last decades, researchers have found compelling evidence of hiring discrimination toward ethnic minorities based on field experiments using fictitious job applications. Despite increasing efforts to discover why ethnic minorities experience hiring penalties, the academic world has not yet found a satisfying answer. With this study, we aim to close this gap in the literature by conducting a state-of-the-art scenario experiment with genuine American recruiters. In the experiment, we ask recruiters to assess fictitious job applicants of variousrace-ethnicities but consistent social class. The applicants are rated on 22 statements related to the dominant explanations for ethnic discrimination in hiring that the models of taste-based and statistical discrimination have offered. We find that different race-ethnicity groups are evaluated rather similarly, except for Asian Americans, who are perceived to have better intellectual abilities and organizational skills and to be more ambitious, motivated, efficient, and open. These results suggest that the hiring discrimination found in previous experimental research might be overestimated because part of the reported hiring penalty may be attributed to aspects other than race-ethnicity.
    Keywords: hiring, ethnic discrimination, statistical discrimination, social class, stigma
    JEL: J71 J15 J24
    Date: 2022–11
  9. By: Müller, Lara Marie; Harrs, Sören; Rockenbach, Bettina
    JEL: D83 D91 G41
    Date: 2022
  10. By: Michael Brock (School of Economics, University of East Anglia); Lucia Milena Murgia (Norwich Business School, University of East Anglia); Stefania Sitzia (School of Economics, University of East Anglia); Jiwei Zheng (University of Lancaster)
    Abstract: Understanding the best ways to incentive recycling and improve the efficiency of waste practices is a key environmental, social and economic management problem that needs addressing. We search for solutions to this issue by implementing a field experiment with two incentive mechanisms (a piece-rate and a lottery-based systems) in three different locations; a residential, a workplace and a student environment. We model our experimental data with the Bass Model, which to the best of our knowledge has never been employed to analyse experimental data and to gather a deeper understanding of the diffusion process among individuals adopting the recycling service. Our results indicate a high degree of heterogeneity across our trial locations. Incentivising recycling can stimulate action by those on lower incomes through opportunities for income generation. By contrast, those in workplace environments engage with or without incentives, but the latter does seem to boost activity. Our study contributes to the literature by providing evidence on how to best increase public involvement through recycling and provides important insights for policy making to address this worldwide relevant issue.
    Keywords: Recycling Behaviour; Field Experiment; Monetary Incentives; Bass Diffusion Model
    JEL: C32 C93 D90 Q53
    Date: 2022–09
  11. By: Cettolin, Elena (Tilburg University, Center For Economic Research); Cole, Kym; Dalton, Patricio (Tilburg University, Center For Economic Research)
    Keywords: Behavioral Constraints; Goals setting; Management Practices; Small firms; Informal Businesses
    Date: 2022
  12. By: Barrera-Osorio, Felipe; Gertler,Paul J.; Nakajima,Nozomi; Patrinos,Harry Anthony
    Abstract: Parental involvement programs aim to increase school-and-parent communication and support children's overall learning environment. This paper examines the effects of low-cost, group-based parental involvement interventions in Mexico using data from two randomized controlled trials. The first experiment provided financial resources to parent associations. The second experiment provided information to parents about how to support their children's learning. Overall, the interventions induced different types of parental engagement in schools. The information intervention changed parenting behavior at home -- with large effects among indigenous parents who have historically been discriminated and socially excluded -- and improved student behavior in school. The grants did not impact parent or student behaviors. Notably, the paper does not find impacts of either intervention on educational achievement. To understand these 0 effects, the paper explores how social ties between parents and teachers evolved over the course of the two interventions. Parental involvement interventions led to significant changes in perceived trustworthiness between teachers and parents. The results suggest that parental involvement interventions can backfire if institutional rules are unclear about the expectations of parents and teachers as parents increase their involvement in schools.
    Keywords: Educational Sciences,Employment and Unemployment,Effective Schools and Teachers,Educational Institutions&Facilities
    Date: 2020–10–29
  13. By: Nathan Canen; Anujit Chakraborty
    Abstract: Many experiments elicit subjects' prior and posterior beliefs about a random variable to assess how information affects one's own actions. However, beliefs are multi-dimensional objects, and experimenters often only elicit a single response from subjects. In this paper, we discuss how the incentives offered by experimenters map subjects' true belief distributions to what profit-maximizing subjects respond in the elicitation task. In particular, we show how slightly different incentives may induce subjects to report the mean, mode, or median of their belief distribution. If beliefs are not symmetric and unimodal, then using an elicitation scheme that is mismatched with the research question may affect both the magnitude and the sign of identified effects, or may even make identification impossible. As an example, we revisit Cantoni et al.'s (2019) study of whether political protests are strategic complements or substitutes. We show that they elicit modal beliefs, while modal and mean beliefs may be updated in opposite directions following their experiment. Hence, the sign of their effects may change, allowing an alternative interpretation of their results.
    Date: 2022–10
  14. By: Mette Trier Damgaard; Christina Gravert; Lisa Norrgren
    Abstract: The effectiveness of health recommendations and treatment plans depends on the extent to which individuals follow them. For the individual, medication adherence involves an inter-temporal trade-off between expected future health benefits and immediate effort costs. Therefore examining time preferences may help us to understand why some people fail to follow health recommendations and treatment plans. In this paper, we use a simple, real-effort task implemented via text message to elicit the time preferences of pregnant women in South Africa. We find evidence that high discounters are significantly less likely to report to adhere to the recommendation of taking daily iron supplements daily during pregnancy. There is some weak indication that time inconsistency also negatively affects adherence. Together our results suggest that measuring time preferences could help predict medication adherence and thus be used to improve preventive health care measures.
    Keywords: time preferences, medication adherence, experiment
    JEL: C93 D91 I12
    Date: 2022
  15. By: Dolls, Mathias; Schüle, Paul; Windsteiger, Lisa
    JEL: R21 R31 R38
    Date: 2022
  16. By: Tobias J. Klein (Tilburg School of Economics and Management, Tilburg University & C.E.P.R.); Madina Kurmangaliyeva (ECARES, Universite Libre de Bruxelles); Jens Prufer (School of Economics and Centre for Competition Policy, University of East Anglia); Patricia Prufer (CentERdata, Tilburg University)
    Abstract: Do some search engines produce better search results because their algorithm is better, or because they have access to more data from past searches? In the latter case, mandatory data sharing, a policy that is currently discussed, could trigger innovation and would benefit all users of search engines. We document that the algorithm of a small search engine can produce non-personalized results that are of similar quality than Googles, if it has enough data, and that overall differences in the quality of search results are explained by searches for less popular search terms. This is confirmed by results from an experiment, in which we keep the algorithm of the search engine fixed and vary the amount of data it uses as an input.
    Date: 2022–09
  17. By: Gabriele Camera (Economic Science Institute, Chapman University); Lukas Hohl (University of Basel and Federal Finance Administration); Rolf Weder (University of Basel)
    Abstract: International economic theory suggests that people should embrace economic integration because it promises large gains. But policy reversals such as Brexit indicate a desire for economic disintegration. Here we report results of an experiment of how size and cross-country distribution of gains from integration influence individuals’ inclination to cooperate to reap its intended benefits and to embrace or reject integration. The design considers an indefinitely repeated helping game with multiple equilibria and strategic uncertainty. The data reveal that inequality of potential gains neither affected behavior nor reduced support for economic integration. However, integration may lead to disappointing, unequally distributed welfare gains, undermining support for the policy. This suggests that to better assess integration policies, we should account for the spillover effects of integration on behavior. Miscalculating this behavioral aspect may undermine the intended development goals and motivate calls for dramatic policy-reversals.
    Keywords: economic opportunity, endogenous institutions, globalization, indefinitely repeated games, social dilemmas
    JEL: C70 C90 F02
    Date: 2022
  18. By: Jurgen Huber (University of Innsbruck); Sabiou M. Inoua (Chapman University); Rudolf Kerschbamer (University of Innsbruck); Christian Konig-Kersting (University of Innsbruck); Stefan Palan (University of Graz); Vernon L. Smith (Chapman University)
    Abstract: Peer-review is a well-established cornerstone of the scientific process, yet it is not immune to biases like the status bias, which we explore in this paper. Merton described this bias as prominent researchers getting disproportionately great credit for their contribution while relatively unknown researchers getting disproportionately little credit (1). We measured the extent of this bias in the peer-review process through a pre-registered field experiment. We invited more than 3,300 researchers to review a finance research paper jointly written by a prominent author (a Nobel laureate) and by a relatively unknown author (an early-career research associate) varying whether reviewers saw the prominent author’s name, an anonymized version of the paper, or the less well-known author’s name. We found strong evidence for the status bias: more of the invited researchers accepted to review the paper when the prominent name was shown, and while only 23 percent recommended “reject†when the prominent researcher was the only author shown, 48 percent did so when the paper was anonymized, and 65 percent did when the little-known author was the only author shown. Our findings complement and extend earlier results on double-anonymized vs. single-anonymized review (2–10).
    Date: 2022
  19. By: Allister Loder; Fabienne Cantner; Andrea Cadavid; Markus B. Siewert; Stefan Wurster; Sebastian Goerg; Klaus Bogenberger
    Abstract: In spring 2022, the German federal government agreed on a set of measures that aimed at reducing households' financial burden resulting from a recent price increase, especially in energy and mobility. These measures included among others, a nation-wide public transport ticket for 9EUR per month and a fuel tax cut that reduced fuel prices by more than 15%. In transportation policy and travel behavior research this is an almost unprecedented behavioral experiment. It allows to study not only behavioral responses in mode choice and induced demand but also to assess the effectiveness of transport policy instruments. We observe this natural experiment with a three-wave survey and an app-based travel diary on a sample 2'263 individuals; for the Munich Study, 919 participants in the survey-and-app group and 425 in the survey-only group have been successfully recruited, while 919 participants have been recruited through a professional panel provider to obtain a representative nation-wide reference group for the three-wave survey. In this fourth report we present the results of the third wave. At the end of the study, all three surveys have been completed by 1'484 participants and 642 participants completed all three surveys and used the travel diary throughout the entire study. Based on our results we conclude that when offering a 49EUR-Ticket as a successor to the 9~EUR-Ticket and a local travel pass for 30EUR/month more than 60% of all 9~EUR-Ticket owners would buy one of the two new travel passes. In other words, a substantial increase in travel pass ownership in Germany can be expected, with our modest estimate being around 20%. With the announcement of the introduction of a successor ticket in 2023 as well as with the prevailing high inflation, this study will continue into the year 2023 to monitor the impact on mobility and daily activities.
    Date: 2022–10
  20. By: Lorko, Matej; Servátka, Maroš; Zhang, Le
    Abstract: Establishing realistic project plans and completing the resulting business projects on schedule is crucial for organizations striving to effectively utilize their resources. However, incentivizing on-time project delivery may result in moral hazard, as people could respond to estimation accuracy incentives by strategically inflating duration estimates and subsequently prolonging project execution. While the project is delivered on time, the resources are underutilized. We conjecture that the possibility of moral hazard can be mitigated by introducing speed incentives in addition to the schedule accuracy incentives. We conduct a diagnostic test of the effect of accuracy and speed incentives on the process of project estimation and delivery. Our study presents direct empirical evidence that the incentive structure rewarding solely the estimation accuracy can result in hidden inefficiency due to inflated estimates and deliberately slower project execution. However, when speed incentives are implemented alongside estimation accuracy incentives, the estimates are significantly lower and the project is completed more quickly, without compromising the schedule accuracy or output quality. Aligning the objectives of a project owner with those of planners, by incentivizing the planners for both estimation accuracy and quick project completion, fosters more compressed but still accurate and reliable project schedules, and accelerated project delivery.
    Keywords: project management, project planning, time management, duration estimation, moral hazard
    JEL: C91 D82 D83 O21 O22
    Date: 2022–10–15
  21. By: Clement De Chaisemartin (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, J-PAL Europe - Abdul Latif Jameel Poverty Action Lab - Europe, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research); Nicolás Navarrete (City University of London)
    Abstract: Social and emotional learning (SEL) programs that target disruptive students aim to improve their classroom behavior. Small-scale programs in high-income countries have demonstrated positive effects. Using a randomized experiment, we show that a nationwide SEL program in Chile has no effect. Very disruptive students seem to reduce the program's effectiveness. ADHD being more prevalent in middle-than high-income countries, very disruptive students may be more present there, which could diminish the effectiveness of SEL programs. Moreover, implementation fidelity seems lower in this program than in the small-scale ones considered earlier, which could also explain the program's null effect.
    Keywords: disruptive students,spillover effects,peer effects,social and emotional learning,implementation fidelity
    Date: 2022

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