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on Experimental Economics |
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Issue of 2023‒01‒16
forty-one papers chosen by |
| By: | Ben Grodeck (Department of Economics, Monash University); Franziska Tausch (Tausch: Stepstone); Chengsi Wang (Department of Economics, Monash University); Erte Xiao (Department of Economics, Monash University) |
| Abstract: | We design and test a novel insurance advice mechanism aimed at promoting trust and cooperation in markets with asymmetric information. In a buyer-seller game, sellers have the option to advise buyers on whether to purchase third-party insurance against the potential losses from the opportunistic behavior of strategic sellers. The theoretical model suggests that both cooperative and strategic sellers advise buyers not to purchase insurance. Once this advice has been given, strategic sellers are less likely to pursue self-interest due to associated psychological costs. We conduct a controlled laboratory experiment and show that the insurance advice mechanism significantly increases market efficiency, with sellers being more likely to cooperate with buyers and buyers being more likely to purchase from sellers. Furthermore, we find that the insurance advice mechanism is more effective when sellers observe buyers’ insurance purchase decisions. |
| Keywords: | asymmetric information, insurance, trust, cooperation, experimental economics |
| JEL: | C91 D9 D47 D82 L86 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2022-25&r=exp |
| By: | Hubert J. Kiss (Centre for Economic and Regional Studies, Corvinus University of Budapest); Ismael Rodriguez-Lara (Universidad de Malaga, Teoria e Historia Economica, Economic Science Institute (ESI), Chapman University); Alfonso Rosa-Garcia (Universidad de Murcia, Campus Universitario de Espinardo) |
| Abstract: | Andolfatto et al. (2017) proposes a mechanism to eliminate bank runs that occur as a coordination problem among depositors (Diamond and Dybvig, 1983). Building on their work, we conduct a laboratory experiment where we offer depositors the possibility to relocate their funds to a priority account. We find evidence that the mechanism reduces not only bank runs that occur because of a coordination problem among depositors but also panic bank runs (Kiss et al., 2018) that occur when depositors can observe the action of others. |
| Keywords: | bank run, coordination problem, panic behavior, experimental economics, policy tools, financial stability |
| JEL: | C91 D90 G21 G40 |
| Date: | 2022–06 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2213&r=exp |
| By: | Duk Gyoo Kim; Max Riegel |
| Abstract: | This study investigates the influence of gender composition on allocation decisions involving a rank–inequality tradeoff. In a laboratory experiment, participants chose to either alleviate inequality by relinquishing their current relative rank or exacerbate inequality by maintaining their current rank. Two essential features of the experiment are: 1) participants’ relative rank is the outcome of their real-effort performance and luck; 2) participants’ genders are naturally revealed by gender-specific nicknames. We found that female participants are more reluctant to relinquish their current relative rank when the persons ranked below and above them are of the opposite gender. This tendency was less pronounced in the male participants. |
| Keywords: | gender composition, positional concerns, preferences for redistribution, last-place aversion, perception of luck |
| JEL: | C91 D63 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10109&r=exp |
| By: | Hermes, Henning (Düsseldorf Institute for Competition Economics (DICE)); Krauß, Marina (University of Augsburg); Lergetporer, Philipp (Ifo Institute for Economic Research); Peter, Frauke (DZHW-German Centre for Research on Higher Education and Science Studies); Wiederhold, Simon (Ifo Institute for Economic Research) |
| Abstract: | We present experimental evidence that enabling access to universal early child care for families with lower socioeconomic status (SES) increases maternal labor supply. Our intervention provides families with customized help for child care applications, resulting in a large increase in enrollment among lower-SES families. The treatment increases lower-SES mothers' full-time employment rates by 9 percentage points (+160%), household income by 10%, and mothers' earnings by 22%. The effect on full-time employment is largely driven by increased care hours provided by child care centers and fathers. Overall, the treatment substantially improves intra-household gender equality in terms of child care duties and earnings. |
| Keywords: | child care, maternal employment, gender equality, randomized controlled trial |
| JEL: | D90 J13 J18 J22 C93 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15814&r=exp |
| By: | Chowdhury, Shyamal (University of Sydney); Schildberg-Hörisch, Hannah (Heinrich Heine University Düsseldorf); Schneider, Sebastian O. (Max Planck Institute for Research on Collective Goods); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | Lack of information about COVID-19 and its spread may have contributed to excess mortality at the pandemic's onset. In April and May 2020, we implemented a randomized controlled trial with more than 3,000 households in 150 Bangladeshi villages. Our one-to-one information campaign via phone stressed the importance of social distancing and hygiene measures, and illustrated the consequences of an exponential spread of COVID-19. We find that information provision improves knowledge about COVID-19 and induces significant behavioral changes. Information provision also yields considerably better health outcomes, most importantly by reducing the number of reported deaths by about 50% in treated villages. |
| Keywords: | field experiment, COVID-19, information intervention, death rates |
| JEL: | C93 D01 D91 I12 |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15768&r=exp |
| By: | Altmann, Steffen (IZA and University of Copenhagen); Glenny, Anita Marie (Aarhus University); Mahlstedt, Robert (University of Copenhagen); Sebald, Alexander (Copenhagen Business School) |
| Abstract: | We study how online job search advice affects the job search strategies and labor market outcomes of unemployed workers. In a large-scale field experiment, we provide job seekers with vacancy information and occupational recommendations through an online dashboard. A clustered randomization procedure with regionally varying treatment intensities allows us to account for treatment spillovers. Our results show that online advice is highly effective when the share of treated workers is relatively low: in regions where less than 50% of job seekers are exposed to the treatment, working hours and earnings of treated job seekers increase by 8.5–9.5% in the year after the intervention. At the same time, we find substantial negative spillovers on other treated job seekers for higher treatment intensities, resulting from increased competition between treated job seekers who apply for similar vacancies. |
| Keywords: | unemployment, job search, job search assistance, public policy, field experiments, information frictions, occupational recommendations, online advice |
| JEL: | J62 J23 J68 D83 C93 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15830&r=exp |
| By: | Andreas Fuster (Swiss National Bank); Ricardo Perez-Truglia (UCLA - University of California [Los Angeles] - UC - University of California); Mirko Wiederholt (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Basit Zafar (ASU - Arizona State University [Tempe]) |
| Abstract: | We use a survey experiment to generate direct evidence on how people acquire and process information. Participants can buy different information signals that could help them forecast future national home prices. We elicit their valuations and exogenously vary the cost of information. Participants put substantial value on their preferred signal and, when acquired, incorporate the signal in their beliefs. However, they disagree on which signal to buy. As a result, making information cheaper does not decrease the cross-sectional dispersion of expectations. We provide a model with costly acquisition and processing of information, which can match most of our empirical results. |
| Keywords: | Expectations,Experiment,Housing,Information frictions,Rational inattention |
| Date: | 2022–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03878688&r=exp |
| By: | Daniele Nosenzo (Aarhus Univeristy, Denmark); Erte Xiao (Department of Economics, Monash University); Nina Xue (Department of Economics, Monash University) |
| Abstract: | The literature on punishment and prosocial behavior has presented conflicting findings. In some settings, punishment crowds out prosocial behavior and backfires; in others, however, it promotes prosociality. We examine whether the punisher’s motives can help reconcile these results through a novel experiment in which the agent’s outcomes are identical in two environments, but in one punishment is self-serving (i.e., potentially benefits the punisher) while in the other it is other-regarding (i.e., potentially benefits a third party). We find that self-regarding punishment reduces the social stigma of selfish behavior, while other-regarding punishment does not. As a result, self-serving punishment is less effective at encouraging compliance and is more likely to backfire compared to other-regarding punishment. Our findings have implications for the design of punishment mechanisms and highlight the importance of the punisher’s motives in the norm-signalling function of punishment. |
| Keywords: | punishment, norms, stigma, crowd out, experiment |
| JEL: | D02 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2022-26&r=exp |
| By: | Itzhak Rasooly (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Roberto Rozzi (Unipd - Università degli Studi di Padova = University of Padua, Université de Venise Ca’ Foscari | Università Ca’ Foscari di Venezia) |
| Abstract: | In contrast to classical social norm experiments, we conduct experiments that semicontinuously randomise the share of individuals who are taking a particular action in a given environment. Using our experimental results, we are able to estimate the distributions of individual tipping points across our settings. We find that tipping points are very heterogenous, and that a substantial share choose to do the action (or not) regardless of what others are doing. We also show that, once embedded in dynamic models, our estimates predict that individuals will end up doing very different things despite engaging in copying-like behaviour. |
| Keywords: | Social norms, Field experiment, Dynamic models |
| Date: | 2022–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:spmain:hal-03892947&r=exp |
| By: | King-King Li (Shenzhen Audencia Business School, Shenzhen University) |
| Abstract: | We experimentally investigate the memory recall bias of overconfident (underconfident) individuals after receiving feedback on their overconfidence (underconfidence). Our study differs from the literature by identifying the recall pattern conditional on subjects' overconfidence/underconfidence. We obtain the following results. First, overconfident (underconfident) subjects exhibit overconfident (underconfident) recall despite receiving feedback on their overconfidence (underconfidence). Second, awareness of one's overconfidence or underconfidence does not eliminate memory recall bias. Third, the primacy effect is stronger than the recency effect. Overall, our results suggest that memory recall bias is mainly due to motivated beliefs of sophisticated decision makers rather than naïve decision-making. |
| Keywords: | memory recall bias, overconfidence, underconfidence, experiment |
| Date: | 2022–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03841235&r=exp |
| By: | Johannes Diederich; Raphael Epperson; Timo Goeschl |
| Abstract: | Unit donations are an alternative fundraising scheme in which potential donors choose how many units of a charitable good to fund, rather than just giving money. Based on evidence from an online experiment with 8,673 participants, we demonstrate that well-designed unit donation schemes can significantly boost giving above and beyond the standard money donation scheme. A decomposition of the underlying mechanisms shows patterns consistent with the conjecture that unit donations increase impact salience and leverage donors’ cognitive biases by changing the metric of the donation space. The potential increase in donations likely outweighs the complications of designing a unit scheme, but requires expert handling of the choice of unit sizes. |
| Keywords: | Aid effectiveness, charitable giving, framing, restricted choice, unit donation |
| JEL: | D64 H4 L31 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2022-18&r=exp |
| By: | Riccardo Bruni (University of Florence); Alessandro Gioffré (University of Florence); Maria Marino (Universitat de Barcelona) |
| Abstract: | Using a new survey and experimental data, we investigate how information on inequality and immigration affect preferences for redistribution in Italy. Our randomized treatments show that preferences for redistribution are often inelastic to information. However, we find that provision of information on poverty statistics related to the native-immigrant composition of poverty reduces economic in-group bias by affecting exclusionary redistributive preferences: respondents are less likely to support policies which exclude immigrants from access to the welfare state once they learn that immigrants are less represented among the poor and natives are not as poor as they used to believe. Finally, we find some evidence of in-group bias by investigating the presence of heterogeneous treatment effects across groups. |
| Keywords: | Redistribution, Survey, Perceptions, Immigration, Inequality, Online Experiment. JEL classification: D72, D91, H2, H23, H41. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:202223&r=exp |
| By: | Marco Angrisani; Marco Cipriani; Antonio Guarino |
| Abstract: | We run an experiment where professional traders, endowed with private information, trade an asset over multiple periods. After the trading game, we gather information about the professional traders’ characteristics by having them carry out a series of tasks. We study which of these characteristics predict profits in the trading game. We find that strategic sophistication, as measured in the Guessing Game (for example, through level-k theory), is the only significant determinant of professional traders’ profits. In contrast, profits are not driven by individual characteristics such as cognitive abilities or behavioral traits. Moreover, higher profits are due to the ability to trade at favorable prices rather than to the ability to earn higher dividends. Comparing these results to those of a sample of students, we show that whereas cognitive skills are important for students, they are not for traders, whereas the opposite is the case for strategic sophistication. |
| Keywords: | experiments; financial markets; professional traders; strategic sophistication |
| JEL: | C93 G11 G14 |
| Date: | 2022–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:95394&r=exp |
| By: | Berlinski, Samuel; Busso, Matías; Dinkelman, Taryn; Martínez, Claudia |
| Abstract: | We conducted an experiment in low-income schools in Chile to test the effects and behavioral changes triggered by a program that sends attendance, grade, and classroom behavior information to parents via weekly and monthly text messages. Our 18-month intervention raised average math GPA by 0.08 of a standard deviation and increased the share of students satisfying attendance requirements for grade promotion by 4.5 percentage points. Treatment effects were larger for students at higher risk of later grade retention and dropout. Leveraging existing school inputs for a light-touch, costeffective, and scalable information intervention can improve education outcomes in lower-income settings. |
| Keywords: | Education;Chile;Information experiment;Parent-School communication |
| JEL: | I25 N36 D8 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:11234&r=exp |
| By: | Alaoui, Larbi; Janezic, Katharina A.; Penta, Antonio |
| Abstract: | How coordination can be achieved in isolated, one-shot interactions without com- munication and in the absence of focal points is a long-standing question in game theory. We show that a cost-benefit approach to reasoning in strategic settings deliv- ers sharp theoretical predictions that address this central question. In particular, our model predicts that, for a large class of individual reasoning processes, coordination in some canonical games is more likely to arise when players perceive heterogeneity in their cognitive abilities, rather than homogeneity. In addition, and perhaps contrary to common perception, it is not necessarily the case that being of higher cognitive sophistication is beneficial to the agent: in some coordination games, the opposite is true. We show that subjects’ behavior in a laboratory experiment is consistent with the predictions of this model, and reject alternative coordination mechanisms. Overall, the empirical results strongly support our model. |
| Keywords: | coordination; cognitive cost; sophistication; strategic reasoning; value of reasoning |
| JEL: | C72 C91 C92 D80 |
| Date: | 2022–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:127599&r=exp |
| By: | IGEI Kengo; KUROKAWA Hirofumi; ISEKI Masato; KITSUKI Akinori; KURITA Kenichi; MANAGI Shunsuke; NAKAMURO Makiko; SAKANO Akira |
| Abstract: | We examined the effectiveness of nudge and boost in environmental education classes on students’ attitudes toward environmental issues and energy-saving behaviors. We randomly assigned the target of this study, students in 8 primary schools and 6 junior high schools, with four types of interventions: receiving only environmental education (the control group), education with either nudges (goal-setting of energy-saving actions) or boosts (playing a game with “the tragedy of the commons†setting) only, and education with both nudges and boosts. We confirmed that students subject to boosts significantly became more environmentally conscious in the game and set more goals in the nudge task. The follow-up survey one month after the intervention revealed that students who set more targets in the nudge and boost group showed higher energy-saving awareness and environmental attitudes and took more energy-saving actions and reduced water consumption at home. We also found that even three months after the intervention, students who set more goals in the nudge and boost group were more energy conscious and implemented more energy-saving actions, and reduced water consumption at home. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:22111&r=exp |
| By: | Kelishomi, Ali Moghaddasi (Loughborough University); Sgroi, Daniel (University of Warwick) |
| Abstract: | Iran has the world's only government-regulated kidney market. We report the results of the first field study of donor behaviour in this unusual market. Participants have lower risk tolerance and higher patience levels than the Iranian average but display no difference in rationality from population averages and there is evidence of altruism among participants. We provide an examination of decision-making in extreme situations by individuals in this market, typically at the very bottom of the income distribution, and shed light on the sort of people likely to participate if other nations were to operate such markets. |
| Keywords: | kidney donation, Iranian kidney market, risk, patience, rationality, altruism, generalized axiom of revealed preference, lab in the field |
| JEL: | I11 I12 I18 C93 D03 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15806&r=exp |
| By: | Toman Barsbai; Vojtěch Bartoš; Victoria Licuanan; Andreas Steinmayr; Erwin Tiongson; Dean Yang |
| Abstract: | International migrant workers are vulnerable to abuses by their employers. We implemented a randomized controlled trial of an intervention to reduce mistreatment of Filipino women working as domestic workers (DWs) by their household employers in Hong Kong and Saudi Arabia. The intervention – encouraging DWs to show their employers a photo of their family while providing a small gift when starting employment – caused DWs to experience less mistreatment, have higher satisfaction with the employer, and be more likely to stay with the employer. DWs’ families in the Philippines also come to view international labor migration more positively, while they generally remain unaware of the intervention. An online experiment with potential employers in Hong Kong and the Middle East suggests that a mechanism behind the treatment effect is a reduction in the employer’s perceived social distance from the employee. A simple intervention can thus help to protect migrant workers without requiring public policy changes in the destination country. |
| Keywords: | temporary labor migration, working conditions, contract enforcement, dictator game |
| JEL: | D9 J61 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2022-17&r=exp |
| By: | Blackman, Allen; Hoffmann, Bridget |
| Abstract: | Until a vaccine is widely available, face masks and other nonpharmaceutical interventions (NPIs) will continue to be the frontline defense against Covid-19 in developing countries. But their effectiveness depends critically on compliance by young adults, who are most likely both to become infected and to infect others. We conducted a randomized controlled trial in Bogotá, Colombia, to assess the effectiveness of informational nudges on university students concern about Covid-19, recent compliance with NPI recommendations, and intended future compliance. Although nudges boosted concern, they had limited effects on either recent or intended future compliance. We attribute these null results to high baseline levels of information about and compliance with NPIs an informational diminishing returns scenario that is likely to be increasingly common globally. Nudges were more effective at boosting recent compliance among participants who were politically left-wing, were relatively poor, and lived with more people. |
| Keywords: | behavioral economics;framing;Coronavirus;HEALTH BEHAVIOR;nonpharmaceutical intervention;randomized controlled trial |
| JEL: | D83 O10 I18 I1 I15 D8 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:11249&r=exp |
| By: | Marcel Preuss, Germán Reyes, Jason Somerville y Joy Wu (CEDLAS - IIE-UNLP) |
| Abstract: | We examine how people redistribute income when there is uncertainty about the role luck plays in determining opportunities and outcomes. We elicit redistribution decisions from a U.S.- 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. Our findings have implications for models that seek to understand and predict redistribution attitudes, and help to explain the gap between lab evidence on support for redistribution and U.S. inequality trends. |
| JEL: | C91 D63 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0309&r=exp |
| By: | Loerakker, Ben; Bault, Nadège (University of Plymouth); Hoyer, Maximilian; van Winden, Frans |
| Abstract: | The importance of prosocial behavior is currently widely acknowledged. This not only holds for the social sciences, including economics, but also the life sciences where this kind of behavior is observed across the evolutionary ladder. Evolutionary continuity consequently suggests that caring for others may be due to both strategic motivations, based on deliberation and reasoning, and more impulsive (affective) non-strategic motivations, in line with the two major mental systems distinguished by Kahneman (2011). This study estimates and applies a dynamic affective-ties model, allowing for strategic behavior, on a novel experimental data set to investigate four underexplored issues regarding public good environments. First, do negative (antagonistic) relationships as well as positive (cooperative) relationships develop in a public good game environment once equal space is given for their development? Second, do people react differently to the positive versus negative behavior of others in such an environment? Third, does the affective-ties model outperform other relevant models in a proper out-of-sample prediction horse race regarding the same game? Fourth, is this model helpful in explaining behavior across different contexts? Our results provide a clear yes to each of these four questions. Negative relationships do develop, but seem less stable than positive relationships in the long run; people appear to react more strongly to the positive compared to the negative behavior of others; our estimated (two parameter) model outperforms other models; and our model helps explain why and how people switch behavioral rules (like tit-for-tat) as the parameters of a repeated prisoner’s dilemma game change. |
| Date: | 2022–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:wur7c&r=exp |
| By: | Alicia von Schenk; Victor Klockmann; Jean-Fran\c{c}ois Bonnefon; Iyad Rahwan; Nils K\"obis |
| Abstract: | People are not very good at detecting lies, which may explain why they refrain from accusing others of lying, given the social costs attached to false accusations - both for the accuser and the accused. Here we consider how this social balance might be disrupted by the availability of lie-detection algorithms powered by Artificial Intelligence. Will people elect to use lie detection algorithms that perform better than humans, and if so, will they show less restraint in their accusations? We built a machine learning classifier whose accuracy (67\%) was significantly better than human accuracy (50\%) in a lie-detection task and conducted an incentivized lie-detection experiment in which we measured participants' propensity to use the algorithm, as well as the impact of that use on accusation rates. We find that the few people (33\%) who elect to use the algorithm drastically increase their accusation rates (from 25\% in the baseline condition up to 86% when the algorithm flags a statement as a lie). They make more false accusations (18pp increase), but at the same time, the probability of a lie remaining undetected is much lower in this group (36pp decrease). We consider individual motivations for using lie detection algorithms and the social implications of these algorithms. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2212.04277&r=exp |
| By: | Fehr, Dietmar; Kübler, Dorothea |
| Abstract: | We study the endowment effect and expectation-based reference points in the field leveraging the setup of the Socio-Economic Panel. Households receive a small item for taking part in the panel, and we randomly assign respondents either a towel or a notebook, which they can exchange at the end of the interview. We observe a trading rate of 32 percent, consistent with an endowment effect, but no relationship with loss aversion. Manipulating expectations of the exchange opportunity, we find no support for expectation-based reference points. However, trading predicts residential mobility and is related to stock-market participation, i.e., economic decisions that entail parting with existing resources. |
| Keywords: | exchange asymmetry, reference-dependent preferences, loss aversion, fieldexperiment, SOEP |
| JEL: | C93 D84 D91 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbmbh:spii2022204&r=exp |
| By: | Monica Martinez-Bravo (CEMFI, Centro de Estudios Monetarios y Financieros); Carlos Sanz (Banco de España) |
| Abstract: | The COVID-19 pandemic took place against the backdrop of growing political polarization and distrust in political institutions in many countries. Furthermore, most governments fell short of expectations regarding preparedness and quality in the management of the pandemic. Did deficiencies in government performance further erode trust in public institutions? Did citizens’ ideology interfere on the way they processed information on their government performance? To investigate both questions, we conducted a pre-registered online experiment in Spain in November 2020. Respondents in the treatment group were provided information on the number of contact tracers in their region, a key policy under the control of regional governments. We find that individuals greatly over-estimate the number of contact tracers in their region. When we provide the actual number of contact tracers, we find: a decline in trust in governments; a reduction on willingness to fund public institutions; and a decrease in COVID-19 vaccine acceptance. We also find that individuals endogenously change their attribution of responsibilities when receiving the treatment. In regions where the regional and central governments are ruled by different parties, sympathizers of the regional incumbent react to the negative news on performance by attributing greater responsibility for it to the central government. We call this the blame shifting effect. In those regions, the negative information does not translate into lower voting intentions for the regional incumbent government. These results suggest that the exercise of political accountability may be particularly difficult in settings with high political polarization and where areas of responsibility are not clearly delineated. |
| Keywords: | Trust, accountability, polarization, COVID-19. |
| JEL: | P00 D72 H1 H7 |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2022_2207&r=exp |
| By: | Keigo Inukai; Yuta Shimodaira; Kohei Shiozawa |
| Abstract: | In previous work, we proposed a method to address mathematical inconvenience by extending the constant elasticity of substitution (CES) utility function in Inukai, Shimodaira, and Shiozawa (2022, ISER DP No.1195). However, the relationships between the extended CES parameters and the external measurements are yet unrevealed. To explore these empirical properties of the extended CES utility function, in this paper we construct an online experiment of Amazon Mechanical Turk workers using a modified dictator game, a public goods game, and a questionnaire. We then compare the parameters of the utility function according to the modified dictator game to behavior in the public goods game and the responses to the questionnaire. This provides evidence that the distribution parameter of the extended CES utility function measures the preference for equality or selfishness. However, we do not find any positive evidence that the substitution parameter measures the preference for efficiency. |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1199&r=exp |
| By: | Thomas Graeber; Christopher Roth; Florian Zimmermann; Thomas W. Graeber |
| Abstract: | For most decisions, we rely on information encountered over the course of days, months or years. We consume this information in various forms, including abstract summaries of multiple data points – statistics – and contextualized anecdotes about individual instances – stories. This paper proposes that we do not always have access to the full wealth of our accumulated information, and that the information type – story versus statistic – is a central determinant of selective memory. In controlled experiments we show that the effect of information on beliefs decays rapidly and exhibits a pronounced story-statistic gap: the average impact of stories on beliefs fades by 33% over the course of a day, but by 73% for statistics. Consistent with a model of similarity and interference in memory, prompting contextual associations with statistics improves recall. A series of mechanism experiments highlights that the lower similarity of stories to interfering information is the key driving force behind the story-statistic gap. |
| Keywords: | memory, belief formation, stories, narratives, statistical information |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10107&r=exp |
| By: | Christine Merk; Gernot Wagner |
| Abstract: | ‘Moral hazard’ links geoengineering to mitigation via the fear that either solar geoengineering (solar radiation management, SRM) or carbon dioxide removal (CDR) might crowd out the desire to cut emissions. We test moral hazard versus its inverse in the first large-scale, revealed-preference experiments (n~340,000) and find that only extreme political messages lead to either outcome for some. Our results indicate the importance of actors and reasoned narratives of geoengineering to help guide public discourse. |
| Keywords: | climate change, geoengineering, moral hazard, revealed preference |
| JEL: | Q54 Q58 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10104&r=exp |
| By: | Martínez Villarreal, Déborah; Parilli, Cristina; Rojas Méndez, Ana María; Scartascini, Carlos; Simpser, Alberto |
| Abstract: | Diagnostic and contact tracing apps are an important weapon against contagion during a pandemic. We study how the content of the messages used to promote the apps influences adoption by conducting a survey experiment on approximately 23,000 Mexican adults. Respondents were randomly assigned to one of three different prompts, or a control condition, before stating their willingness to adopt a diagnostic app and contact-tracing app. The prompt emphasizing government efforts to ensure data privacy, which has been one of the most common strategies, reduced willingness to adopt the diagnostic app by about 4 percentage points and the contact tracing app by 3 percentage points. An effective app promotion policy must understand individuals' reservations and be wary of unintended reactions to naive reassurances. |
| Keywords: | data privacy;COVID19;Priming;contact tracing apps;Diagnostic apps;Take-up |
| JEL: | I12 D91 D62 D90 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:11121&r=exp |
| By: | Yann Algan (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, HEC Paris - Ecole des Hautes Etudes Commerciales); Elizabeth Beasley (CEPREMAP - Centre pour la recherche économique et ses applications - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres); Sylvana Côté (UdeM - Université de Montréal); Jungwee Park (Statistics Canada); Richard E Tremblay (UCD - University College Dublin [Dublin], UdeM - Université de Montréal); Frank Vitaro (UdeM - Université de Montréal) |
| Abstract: | A childhood intervention to improve the social skills and self-control of at-risk kindergarten boys in the 1980s had positive impacts over the life course: higher trust and self-control as adolescents; increased social group membership, education, and reduced criminality as young adults; and increased marriage and employment as adults. Using administrative data, we find this intervention increased average yearly employment income by about 20 percent and decreased average yearly social transfers by almost 40 percent. We estimate that $1 invested in this program around age 8 yields about $11 in benefits by age 39, with an internal rate of return of around 17 percent. |
| Date: | 2022–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03887405&r=exp |
| By: | Shroff, Ravi; Vamvourellis, Konstantinos |
| Abstract: | Field studies in many domains have found evidence of decision fatigue, a phenomenon describing how decision quality can be impaired by the act of making previous decisions. Debate remains, however, over posited psychological mechanisms underlying decision fatigue, and the size of effects in high-stakes settings. We examine an extensive set of pretrial arraignments in a large, urban court system to investigate how judicial release and bail decisions are influenced by the time an arraignment oc-curs. We find that release rates decline modestly in the hours before lunch and before dinner, and these declines persist after statistically adjusting for an extensive set of ob-served covariates. However, we find no evidence that arraignment time affects pretrial release rates in the remainder of each decision-making session. Moreover, we find that release rates remain unchanged after a meal break even though judges have the opportunity to replenish their mental and physical resources by resting and eating. In a complementary analysis, we find that the rate at which judges concur with prosecutorial bail requests does not appear to be influenced by either arraignment time or a meal break. Taken together, our results imply that to the extent that decision fatigue plays a role in pretrial release judgments, effects are small and inconsistent with previous explanations implicating psychological depletion processes. |
| Keywords: | decision fatigue; judicial decision making; mental depletion; pretrial detention |
| JEL: | C1 |
| Date: | 2022–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117579&r=exp |
| By: | Chemin, Matthieu; Chen, Daniel L.; Di Maro, Vincenzo; Kimalu, Paul; Mokaya, Momanyi; Ramos-Maqueda, Manuel |
| Abstract: | Can data science be used to improve the functioning of courts, and unlock the positive effects of institutions on economic development? In a nationwide randomized experiment in Kenya, we use algorithms to identify the greatest sources of court delay for each court and recommend actions. We randomly assign courts to receive no information, information, or an information and accountability intervention. Information and accountability reduces case duration by 22%. We find an effect on contracting behaviour, with more written labor contracts being signed by firms, and an effect on wage, since jobs with written labor contracts pay more. These results demonstrate a causal relationship between judicial institutions and development outcomes. |
| Date: | 2022–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:127593&r=exp |
| By: | Busso, Matías; Frisancho, Verónica |
| Abstract: | This study examines the gendered effects of early and sustained exposure to high-performing peers on female educational trajectories. Exploiting random allocation to classrooms within middle schools, we measure the effect of male and female high performers on girls' high school placement outcomes. We disentangle two channels through which peers of either sex can play a role: academic performance and school preferences. We also focus on the effects of peers along the distribution of baseline academic performance. Exposure to good peers of either sex reduces the degree to which high-achieving girls seek placement in more-selective schools. High-achieving boys have particularly strong, negative effects on high-performing girls' admission scores and preferences for more-selective schools. By contrast, high-achieving girls improve low-performing girls' placement outcomes, but exclusively through a positive effect on exam scores. |
| Keywords: | gender;Mexico;secondary education;Peer effects;High achievers |
| JEL: | I24 I21 J16 J24 C93 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:11220&r=exp |
| By: | Yulin Hswen (UC San Francisco - University of California [San Francisco] - UC - University of California, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Ulrich Nguemdjo (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, LPED - Laboratoire Population-Environnement-Développement - IRD - Institut de Recherche pour le Développement - AMU - Aix Marseille Université); Elad Yom-Tov (Microsoft Research Israel); Gregory Marcus (UC San Francisco - University of California [San Francisco] - UC - University of California); Bruno Ventelou (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, ORS PACA) |
| Abstract: | This study aims to evaluate people's willingness to provide their geospatial global positioning system (GPS) data from their smartphones during the COVID-19 pandemic. Based on the self-determination theory, the addition of monetary incentives to encourage data provision may have an adverse effect on spontaneous donation. Therefore, we tested if a crowding-out effect exists between financial and altruistic motivations. Participants were randomized to different frames of motivational messages regarding the provision of their GPS data based on (1) self-interest, (2) pro-social benefit, and (3) monetary compensation. We also sought to examine the use of a negative versus positive valence in the framing of the different armed messages. 1055 participants were recruited from 41 countries with a mean age of 34 years on Amazon Mechanical Turk (MTurk), an online crowdsourcing platform. Participants living in India or in Brazil were more willing to provide their GPS data compared to those living in the United States. No significant differences were seen between positive and negative valence framing messages. Monetary incentives of $5 significantly increased participants' willingness to provide GPS data. Half of the participants in the self-interest and pro-social arms agreed to provide their GPS data and almost two-thirds of participants were willing to provide their data in exchange for $5. If participants refused the first framing proposal, they were followed up with a "Vickrey auction" (a sealed-bid second-priced auction, SPSBA). An average of $17 bid was accepted in the self-interest condition to provide their GPS data, and the average "bid" of $21 was for the pro-social benefit experimental condition. These results revealed that a crowding-out effect between intrinsic and extrinsic motivations did not take place in our sample of internet users. Framing and incentivization can be used in combination to influence the acquisition of private GPS smartphone data. Financial incentives can increase data provision to a greater degree with no losses on these intrinsic motivations, to fight the COVID-19 pandemic. |
| Keywords: | Economics,Science,technology and society,Sociology |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03798844&r=exp |
| By: | Keefer, Philip; Perilla, Sergio; Vlaicu, Razvan |
| Abstract: | This paper examines new data on public sector employees from 18 Latin American countries to shed light on the role of trust in the performance of government agencies. We developed an original survey taken during the first COVID-19 wave that includes randomized experiments with pandemic-related treatments. We document that individual-level trust in coworkers, other public employees, and citizens is positively related to performance-enhancing behaviors, such as cooperation and information-sharing, and policy attitudes, such as openness to technological innovations in public service delivery. Trust is more strongly linked to positive behaviors and attitudes in non-merit-based civil service systems. High-trust and low-trust respondents report different assessments of their main work constraints. Also, they draw different inferences and prefer different policy responses when exposed to data-based framing treatments about social distancing outcomes in their countries. Low-trust public employees are more likely to assign responsibility for a negative outcome to the government and to prefer stricter enforcement of social distancing. |
| Keywords: | Trust;public sector;pandemic;Cooperation;Policy attitudes;Surveyexperiments |
| JEL: | D73 H83 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:11252&r=exp |
| By: | Ebun Akinsete (ICRE8); Alina Velias; Phoebe Koundouri |
| Abstract: | The ultimate goal of water resource management is the efficient allocation of increasingly scarce water resources. One of the most crucial and often obscure aspects of water resource management pertains to the behavioural particularities of the societal relationship with water; how people value the resource, how utility companies price the resource, and how policy makers derive financial instruments to address social dilemmas associated with common pool resources and public goods. This chapter explores the use of two complimentary approaches to derive both quantitative and qualitative data within an iterative process to provide evidence-based decision support in the sustainable management of water resources. Within this integrated approach, participatory Living Labs use small focus group settings to collect qualitative data about key phenomena. This qualitative evidence provides foundation for theoretical models that produce testable suggestions for economic experiments. The economic and behavioural experiments focus on gathering quantitative data to test a prediction, subsequently raising further questions - such as heterogeneity of behaviour, causal relationships between factors - that can be explored deeper by living labs qualitative angle. The Living Labs and Experimental Economics approaches have an iterative relationship, examples of which will be highlighted in this article. |
| Keywords: | Water, Living Labs, Experimental Economics, Stakeholder Engagement, Participatory Approaches |
| Date: | 2023–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:2301&r=exp |
| By: | Valérie De Cock; Pinar Celik; Claudia Toma |
| Abstract: | While many organizations communicate publicly about their commitment to diversity and inclusion (D&I), progress in the domain remains slow. In two studies we investigated how workers are impacted by situations in which their organization talks about D&I without making any significant progress in the domain. Study 1 (N=437) used a 2 (diversity talk: present, absent) X 2 (diversity progress: present, absent) experimental design in which participants reacted to a hypothetical situation, while Study 2 (N=240) was a correlational study in which respondents were reporting about their own organization. The results show that diversity progress, and not diversity talk, consistently affects workers’ company image (perceived corporate hypocrisy) and their work experiences (sense of inclusion, organizational commitment, person-organization fit, negative affect). Moreover, further analyses showed that the impact of diversity progress on the experiences of workers is explained by their levels of perceived corporate hypocrisy. Interestingly, these findings suggest that in a context in which information about diversity talk and diversity progress is present workers disregard diversity talk and primarily care about diversity progress in their organization. Our findings are discussed considering existing theoretical frameworks and potential practical implications are debated. |
| Keywords: | diversity talk; diversity progress; worker perceptions; perceived corporate hypocrisy; work experiences |
| Date: | 2022–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/352282&r=exp |
| By: | Hyoji Kwon (Graduate School of Ecoomics, Waseda University); Yukihiko Funaki (School of Political Science and Economics, Waseda University) |
| Abstract: | The purpose of our study is to verify the argument of Cappelen et al. (2007) that insists on the pluralism of fairness ideals. Their experiments are based on the dictator game with production, and they suggest that three fairness ideals exist: strict egalitarianism, libertarianism, and liberal egalitarianism. However, because of the characteristics of the dictator game, the egoistic behavior of taking all of the endowments is a reasonable decision and cannot be ignored. In this paper, we show by estimation of modified models that strict egalitarians do not exist but that egoists do. We assume that people who follow different fairness ideals also place different weights on fairness, and we separate the weight parameter by the three fairness ideals. Especially in the case of strict egalitarianism, the estimated value of the weight parameter indicates that strict egalitarians behave like egoists who take all of the total product. This result implies that people rarely follow the strict egalitarian ideal under this kind of dictator game with a production phase and, instead, a high proportion of egoists take the total product without considering any fairness ideals. |
| Keywords: | Fairness; Distributional Preferences; Dictator game |
| JEL: | C91 D63 D91 |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:wap:wpaper:2206&r=exp |
| By: | Bauer, Kevin; Nofer, Michael; Abdel-Karim, Benjamin M.; Hinz, Oliver |
| Abstract: | Advances in Machine Learning (ML) led organizations to increasingly implement predictive decision aids intended to improve employees' decision-making performance. While such systems improve organizational efficiency in many contexts, they might be a double-edged sword when there is the danger of a system discontinuance. Following cognitive theories, the provision of ML-based predictions can adversely affect the development of decision-making skills that come to light when people lose access to the system. The purpose of this study is to put this assertion to the test. Using a novel experiment specifically tailored to deal with organizational obstacles and endogeneity concerns, we show that the initial provision of ML decision aids can latently prevent the development of decision-making skills which later becomes apparent when the system gets discontinued. We also find that the degree to which individuals "blindly" trust observed predictions determines the ultimate performance drop in the post-discontinuance phase. Our results suggest that making it clear to people that ML decision aids are imperfect can have its benefits especially if there is a reasonable danger of (temporary) system discontinuances. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:safewp:370&r=exp |
| By: | Clément de Chaisemartin (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | I consider estimation of the average treatment effect (ATE), in a population composed of G groups, when one has unbiased and uncorrelated estimators of each group's conditional average treatment effect (CATE). These conditions are met in stratified randomized experiments. I assume that the outcome is homoscedastic, and that each CATE is bounded in absolute value by B standard deviations of the outcome, for some known B. I derive, across all linear combinations of the CATEs' estimators, the estimator of the ATE with the lowest worst-case mean-squared error. This minimax-linear estimator assigns a weight equal to group g's share in the population to the most precisely estimated CATEs, and a weight proportional to one over the estimator's variance to the least precisely estimated CATEs. I also derive the minimax-linear estimator when the CATEs' estimators are positively correlated, a condition that may be met by differences-indifferences estimators in staggered adoption designs. |
| Keywords: | Bias-variance trade-off, Average treatment effect, Mean-squared error, Minimaxlinear estimator, Bounded normal mean model, Stratified randomized experiments, Differencesin-differences, Staggered adoption designs, Shrinkage |
| Date: | 2022–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03873919&r=exp |
| By: | Bremer, Björn (Max Planck Institute for the Study of Societies); Bürgisser, Reto (University of Zurich) |
| Abstract: | It is commonly assumed that voters favor lower taxes, which undermines the ability of governments to raise revenues. How does the demand for lower taxes change when it involves fiscal trade-offs? Who supports tax cuts at all costs? We use a survey experiment conducted in four European countries (Germany, Italy, Spain, and the UK) to answer these questions, studying preferences on income taxes, value added taxes (VAT), and top income taxes. The results show that support for income tax and VAT cuts drops profoundly when it implies lower government spending or higher government debt. Lower top income taxes are always unpopular. Both interest and ideology influence preferences, but for cross-pressured people, ideology dominates: high-income voters that are left-wing oppose tax cuts. The results are important because they suggest that a progressive coalition against lower taxes – including low-income voters and the high-income left – is possible. |
| Date: | 2022–12–27 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:e6ds9&r=exp |
| By: | Rana Hendy (American University in Cairo); Shaimaa Yassin (Institute for Research on Public Policy, Canada) |
| Abstract: | Boosting low levels of female labor force participation remains a challenge in the MENA region. Women, especially after marriage and childbirth, typically forgo the labor market (LM), particularly when jobs/job offers are non-family-friendly. Especially for females, a job is perceived as a combined package of wages and non-monetary attributed. This paper relies on an attributebased discrete choice experiment using hypothetical job offers, as opposed to the employment situation pre and post the outbreak of the Coronavirus. The objective is to estimate the willingness to pay (WTP) distribution for non-monetary job attributes. An experiment was administered within a COVID-19 impact survey in Egypt (namely CETUS20) - 5 months into the outbreak of the pandemic, making it possible to measure the change in job preferences following the COVID19 health shock. The hypothetical choice method robustly identifies preferences, and overcomes challenges to estimate WTP for specific non-monetary job attributes using other methods. Our findings reveal that COVID-19 has led workers to value more positive job amenities, such as parttime jobs, flexible work, work from home and shorter commutes. With the increased burden of domestic work, females with children value the most jobs where they can work on a part-time basis. They would require to receive substantial increases to their current labor income to accept jobs with a non-family friendly set-up, such as the need to work in weekends or night-shifts. Interestingly, however, respondents in the experiment, particularly male workers, have perceived overtime as a positive job amenity. Their WTP for the latter increased post-COVID suggesting income challenges faced by workers post-COVID. Generally, a substantial proportion of our experiment's employed respondents accept the hypothetical job offers they receive during the interview (about 40% of the males and 70% of the females). More than 50% of those who accepted those offers would have never accepted them prior to COVID. Our results reveal the change in the value of employment to workers, particularly females, which comprises both the wage and the non-monetary attributes associated with employment |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1575&r=exp |