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on Experimental Economics |
| By: | Ginzburg, Boris; Guerra, José-Alberto Guerra |
| Abstract: | We study the role of collective action in creating shared identity and shaping subsequent social interactions. In a laboratory experiment, we offer subjects to sign an online petition, or ask whether they had participated in recent street protests. Afterwards, subjects interact in games that measure prosocial preferences. We find more altruism, trust, and trustworthiness within a pair of subjects who participated in collective action than in any other pair. Our structural estimation recovers individual prosocial preferences, showing that they increase as a result of joint participation. We then show that participating individuals receive private payoffs in subsequent interactions with fellow participants. Because of this, expecting higher participation by peers makes an individual more likely to participate. This mechanism suggests a reason why citizens participate in political collective action, and helps explain the role of coordination and signalling. |
| Keywords: | political identity, collective action, petitions, protests, social preferences, laboratory experiment |
| JEL: | C91 D72 D74 |
| Date: | 2022–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117140&r=exp |
| By: | Giuseppe Attanasi (Université Côte d'Azur, France; GREDEG CNRS); Michela Chessa (Université Côte d'Azur, France; GREDEG CNRS); Sara Gil Gallen (Università degli studi di Bari "Aldo Moro", Italy); Elena Manzoni (University of Bergamo) |
| Abstract: | We investigate theoretically and experimentally the performance of a bargaining-overstrategies protocol with confirmed proposals, with either symmetric (i.e., alternating among the two players) or asymmetric power of confirmation (i.e., assigned to one of the two players alone). We apply it both to a Bertrand duopoly market, in which competition is on prices, and to a Cournot duopoly market, in which players compete on the amount of output they produce. We characterize the set of subgame perfect equilibrium outcomes of the bargaining game with confirmed proposals for each of the four combinations of confirmation power and market game, and formulate theory-driven hypotheses based on these different characterizations. Our experimental results show that bargaining over strategies of price- or quantity-setting (i) acts as a communication device in competitive environments, (ii) increases the level of collusion, and (iii) reduces the bargaining length. In particular, we report experimental evidence of overall better performance of a Bertrand duopoly market in reaching an equitable, welfare-maximizing, and Pareto-efficient agreement. However, competing in price rather than in quantity setting reduces the bargaining length only under asymmetric power of confirmation, while under symmetric power price-setting only has a second-order effect on reducing the bargaining length. We complement the data analysis with a qualitative analysis of the sequence of players' declared strategies as communication devices. |
| Keywords: | Bargaining, Tacit collusion, Experiments, Bertrand duopoly, Cournot duopoly |
| JEL: | C72 C91 |
| Date: | 2022–07 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2022-18&r=exp |
| By: | Ginzburg, Boris; Guerra, José-Alberto; Lekfuangfu, Warn N. |
| Abstract: | Using a laboratory experiment, we study the incentives of individuals to contribute to a public good that is provided if and only if the fraction of contributors reaches a certain threshold. We jointly vary the size of the group, the cost of contributing, the required threshold, and the framing of contributions (giving to the common pool, or not taking from the common pool). We find that a higher threshold makes individuals more likely to contribute. The effect is strong enough that in a small group, making the required threshold higher increases the probability that the public good is provided. In larger groups, however, the effect disappears. At the same time, we do not find a consistent effect of framing on the probability of contributing or on the likelihood of success. |
| Keywords: | threshold public goods, critical mass, framing effect, laboratory experiment |
| JEL: | C92 D71 H41 |
| Date: | 2023–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:117139&r=exp |
| By: | John Duffy; Janet Hua Jiang; Huan Xie |
| Abstract: | We study indefinitely lived assets in experimental markets and find that the traded prices of these assets are, on average, about 40% of the risk-neutral fundamental value. Neither uncertainty about the value of total dividend payments nor horizon uncertainty about the duration of trade can account for this low traded price. An Epstein and Zin (1989) recursive preference specification that models the dynamic realization of dividend payments and incorporates risk preferences can rationalize the low traded price observed in our indefinitely lived asset market. |
| Keywords: | Asset pricing; Financial markets |
| JEL: | C92 D81 G12 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:23-25&r=exp |
| By: | Henning Hermes; Philipp Lergetporer; Fabian Mierisch; Frauke Peter; Simon Wiederhold |
| Abstract: | We provide the first causal evidence of discrimination against migrants seeking child care. We send emails from fictitious parents to > 18, 000 early child care centers across Germany, asking if there is a slot available and how to apply. Randomly varying names to signal migration background, we find that migrants receive 4.4 percentage points fewer responses. Responses to migrants also contain substantially fewer slot offers, are shorter, and less encouraging. Exploring channels, discrimination against migrants does not differ by the perceived educational background of the email sender. However, it does differ by regional characteristics, being stronger in areas with lower shares of migrants in child care, higher right-wing vote shares, and lower financial resources. Discrimination on the child care market likely perpetuates existing inequalities of opportunities for disadvantaged children. |
| Keywords: | child care, discrimination, information provision, inequality, field experiment |
| JEL: | J13 J18 J22 C93 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10368&r=exp |
| By: | Hermes, Henning (Düsseldorf Institute for Competition Economics (DICE)); Lergetporer, Philipp (Ifo Institute for Economic Research); Mierisch, Fabian (Catholic University of Eichstätt-Ingolstadt); Peter, Frauke (DZHW-German Centre for Research on Higher Education and Science Studies); Wiederhold, Simon (IWH Halle) |
| Abstract: | We provide the first causal evidence of discrimination against migrants seeking child care. We send emails from fictitious parents to > 18, 000 early child care centers across Germany, asking if there is a slot available and how to apply. Randomly varying names to signal migration background, we find that migrants receive 4.4 percentage points fewer responses. Responses to migrants also contain substantially fewer slot offers, are shorter, and less encouraging. Exploring channels, discrimination against migrants does not differ by the perceived educational background of the email sender. However, it does differ by regional characteristics, being stronger in areas with lower shares of migrants in child care, higher right-wing vote shares, and lower financial resources. Discrimination on the child care market likely perpetuates existing inequalities of opportunities for disadvantaged children. |
| Keywords: | child care, discrimination, information provision, inequality, field experiment |
| JEL: | J13 J18 J22 C93 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16082&r=exp |
| By: | Katrin Gödker; Terrance Odean; Paul Smeets |
| Abstract: | We show that the disposition effect–the tendency of investors to hold losers and sell winners–can be a source of overconfidence. We find experimental evidence that individuals update beliefs about their own investment ability based on realized gains and losses rather than the overall performance of their portfolio. We also find supporting field evidence. Dutch retail investors who realized more gains than losses believe they have higher portfolio performance relative to other investors, even after controlling for their actual portfolio performance. We develop a formal model demonstrating how the disposition effect leads to overconfidence and examine model implications for investors’ trading behavior and expected profit. |
| Keywords: | investor beliefs, disposition effect, overconfidence, experimental finance |
| JEL: | D01 G40 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10357&r=exp |
| By: | Palaash Bhargava (Max Planck Institute for Research on Collective Goods, Bonn); Daniel L. Chen (Max Planck Institute for Research on Collective Goods, Bonn); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn); Camille Terrier (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | Social networks are a key factor of success in life, but they are also strongly segmented on gender, ethnicity, and other demographic characteristics (Jackson, 2010). We present novel evidence on an understudied source of homophily: behavioral traits. Behavioral traits are important determinants of life outcomes. While recent work has focused on how these traits are influenced by the family environment, or how they can be affected by childhood interventions, little is known about how these traits are related to social networks. Based on unique data collected using incentivized experiments on more than 2, 500 French high-school students, we find high levels of homophily across all ten behavioral traits that we study. Notably, the extent of homophily depends on similarities in demographic characteristics, in particular with respect to gender. Furthermore, the larger the number of behavioral traits that students share, the higher the overall homophily. Using network econometrics, we show that the observed homophily is not only an outcome of endogenous network formation, but is also a result of friends influencing each others’ behavioral traits. Importantly, the transmission of traits is larger when students share demographic characteristics, such as gender, have longer periods of friendship, or are friends with more popular individuals. |
| Keywords: | Homophily, social networks, behavioral traits, peer effects, experiments |
| JEL: | D85 C91 D01 D90 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2023_02&r=exp |
| By: | Jana Freundt; Holger Herz; Leander Kopp |
| Abstract: | Personal autonomy has been argued to be fundamental to well-being and is often discussed as an important driver of economic and political behavior. Yet, preferences for autonomy are not well understood, because their identification requires the separation of instrumental value attached to autonomous choice. We propose a novel elicitation method that solves this identification challenge. We establish the existence of intrinsic preferences for choice autonomy and show substantial heterogeneity in a large online sample. We further study their antecedents by relating them to existing personality scales and socioeconomic characteristics. Finally, we test their association with other preferences, attitudes and beliefs. |
| Keywords: | autonomy, preference measurement, experiment |
| JEL: | D01 D90 C91 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10342&r=exp |
| By: | Sergio Beraldo (Università di Napoli Federico II, IREF and CSEF); Enrico Colombatto (University of Turin and IREF) |
| Abstract: | We designed a Survey Experiment (SE) to study the attitudes of the Italians towards wealth, income and consumptions taxes. In particular, we interviewed a sample of 2, 400 subjects drawn from a larger representative pool of 120, 000 individuals. Beside collecting information about individuals’ values and beliefs, the survey also gathered information about (i) the preferred tax base, (ii) the attitudes towards replacing all the taxes with a unique tax, possibly on wealth, (iii) the views in regard to proposals to increase public expenditure by resorting to taxes of various kind and in different scenarios. We find that wealth taxes are definitely preferred to consumption taxes and that this preference is at par with income taxation. Wealth taxes are justified by the fact that they reflect one’s ability to pay. Opposition emerges when it is feared that wealth taxes end up increasing tax pressure and when the value of the main residence is included in the tax base. Political inclinations play a minor role. |
| Keywords: | Wealth taxes; Survey Experiment. |
| JEL: | D31 H24 |
| Date: | 2023–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:671&r=exp |
| By: | Guillermo Cruces (University of Nottingham); Dario Tortarolo (Institute for Fiscal Studies); Gonzalo Vazquez-Bare (UC Santa Barbara) |
| Date: | 2022–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:22/32&r=exp |
| By: | David McKenzie (Development Economics Research Group, World Bank); Dean Yang (Department of Economics, University of Michigan) |
| Abstract: | Many research and policy questions surrounding migration are causal questions. We want to know what causes people to migrate, and what the consequences of migration are for the migrants, their families, and their communities. However, answering these questions requires dealing with the self-selection inherent in migration choices. Field and natural experiments offer methodological approaches that enable answering these causal questions. We discuss the key conceptual and logistical issues that face applied researchers when applying these methods to the study of migration, as well as providing guidance for practitioners and policymakers in assessing the credibility of causal claims. For randomized experiments, this includes providing a framework for thinking through what can be randomized; discussing key measurement and design issues that arise from issues such as migration being a rare event, and in measuring welfare changes when people change locations; as well as discussing ethical issues that can arise. We then outline what makes for a good natural experiment in the context of migration and discuss the implications of recent econometric work for the use of difference-in-differences, instrumental variables (and especially shift-share instruments), and regression discontinuity methods in migration research. A key lesson from this recent work is that it is not meaningful to talk about “the†impact of migration, but rather impacts are likely to be heterogeneous, affecting both the validity and interpretation of causal estimates. |
| Keywords: | Experimental Methods, Difference-in-Differences, Instrumental Variables, Regression Discontinuity, Natural Experiment, Migration |
| JEL: | F22 J61 O15 C93 C23 C26 |
| Date: | 2022–11 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2226&r=exp |
| By: | Jha, Saumitra (Stanford U); Shayo, Moses (Hebrew U of Jerusalem and King's College, London); Weiss, Chagai M. (Stanford U) |
| Abstract: | Generalized trust is essential for supporting the functioning of modern soci- eties, yet many countries experience limited trust. Given the social, economic, and political benefits of trust, it is crucial to understand how to increase gen- eralized trust, especially in polarized societies. We argue that exposure to op- portunities to trade in broad financial markets can increase generalized trust because it exposes investors to shared risks and returns that highlight the bene- fits of large-scale economic cooperation. Reporting results from a randomized controlled trial in which we encouraged Israelis to trade stocks for up to seven weeks, we show that participation in financial markets increased generalized trust by 5.9pp. This effect is more salient among political partisans and male respondents. Moreover, the effect is stronger among successful investors and robust to negative price changes. Our findings highlight the promise of finan- cial innovations in facilitating trust in polarized societies. |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:4083&r=exp |
| By: | Michael W. Walker; Alice H. Huang; Suleiman Asman; Sarah J. Baird; Lia Fernald; Joan Hamory Hicks; Fernando Hoces de la Guardia; Satoshi Koiso; Michael Kremer; Matthew N. Krupoff; Michelle Layvant; Eric Ochieng; Pooja Suri; Edward Miguel |
| Abstract: | We assess the impacts of a randomized school-based deworming intervention in Kenya on the mortality of recipients’ children using a 23-year longitudinal data set of over 6, 500 original participants and their offspring. The under-5 mortality rate fell by 22% (17 deaths per 1000 live births) for children of treatment group individuals. We find that a combination of improved health, education and living standards, increased urban residence, delayed fertility, and greater use of health care in the parent generation contributed to the reduction. The results provide evidence for meaningful intergenerational benefits of child health investments. |
| JEL: | H51 I15 I25 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31162&r=exp |
| By: | Pacchiano, Aldo (Microsoft Research NYC); Wulsin, Drausin (Immunai); Barton, Robert A. (Immunai); Voloch, Luis |
| Abstract: | The problem of how to genetically modify cells in order to maximize a certain cellular phenotype has taken center stage in drug development over the last few years (with, for example, genetically edited CAR-T, CAR-NK, and CAR-NKT cells entering cancer clinical trials). Exhausting the search space for all possible genetic edits (perturbations) or combinations thereof is infeasible due to cost and experimental limitations. This work provides a theoretically sound framework for iteratively exploring the space of perturbations in pooled batches in order to maximize a target phenotype under an experimental budget. Inspired by this application domain, we study the problem of batch query bandit optimization and introduce the Optimistic Arm Elimination (OAE) principle designed to find an almost optimal arm under different functional relationships between the queries (arms) and the outputs (rewards). We analyze the convergence properties of OAE by relating it to the Eluder dimension of the algorithm’s function class and validate that OAE outperforms other strategies in finding optimal actions in experiments on simulated problems, public datasets well-studied in bandit contexts, and in genetic perturbation datasets when the regression model is a deep neural network. OAE also outperforms the benchmark algorithms in 3 of 4 datasets in the GeneDisco experimental planning challenge. |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:4087&r=exp |
| By: | Caliendo, Marco (University of Potsdam); Cobb-Clark, Deborah A. (University of Sydney); Silva Goncalves, Juliana (University of Sydney); Uhlendorff, Arne (CREST) |
| Abstract: | We conduct a laboratory experiment to study how locus of control operates through people's preferences and beliefs to influence their decisions. Using the principal-agent setting of the delegation game, we test four key channels that conceptually link locus of control to decision- making: (i) preference for agency; (ii) optimism and (iii) confidence regarding the return to effort; and (iv) illusion of control. Knowing the return and cost of stated effort, principals either retain or delegate the right to make an investment decision that generates payoffs for themselves and their agents. Extending the game to the context in which the return to stated effort is unknown allows us to explicitly study the relationship between locus of control and beliefs about the return to effort. We find that internal locus of control is linked to the preference for agency, an effect that is driven by women. We find no evidence that locus of control influences optimism and confidence about the return to stated effort, or that it operates through an illusion of control. |
| Keywords: | locus of control, preference for agency, decision-making, beliefs, optimism, confidence, illusion of control |
| JEL: | D83 D87 D91 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16061&r=exp |
| By: | Dario Tortarolo (Institute for Fiscal Studies); Guillermo Cruces (University of Nottingham and CEDLAS-UNLP); Gonzalo Vazquez-Bare (University of California, Santa Barbara) |
| Date: | 2023–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:23/17&r=exp |
| By: | Tom Lane (University of Nottingham) |
| Abstract: | The importance of social identities (e.g. race, gender, political ideology) in economic interactions is well established, but little is known about how people strategically manipulate the visibility or salience of their multiple identity types. This paper experimentally explores a common type of situation in which one party can choose between different identity characteristics to truthfully reveal about oneself before entering an economic exchange. Results demonstrate the choice this party makes has substantial potential to influence their payoff: individuals can increase earnings by around 22% by selecting the characteristic most favoured by their counterpart, relative to choosing randomly. Anticipating discriminatory treatment, individuals make strategic choices over which characteristic to reveal, and benefit from a broadly accurate understanding of which dimensions of social identity counterparts will more strongly discriminate along. However, they only reap a fraction of the potential returns from strategic social identity revelation, partly because beliefs about counterparts’ likely behaviour are saddled with misperceptions (for instance, overestimating likely in-group favouritism). Approximately half of individuals display willingness to sacrifice expected payoffs in exchange for making their preferred characteristics visible, suggesting that intrinsic utility is derived from social identity. |
| Keywords: | Social Identity; Multidimensionality; Discrimination; Prediction Accuracy; Strategic Revelation |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2023-01&r=exp |