nep-exp New Economics Papers
on Experimental Economics
Issue of 2023‒10‒16
27 papers chosen by
Daniel Houser, George Mason University

  1. How to Organize Monitoring and Punishment: Experimental Evidence By Goeschl, Timo; Haberl, Beatrix; Soldà, Alice
  2. Social Networks, Gender Norms and Labor Supply: Experimental Evidence Using a Job Search Platform By Afridi, Farzana; Dhillon, Amrita; Roy, Sanchari; Sangwan, Nikita
  3. Activating Change: The Role of Information and Beliefs in Social Activism By Afridi, Farzana; Basistha, Ahana; Dhillon, Amrita; Serra, Danila
  4. Gender differences in investment reactions to irrelevant information By Maximilian Späth; Daniel Goller
  5. Dissolving an ambiguous partnership By Oechssler, Jörg; Roomets, Alex
  6. Motives for Delegating Financial Decisions By Mikhail Freer; Daniel Friedman; Simon Weidenholzer
  7. Time Preferences and Food Choice By Andy Brownback; Alex Imas; Michael A. Kuhn
  8. Cash Transfers and Social Preferences of Children By Johannes Haushofer; Magdalena Larreboure; Sara Lowes; Leon Mait
  9. How Overconfidence Bias Influences Suboptimality in Perceptual Decision Making By Marine Hainguerlot; Thibault Gajdos; Jean-Christophe Vergnaud; Vincent de Gardelle
  10. Immorality Judgments and Framing Effects in Voluntary Payment Settings By Elisa Hofmann; Deliah Bolesta; Aya Adra
  11. Are risk preferences optimal? By Skjold, Benjamin; Steinkamp, Simon Richard; Hulme, Oliver J; Peters, Ole; Connaughton, Colm
  12. Perishable Goods versus Re-tradable Assets: A Theoretical Reappraisal of a Fundamental Dichotomy By Sabiou Inoua; Vernon Smith
  13. On the benefits of robo-advice in financial markets By Lambrecht, Marco; Oechssler, Jörg; Weidenholzer, Simon
  14. Can you spot a scam? Measuring and improving scam identification ability By Elif Kubilay; Eva Raiber; Lisa Spantig; Jana Cahlíková; Lucy Kaaria
  15. Stated preferences outperform elicited preferences for predicting reported compliance with Covid-19 prophylactic measures By Phu Nguyen-Van; Thierry Blayac; Dimitri Dubois; Sebastien Duchene; Bruno Ventelou; Marc Willinger
  16. The Behavioral Mechanisms of Voluntary Cooperation across Culturally Diverse Societies: Evidence from the US, the UK, Morocco, and Turkey By Till O. Weber; Jonathan F. Schulz; Benjamin Beranek; Fatima Lambarraa-Lehnhardt; Simon Gaechter
  17. Preferences for collective working-time reduction policies:a factorial survey experiment By Damaris Castro; Brent Bleys
  18. Interpreting IV Estimators in Information Provision Experiments By Vod Vilfort; Whitney Zhang
  19. Beyond the Matrix: Experimental Approaches to Studying Social-Ecological Systems By Hertz, Uri; Koster, Raphael; Janssen, Marco; Leibo, Joel Z.
  20. Fairness and inequality in institution formation By Detemple, Julian; Kosfeld, Michael
  21. Strategic Ignorance and Perceived Control By Balietti, Anca; Budjan, Angelika; Eymess, Tillmann; Soldà, Alice
  22. Drivers of Change: How Intra-household Preferences Shape Employment Responses to Gender Reform By Chaza Abou Daher; Erica M. Field; Kendal M. Swanson; Kate H. Vyborny
  23. Welfare Estimates of Shifting Peak Travel By Robert W. Hahn; Robert D. Metcalfe; Eddy Tam
  24. Replication and Sensitivity Analysis of "Market Access and Quality Up-grading: Evidence from Four Field Experiments": A Comment on Bold et al. (2022b) By McWay, Ryan; Nchare, Karim; Sun, Pu
  25. The Way People Lie in Markets: Detectable vs. Deniable Lies By Chloe Tergiman; Marie Claire Villeval
  26. Strategic Behavior of Large Language Models: Game Structure vs. Contextual Framing By Nunzio Lor\`e; Babak Heydari
  27. Subsidies, information, and energy-efficient cookstove adoption: A randomized uncontrolled trial in rural Ethiopia By Malan, Mandy; Voors, Marten; Ankel-Peters, Jörg; Seje, Selan J.; Heuburger, Lotte; Seid, Dawud; Mitiku, Abiyot

  1. By: Goeschl, Timo; Haberl, Beatrix; Soldà, Alice
    Abstract: Punishment institutions for curtailing free-riding in social dilemmas rely on information about individuals’ behavior collected through monitoring. We contribute to the experimental study of cooperation-enhancing institutions by examining how cooperation and efficiency in a social dilemma change in response to varying how monitoring and punishment are jointly organized. Specifically, we evaluate - against a no-monitoring baseline - combinations of two imperfect monitoring regimes (cen-tralized vs. decentralized) and three punishment regimes (self- vs. peer- vs. del-egated punishment) in a repeated public goods game. As hypothesized, we find that delegated punishment outperforms other punishment regimes, irrespective of the monitoring regime, both in terms of cooperation and efficiency. Monitoring, both centralized and decentralized, cannot raise cooperation relative to the baseline unless accompanied by a credible punishment. When combined with a punishment institution, both monitoring regime outperforms the baseline.
    Keywords: compliance; monitoring; punishment; experiment
    Date: 2023–09–22
  2. By: Afridi, Farzana (Indian Statistical Institute (Delhi) and IZA); Dhillon, Amrita (King’s College London and CAGE); Roy, Sanchari (King’s College London and CAGE); Sangwan, Nikita (Indian Statistical Institute)
    Abstract: This paper studies the role of job search frictions and peer effects in shaping female employment outcomes in developing countries. Motivated by a collective model of household decision-making, we conduct a randomized field experiment in Delhi, India where we randomly offer a hyper-local digital job search and matching service to married couples on their own (non-network treatment), together with the wife's peer network (network treatment), or not at all. Approximately one year later, we find no significant impact on wives' overall likelihood of working in either treatment group, but wives in the non-network treatment group reduce their work intensity and casual work, while those in the network treatment group increase their home-based self-employment. Strikingly, husbands' labor market outcomes also improved significantly in the network treatment group. We show theoretically and empirically that our findings can be explained by the home-bound structure of women’s social networks that reinforce (conservative) social norms about women's outside-of-home work.
    Keywords: social networks, social norms, gender, job-matching platforms, employment JEL Classification: J16, J21, J24, O33
    Date: 2023
  3. By: Afridi, Farzana (Indian Statistical Institute (Delhi)); Basistha, Ahana (Indian Statistical Institute (Delhi)); Dhillon, Amrita (King’s College, London and CAGE, University of Warwick); Serra, Danila (Texas A&M University)
    Abstract: What motivates individuals to participate in social activism? Do awareness campaigns and information about others’ willingness to act play a role? We conduct an online experiment within a survey of nearly 2000 Indian men, focusing on activism to combat health sector fraud during the COVID-19 pandemic. In different treatment groups, we either provide information about the social problem, correct misaligned beliefs about others’ willingness to act, or both. Participants are then cross-randomized to engage in one of three forms of activism: signing a petition, making a donation to an NGO fighting for the cause, or watching a video on ways to support the cause. We also experimentally examine the impact of allowing subjects to choose between the three forms of activism. Providing information and correcting downward biased beliefs about others increases petition signing, but has no impact on donations and video viewing. Giving participants a choice of actions decreases the probability of any single action being taken up. Our comprehensive examination of the factors influencing engagement in different forms of activism within a unified framework generates insights on the motivations behind participation in collective efforts for social change.
    Keywords: activism, information, beliefs, experiment JEL Classification: D73, D83, I15, P0
    Date: 2023
  4. By: Maximilian Späth (University of Potsdam); Daniel Goller (Centre for Research in Economics of Education, University of Bern, Swiss Institute for Empirical Economic Research, University of St. Gallen)
    Abstract: Economic agents often irrationally base their decision-making on irrelevant information. This research analyzes whether men and women react to futile information about past outcomes. For this purpose, we run a laboratory experiment (Study 1) and use field data (Study 2). In both studies, the behavior of men is consistent with falsely assumed negative autocorrelation, often referred to as gambler’s fallacy Women’s behavior aligns with falsely assumed positive autocorrelation, a notion of the hot hand fallacy. On the aggregate, the two fallacies cancel out. Even when individuals are, on average, rational, the biases in the decision-making of subgroups might cause inefficient outcomes. In a mediation analysis, we find that a) the agents stated perceived probabilities of future outcomes are not blurred by irrelevant information and b) about 40 % of the observed biases are driven by differences in the perceived attractiveness of available choices caused by the irrelevant information.
    Keywords: hot hand fallacy, gambler’s fallacy, gender, irrelevant information
    JEL: D81 J16 C91
    Date: 2023–09
  5. By: Oechssler, Jörg; Roomets, Alex
    Abstract: Two partners try to dissolve a partnership that owns an asset of ambiguous value, where the value is determined ex post by a draw from an Ellsberg urn. In a within-subject experiment, subjects make decisions in three different bargaining mechanisms: unstructured bargaining, the Texas shoot-out, and a K + 1 auction. We find that the K +1 auction is the most e¢ cient mechanism, which is in line with theory. Free format bargaining yields a surprising number of disagreements, which are not usually observed when the partnership has a certain or risky value.
    Keywords: bargaining; ambiguity; experiment
    Date: 2023–09–22
  6. By: Mikhail Freer; Daniel Friedman; Simon Weidenholzer
    Abstract: Why do investors delegate financial decisions to supposed experts? We report a laboratory experiment designed to disentangle four possible motives. Almost 600 investors drawn from the Prolific subject pool choose whether or not to delegate a real-stakes choice among lotteries to a previous investor (an ``expert'') after seeing information on the performance of several available experts. We find that a surprisingly large fraction of investors delegate even trivial choice tasks, suggesting a major role for the blame shifting motive. A larger fraction of investors delegate our more complex tasks, suggesting that decision costs play a role for some investors. Some investors who delegate choose a low quality expert with high earnings, suggesting a role for chasing past performance. We find no evidence for a fourth possible motive, that delegation makes risk more acceptable.
    Date: 2023–09
  7. By: Andy Brownback; Alex Imas; Michael A. Kuhn
    Abstract: Healthy food choices are a canonical example used to illustrate the importance of time preferences in behavioral economics. However, the literature lacks a direct demonstration that they are well-predicted by incentivized time preference measures. We offer direct evidence by combining a novel, two-question, incentivized time preference measurement with data from a field experiment that includes grocery purchases and consumption. Our present-focus measure is highly predictive of food choice, capturing a number of behaviors consistent with self-control problems, which provides direct evidence for the common assumption that important aspects of nutrition are driven by time preferences.
    JEL: D03 H20 I12 I39
    Date: 2023–09
  8. By: Johannes Haushofer; Magdalena Larreboure; Sara Lowes; Leon Mait
    Abstract: We study the effects of an unconditional cash transfer program on social preferences of children. The program allocated $1, 076 to randomly selected households in rural Kenya. We measure the social preferences of 4, 022 children from 1, 687 households with survey questions and incentivized behavioral games three years after the intervention. We distinguish between the direct effects on children of recipient households and the spillover effects on children of neighboring households. We do not find consistent evidence that children from treatment and spillover groups are more or less prosocial than children from the control group. Additionally, we find no persistent economic effects of the program. We find some evidence of reduced psychological well-being among adults and children in spillover households.
    JEL: C92 C93 D31 I38 O12
    Date: 2023–09
  9. By: Marine Hainguerlot (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Thibault Gajdos (LPC - Laboratoire de psychologie cognitive - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique); Jean-Christophe Vergnaud (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Vincent de Gardelle (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - 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)
    Abstract: In perceptual decision making, it is often found that human observers combine sensory information and prior knowledge suboptimally. Typically, in detection tasks, when an alternative is a priori more likely to occur, observers choose it more frequently to account for the unequal base rate but not to the extent they should, a phenomenon referred to as "conservative decision bias" (i.e., observers do not shift their decision criterion enough). One theoretical explanation of this phenomenon is that observers are overconfident in their ability to interpret sensory information, resulting in overweighting the sensory information relative to prior knowledge. Here, we derived formally this candidate model, and we tested it in a visual discrimination task in which we manipulated the prior probabilities of occurrence of the stimuli. We measured confidence in decisions and decision criterion placement in two separate experimental sessions for the same participants (N = 69). Both overconfidence bias and conservative decision bias were found in our data, but critically the link that was predicted between these two quantities was absent. Our data suggested instead that when informed about the a priori probability, overconfident participants put less effort into processing sensory information. These findings offer new perspectives on the role of overconfidence bias to explain suboptimal decisions.
    Keywords: overconfidence bias, perceptual decision making, suboptimality, signal detection theory, conservative decision bias, sensitivity
    Date: 2023
  10. By: Elisa Hofmann (Friedrich Schiller University Jena); Deliah Bolesta (Center for Criminological Research Saxony, Chemnitz); Aya Adra (Ramón Llull University, Esade Business School, Barcelona)
    Abstract: The Theory of Dyadic Morality (TDM; Schein and Gray (2018)) posits that immorality judgments emerge from norm violations, harm perceptions, and negative affect. We test this core prediction in an applied setting: voluntary payment settings, such as the Pay-What-You-Want mechanism. In our study, we assess own payment intentions and how voluntary payments of an ostensible individual for an online-news website are judged by participants regarding their perceptions of immorality, harm, anger, and social norms. As political orientation is a key variable in theorizing and exploring immorality judgments in psychological research, we take its potential impact into account in our study. Because voluntary payments have been shown to be sensitive to framing, we vary the pricing mechanism’s name in a between-subjects one-factorial design with four factor levels (Pay-What-You-Want, You-Can, It-Is-Worth-To-You, You-Believe-Is-Fair). The results of our online experiment with 602 Americans indicate that voluntary payment settings are indeed perceived as moral domains. We find that perceptions of norm violation, harm, and negative affect predict immorality judgments, lending empirical support to the Theory of Dyadic Morality. We also show that these components, the immorality judgments, and the own payment intentions are sensitive to framing effects. Finally, we find substantial differences between liberals and conservatives, suggesting an ideological influence on immorality judgments.
    Keywords: Theory of Dyadic Morality, immorality judgments, experiment, voluntary payments, Pay-What-You-Want, framing, social norms
    JEL: C99 D01 D91 L11
    Date: 2023–10–20
  11. By: Skjold, Benjamin; Steinkamp, Simon Richard; Hulme, Oliver J; Peters, Ole; Connaughton, Colm
    Abstract: Decision theories commonly assume that risk preferences are idiosyncratic but stable over time. A recent model from ergodicity economics reveals that optimising the growth rate of wealth requires individuals to adjust their risk preferences to wealth dynamics. Here we ask whether humans are capable of such adjustments. In a randomised control trial, participants will make risky decisions under additive and multiplicative dynamics. We will estimate risk preferences separately in the two conditions for each participant by fitting isoelastic utility functions via hierarchical Bayesian models and standard regression techniques. Growth optimal adjustments to risk preferences would confirm our main hypothesis, whereas risk preferences that are stable across conditions would disconfirm it. Pilot data from 11 participants revealed strong evidence supporting the main hypothesis. We will replicate this pilot in a pre-registered experiment with up to 150 participants.
    Date: 2023–09–07
  12. By: Sabiou Inoua; Vernon Smith
    Abstract: Experimental results on market behavior establish a lower stability and efficiency of markets for durable re-tradable assets compared to markets for non-durable, or perishable, goods. In this chapter, we revisit this known but underappreciated dichotomy of goods in the light of our theory of competitive market price formation, and we emphasize the fundamental nature of the concept of asset re-tradability in neoclassical finance through a simple reformulation of the famous no-trade and no-arbitrage theorems.
    Date: 2023–09
  13. By: Lambrecht, Marco; Oechssler, Jörg; Weidenholzer, Simon
    Abstract: Robo-advisors are novel tools in financial markets that provide investors with low-cost financial advice, usually based on individual characteristics like risk attitudes. In a portfolio choice experiment running over 10 weeks, we study how much investors benefit from robo advice. We also study whether robos increase financial market participation. The treatments are whether investors just receive advice, have a robo making all decisions for them, or have to trade on their own. We find no effect on initial market participation. But robos help investors to avoid mistakes, make rebalancing more frequent, and overall yield portfolios much closer to the utility maximizing ones. Robo-advisors that implement the recommendations by default do significantly better than those that just give advice.
    Keywords: algorithmic trading; experiment; financial markets
    Date: 2023–09–22
  14. By: Elif Kubilay (University of Essex, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics); Eva Raiber (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, CEPR - Center for Economic Policy Research - CEPR); Lisa Spantig (UKA - Universitätsklinikum RWTH Aachen - University Hospital Aachen [Aachen, Germany] - RWTH - Rheinisch-Westfälische Technische Hochschule Aachen University, University of Essex); Jana Cahlíková (Universität Bonn = University of Bonn); Lucy Kaaria (UoN - University of Nairobi)
    Abstract: The expansion of digital financial services leads to severe consumer protection issues such as fraud and scams. As these potentially decrease trust in digital services, especially in developing countries, avoiding victimization has become an important policy objective. In an online experiment, we first investigate how well individuals in Kenya identify phone scams using a novel measure of scam identification ability. We then test the effectiveness of scam education, a commonly used approach by organizations for fraud prevention. We find that common tips on how to spot scams do not significantly improve individuals' scam identification ability, i.e., the distinction between scams and genuine messages. This null effect is driven by an increase in correctly identified scams and a decrease in correctly identified genuine messages, indicating overcaution. Additionally, we find suggestive evidence that genuine messages with scam-like features are misclassified more often, highlighting the importance of a careful design of official communication.
    Keywords: Consumer protection, consumer fraud, digital financial services, scam susceptibility, scam education, Kenya
    Date: 2023
  15. By: Phu Nguyen-Van; Thierry Blayac; Dimitri Dubois; Sebastien Duchene; Bruno Ventelou; Marc Willinger
    Abstract: This paper studies the behavioral and socio-demographic determinants of reported compliance with prophylactic measures against COVID-19: barrier gestures, lockdown restrictions and mask wearing. The study contrasts two types of measures for behavioral determinants: experimentally elicited preferences (risk tolerance, time preferences, social value orientation and cooperativeness) and stated preferences (risk tolerance, time preferences, and the GSS trust question). Data were collected from a representative sample of the metropolitan French adult population (N=1154) surveyed during the first lockdown in May 2020, and the experimental tasks were carried out on-line. The in-sample and out-of-sample predictive power of several regression models - which vary in the set of variables that they include - are studied and compared. Overall, we find that stated preferences are better predictors of compliance with these prophylactic measures than preferences elicited through incentivized experiments: self-reported level of risk, patience and trust are predicting compliance, while elicited measures of risk-aversion, patience, cooperation and prosociality did not.
    Keywords: COVID-19, individual preferences, social preferences, elicited preferences, stated preferences
    JEL: C90 D90 I18
    Date: 2023
  16. By: Till O. Weber; Jonathan F. Schulz; Benjamin Beranek; Fatima Lambarraa-Lehnhardt; Simon Gaechter
    Abstract: We examine the role of cooperative preferences, beliefs, and punishments to uncover potential cross-societal differences in voluntary cooperation. Using one-shot public goods experiments in four comparable subject pools from the US and the UK (two similar Western societies) and Morocco and Turkey (two comparable non-Western societies), we find that cooperation is lower in Morocco and Turkey than in the UK and the US. Using the ABC approach – in which cooperative attitudes and beliefs explain cooperation – we show that cooperation is mostly driven by differences in beliefs rather than cooperative preferences or peer punishment, both of which are similar across the four subject pools. Our methodology is generalizable across subject pools and highlights the central role of beliefs in explaining differences in voluntary cooperation within and across culturally, economically, and institutionally diverse societies. Because our behavioral mechanisms correctly predict actual contributions, we argue that our approach provides a suitable methodology for analyzing the determinants of voluntary cooperation of any group of interest.
    Keywords: public goods, voluntary cooperation, ABC method, conditional cooperation, beliefs, punishment, cross-cultural experiments, WEIRD societies
    JEL: C90 H40 C70 D20
    Date: 2023
  17. By: Damaris Castro; Brent Bleys (-)
    Abstract: Collective working-time reduction (WTR) policies, organized by companies, organizations, sectors or governments, can yield benefits across diverse domains including productivity and well-being. Despite an increasing number of WTR trials, the attractiveness of such policies remains relatively underexplored in literature. In this study, a factorial survey experiment investigates employees' preferences for collective WTR policies with pay reduction that vary along five dimensions. Findings reveal that employees favour policies that minimize pay reduction, that reduce working time moderately rather than extensively, and that establish a high degree of flexibility for taking up the additional leisure time. Moreover, the uptake amongst significant others matters: participation of colleagues as well as of close friends and family positively influences WTR attractiveness, although the latter primarily matter in WTR-supportive company cultures. Our findings provide valuable guidance for companies, organizations and policymakers when devising collective WTR policies and underline the importance of societal participation to enhance WTR attractiveness.
    Keywords: working-time reduction, working-time preferences, factorial survey experiment
    JEL: C83 C91 J22 J88
    Date: 2023–10
  18. By: Vod Vilfort; Whitney Zhang
    Abstract: A growing literature measures "belief effects" -- that is, the effect of a change in beliefs on one's actions -- using information provision experiments, where the provision of information is used as an instrument for beliefs. We show that in passive control design experiments with heterogeneous belief effects, using information provision as an instrument may not produce a positive weighted average of belief effects. We propose a "mover instrumental variables" (MIV) framework and estimator that attains a positive weighted average of belief effects by inferring the direction of belief updating using the prior. Relative to our preferred MIV, commonly used specifications in the literature produce a form of MIV that overweights individuals with larger prior errors; additionally, some specifications may require additional assumptions to generate positive weights.
    Date: 2023–09
  19. By: Hertz, Uri (University of Haifa); Koster, Raphael; Janssen, Marco (Arizona State University); Leibo, Joel Z.
    Abstract: Studying social-ecological systems, in which agents interact with each other and their environment is a challenging but important task. In such systems, the environment shapes the agents' experience and actions, and in turn collective action of agents changes social and physical aspects of the environment. Experimental and computational approaches to studying complex social behaviors and processes have come a long way since the 1950s. However, emphasis on directly mapping the paradigms that are most computationally convenient (matrix games) to their direct analogs in the laboratory may have impoverished experimental design. Modern artificial intelligence (AI) techniques provide new avenues to model complex social worlds, preserving more of their characteristics. These techniques can be fed back to the laboratory where they help to design experiments in more complex social situations without compromising their tractability for computational modeling. This novel approach can help researchers bring together insights from human cognition, sustainability, and AI, to tackle real world problems of social ecological systems such as climate change, pandemics, and conflict resolution.
    Date: 2023–09–06
  20. By: Detemple, Julian; Kosfeld, Michael
    Abstract: A key solution for public good provision is the voluntary formation of institutions that commit players to cooperate. Such institutions generate inequality if some players decide not to participate but cannot be excluded from cooperation benefits. Prior research with small groups emphasizes the role of fairness concerns with positive effects on cooperation. We show that effects do not generalize to larger groups: if group size increases, groups are less willing to form institutions generating inequality. In contrast to smaller groups, however, this does not increase the number of participating players, thereby limiting the positive impact of institution formation on cooperation.
    Keywords: Institution formation, group size, social dilemma, social preferences
    JEL: C92 D02 D63 H41
    Date: 2023
  21. By: Balietti, Anca; Budjan, Angelika; Eymess, Tillmann; Soldà, Alice
    Abstract: Information can trigger unpleasant emotions. As a result, individuals might be tempted to strategically ignore it. We experimentally investigate whether increasing perceived control can mitigate strategic ignorance. Participants from India were presented with a choice to receive information about the health risk associated with air pollution and were later asked to recall it. Perceived control leads to a substantial improvement in information recall. We find that optimists react most to perceived control, both with a reduction in information avoidance and an increase in information recall. This latter result is supported by a US sample. A theoretical framework rationalizes our findings.
    Keywords: information avoidance; information recall; perceived control; motivated cognition; air pollution; Luftverschmutzung
    Date: 2023–09–22
  22. By: Chaza Abou Daher; Erica M. Field; Kendal M. Swanson; Kate H. Vyborny
    Abstract: Billions of women still face legal barriers to economic inclusion, yet it is unclear whether lifting these barriers is sufficient to enhance their economic participation. We conduct a field experiment to quantify the impact of a major legal reform - the lifting of the Saudi women's driving ban - on women's employment by randomizing rationed spaces in driver's training. Two years later, women in the treatment group are 61% more likely to drive, 19% more likely to leave the house unchaperoned, and 35% more likely to be employed. However, they are also 19% more likely to require permission to make purchases. These patterns vary systematically with marital status: although physical mobility increases for all women, treatment effects on employment are only observed among never-married and widowed women, who negotiate employment with their fathers. Married and divorced women with children, over whom husbands and ex-husbands have leverage, actually exit the labor force and experience decreased spending autonomy. We posit that these patterns reflect differences in male family members' support for women's employment. They provide evidence that men's resistance to wives' employment poses a binding constraint to female labor force participation when legal restrictions are relaxed, but also that men are more open to granting their daughters economic rights, as has been posited in the literature. The results underscore the importance of intra-household responses to gender reforms, which have the potential to counteract legal gains in women's freedoms, and help explain why potential economic gains from lifting discriminatory laws often go unrealized.
    JEL: J12 J16 J22
    Date: 2023–09
  23. By: Robert W. Hahn; Robert D. Metcalfe; Eddy Tam
    Abstract: We develop novel estimates of peak and off-peak price elasticities for urban mass transit demand in San Francisco using a large natural experiment with 3.6 million trip sessions and a natural field experiment that both have exogenous price subsidies. We then estimate the welfare impacts for these price subsidies using a sufficient statistics approach. Our analysis suggests that off-peak subsidies can increase welfare, but the positive effects are reduced when consumers take the decisions of others into account compared to when they do not. We also find a large variation in the welfare impacts of shifting travel to different periods, which is explained by differences in demand and congestion characteristics. Finally, we show that the targeting of subsidies can increase welfare, but need not do so if the regulator does not have accurate information on demand.
    JEL: H20 R41
    Date: 2023–08
  24. By: McWay, Ryan; Nchare, Karim; Sun, Pu
    Abstract: Bold et al. (2022b) investigate the effect of providing access to a larger, centralized market where quality is rewarded with a premium on farm productivity and framing incomes from smallholder maize farmers in western Uganda, using a series of randomized experiments and a difference-in-differences approach. We successfully reproduce the results of this study using the publicly provided replication packet. Then test the robustness of these results by re-defining treatment and outcome variables, testing for model misspecification and the leverage of outliers, and testing for non-random selection in the Fisher-permutation process. Our results show that the findings in Bold et al. (2022b) are robust to a variety of decisions in the research process. This evokes confidence in the internal validity of the findings.
    Keywords: Reproducibility, Replication, Farm Productivity, Economic Development
    JEL: L14 L15 O13 Q12 Z00
    Date: 2023
  25. By: Chloe Tergiman; Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In a finitely repeated game with asymmetric information, we experimentally study how individuals adapt the nature of their lies when settings allow for reputation building. Although some lies can be detected ex post by the uninformed party, others remain deniable. We find that traditional market mechanisms, such as reputation, generate strong changes in the way people lie and lead to strategies in which individuals can maintain plausible deniability; people simply hide their lies better by substituting deniable lies for detectable lies. Our results highlight the limitations of reputation to root out fraud when a deniable lie strategy is available.
    Keywords: Lying, Deniability, Reputation, Financial Markets
    Date: 2023–06
  26. By: Nunzio Lor\`e; Babak Heydari
    Abstract: This paper investigates the strategic decision-making capabilities of three Large Language Models (LLMs): GPT-3.5, GPT-4, and LLaMa-2, within the framework of game theory. Utilizing four canonical two-player games -- Prisoner's Dilemma, Stag Hunt, Snowdrift, and Prisoner's Delight -- we explore how these models navigate social dilemmas, situations where players can either cooperate for a collective benefit or defect for individual gain. Crucially, we extend our analysis to examine the role of contextual framing, such as diplomatic relations or casual friendships, in shaping the models' decisions. Our findings reveal a complex landscape: while GPT-3.5 is highly sensitive to contextual framing, it shows limited ability to engage in abstract strategic reasoning. Both GPT-4 and LLaMa-2 adjust their strategies based on game structure and context, but LLaMa-2 exhibits a more nuanced understanding of the games' underlying mechanics. These results highlight the current limitations and varied proficiencies of LLMs in strategic decision-making, cautioning against their unqualified use in tasks requiring complex strategic reasoning.
    Date: 2023–09
  27. By: Malan, Mandy; Voors, Marten; Ankel-Peters, Jörg; Seje, Selan J.; Heuburger, Lotte; Seid, Dawud; Mitiku, Abiyot
    Abstract: Energy-efficient biomass cookstoves (EEBC) are an important technology for the three billion people relying on firewood and charcoal for cooking in the Global South. This paper assesses the price-responsiveness of demand for EEBC and the role of information about health and economic benefits. The pilot program under evaluation randomized different subsidy schemes (40%, 70%, and 100% subsidy) and information treatments across 292 Ethiopian villages. Unlike previous willingness-to-pay studies we examine a take-it-orleave-it approach in an uncontrolled and hence natural setting. We observe that EEBC demand is highly price-sensitive: There is virtually no EEBC uptake in the no-subsidy group, irrespective of which information households received. Yet, uptake increases considerably for households who received a high subsidy (70% or a 100%). Adding information on economic benefits nearly doubles uptake when coupled with such high subsidies. Our results confirm the emerging picture in the literature suggesting that subsidization for EEBC is required to foster widespread adoption.
    Keywords: Household technology adoption, biomass consumption, randomized controlled trial, humanitarian assistance, environmental degradation
    JEL: C93 O12 O13 Q41 Q48
    Date: 2023

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