nep-exp New Economics Papers
on Experimental Economics
Issue of 2023‒12‒04
28 papers chosen by
Daniel Houser, George Mason University

  1. Estimating Present Bias and Sophistication over Effort and Money By Claudia Cerrone; Anujit Chakraborty; Hyok Jung Kim; Leonhard Lades
  2. The Impact of Fake Reviews on Demand and Welfare By Jesper Akesson; Robert W. Hahn; Robert D. Metcalfe; Manuel Monti-Nussbaum
  3. Locally Optimal Best Arm Identification with a Fixed Budget By Masahiro Kato
  4. Ambiguity induces opportunistic rule breaking and erodes social norms By Lucas Molleman; Daniele Nosenzo; Tina Venema
  5. How WEIRD are student samples? Lessons based on the trust game in Malawi By Holden, Stein T.; Tione, Sarah; Tilahun, Mesfin; Katengeza, Samson
  6. To Go Electric or To Burn Coal? A Randomized Field Experiment of Informational Nudges By Hanming Fang; King King Li; Peiyao Shen
  7. Can Information Be Too Much? Information Source Selection and Beliefs By Andrea Amelio
  8. Beyond the Threshold: How Electoral Size-Dependent Uncertainty Affects Majority Determination By Giuseppe Attanasi; Anna Maffioletti; Giulia Papini; Patrizia Sbriglia; Maria Luigia Signore
  9. Contingent Belief Updating By Chiara Aina; Andrea Amelio; Katharina Brütt
  10. Can Social Pressure Stifle Free Speech By Juan S. Morales, Margaret Samahita
  11. Incorporating Cultural Context into Safe-Water Interventions: Experimental Evidence from Egypt By Giulia Buccione; Martín Rossi
  12. Behavioral forces driving information unraveling By Benndorf, Volker; Kübler, Dorothea; Normann, Hans-Theo
  13. Shallow meritocracy By Andre, Peter
  14. When Fairness Matters: Cross-Race Responses to Intentionally Fair Treatment By Harvey, Matthew; Nickerson, David; Wozniak, Abigail
  15. The tax treatment of commuting expenses and job-related mobility By Baumgart, Eike; Blaufus, Kay; Hechtner, Frank
  16. Financial fraud in developing countries: Common scam detection tips do not help distinguish scam from non-scam messages By Elif Kubilay; Eva Raiber; Lisa Spantig; Jana Cahlíková; Lucy Kaaria
  17. Self-Control and Demand for Preventive Health: Evidence from Hypertension in India By Bai, Liang; Handel, Benjamin; Miguel, Edward; Rao, Gautam
  18. So, dear applicant, do you mean working from home or shirking from home? By Eline Moens; Elsy Verhofstadt; Luc Van Ootegem; Stijn Baert
  19. Ultimatum game: regret or fairness? By Lida H. Aleksanyan; Armen E. Allahverdyan; Vardan G. Bardakhchyan
  20. Social Capital: Experimental Validation of Survey Measures By Ivàn José Barreda Tarrazona; Agnès Festré; Stein Østbye
  21. Losing on the Home Front? Battlefield Casualties, Media, and Public Support for Foreign Interventions By Fetzer, Thiemo; CL Souza, Pedro; Vanden Eynde, Oliver; Wright, Austin L.
  22. How Cognitive Skills Affect Strategic Behavior: Cognitive Ability, Fluid Intelligence and Judgment By Gill, David; Knepper, Zachary; Prowse, Victoria; Zhou, Junya
  23. Blame or gain? Is institutional trust impacted by the perception of political influence in state-owned enterprises? By Krause, Tobias Alexander; Ivanov, Igor; Sidki, Marcus
  24. Decomposing Trust By Dirk Engelmann; Jana Friedrichsen; Roel van Veldhuizen; Pauline Vorjohann; Joachim Winter
  25. Writing Matters By Feld, Jan; Lines, Corinna; Ross, Libby
  26. The Persistent Effect of Competition on Prosociality By Fabian Kosse; Ranjita Rajan; Michela Tincani
  27. ‘IOS11’: A new, extended, interactive version of the ‘Inclusion of Other in the Self’ scale By Malte Baader; Chris Starmer; Fabio Tufano; Simon Gächter
  28. Behavioral Science Interventions Could Increase SNAP Comprehension and Awareness Among Military Families By Colleen Heflin; Hannah Patnaik; Leonard M. Lopoo; Siobhan O'Keefe

  1. By: Claudia Cerrone; Anujit Chakraborty; Hyok Jung Kim; Leonhard Lades (Department of Economics, University of California Davis)
    Abstract: We use a real-effort experiment to jointly estimate present bias (β) and sophistication (̂ β) parameters, separately over money (βm, ̂ βm) and effort (βe, ̂ βe). Our novel incentive structure aligns the choice scenario with the canonical assumption of choices being the interior optima of a concave utility-maximization exercise. Participants choose to (and predict to) complete 14% (and 10%) fewer tasks on the same day than on a future day, leading to an estimated βe between 0.70 and .79 (and ̂ βe between 0.80 and .88). We find no evidence of present bias or sophistication over money
    Keywords: present bias, sophistication, beliefs, experiment, real effort task, experiment
    Date: 2023–11–06
  2. By: Jesper Akesson; Robert W. Hahn; Robert D. Metcalfe; Manuel Monti-Nussbaum
    Abstract: Although fake online customer reviews have become prevalent on platforms such as Amazon, Google, and Facebook, little is known about how these reviews influence consumer behavior. This paper provides the first experimental estimates of the effects of fake reviews on individual demand and welfare. We conduct an incentive-compatible online experiment with a nationally representative sample of respondents from the United Kingdom (n = 10, 000). Consumers are asked to choose a product category, browse a platform resembling Amazon, and select one of five equally priced products. One of the products is of inferior quality, one is of superior quality, and three are of average quality. We randomly allocate participants to variants of the platform: five treatment groups see positive fake reviews for an inferior product, and the control group does not see fake reviews. Moreover, some participants are randomly selected to receive an educational intervention that aims to mitigate the potential effects of fake reviews. Our analysis of the experimental data yields four findings. First, fake reviews make consumers more likely to choose lower-quality products. Second, we estimate that welfare losses from such reviews may be important—on the order of $.12 for each dollar spent in the setting we study. Third, we find that fake reviews have heterogeneous effects. For example, the effect of fake reviews is smaller for those who do not trust customer reviews. Fake reviews also have larger effects on those who shop online more frequently. Fourth, we show that the educational intervention reduces the adverse welfare impact of fake reviews by 44%.
    JEL: C90 D18 M30
    Date: 2023–11
  3. By: Masahiro Kato
    Abstract: This study investigates the problem of identifying the best treatment arm, a treatment arm with the highest expected outcome. We aim to identify the best treatment arm with a lower probability of misidentification, which has been explored under various names across numerous research fields, including \emph{best arm identification} (BAI) and ordinal optimization. In our experiments, the number of treatment-allocation rounds is fixed. In each round, a decision-maker allocates a treatment arm to an experimental unit and observes a corresponding outcome, which follows a Gaussian distribution with a variance different among treatment arms. At the end of the experiment, we recommend one of the treatment arms as an estimate of the best treatment arm based on the observations. The objective of the decision-maker is to design an experiment that minimizes the probability of misidentifying the best treatment arm. With this objective in mind, we develop lower bounds for the probability of misidentification under the small-gap regime, where the gaps of the expected outcomes between the best and suboptimal treatment arms approach zero. Then, assuming that the variances are known, we design the Generalized-Neyman-Allocation (GNA)-empirical-best-arm (EBA) strategy, which is an extension of the Neyman allocation proposed by Neyman (1934) and the Uniform-EBA strategy proposed by Bubeck et al. (2011). For the GNA-EBA strategy, we show that the strategy is asymptotically optimal because its probability of misidentification aligns with the lower bounds as the sample size approaches infinity under the small-gap regime. We refer to such optimal strategies as locally asymptotic optimal because their performance aligns with the lower bounds within restricted situations characterized by the small-gap regime.
    Date: 2023–10
  4. By: Lucas Molleman (Department of Psychology, University of Amsterdam, and Social Psychology, Tilburg University); Daniele Nosenzo (Department of Economics and Business Economics, Aarhus University); Tina Venema (Copernicus Institute of Sustainable Development, Utrecht University)
    Abstract: Rules are central to social order, but violations can rapidly spread when compliance is costly to individuals. Moreover, rules are often ambiguous and open to interpretation, creating “wiggle room" to bend rules in self-serving ways. It is currently unknown how ambiguity shapes rule compliance and the sway of social influence. Here we present incentivized experiments (total n=3, 226 American Prolific workers) showing that ambiguity substantially reduces rule compliance. Observing rule bending or a rule violation reduces compliance, but observing compliance does not increase it. The combined effect of ambiguity and bad examples is as strong as the effect of either factor on its own, indicating that many people comply unless an opportunity arises for self-serving rule violation. Further experiments suggest that these results are due to weakened social norms: ambiguity reduces disapproval of rule bending, and people expect violations to increase after observing non-compliance.
    Keywords: Rule-following, peer effects, conditional compliance, behavioral experiment, social influence
    JEL: C91 C92 D91
    Date: 2023–11–14
  5. By: Holden, Stein T. (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Tione, Sarah (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Tilahun, Mesfin (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Katengeza, Samson (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: We have used the standard trust game on a random sample of university students (N=764) and a random sample of rural residents (N=834) in Malawi. The study identifies social preference types (Bauer, Chytilov´a, & Pertold-Gebicka, 2014; Fehr, Gl¨atzle-R¨utzler, & Sutter, 2013) and how these relate to variations in trust and trustworthiness based on the standard trust game (Berg, Dickhaut, & McCabe, 1995). The games are framed as within-class and within-university for students and as within-village and within-district for the rural sample. Many previous studies have found students to represent a lower bound in experimental studies of pro-social, trust, and trustworthiness behavior compared to broader population samples. Contrary to this, we found that trust and trustworthiness were significantly higher among university students than among villagers in rural communities in Malawi. We decomposed the trust and trustworthiness to investigate the relative importance of alternative explanations for their variation and to explain the unexpected gap in trust and trustworthiness between the student and rural samples. We were able to explain most of the gap for trustworthiness and about half of the gap for trust. Factors contributing significantly to the variation in trustworthiness were social preference type, reciprocity norm, age, and gender. Trust and trustworthiness varied systematically across social preference types. Altruistic and egalitarian types were more common among the students than in the rural population, and the students also demonstrated stronger moral obligations to reciprocate in the game. On average, students and rural respondents were too optimistic about the expected returns in the trust game; students were more optimistic than rural subjects on average, and expectations influenced trust investments. Risk tolerance also enhanced trust investments; students were slightly more risk tolerant than rural subjects. Women were found to be less trusting and less trustworthy than men, and there was a larger share of women in the rural sample. There were only modest gains in trust and trustworthiness in the within-class vs. within-university and the within-village vs. within-district frames.
    Keywords: Social preferences; Trust; Trustworthiness; university students; rural subjects; Malawi
    JEL: C72 C92 C93 D01 D90
    Date: 2023–11–11
  6. By: Hanming Fang; King King Li; Peiyao Shen
    Abstract: Coal heating in residential homes is an important source of indoor air pollution, leading to detrimental health effects. We conduct a randomized field experiment in northern China using three types of SMS campaigns targeting three potential biases that may hinder the adoption of electric heating: a Cost SMS campaign, designed to address the overestimation of electricity expenses; a Health SMS campaign, aimed at addressing the underestimation of health damage associated with coal heating; and a Social Comparison SMS campaign, intended to inform households about the popularity of electric heating. We find that the Cost SMS backfires: it instead leads to a substantial reduction in electric heating, which can be attributed to salience bias induced by the Cost SMS, which drew heightened attention to the cost of electricity. The Health SMS is ineffective for households that underestimate the health damage of coal heating and even backfires for those who expressed little concern about the health consequences. Social Comparison SMS is only effective for a small proportion of households who were concerned about their neighbors' heating choices. Overall, our findings suggest that SMS campaigns targeting these biases are largely ineffective, and caution should be exercised when applying plausible nudge interventions. The findings also suggest that households may be motivated to maintain their beliefs and resist paternalistic interventions.
    JEL: C93 D91 Q50 Q58
    Date: 2023–11
  7. By: Andrea Amelio (University of Bonn, Bonn Graduate School of Economics (BGSE))
    Abstract: Agents undertaking economic decisions are exposed to an ever-increasing amount of information sources, especially nowadays in what has been defined as the Information Age. This paper investigates how the number of available information sources impacts agents’ ability to (i) select reliable sources and (ii) use their content effectively to update their beliefs. To answer these questions, I set up an online experiment informed by a simple automata decision-making and belief-updating model. Participants’ source selection performances deteriorate as the number of available sources increases. Also, ceteris paribus, their performance in updating their beliefs using the selected sources worsens, showing a trade-off between source selection and belief updating performances. These results may help to guide policy-making decisions, providing evidence on externalities of information production.
    Keywords: Information Overload, Complexity, Belief Updating, Experiments
    JEL: D91 C91 D83
    Date: 2023–11
  8. By: Giuseppe Attanasi (Sapienza University of Rome, Italy; BETA, University of Strasbourg, France; Université Côte d'Azur, CNRS, GREDEG, France); Anna Maffioletti (Università degli Studi di Torino); Giulia Papini (Università degli Studi di Torino); Patrizia Sbriglia (Università degli Studi della Campania "Luigi Vanvitelli"); Maria Luigia Signore (Sapienza University of Rome, Italy)
    Abstract: The determination of a majority threshold in any voting system can be influenced by voters' attitudes towards uncertainty. Traditionally, a higher majority threshold is associated with a risk-averse attitude, serving as a means to protect against the tyranny of the majority. Moreover, the absence of ex-ante information regarding the likelihood of the voting outcome introduces a further layer of uncertainty, that of ambiguity, which motivates decision-makers to seek increased protection. In this study, we first provide a thorough formalization of this theoretical prediction, relying on a second-order expected utility model with both risk and ambiguity aversion of the voter toward the voting lottery. Second, we experimentally test its predictions by integrating the majority threshold implication into traditional experiments for risk and ambiguity elicitation. Through a series of classroom experiments run on 2020-2023 (about 1, 100 subjects in Italy & France), we analyze how individuals, placed under varying conditions of uncertainty, react to the determination of a barrier threshold. We find a strong correlation between the number of voters and the chosen quorum for a majority: as each subject is only aware of her own voting preference, expanding the electoral base results in a more ambiguous probability about the outcome. This favors more conservative behavior and results in an upward adjustment of the majority threshold.
    Keywords: voting lottery, majority threshold, risk and ambiguity attitude, theory-driven experiment
    JEL: D72 D81 C91
    Date: 2023–06
  9. By: Chiara Aina (Department of Economics, Harvard University); Andrea Amelio (Bonn Graduate School of Economics, University of Bonn); Katharina Brütt (School of Business & Economics, Vrije Universiteit Amsterdam)
    Abstract: We study how contingent thinking – that is, reasoning through all possible contingencies without knowing which is realized – affects belief updating. According to the Bayesian benchmark, beliefs updated after exposure to new information should be equivalent to beliefs assessed for the contingency of receiving such information. Using an experiment, we decompose the effect of contingent thinking on belief updating into two components: (1) hypothetical thinking (updating on a piece of not-yet-observed information) and (2) contrast reasoning (comparing multiple contingencies during the updating process). Our results show that contingent thinking increases deviations from Bayesian updating and that this effect can be attributed to hypothetical thinking.
    Keywords: Belief Updating; Contingent Thinking; Experiment
    JEL: C91 D83 D91
    Date: 2023–11
  10. By: Juan S. Morales, Margaret Samahita (Wilfrid Laurier University)
    Abstract: This paper studies public opinion in the context of strong social norms that can induce conformity and self-censorship. We present a model that highlights how social pressure can affect the public expression of opinion either through a change in publicly stated views (conformity) or by inducing self-censorship (silence). In a series of pre-registered online experiments in the US, we elicit participants’ views on two controversial topics (race and gender) and their willingness to publish these views online in an incentivized manner. The empirical patterns are consistent with the presence of ideologically left-wing social norms: participants who held left-wing views were more willing to publish their opinions, and those who were randomly made aware of the prospect of publication reported less conservative views. A priming information treatment, in which participants were informed about cancel culture and the potential negative backlash from social media posts, induced some conformity and silencing, but the results were generally weak and not statistically significant. Finally, a social information treatment, which informed respondents about high rates of others’ willingness to speak up, significantly decreased self-censorship. We use our theoretical model, and empirical estimates from the experiment about the value of "speaking up", to analyze potential welfare implications. The analysis reveals that social norms which restrict freedom of expression may enhance social welfare.
    Keywords: social media; spiral of silence; public opinion; cancel culture; free speech
    JEL: D83 P16 C90 Z13
    Date: 2023–08
  11. By: Giulia Buccione (Brown University); Martín Rossi (Department of Economics, Universidad de San Andrés)
    Abstract: Adoption rates of safe drinking water are low in developing countries. In regions where centralized water treatment infrastructure is absent, the conventional policy response is to enhance access to safe water via point-of-use chlorination. Previous research, however, reports a ceiling in adoption rates of chlorinated water at 50 percent, even when chlorine is provided for free. We report experimental evidence that a cultural-friendly technology, which provides filtered water that resembles local ancestral water, leads to higher adoption rates and willingness to pay than usual chlorinated water provision. We document adoption rates of 91 percent for filtered water, 42 percentage points higher than for chlorinated water. Willingness to pay is 61 percent higher for filtered water compared to chlorinated water. Our findings suggest policymakers should redirect their efforts away from the current mainstream approach of subsidized chlorine and instead explore alternative strategies that consider local communities’ culture and preferences.
    Keywords: Middle East, water-borne diseases, field experiments
    JEL: D10 I10 C93 Q53 Z10
    Date: 2023–11
  12. By: Benndorf, Volker; Kübler, Dorothea; Normann, Hans-Theo
    Abstract: Information unraveling is an elegant theoretical argument suggesting that private information may be fully and voluntarily surrendered. The experimental literature has, however, failed to provide evidence of complete unraveling and has suggested senders' limited depth of reasoning as one behavioral explanation. In our novel design, decisionmaking is essentially sequential, which removes the requirements on subjects' reasoning and should enable subjects to play the standard Nash equilibrium with full revelation. However, our design also facilitates coordination on equilibria with partial unraveling which exist with other-regarding preferences. Our data confirm that the new design is successful in that it avoids miscoordination entirely. Roughly half of the groups fully unravel whereas other groups exhibit monotonic outcomes with partial unraveling. Altogether, we find more information unraveling with the new design, but there is clear evidence that other-regarding preferences do play a role in impeding unraveling.
    Keywords: data protection, inequality aversion, information revelation, level-k reasoning, privacy
    JEL: C72 C90 C91
    Date: 2023
  13. By: Andre, Peter
    Abstract: Meritocracies aspire to reward hard work and promise not to judge individuals by the circumstances into which they were born. However, circumstances often shape the choice to work hard. I show that people's merit judgments are "shallow" and insensitive to this effect. They hold others responsible for their choices, even if these choices have been shaped by unequal circumstances. In an experiment, US participants judge how much money workers deserve for the effort they exert. Unequal circumstances disadvantage some workers and discourage them from working hard. Nonetheless, participants reward the effort of disadvantaged and advantaged workers identically, regardless of the circumstances under which choices are made. For some participants, this reflects their fundamental view regarding fair rewards. For others, the neglect results from the uncertain counterfactual. They understand that circumstances shape choices but do not correct for this because the counterfactual-what would have happened under equal circumstances-remains uncertain.
    Keywords: Meritocracy, fairness, responsibility, attitudes towards inequality, redistribution, social preferences, inference, uncertainty, counterfactual thinking
    JEL: C91 D63 D91 H23
    Date: 2023
  14. By: Harvey, Matthew (University of Washington Tacoma); Nickerson, David (Temple University); Wozniak, Abigail (Federal Reserve Bank of Minneapolis)
    Abstract: Do White and Black Americans differ in their response to fair versus unfair treatment, and do these reactions depend on whether treatment is intentional? We study an ultimatum game in which we non-deceptively vary three dimensions: racial identities of participants, offer inequality, and whether the offer was made intentionally or assigned by lottery. Unequal offers are more likely to be rejected in all conditions, but participants differed in how intentionality behind an offer affected their response. White respondents did not differentiate between intentional and randomly assigned offer inequality. In contrast, among Black respondents, intentionality increased acceptance of fair offers.
    Keywords: race identities, fairness, ultimatum game, inequality aversion, intentionality
    JEL: D63 J71 C90
    Date: 2023–11
  15. By: Baumgart, Eike; Blaufus, Kay; Hechtner, Frank
    Abstract: Amid global climate change concerns, policymakers worldwide are increasingly scrutinizing environmentally harmful subsidies. This study examines the tax-deductibility of job-related commuting expenses, which has faced criticism for promoting longer commutes and congestion. Through a controlled, randomized survey experiment, we confirm that the tax-deductibility of commuting expenses results in longer commutes but does so with minimal economic impact. Increasing the deduction rate by e0.10 leads to an average acceptance of 377-meter-longer commutes. Surprisingly, subjects are inattentive to changes in the tax deduction's size when such changes are presented as tax-deductible expenses rather than as direct cash effects. In contrast, abolishing the tax deductibility significantly reduces average commuting distances by nearly 9 percent. These findings highlight people's responsiveness to the mere presence of the commuter tax break while being less sensitive to its specific size. Policymakers should consider these findings when evaluating the effectiveness of such tax deductions in mitigating climate change or their economic efficiency effects.
    Keywords: Commuting Behavior, Commuting Subsidies, Tax Policy, Tax Complexity, Rational Inattention
    JEL: D90 H21 H24 J22 R23 R28 R41
    Date: 2023
  16. By: Elif Kubilay; Eva Raiber; Lisa Spantig; Jana Cahlíková; Lucy Kaaria
    Abstract: The expansion of digital financial services raises serious consumer protection concerns, including fraud, especially in developing countries. This column reports findings from an online experiment in Kenya which suggest that conventional scam detection tips do not improve individuals' ability to distinguish between scams and genuine messages. Rather, they make people over-cautious – a result partly driven by official communication often including scam markers.
    Date: 2023–11
  17. By: Bai, Liang; Handel, Benjamin; Miguel, Edward; Rao, Gautam
    Abstract: Self-control problems constitute a potential explanation for the underinvestment in preventive health in low-income countries. Behavioral economics offers a tool to solve such problems: commitment devices. We conduct a field experiment to evaluate the effectiveness of different types of theoretically motivated commitment contracts in increasing preventive doctor visits by hypertensive patients in rural India. Despite achieving high take-up of such contracts in some treatment arms, we find no effects on actual doctor visits or individual health outcomes. A substantial number of individuals pay for commitment but fail to follow through on the doctor visit, losing money without experiencing health benefits. We develop and structurally estimate a prespecified model of consumer behavior under present bias with varying levels of naiveté. The results are consistent with a large share of individuals being partially naive about their own self-control problems: sophisticated enough to demand some commitment but overly optimistic about whether a given level of commitment is sufficiently strong to be effective. The results suggest that commitment devices may in practice be welfare diminishing, at least in some contexts, and serve as a cautionary tale about their role in health care.
    Keywords: Economics, Applied Economics, Prevention, Clinical Research, Good Health and Well Being, Econometrics, Banking, finance and investment, Applied economics
    Date: 2021–12–02
  18. By: Eline Moens; Elsy Verhofstadt; Luc Van Ootegem; Stijn Baert (-)
    Abstract: Many applicants want a job with the possibility of telework. However, the literature is unclear on whether being explicit about this wish and the reason for it leads to negative consequences on hiring intentions. In this paper we therefore investigate how expressing a desire for telework, for work-life balance and for productivity in particular, impacts the probability of receiving an interview and what it signals to recruiters. To this end, we set up a state-ofthe-art vignette experiment in which recruiters evaluate fictitious applicants for different jobs. As a result of this experimental set-up, the answers to our research questions can be interpreted causally, and external validity benefits from the heterogeneity of the jobs. We find that if the desire for work-life balance is the stated motivation, the preference is punished more severely than if the motivation is productivity. Compared to applicants who do not mention a preference for telework, recruiters are 5.1 percentage points less inclined to invite applicants who pronounce this desire for work-life balance to an interview and 2.1 percentage points less inclined to invite applicants for whom the motivation is productivity. Lastly, mentioning a telework preference for work-life balance has a clear negative effect on anticipated achievement striving, commitment, and availability.
    Keywords: telework, interview probability, factorial survey experiment
    JEL: M51 M54 J22 J32 J63 J81
    Date: 2023–11
  19. By: Lida H. Aleksanyan; Armen E. Allahverdyan; Vardan G. Bardakhchyan
    Abstract: In the ultimatum game, the challenge is to explain why responders reject non-zero offers thereby defying classical rationality. Fairness and related notions have been the main explanations so far. We explain this rejection behavior via the following principle: if the responder regrets less about losing the offer than the proposer regrets not offering the best option, the offer is rejected. This principle qualifies as a rational punishing behavior and it replaces the experimentally falsified classical rationality (the subgame perfect Nash equilibrium) that leads to accepting any non-zero offer. The principle is implemented via the transitive regret theory for probabilistic lotteries. The expected utility implementation is a limiting case of this. We show that several experimental results normally prescribed to fairness and intent-recognition can be given an alternative explanation via rational punishment; e.g. the comparison between "fair" and "superfair", the behavior under raising the stakes etc. Hence we also propose experiments that can distinguish these two scenarios (fairness versus regret-based punishment). They assume different utilities for the proposer and responder. We focus on the mini-ultimatum version of the game and also show how it can emerge from a more general setup of the game.
    Date: 2023–11
  20. By: Ivàn José Barreda Tarrazona (Universitat Jaume I de Castelló, Spain); Agnès Festré (Université Côte d'Azur, France; GREDEG CNRS); Stein Østbye (University of Tromsø, Norway)
    Abstract: The social fabric, generally recognized as essential for economic and social transactions, is often referred to as Social Capital (SC). In this paper, we explore to what extent inexpensive attitudinal survey data can be a substitute for more expensive experimental data as a metric of SC, using a cross-country design. We use data from two standard subject pools (located in Spain and France) and a mixed-method approach in the sense of presenting validated attitudinal survey questions from the SC section of the latest wave of World Values Survey (WVS) to our participants, in addition to games for eliciting SC through actions and beliefs. Our data can be compared to publicly available WVS data at the relevant regional level as well as the national level. The main takeaway from our study is that SC measured by survey items consistently is higher in Spain than in France regardless of item and spatial resolution (nation, region, lab), whereas SC measured by choices and beliefs in incentivised games consistently is higher in France. This may confirm that there is reason for scepticism concerning the validity of survey measures in the context of social capital, not least since we, as opposed to in earlier studies, have data on group specific items used in the latest wave of WVS pertaining to trust in personal relations as well as more distant relations, all consistently pointing in the same direction regardless of spatial resolution. In this version of the paper we are concentrating on aggregates. Work remain to be done on the individual level.
    Keywords: social capital, mixed-method, cross-cultural, lab experiments
    JEL: Q12 C22 D81
    Date: 2023–06
  21. By: Fetzer, Thiemo (Department of Economics, University of Warwick and University of Bonn.); CL Souza, Pedro (Department of Economics, Queen Mary University of London.); Vanden Eynde, Oliver (Paris School of Economics and CNRS); Wright, Austin L. (Harris School of Public Policy, University of Chicago)
    Abstract: How domestic constituents respond to signals of weakness in foreign wars remains an important question in international relations. In this paper, we study the impact of battlefield casualties and media coverage on public demand for war termination. To identify the effect of troop fatalities, we leverage the otherwise exogenous timing of survey collection across 26, 776 respondents from nine members of the International Security Assistance Force (ISAF) in Afghanistan. Quasi-experimental evidence demonstrates that battlefield casualties increase coverage of the Afghan conflict and public demand for withdrawal, with heterogeneous effects consistent with an original theoretical argument. Evidence from a survey experiment replicates the main results. To shed light on the media mechanism, we leverage a news pressure design and find that major sporting matches occurring around the time of battlefield casualties drive down subsequent coverage, and significantly weaken the effect of casualties on support for war termination. These results highlight the crucial role that media play in shaping public support for foreign military interventions.
    Keywords: international security, public opinion, political economy, Afghanistan, NATO JEL Classification:
    Date: 2023
  22. By: Gill, David (Department of Economics, Purdue University); Knepper, Zachary (Department of Economics, Purdue University); Prowse, Victoria (Department of Economics, Purdue University); Zhou, Junya (Department of Economics, Purdue University)
    Abstract: We explore the influence of cognitive ability and judgment on strategic behavior in the beauty contest game. Using the level-k model of bounded rationality, cognitive ability and judgment both predict higher level strategic thinking. However, individuals with better judgment choose the Nash equilibrium action less frequently, and we uncover a novel dynamic mechanism that sheds light on this pattern. Taken together, our results indicate that fluid (i.e., analytical) intelligence is a primary driver of strategic level-k thinking, while facets of judgment that are distinct from fluid intelligence drive the lower inclination of high judgment individuals to choose the equilibrium action.
    Keywords: cognitive ability; judgment; fluid intelligence; matrix reasoning; beauty contest; strategic sophistication; level-k; experiment; game theory JEL Classification: C92; C72; D91
    Date: 2023
  23. By: Krause, Tobias Alexander; Ivanov, Igor; Sidki, Marcus
    Abstract: Investigating institutional trust has a strong tradition in public administration research (Bouckaert and Van de Walle 2003; Van de Walle et al. 2008; Grimmelikhuijsen et al. 2013). Blame attribution theory suggests that citizens may blame politicians for serious distrust in public service providers, however there is only scarce evidence with respect to municipally owned corporations in a private law context (Bisgaard 2015; Van den Bekerom et al. 2021). Considering a large-scale survey experiment on 2, 023 German citizens, we investigated whether citizen trust in local energy providers is affected by perceptions of political influence. Evidence suggests that there is a small bias effect of perceived influence, however this effect contradicts with the blame attribution hypothesis. We find that citizens are much more positive towards direct political influence than predicted.
    Abstract: Die Untersuchung von institutionellem Vertrauen hat eine lange Tradition in der Forschung zur öffentlichen Verwaltung (Bouckaert und Van de Walle 2003; Van de Walle et al. 2008; Grimmelikhuijsen et al. 2013). Die Theorie der Schuldzuweisung legt nahe, dass Bürgerinnen und Bürger Politikerinnen und Politikern die Schuld für ernsthaftes Misstrauen gegenüber öffentlichen Dienstleistungsanbietern geben könnten, allerdings gibt es nur wenig Belege für kommunale Unternehmen in einem privatrechtlichen Kontext (Bisgaard 2015; Van den Bekerom et al. 2021). Anhand eines groß angelegten Umfrageexperiments mit 2.023 deutschen Bürger:innen haben wir untersucht, ob institutionelles Vertrauen der Bürger:innen in lokale Energieversorger durch die Wahrnehmung des politischen Einflusses tangiert wird. Die Ergebnisse deuten darauf hin, dass es einen kleinen Verzerrungseffekt des wahrgenommenen Einflusses gibt, der jedoch im Widerspruch zur Hypothese der Schuldzuweisung steht. Wir stellen fest, dass die Bürger:innen dem direkten politischen Einfluss gegenüber viel positiver eingestellt sind als vermutet.
    Date: 2023
  24. By: Dirk Engelmann (HU Berlin); Jana Friedrichsen (Christian-Albrechts-Universität Kiel); Roel van Veldhuizen (Lund University); Pauline Vorjohann (University of Exeter); Joachim Winter (LMU Munich)
    Abstract: Trust is an important condition for economic growth and other economic outcomes. Previous studies suggest that the decision to trust is driven by a combination of risk attitudes, distributional preferences, betrayal aversion, and beliefs about the probability of being reciprocated. We compare the results of a binary trust game to the results of a series of control treatments that by design remove the effect of one or more of these components of trust. This allows us to decompose variation in trust behavior into its underlying factors. Our results imply that beliefs are a key driver of trust, and that the additional components only play a role when beliefs about reciprocity are sufficiently optimistic. Our decomposition approach can be applied to other settings where multiple factors that are not mutually independent affect behavior. We discuss its advantages over the more traditional approach of controlling for measures of relevant factors derived from separate tasks in regressions, in particular with respect to measurement error and omitted variable bias.
    Keywords: trust; omitted-variable bias; measurement error;
    JEL: C90 D90
    Date: 2023–11–16
  25. By: Feld, Jan (Victoria University of Wellington); Lines, Corinna (Write Limited in Wellington); Ross, Libby (Write Limited in Wellington)
    Abstract: For papers to have scientific impact, they need to impress our peers in their role as referees, journal editors, and members of conference committees. Does better writing help our papers make it past these gatekeepers? In this study, we estimate the effect of writing quality by comparing how 30 economists judge the quality of papers written by PhD students in economics. Each economist judged five papers in their original version and five different papers that had been language edited. No economist saw both versions of the same paper. Our results show that writing matters. Compared to the original versions, economists judge edited versions as higher quality; they are more likely to accept edited versions for a conference; and they believe that edited versions have a better chance of being accepted at a good journal.
    Keywords: academic writing, writing quality, economics, randomized experiment
    JEL: A10
    Date: 2023–11
  26. By: Fabian Kosse (LMU Munich); Ranjita Rajan (The Karta Initiative); Michela Tincani (University College London)
    Abstract: We present the first causal evidence on the persistent impact of enduring competition on prosociality. Inspired by the literature on tournaments within firms, which shows that competitive compensation schemes reduce cooperation in the short-run, we explore if enduring exposure to a competitive environment persistently attenuates prosociality. Based on a large-scale randomized intervention in the education context, we find lower levels of prosociality for students who just experienced a 2-year competition period. 4-year follow-up data indicate that the effect persists and generalizes, suggesting a change in traits and not only in behavior.
    Keywords: prosociality, competition, cooperation, social skills, socio-emotional skills, tournaments, comparative pay, incentive schemes
    JEL: D74 D91 J13 J24
    Date: 2023–11
  27. By: Malte Baader (University of Zurich); Chris Starmer (University of Nottingham); Fabio Tufano (University of Leicester); Simon Gächter (University of Nottingham)
    Abstract: We introduce and test a new tool designed to measure “relationship closeness”. Studying relationship closeness has a long history in psychology and is currently expanding in other fields including economics. Our new measurement tool is a refinement of the widely used ‘Inclusion of Other in the Self’ scale (IOS for short) of Aron et al.(1992) and is designed to embody three key features. First, it retains attractive attributes of the standard IOS tool including being an effective measurement technique which is easy to implement and understand. Second, we enhance the scope for convenient use of the tool via the development of a portable interactive interface that will be particularly useful in online studies. Thirdly and crucially, through extensive pre-registered experimental testing, we demonstrate that our enhanced tool – IOS11 which features an 11-point response scale – outperforms previous versions of IOS in better proxying features of relationships captured by a range of more complex survey tools; the performance of IOS11 is also indistinguishable from that of the more complex ‘Oneness’ measure of Cialdini et al. (1997) which uses the standard IOS as one of its twoitem inputs.
    Keywords: Inclusion of other in the self scale; oneness; relationship closeness; psychometric evaluation; replication
    Date: 2023–10
  28. By: Colleen Heflin (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Hannah Patnaik (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Leonard M. Lopoo (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Siobhan O'Keefe
    Abstract: Food insecurity is more common among military families than the general population, and the transition from active service to civilian life is a time of heightened risk. The Supplemental Nutritional Assistance Program (SNAP) is designed to support food security among low-income families. Many eligible military and veteran families do not enroll in SNAP due to a lack of information, stigma, and administrative barriers. This brief highlights findings from a survey experiment conducted in 2022 and 2023 to assess how small changes to SNAP informational flyers, such as simplifying information provided about SNAP, highlighting that other veterans use SNAP, and emphasizing how much monetary support veterans may be foregoing, to improve SNAP uptake among military families transitioning to civilian life. Results of the study show that making these small changes to informational flyers increased veterans’ awareness and comprehension of SNAP, while also reducing the cognitive load placed on veterans and their families.
    Keywords: Food insecurity, SNAP, veterans
    Date: 2023–11

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