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on Experimental Economics |
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Issue of 2024‒01‒01
twenty-two papers chosen by |
| By: | Oana Borcan (School of Economics, University of East Anglia); Nikita Grabher-Meyer (School of Economics, University of East Anglia); Stephanie Heger (University of Bologna); Amrish Patel (School of Economics, University of East Anglia) |
| Abstract: | Although integrity education and awareness is touted as an important solution to combat corruption, there is little evidence on its effectiveness. To fill this gap, we conduct a lab-in-the-field experiment where law students in Ukraine are randomly assigned to an innovative and interactive integrity training programme to enhance students awareness and behaviour around ethical issues. We collect data on attitudes towards corruption and actual corrupt behaviour through a series of surveys and a novel experimental game, in which both the integrity-trained students and those who did not get assigned to integrity training play the role of middlemen in a bribe exchange between firms and public officials. We show that integrity training had a significant impact on attitudes towards corruption but only significantly reduced corrupt behaviour in the game when the students knew they were playing alongside other integrity-trained students. |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaeco:2023-05&r=exp |
| By: | Yukihiko Funaki; Kohei Kawamura; Nobuyuki Uto; Kozo Ueda |
| Abstract: | We identify a minimal set of components to generate price stickiness by a laboratory experiment on an oligopolistic price setting game. Our design involves repeated aggregate shocks to the market but features no uncertainty in their timing and magnitude, no real-nominal distinction, or no need to compute the best response to the prices of the other subjects. We find persistent price stickiness when prices are strategic complements and fully anticipated shocks lower the equilibrium price. We argue that the observed downward stickiness can be attributed to the presence of strategic uncertainty and strategic complementarity, combined with an asymmetric payoff structure such that adjusting an individual price faster than others toward the lower equilibrium price can potentially lead to a significant loss, compared to faster adjustment to the higher equilibrium price. |
| Keywords: | strategic complements; sticky prices; bounded rationality |
| JEL: | C92 E32 E52 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2023-63&r=exp |
| By: | Florian Englmaier (LMU Munich); Stefan Grimm (LMU Munich); Dominik Grothe (LMU Munich); David Schindler (Tilburg University); Simeon Schudy (LMU Munich) |
| Abstract: | Tournaments are often used to improve performance in innovation contexts. Tournaments provide monetary incentives but also render teams' identity and image concerns salient. We study the effects of tournaments on team performance in a non-routine task and identify the importance of these behavioral aspects. In a field experiment (n>1, 700 participants), we vary the salience of team identity, social image concerns, and whether teams face monetary incentives. Increased salience of team identity does not improve performance. Social image motivates the top performers. Additional monetary incentives improve all teams' outcomes without crowding out teams' willingness to explore or perform similar tasks again. |
| Keywords: | team work; tournaments; rankings; incentives; identity; image concerns; innovation; exploration; natural field experiment; |
| JEL: | C93 D90 J24 J33 M52 |
| Date: | 2023–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:445&r=exp |
| By: | Evan M. Calford; Timothy N. Cason |
| Abstract: | Contributions toward public goods often reveal information that is useful to others considering their own contributions. This experiment compares static and dynamic contribution decisions to determine how contingent reasoning differs in dynamic decisions where equilibrium requires understanding how future information can inform about prior events. This identifies partially cursed individuals who can only extract partial information from contingent events, others who are better at extracting information from past rather than future or concurrent events, and Nash players who effectively perform contingent thinking. Contrary to equilibrium, the dynamic provision mechanism does not lead to lower contributions than the static mechanism. |
| Keywords: | Cursed equilibrium; Voluntary contributions; Club goods; Laboratory experiment |
| JEL: | C91 D71 D91 H41 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1336&r=exp |
| By: | Aljoscha Minnich; Hauke Roggenkamp; Andreas Lange |
| Abstract: | This paper investigates ambiguity attitudes for natural events (temperatures) and how they are updated following new information. Using a general population sample, we first obtain baseline ambiguity attitudes for future weather events based on real temperatures over several past days. Second, we study the influence of different communication types on updating the ambiguity attitudes: participants are given either point estimators, interval estimators, or the combination of both as weather forecasts. We further vary whether the forecast is surprising or in line with the initially received information. In contrast to claims that ambiguity aversion may increase in response to surprising news, we find that ambiguity attitudes are rather robust to new information and variants of their communication. Yet, different variants of communicating new information significantly change the belief updating process and affect the matching probabilities given to specific events. Our sample allows us to analyze sociodemographic correlates of ambiguity attitudes and the updating of ambiguity attitudes to new information. |
| Keywords: | ambiguity attitude, belief updating, expert forecasts, survey experiment |
| JEL: | D81 D83 C93 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10783&r=exp |
| By: | Osman, Adam (University of Illinois at Urbana-Champaign); Speer, Jamin D. (University of Memphis) |
| Abstract: | Aversion to "stigma" - disutility associated with a program or activity due to beliefs about how it is perceived - may affect labor market choices and utilization of social programs, but empirical evidence of its importance is scarce. Using two randomized field experiments, we show that stigma can affect consequential labor market decisions. Treatments designed to alleviate stigma concerns about taking entry-level jobs - such as how those jobs are perceived by society - had small average effects on take-up of job assistance programs. However, using compositional analysis and machine learning methods, we document large heterogeneity in the responses to our treatments. Stigma significantly affects the composition of who takes up a program: the treatments were successful in overcoming stigma for older, wealthier, and working respondents. For other people, we show that our treatments merely increased the salience of the stigma without dispelling it. We conclude that social image concerns affect labor market decisions and that messaging surrounding programs can have important effects on program take-up and composition. |
| Keywords: | stigma, experiment, machine learning |
| JEL: | J22 C93 I38 Z13 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16599&r=exp |
| By: | Dräger, Lena; Nghiem, Giang |
| JEL: | E52 E31 D84 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc23:277587&r=exp |
| By: | Gächter, Simon (University of Nottingham); Fages, Diego Marino (University of Durham) |
| Abstract: | In this paper we disentangle the role of cooperative preferences and beliefs for explaining MPCR and group size effects in public goods games. To achieve this, we use the ABC approach, which explains cooperation as a function of cooperative attitudes and beliefs. We measure cooperative attitudes using the incentive-compatible strategy method by Fischbacher et al. (2001, Economics Letters, 71-3, 397–404)(FGF). However, to keep the incentives in the strategy method equal across all group sizes (which FGF does not), we also compare FGF with a version of the strategy method that is scalable to any group size. We find that preference types are similar across strategy methods, group sizes of 3 and 9, and MPCRs of 0.4 and 0.8. Further experiments with group sizes of 3 and 30 again find similar distributions of conditional preferences. The ABC approach predicts actual cooperation in all conditions and for both strategy methods and reveals that, controlling for elicited preferences, differences in cooperation levels observed across the various games are mostly due to differences in beliefs. |
| Keywords: | public goods, group size, MPCR, strategy method, ABC approach, conditional cooperation, experiments |
| JEL: | C92 H41 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16605&r=exp |
| By: | Camille Cornand (CNRS, GATE UMR 5824, F-69130 Ecully, France); Maria Alejandra Erazo Diaz (University of Bologna, Department of Economics); Béatrice Rey (Univ Lyon, Université Lyon 2, GATE UMR 5824, F-69130 Ecully, France); Adam Zylbersztejn (Univ Lyon, Université Lyon 2, GATE UMR 5824, F-69130 Ecully, France; research fellow at Vistula University Warsaw (AFiBV), Warsaw, Poland) |
| Abstract: | In a context-free preference situation, we conduct a laboratory experiment in which we test higher order ambiguity attitudes (order 2, order 3, and order 4) using a simple model with two states of nature (good and bad). We compare ambiguity attitudes when the random variable capturing ambiguity is introduced on the probability associated with the good state of nature versus the bad state of nature. In addition, in the case of order 3, we compare ambiguity attitudes when the random variable capturing ambiguity is presented as two harms (as usual in decision theory) versus one harm and one favor. We first establish the theoretical prediction of a general consistency of ambiguity attitudes. Ceteris paribus, these attitudes should remain invariant with respect to (i) the state of nature to which ambiguity is associated, and to (ii) the type of the change (harm or favor) in the probability to which ambiguity is associated. Our empirical results systematically contradict this formal prediction pointing to the behavioral importance of ambiguity framing. |
| Keywords: | Ambiguity attitudes; Higher order attitudes; Ambiguity aversion; Ambiguity prudence; Ambiguity temperance; Framing |
| JEL: | D81 C91 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:2318&r=exp |
| By: | Lea Heursen (HU Berlin); Svenja Friess (Max Planck Institute for Innovation and Competition/LMU Munich); Marina Chugunova (Max Planck Institute for Innovation and Competition) |
| Abstract: | We examine the impact of reputational concerns on seeking advice. While seeking can improve performance, it may affect how others perceive the seeker's competence. In an online experiment with white-collar professionals (N=2, 521), we test how individuals navigate this tradeoff and if others' beliefs about competence change it. We manipulate visibility of the decision to seek and stereotypes about competence. Results show a sizable and inefficient decline in advice-seeking when visible to a manager. Higher-order beliefs about competence cannot mediate this inefficiency. We find no evidence that managers interpret advice-seeking negatively, documenting a misconception that may hinder knowledge flows in organizations. |
| Keywords: | advice-seeking; reputational concerns; stereotypes; higher-order beliefs; knowledge flows; experiment; |
| JEL: | D16 D21 D83 D91 M51 |
| Date: | 2023–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:447&r=exp |
| By: | Bernold, Elizabeth; Gsottbauer, Elisabeth; Ackermann, Kurt A.; Murphy, Ryan |
| Abstract: | Past experiments show systematic differences in contributions to public goods under various framing conditions. Several explanations of these differences have been presented. Some suggest that social frames affect subjects' preferences, while others suggest that framing changes subjects' beliefs about others, and thus in turn affects behavior. In this paper, we test the effect of framing on the level of contributions in a series of public goods games designed to separate the impact of preferences from beliefs in shaping cooperative decisions. This is achieved by implementing a social value orientation measure to elicit social preferences from decision makers, which are then analyzed in concert with reported beliefs about others’ cooperation and own contribution decisions from the linear public goods games. While we find mixed results on framing effects, our study demonstrates that preferences and beliefs are significant predictors of cooperation. Furthermore, the degree to which they influence cooperation is either strengthened or weakened by framing. |
| Keywords: | cooperation; framing; public good game; social value orientation (svo); beliefs; 100014 143199/1 |
| JEL: | M40 J1 |
| Date: | 2023–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:119353&r=exp |
| By: | Livia Alfonsi; Michal Bauer; Julie Chytilová; Edward Miguel |
| Abstract: | We study how human capital and economic conditions causally affect the choice of religious denomination. We utilize a longitudinal dataset monitoring the religious history of more than 5, 000 Kenyans over twenty years, in tandem with a randomized experiment (deworming) that has exogenously boosted education and living standards. The main finding is that the program reduces the likelihood of membership in a Pentecostal denomination up to 20 years later when respondents are in their mid-thirties, while there is a comparable increase in membership in traditional Christian denominations. The effect is concentrated and statistically significant among a sub-group of participants who benefited most from the program in terms of increased education and income. The effects are unlikely due to increased secularization, because the program does not reduce measures of religiosity. The results help explain why the global growth of the Pentecostal movement, sometimes described a “New Reformation”, is centered in low-income communities. |
| Keywords: | religion, identity, human capital, Kenya |
| JEL: | C93 O12 Z12 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10772&r=exp |
| By: | Thiemo Fetzer; Pedro CL Souza; Oliver Vanden Eynde; Austin L. Wright |
| 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 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10770&r=exp |
| By: | Aljoscha Minnich; Andreas Lange |
| Abstract: | This study measures the differences in ambiguity attitudes of groups and individuals in the gain and loss domain. We elicit the ambiguity attitudes and ambiguity-generated insensitivity for natural temperature events. We do not find significant differences between individuals and groups in our main sample, yet higher ambiguity aversion and ambiguity-generated insensitivity results for groups in the gain when constraining the sample to groups and individuals with a better understanding of the experiment. Moreover, the group effect on the ambiguity-generated insensitivity seems domain dependent. |
| Keywords: | ambiguity attitudes, group decision making, gain and loss domain |
| JEL: | C91 C92 D70 D81 D83 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10781&r=exp |
| By: | Charles, Constantin; Frydman, Cary; Kilic, Mete |
| Abstract: | We experimentally study the transmission of subjective expectations into actions. Subjects in our experiment report valuations that are far too insensitive to their expectations, relative to the prediction from a frictionless model. We propose that the insensitivity is driven by a noisy cognitive process that prevents subjects from precisely computing asset valuations. The empirical link between subjective expectations and actions becomes stronger as subjective expectations approach rational expectations. Our results highlight the importance of incorporating weak transmission into belief-based asset pricing models. Finally, we discuss how cognitive noise can provide a microfoundation for inelastic demand in the stock market. |
| Keywords: | 1749824 |
| JEL: | F3 G3 |
| Date: | 2023–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120788&r=exp |
| By: | Fabian Kosse; Ranjita Rajan; Michela Tincani; Michela Maria Tincani |
| 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: | D64 C90 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10779&r=exp |
| By: | Alonso, Ricardo; Câmara, Odilon |
| Abstract: | We develop a theory of credible skepticism in organizations to explain the main tradeoffs in organizing data generation, analysis, and reporting. In our designer-agent-principal game, the designer selects the information privately observed by the agent who can misreport it at a cost, whereas the principal can audit the report. We study three organizational levers: tampering prevention, tampering detection, and the allocation of the experimental-design task. We show that motivating informative experimentation while discouraging misreporting are often conflicting organizational goals. To incentivize experimentation, the principal foregoes a flawless tampering detection/prevention system and separates the tasks of experimental design and analysis. |
| Keywords: | strategic experimentation; Bayesian persuasion; tampering; organizational design; information technology; audit |
| JEL: | D80 D83 M10 |
| Date: | 2023–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120780&r=exp |
| By: | Fabian Kosse (University of Würzburg, briq); 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: | D64 C90 |
| Date: | 2023–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:449&r=exp |
| By: | Au, Pak Hung (Hong Kong University of Science & Technology); Li, King King (Shenzhen University); Zhang, Qing (Hunan University); Zhu, Rong (Flinders University) |
| Abstract: | Freedom of choice is often thought to improve efficiency. We experimentally investigate the effect of giving workers a choice between compensation schemes with and without a CSR component (CSR/NoCSR) on labor market participation decision and work performance, compared to the alternative of exogenous assignment. Classical economic theory suggests that giving workers a choice should not reduce their performance. Our results show that there are hidden costs associated with the right of choice. When a worker is allowed to choose his or her compensation scheme, the labor market participation rate is significantly lower than when the same scheme is exogenously assigned. Work quality is also significantly lower for those who choose CSR, as well as for those who choose no CSR, than for those who are exogenously assigned to the same scheme.We propose a model of signaling with image concerns to explain why the freedom of choice may induce reduced participation and effort exertion of workers. |
| Keywords: | choice, signaling, image concerns, corporate social responsibility, labor, experiment |
| JEL: | M14 J01 C9 M52 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16623&r=exp |
| By: | Jossie Fahsbender; Siddhant Gokhale; Michael Walton |
| Abstract: | Developing scalable innovations is a central challenge in development. Organizations that succeed in scaling often prioritize measurement, learning, and evaluation, but how this is done is poorly understood. This paper explores the case of Pratham, one of the largest NGOs in primary education and an exceptional learning organization. While Pratham is renowned for its randomized control trial sequence with J-PAL, we underscore this is just one aspect of a wider array of learning activities. These include an iterative process to continuously refine and protocolize solutions as they scale, the use of on-field qualitative insights and quantitative tracking, open feedback channels between the field, state, and central offices, information exchange among content and evaluation teams, and a nationwide assessment of learning levels (ASER). The RCTs were effective because they were embedded within this broader learning process and culture. Pratham learns at three levels: learning to improve children's basic skills, learning as an organization about what does and doesn’t work, and fostering learning by others in the system. Its learning capacity is rooted in deep-seated values and a culture of openness, trust, problem-solving, and the freedom to experiment and learn from failure, inculcated and nurtured by its leadership. Throughout, we use the prism of an Adaptive Evaluation to provide a systematic framework for mirroring and understanding Pratham's organic learning processes (as affirmed by its own leadership). Pratham actively engages with the three main pillars of an Adaptive Evaluation, involving understanding systems, theorizing how to effect change, and iterating its designs. While Pratham’s culture will often not be transferable, the systematic analysis of how Pratham learns can provide a framework for other organizations aspiring to replicate Pratham's success as a learning institution. |
| Keywords: | Pratham, Primary Education |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:cid:wpfacu:438&r=exp |
| By: | Jian, L.; Linton, O. B.; Tang, H.; Zhang, Y. |
| Abstract: | We investigate how to improve efficiency using regression adjustments with covariates in covariate-adaptive randomizations (CARs) with imperfect subject compliance. Our regression-adjusted estimators, which are based on the doubly robust moment for local average treatment effects, are consistent and asymptotically normal even with heterogeneous probabilities of assignment and misspecified regression adjustments. We propose an optimal but potentially misspecified linear adjustment and its further improvement via a nonlinear adjustment, both of which lead to more efficient estimators than the one without adjustments. We also provide conditions for nonparametric and regularized adjustments to achieve the semiparametric efficiency bound under CARs. |
| Keywords: | Covariate-adaptive randomization, High-dimensional data, Local average treatment effects, Randomized experiment, Regression adjustment |
| JEL: | C14 C21 I21 |
| Date: | 2023–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2366&r=exp |
| By: | Seth M. Freedman; Alex Hollingsworth; Kosali I. Simon; Coady Wing; Madeline Yozwiak |
| Abstract: | Difference-in-Difference (DID) estimators are a valuable method for identifying causal effects in the public health researcher’s toolkit. A growing methods literature points out potential problems with DID estimators when treatment is staggered in adoption and varies with time. Despite this, no practical guide exists for addressing these new critiques in public health research. We illustrate these new DID concepts with step-by-step examples, code, and a checklist. We draw insights by comparing the simple 2 × 2 DID design (single treatment group, single control group, two time periods) with more complex cases: additional treated groups, additional time periods of treatment, and with treatment effects possibly varying over time. We outline newly uncovered threats to causal interpretation of DID estimates and the solutions the literature has proposed, relying on a decomposition that shows how the more complex DID are an average of simpler 2X2 DID sub-experiments. |
| JEL: | I0 I1 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31842&r=exp |