nep-exp New Economics Papers
on Experimental Economics
Issue of 2024‒03‒04
twenty-six papers chosen by

  1. Does online fundraising increase charitable giving? A nationwide field experiment on Facebook By Adena, Maja; Hager, Anselm
  2. The Truth-Telling of Truth-Seekers: Evidence from Online Experiments with Scientists By Moritz A. Drupp; Menusch Khadjavi; Rudi Voss
  3. Differences in how and why social comparisons and real-time feedback impact resource use: Evidence from a field experiment By Andor, Mark Andreas; Götte, Lorenz; Price, Michael Keith; Schulze Tilling, Anna; Tomberg, Lukas
  4. Are biases contagious? The influence of communication on motivated beliefs By Grunewald, Andreas; Klockmann, Victor; von Schenk, Alicia; von Siemens, Ferdinand
  5. Rebate rules in reward-based crowdfunding: Introducing the bid-cap rule By Fabian Gerstmeier; Yigit Oezcelik; Michel Tolksdorf
  7. Do Patients Value High-Quality Medical Care? Experimental Evidence from Malaria Diagnosis and Treatment By Carolina Lopez; Anja Sautmann; Simone G. Schaner
  8. Tendencies toward triadic closure: Field-experimental evidence By Mosleh, Mohsen; Eckles, Dean; Rand, David Gertler
  9. Too old to be a diversity hire: choice bundling shown to increase gender-diverse hiring decisions fails to increase age diversity By Jolles, Daniel; Juanchich, Marie; Piccoli, Beatrice
  10. How Do Surrogates Make Treatment Decisions for Patients with Dementia? An Experimental Survey Study By Lauren Hersch Nicholas; Kenneth M. Langa; Scott D. Halpern; Mario Macis
  11. Negative Emission Technologies and Climate Cooperation By Michela Boldrini; Valentina Bosetti; Salvatore Nunnari
  12. Does Information about Inequality and Discrimination in Early Child Care Affect Policy Preferences? By Hermes, Henning; Lergetporer, Philipp; Mierisch, Fabian; Schwerdt, Guido; Wiederhold, Simon
  13. Information-Constrained Coordination of Economic Behavior By Guy Aridor; Rava Azeredo da Silveira; Michael Woodford
  14. News and Views on Public Finances: A Survey Experiment By Jan Behringer; Lena Dräger; Sebastian Dullien; Sebastian Gechert
  15. Incentives, Framing, and Reliance on Algorithmic Advice: An Experimental Study By Greiner, Ben; Grünwald, Philipp; Lindner, Thomas; Lintner, Georg; Wiernsperger, Martin
  16. Platform Information Provision and Consumer Search: A Field Experiment By Lu Fang; Yanyou Chen; Chiara Farronato; Zhe Yuan; Yitong Wang
  17. Revisiting ‘Growth and Inequality in Public Good Provision’—Reproducing and Generalizing Through Inconvenient Online Experimentation By Roggenkamp, Hauke C.
  18. The Impact of the Menstrual Cycle on Bargaining Behavior By Lozano, Lina; Riedl, Arno; Rott, Christina
  19. The impact of insufficient sleep on the serial reproduction of information By David L. Dickinson; Sean P.A. Drummond
  20. Using point forecasts to anchor probabilistic survey scales By Becker, Christoph K.; Duersch, Peter; Eife, Thomas A.; Glas, Alexander
  21. Deliberately Ignoring Unfairness: Responses to Uncertain Inequality in the Ultimatum Game By Konstantin Offer; Dorothee Mischkowski; Zoe Rahwan; Christoph Engel
  22. Technological Shocks and Algorithmic Decision Aids in Credence Goods Markets By Alexander Erlei; Lukas Meub
  23. Misperceived Effectiveness and the Demand for Psychotherapy By Christopher Roth; Peter Schwardmann; Egon Tripodi
  24. Decreasing Differences in Expert Advice By Elias Bouacida; Renaud Foucart; Maya Jalloul
  25. Does Pension Automatic Enrollment Increase Debt? Evidence from a Large-Scale Natural Experiment By John Beshears; Matthew Blakstad; James J. Choi; Christopher Firth; John Gathergood; David Laibson; Richard Notley; Jesal D. Sheth; Will Sandbrook; Neil Stewart
  26. Using Generative Pre-Trained Transformers (GPT) for Supervised Content Encoding: An Application in Corresponding Experiments By Churchill, Alexander; Pichika, Shamitha; Xu, Chengxin

  1. By: Adena, Maja; Hager, Anselm
    Abstract: Does online fundraising increase charitable giving? Using the Facebook advertising tool, we implemented a natural field experiment across Germany, randomly assigning almost 8, 000 postal codes to Save the Children fundraising videos or to a pure control. We studied changes in the donation revenue and frequency for Save the Children and other charities by postal code. Our georandomized design circumvented many difficulties inherent in studies based on click-through data, especially substitution and measurement issues. We found that (i) video fundraising increased donation revenue and frequency to Save the Children during the campaign and in the subsequent five weeks; (ii) the campaign was profitable for the fundraiser; and (iii) the effects were similar independent of video content and impression assignment strategy. However, we also found some crowding out of donations to other similar charities or projects. Finally, we demonstrated that click data may be an inappropriate proxy for donations and recommend that managers use careful experimental designs that can plausibly evaluate the effects of advertising on relevant outcomes.
    Keywords: Charitable giving, field experiments, fundraising, social media, competition
    JEL: C93 D64 D12
    Date: 2024
  2. By: Moritz A. Drupp; Menusch Khadjavi; Rudi Voss
    Abstract: Academic honesty is crucial for scientific advancement, yet replication crises and misconduct scandals are omnipresent. We provide evidence on scientists’ truth-telling from two incentivized coin-tossing experiments with more than 1, 300 scientists. Experiment I, with predominantly European and North-American scientists, shows that fewer scientists over-report winning tosses when their professional identity is salient. The global Experiment II yields heterogeneous effects. We replicate Experiment I’s effect for North-American scientists, but find the opposite for Southern European and East-Asian scientists. Over-reporting correlates with publication metrics and country-level measures of academic and field-experimental dishonesty, suggesting that country-level honesty norms also guide truth-telling by scientists.
    Keywords: truth-telling, lying, identity, science, cross-country, experiment
    JEL: C93 D82 K42 J45
    Date: 2024
  3. By: Andor, Mark Andreas; Götte, Lorenz; Price, Michael Keith; Schulze Tilling, Anna; Tomberg, Lukas
    Abstract: We compare the behavior and welfare effects of two popular behavioral interventions for resource conservation. The first intervention is social comparison reports (SC), primarily providing consumers with information motivating behavioral change. The second intervention is real-time feedback (RTF), primarily providing consumers with information facilitating behavioral change. In a field experiment with around 1, 000 participants, SC reduces water use per shower by 9.4%, RTF by 28.8%, and the combination of both interventions by 35.0%. Participants' willingness to pay for RTF and the combination is higher than for SC. We find that all interventions enhance welfare.
    Abstract: Wir vergleichen die Verhaltens- und Wohlfahrtseffekte von zwei populären verhaltensökonomischen Interventionen zur Ressourcenschonung. Bei der ersten Intervention handelt es sich um soziale Vergleichsberichte, die den Verbraucherinnen und Verbrauchern Informationen zur Verfügung stellen, die in erster Linie zu Verhaltensänderungen motivieren. Bei der zweiten Intervention handelt es sich um Echtzeit-Feedback, das den Verbraucherinnen und Verbrauchern Informationen zur Verfügung stellt, die Verhaltensänderungen in erster Linie erleichtern. In einem Feldexperiment mit rund 1.000 Teilnehmenden reduzieren soziale Vergleichsberichte den Wasserverbrauch pro Dusche um 9, 4 %, Echtzeit-Feedback um 28, 8 % und die Kombination beider Interventionen um 35, 0 %. Die Bereitschaft dem Teilnehmenden, für Echtzeit-Feedback und die Kombination zu zahlen, ist höher als für soziale Vergleichsberichte. Wir stellen fest, dass alle getesteten Interventionen wohlfahrtssteigernd sind.
    Keywords: Resource conservation, welfare, real-time feedback, social comparison, behavioral intervention, field experiment
    JEL: D12 C93 Q25
    Date: 2023
  4. By: Grunewald, Andreas; Klockmann, Victor; von Schenk, Alicia; von Siemens, Ferdinand
    Abstract: This paper examines the potential reinforcement of motivated beliefs when individuals with identical biases communicate. We propose a controlled online experiment that allows to manipulate belief biases and the communication environment. We find that communication, even among like-minded individuals, diminishes motivated beliefs if it takes place in an environment without previously declared external opinions. In the presence of external plural opinions, however, communication does not reduce but rather aggravates motivated beliefs. Our results indicate a potential drawback of the plurality of opinions-it may create communication environments wherein motivated beliefs not only persist but also become contagious within social networks.
    Keywords: Belief bias, Social interaction, Motivated beliefs
    JEL: C91 C92 D83
    Date: 2024
  5. By: Fabian Gerstmeier; Yigit Oezcelik; Michel Tolksdorf
    Abstract: We study the efficacy of rebates in reward-based crowdfunding, where a project is only realized when a funding goal is met, and only those who pledge at least a reservation price receive a reward. We propose and experimentally test two rebate rules against the all-or-nothing model. Firstly, we adapt the proportional rebate rule from threshold public good games to our rewardbased setting. Secondly, we develop the novel bid-cap rule. Here, pledges must only be paid up to a cap, which is determined ex-post such that the provision point is exactly met. Theoretically, the bid-cap rule induces weakly less variance in payments compared with the proportional rebate rule. In our experiment, both rebate rules induce higher pledges and increase the project realization rate in comparison to the all-or-nothing model. Further, we can confirm that the variance of payments is lower under the bid-cap rule compared with the proportional rebate rule
    Keywords: Crowdfunding, laboratory experiment, provision point mechanism, rebates
    JEL: C72 C92 H41
    Date: 2023–05
  6. By: John List
    Abstract: In 2019 I put together a summary of data from my field experiments website that pertained to framed field experiments (see List 2024). Several people have asked me if I have an update. In this document I update all figures and numbers to show the details for 2023. I also include the description from the 2019 paper below.
    Date: 2024
  7. By: Carolina Lopez; Anja Sautmann; Simone G. Schaner
    Abstract: Can information about the value of diagnostic tests improve provider practice and help patients recognize higher quality of care? In a randomized experiment at public clinics in Mali, health providers and patients received tailored information about the importance of rapid diagnostic tests (RDTs) for malaria. The provider training increased provider reliance on RDTs, improving the match between a patient's malaria status and treatment with antimalarials by 15-30 percent. Nonetheless, patients were significantly less satisfied with the care they received, driven by those whose prior beliefs did not match their true malaria status. The patient information intervention did not affect treatment outcomes or patient satisfaction and reduced malaria testing. These findings are consistent with highly persistent patient beliefs that translate into low demand for diagnostic testing and limit patients' ability to recognize improved quality of care.
    JEL: I11 I12 O15
    Date: 2024–01
  8. By: Mosleh, Mohsen; Eckles, Dean (MIT); Rand, David Gertler
    Abstract: Empirical social networks are characterized by a high degree of triadic closure (i.e. transitivity, clustering), whereby network neighbors of the same individual are also likely to be directly connected. It is unknown to what degree this results from dispositions to form such relationships (i.e. to close open triangles) per se or whether it reflects other processes, such as homophily and more opportunities for exposure. These are difficult to disentangle in many settings, but in social media not only can they be decomposed, but platforms frequently make decisions that can depend on these distinct processes. Here, using a field experiment on social media, we randomize the existing network structure that a user faces when followed by a target account that we control, and we examine whether they reciprocate this tie formation. Being randomly assigned to have an existing tie to an account that follows the target user increases tie formation by 35%. Through the use of multiple control conditions in which the relevant tie is absent (never existent or removed), we are able to attribute this effect specifically to a small variation in the stimulus that indicates the presence (or absence) of a potential mutual follower. Theory suggests that triadic closure should be especially likely in open triads of strong ties, and we find evidence of larger effects when the subject has interacted more with the existing follower. These results indicate a substantial role for dispositions toward triadic closure, which platforms and others can choose to leverage in encouraging tie formation, with implications for network structure and the diffusion of information in online networks.
    Date: 2024–01–24
  9. By: Jolles, Daniel; Juanchich, Marie; Piccoli, Beatrice
    Abstract: Past research has shown that people are more likely to make the decision to hire candidates whose gender would increase group diversity when making multiple hiring choices in a bundle (i.e., when selecting multiple team members simultaneously) compared to making choices in isolation (i.e., when selecting a single team member). However, it is unclear if this bundling effect extends to age diversity and the selection of older candidates, as older workers are often the target of socially acceptable negative stereotypes and bias in recruitment, leaving them unemployed for longer than their younger counterparts. Across five preregistered experiments (total N = 4, 096), we tested if the positive effect of bundling on diversity of selections extends to older candidates in hiring decisions. We found evidence of bias against older job candidates in hiring decisions but found inconsistent effects of choice bundling on the selection of older candidates across experiments. An effect of bundling was found in two of five experiments, with no meta-analytic effect found across the five studies. Making older candidates more competitive and introducing a diversity statement aimed at increasing their selection both significantly increased older candidate selections, but failed to activate the bundling effect. We discuss the theoretical implications for choice bundling interventions and for age as a diversity characteristic to support the design of interventions that meet the challenges of an aging workforce.
    Keywords: hiring decisions; aging; diversity; decision making; Open Access funding
    JEL: R14 J01
    Date: 2023–12–14
  10. By: Lauren Hersch Nicholas; Kenneth M. Langa; Scott D. Halpern; Mario Macis
    Abstract: Despite the growing need for surrogate decision-making for older adults, little is known about how surrogates make decisions and whether advance directives would change decision-making. We conducted a nationally representative experimental survey that cross-randomized cognitive impairment, gender, and characteristics of advance care planning among hospitalized older adults through a series of vignettes. Our study yielded three main findings: first, respondents were much less likely to recommend life-sustaining treatments for patients with dementia, especially after personal exposure. Second, respondents were more likely to ignore patient preferences for life-extending treatment when the patient had dementia, and choose unwanted life-extending treatments for patients without dementia. Third, in scenarios where the patient's wishes were unclear, respondents were more likely to choose treatments that matched their own preferences. These findings underscore the need for improved communication and decision-making processes for patients with cognitive impairment and highlight the importance of choosing a surrogate decision-maker with similar treatment preferences.
    JEL: C99 I12 J14
    Date: 2024–02
  11. By: Michela Boldrini; Valentina Bosetti; Salvatore Nunnari
    Abstract: Negative Emissions Technologies (NETs) — a range of methods to remove carbon dioxide from the atmosphere— are a crucial innovation in meeting temperature targets set by international climate agreements. However, mechanisms which undo the adverse consequences of short-sighted actions (as NETs) can fuel substitution effects and crowd out virtuous behaviors (e.g., mitigation efforts). For this reason, the impact of NETs on environmental preservation is an open question among scientists and policy-makers. We model this problem through a novel restorable common-pool resource game and use a laboratory experiment to exogenously manipulate key features of NETs and assess their consequences. We show that crowding out only emerges when NETs are surely available and cheap. The availability of NETs does not allow experimental communities to either conserve the common resource for longer or accrue higher earnings and makes the earnings distribution more unequal.
    Keywords: climate crisis, environmental sustainability, carbon dioxide removal, common-pool resource, free-rider problem, laboratory experiment
    JEL: C92 H41 Q55
    Date: 2024
  12. By: Hermes, Henning (Ifo Institute for Economic Research); Lergetporer, Philipp (Technical University of Munich); Mierisch, Fabian (Catholic University of Eichstätt-Ingolstadt); Schwerdt, Guido (University of Konstanz); Wiederhold, Simon (IWH Halle)
    Abstract: We investigate public preferences for equity-enhancing policies in access to early child care, using a survey experiment with a representative sample of the German population (n ≈ 4, 800). We observe strong misperceptions about migrant-native inequalities in early child care that vary by respondents' age and right-wing voting preferences. Randomly providing information about the actual extent of inequalities has a nuanced impact on the support for equity-enhancing policy reforms: it increases support for respondents who initially underestimated these inequalities, and tends to decrease support for those who initially overestimated them. This asymmetric effect leads to a more consensual policy view, substantially decreasing the polarization in policy support between under- and overestimators. Our results suggest that correcting misperceptions can align public policy preferences, potentially leading to less polarized debates about how to address inequalities and discrimination.
    Keywords: child care, policy support, information, inequality, discrimination, survey experiment
    JEL: I24 J18 J13 D83 C99
    Date: 2024–01
  13. By: Guy Aridor; Rava Azeredo da Silveira; Michael Woodford
    Abstract: We analyze a coordination game with information-constrained players. The players' actions are based on a noisy compressed representation of the game's payoffs in a particular case, where the compressed representation is a latent state learned by a variational autoencoder (VAE). Our generalized VAE is optimized to trade off the average payoff obtained over a distribution of possible games against a measure of the congruence between the agent's internal model and the statistics of its environment. We apply our model to the coordination game in the experiment of Frydman and Nunnari (2023), and show that it offers an explanation for two salient features of the experimental evidence: both the relatively continuous variation in the players' action probabilities with changes in the game payoffs, and the dependence of the degree of stochasticity of players' choices on the range of game payoffs encountered on different trials. Our approach also provides an account of the way in which play should gradually adjust to a change in the distribution of game payoffs that are encountered, offering an explanation for the history-dependent play documented by Arifovic et al. (2013).
    JEL: C60 C73 C92 D89
    Date: 2024–02
  14. By: Jan Behringer; Lena Dräger; Sebastian Dullien; Sebastian Gechert
    Abstract: We use novel German survey data to investigate how perceptions and information about public finances influence attitudes towards public debt and fiscal rules. On average, people strongly underestimate the debt-to-GDP ratio, overestimate the interest-to-tax-revenue ratio and favor a tighter German debt brake. In an information treatment experiment, people consider public debt to be a more (less) severe problem once they learn the actual debt-to-GDP or interest-to-tax-revenue ratio is higher (lower) than their estimates. However, the treatment effects partly vanish when anchoring respondents’ beliefs with historical public debt figures. We find no treatment effects on attitudes towards the debt brake.
    Keywords: public debt, fiscal rules, information treatment, expectations
    JEL: E60 D83 H31 H60
    Date: 2024
  15. By: Greiner, Ben; Grünwald, Philipp; Lindner, Thomas; Lintner, Georg; Wiernsperger, Martin
    Abstract: Managerial decision-makers are increasingly supported by advanced data analytics and other AI-based technologies, but are often found to be hesitant to follow the algorithmic advice. We examine how compensation contract design and framing of an AI algorithm influence decision-makers’ reliance on algorithmic advice and performance in a price estimation task. Based on a large sample of almost 1, 500 participants, we find that compared to a fixed compensation, both compensation contracts based on individual performance and tournament contracts lead to an increase in effort duration and to more reliance on algorithmic advice. We further find that using an AI algorithm that is framed as incorporating also human expertise has positive effects on advice utilization, especially for decision-makers with fixed pay contracts. By showing how widely used control practices such as incentives and task framing influence the interaction of human decision-makers with AI algorithms, our findings have direct implications for managerial practice.
    Keywords: artificial intelligence; algorithmic advice; human-augmented algorithmic advice; trust; financial incentives; decision-making
    Date: 2024–01–31
  16. By: Lu Fang; Yanyou Chen; Chiara Farronato; Zhe Yuan; Yitong Wang
    Abstract: Despite substantial efforts to help consumers search in more intuitive ways, text search remains the predominant tool for product discovery online. In this paper, we explore the effects of visual and textual cues for search refinement on consumer search and purchasing behavior. We collaborate with one of the largest e-commerce platforms in China and study its roll out of a new search tool. When a customer searches for a general term (e.g., “headphones”), the tool suggests refined queries (e.g., “bluetooth headphones” or “noise-canceling headphones”) with the help of images and texts. The search tool was rolled out with a long-run experiment, which allows us to measure its short-run and long-run effects. We find that, although there was no immediate effect on orders or total expenditures, the search tool changed customers’ search and purchasing behavior in the long-run. Customers with access to the new tool eventually increased orders and expenditures compared to those in the control group, especially for non top-selling products. The purchase increase comes from more effective searches, rather than an increase in activity on the platform. We also find that the effect is not only driven by the direct value of suggested searches, but also by customers indirectly learning to perform more effective searches on their own.
    JEL: D81 D83 L2 L81 L86
    Date: 2024–02
  17. By: Roggenkamp, Hauke C. (Univerisity of St. Gallen)
    Abstract: I revisit the dynamic public goods game developed by Gächter et al. (2017) to study cooperation under dynamic interdependencies. Collecting data from both a convenient (students) and an inconvenient (general population) sample, I not only reproduce some of the authors' original observations but also test their novel game's generalizability. Appending a charitable dictator game, I find no correlations between behavior in the charitable context and the dynamic game. This applies to students and the general population sample alike. Because the study of inexperienced general population samples raises methodological challenges, such as fatigue and dropouts, this research approaches them. In doing so, I provide simple solutions to run reliable interactive experiments online. Furthermore, this article showcases the use of literate programming and version control which I argue are convenient tools to make pre-registrations more credible and flexible.
    Date: 2024–02–07
  18. By: Lozano, Lina (New York University, Abu Dhabi); Riedl, Arno (Maastricht University); Rott, Christina (Vrije Universiteit Amsterdam)
    Abstract: We investigate experimentally how the menstrual cycle affects bargaining behavior and bargaining outcomes of women. Female participants negotiate in an unstructured bilateral bargaining game with asymmetric information about the allocation of a surplus ('pie size'). We find that the menstrual cycle affects bargaining behavior and that the effects depend on the information players have. Players who are informed about the pie size are less compromising during ovulation and receive higher payoffs conditional on reaching an agreement. Uninformed players achieve higher final payoffs during ovulation, which is mainly driven by higher agreement rates.
    Keywords: bargaining, asymmetric information, menstrual cycle, biological factors
    JEL: C78 C91 D87 J16
    Date: 2024–01
  19. By: David L. Dickinson; Sean P.A. Drummond
    Abstract: Story telling is part of life, and the retelling of stories is an important form of communication, cultural practice, and message transmission. Insufficient sleep is known to affect relevant cognitive skill areas necessary for story retelling or transmission fidelity. We conducted a preregistered study on n=118 young adults who were administered a week each of restricted and well-rested sleep levels in their home environment (37 additional control participants were well-rested both treatment weeks). A serial story reproduction task was administered online, and the content of story retells was examined regarding the preservation of characters, details, and the key story event. Chains of up to 3 retells of a given story were examined, which involved varied numbers of sleep restricted (SR) versus well-rested (WR) retellers. While all retells of a story showed an average decay in content, results show that additional SR retellers in a chain was associated with greater decay, which mostly resulted from the introduction of an initial SR reteller at the beginning of the chain. Supporting the group-level effect, individual-level analysis confirmed that both the number of details and the story’s key event were significantly less preserved after the SR compared to WR treatment week. Exploratory analysis showed an attenuation of this effect in those who reported a higher level of affective response (interest or surprise) in the story. This suggests that emotional engagement is important in combatting the deleterious effects of SR on successful story retelling, and perhaps on other types of content recollection Key Words: Sleep restriction, cognition, communication, information transmission
    JEL: C91 D90 D83
    Date: 2024
  20. By: Becker, Christoph K.; Duersch, Peter; Eife, Thomas A.; Glas, Alexander
    Abstract: We present the results of an experiment where a random subset of the participants in the Bundesbank's household panel receive personalized response scales, centered at each participant's point forecast. Personalized response scales offer two advantages over the standard scale which is centered at zero inflation: First, they mitigate the impact of the central tendency bias which leads respondents to assign greater probability mass to the center of the scale at zero. Second, they eliminate the need to adjust the scale when actual inflation falls outside the range for which the response scale was designed. Our results show that the personalized survey responses are of higher quality in three dimensions: (i) higher internal consistency, (ii) more uni-modal responses, and (iii) a significant reduction in the use of the (minimally informative) unbounded intervals of the response scale.
    Keywords: Inflation; density forecast; probabilistic forecast; experiment; survey design; personalized response scales
    Date: 2024–02–14
  21. By: Konstantin Offer (Max Planck Institute for Human Development, Center for Adaptive Rationality (ARC), Lentzeallee 94, 14195 Berlin, Germany); Dorothee Mischkowski (Max Planck Institute for Research on Collective Goods, Bonn and Leiden University, The Netherlands); Zoe Rahwan (Max Planck Institute for Human Development, Center for Adaptive Rationality (ARC), Lentzeallee 94, 14195 Berlin, Germany); Christoph Engel (Max Planck Institute for Research on Collective Goods)
    Abstract: Why do people punish experienced unfairness if it induces costs for both the punisher and punished person(s) without any direct material benefits for the punisher? Economic theories of fairness propose that punishers experience disutility from disadvantageous inequality and punish in order to establish equality in outcomes. We tested these theories in a modified Ultimatum Game (N = 1, 370) by examining whether people avoid the urge to reject unfair offers, and thereby punish the proposer, by deliberately blinding themselves to unfairness. We found that 53% of participants deliberately ignored whether they had received an unfair offer. Among these participants, only 6% of unfair offers were rejected. In contrast, participants who actively sought information rejected 39% of unfair offers. Averaging these rejection rates to 21%, no significant difference to the rejection rate by participants who were directly informed about unfairness was found––in line with economic theories of fairness. We interpret these findings as evidence for sorting behavior: People who want to punish experienced unfairness seek information about it, while those who are unwilling to punish deliberately ignore it.
    Date: 2024–02
  22. By: Alexander Erlei; Lukas Meub
    Abstract: In credence goods markets such as health care or repair services, consumers rely on experts with superior information to adequately diagnose and treat them. Experts, however, are constrained in their diagnostic abilities, which hurts market efficiency and consumer welfare. Technological breakthroughs that substitute or complement expert judgments have the potential to alleviate consumer mistreatment. This article studies how competitive experts adopt novel diagnostic technologies when skills are heterogeneously distributed and obfuscated to consumers. We differentiate between novel technologies that increase expert abilities, and algorithmic decision aids that complement expert judgments, but do not affect an expert's personal diagnostic precision. We show that high-ability experts may be incentivized to forego the decision aid in order to escape a pooling equilibrium by differentiating themselves from low-ability experts. Results from an online experiment support our hypothesis, showing that high-ability experts are significantly less likely than low-ability experts to invest into an algorithmic decision aid. Furthermore, we document pervasive under-investments, and no effect on expert honesty.
    Date: 2024–01
  23. By: Christopher Roth (University of Cologne, CEPR and ECONtribute, Max Planck Institute for Collective Goods); Peter Schwardmann (Carnegie Mellon University); Egon Tripodi (Hertie School of Government)
    Abstract: While psychotherapy has been shown to be effective in treating depression, take-up remains low. In a sample of 1, 843 depressed individuals, we document that concerns about effectiveness are top of mind when respondents consider the value of therapy. We then show that the average respondent underestimates the effectiveness of therapy and that an information treatment that corrects this misperception increases participants’ incentivized willingness to pay for therapy. Information affects therapy demand by changing beliefs rather than by shifting attention. Our results suggest that information interventions that target the perceived effectiveness of therapy are a potent tool in combating the ongoing mental health crisis.
    Keywords: Mental Health, Depression, Psychotherapy, Beliefs, Effectiveness, Information policy
    Date: 2024–02
  24. By: Elias Bouacida; Renaud Foucart; Maya Jalloul
    Abstract: We study the impact of external advice on the relative performance of chess players. We asked players in chess tournaments to evaluate positions in past games and allowed them to revise their evaluation following advice from a high or a low ability player. While our data confirms the theoretical prediction that high-quality advice has the potential to act as a “great equalizer, †reducing the difference between high and low ability players, this is not what happens in practice. This is in part because our subjects ignore too much of the advice they receive, but also because low ability players pay – either due to overconfidence or intrinsic preference – a higher premium than high ability ones by following their initial idea instead of high-quality advice.
    Keywords: decreasing differences, expert, advice, chess, control
    JEL: C78 C91 C93 D91 J24 O33
    Date: 2024
  25. By: John Beshears; Matthew Blakstad; James J. Choi; Christopher Firth; John Gathergood; David Laibson; Richard Notley; Jesal D. Sheth; Will Sandbrook; Neil Stewart
    Abstract: Does automatic enrollment into retirement saving increase household debt? We study the randomized roll-out of automatic enrollment pensions to ~160, 000 employers in the United Kingdom with 2-29 employees. We find that the additional savings generated through automatic enrollment are partially offset by increases in unsecured debt. Over the first 41 months after enrollment, each additional month increases the average automatically enrolled employee’s pension savings by £32-£38, unsecured debt (such as personal loans and bank overdrafts) by £7, the likelihood of having a mortgage by 0.05 percentage points, and mortgage balances by £118. Automatic enrollment causes loan defaults to fall and credit scores to rise modestly.
    JEL: D14 D15 D90 G51 J32
    Date: 2024–02
  26. By: Churchill, Alexander; Pichika, Shamitha; Xu, Chengxin (Seattle University)
    Abstract: Supervised content encoding applies a given codebook to a larger non-numerical dataset and is central to empirical research in public administration. Not only is it a key analytical approach for qualitative studies, but the method also allows researchers to measure constructs using non-numerical data, which can then be applied to quantitative description and causal inference. Despite its utility, supervised content encoding faces challenges including high cost and low reproducibility. In this report, we test if large language models (LLM), specifically generative pre-trained transformers (GPT), can solve these problems. Using email messages collected from a national corresponding experiment in the U.S. nursing home market as an example, we demonstrate that although we found some disparities between GPT and human coding results, the disagreement is acceptable for certain research design, which makes GPT encoding a potential substitute for human encoders. Practical suggestions for encoding with GPT are provided at the end of the letter.
    Date: 2024–01–25

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.