nep-exp New Economics Papers
on Experimental Economics
Issue of 2024‒03‒11
twenty-six papers chosen by

  1. Toward an Understanding of Insincere Bidding in a Vickrey Auction Experiment By Shigehiro Serizawa; Natsumi Shimada; Tiffany Tsz Kwan Tse
  2. Making a Song and Dance About It: The Effectiveness of Teaching Children Vocabulary with Animated Music Videos By Ariel Kalil; Susan Mayer; Philip Oreopoulos; Rohen Shah
  3. My Poor(er) Friend: (Non-)Economic Integration in Public Good Games By Pietro Battiston; Simona Gamba; Sharon G. Harrison
  4. Women's Empowerment and Intra-Household Bargaining Power By Nacka, Marina; Drichoutis, Andreas C.; Nayga, Rodolfo
  5. Pyramid Schemes By Gönül Doğan; Kenan Kalayci; Priscilla Man
  6. Earn More Tomorrow: Overconfidence, Income Expectations and Consumer Indebtedness By Antonia Grohmann; Lukas Menkhoff; Christoph Merkle; Renke Schmacker
  7. Social preferences and information about effort and luck: an online survey experiment By Begoña Cabeza;; Koen Decancq;
  8. Good News Is Not a Sufficient Condition for Motivated Reasoning By Michael Thaler
  9. Optimizing Adaptive Experiments: A Unified Approach to Regret Minimization and Best-Arm Identification By Chao Qin; Daniel Russo
  10. How Does P How Does Passive Investing E esting Effect the Informational Efficiency of ect the Informational Efficiency of Prices? By Brice Corgnet; Mark DeSantis; Yan Peng; David Porter; Jason Shachat
  11. Pre-election communication in public good games with endogenous leaders By Lisa Bruttel; Gerald Eisenkopf; Juri Nithammer
  12. Breaking the glass ceiling: empowering female entrepreneurs through female mentors By Vilcassim, Naufel J.
  14. Experimental Estimates of College Coaching on Postsecondary Re-enrollment By Lesley J. Turner; Oded Gurantz
  15. Does Information about Inequality and Discrimination in Early Child Care Affect Policy Preferences? By Henning Hermes; Philipp Lergetporer; Fabian Mierisch; Guido Schwerdt; Simon Wiederhold
  16. Campaigning Against Populism Emotions and Information in Real Election Campaigns By Cesi Cruz; Julien Labonne; Francesco Trebbi
  17. Distributions of Posterior Quantiles via Matching By Anton Kolotilin; Alexander Wolitzky
  18. Out-group Penalties in Refugee Assistance: A Survey Experiment By Cristina Cattaneo; Daniela Grieco; Nicola Lacetera; Mario Macis
  19. Avoiding cognitive dissonance: Experimental evidence on sustainable online shopping By Eßer, Jana; Flörchinger, Daniela; Frondel, Manuel; Sommer, Stephan
  20. Heterogeneity in Effect Size Estimates: Empirical Evidence and Practical Implications By Holzmeister, Felix; Johannesson, Magnus; Böhm, Robert; Dreber, Anna; Huber, Jürgen; Kirchler, Michael
  21. The Resolution of Uncertainty in the Value and Probability Domains By Eungik Lee; Kathleen Ngangoue; Andrew Schotter; Maryse Kathleen Ngangoue
  22. Priming and the gender gap in competitiveness By Barile, Lory; Drouvelis, Michalis
  23. Virtual collaboration technology and international business coaching: examining the impact on marketing strategies and sales By Anderson, Stephen J.; Chintagunta, Pradeep; Vilcassim, Naufel J.
  24. Do women fare worse when men are around? Quasi-experimental evidence By Xavier Ramos; Marcela Gomez-Ruiz; María Cervini-Plá
  25. Behavioral Economics for All: From Nudging to Leadership By Julia M. Puaschunder
  26. The Trade-off between Yield and Nitrogen Pollution under Excessive Rainfall: Evidence from On-farm Field Experiments in Iowa By Choi, Eseul; DePaula, Guilherme; Kyveryga, Peter; Fey, Suzanne

  1. By: Shigehiro Serizawa; Natsumi Shimada; Tiffany Tsz Kwan Tse
    Abstract: This study explores two key factors influencing subjects’ deviation from sincere bidding in Vickrey auction experiments. The first factor examines subjects’ understanding of strategy-proofness (SP), while the second focuses on “human interaction” which includes social preferences (spite and altruism), responses to strategic uncertainty, and tacit collusion. To analyze the effect of understanding SP, we quiz subjects before an experimental Vickrey auction and examine whether their bidding behavior changes if one of the quizzes includes hints about SP. We design the quiz carefully, incorporating implicit hints about SP and ensuring the avoidance of explicit demands or advice to mitigate experimenter demand effects. However, completing the quiz enables the subjects to understand SP themselves. To analyze the effects of human interaction, we examine whether subjects’ bidding behavior changes if they compete against robots instead of human rivals in the auctions. We design 2×2 treatments by varying the type of quiz (with or without hints about SP) and the nature of the rivals (humans or robots). We found that the quiz with hints about SP increases sincere bidding. The nature of rivals also influences the bidding behavior; nonetheless, its impact is not as robust as that of SP hints. Thus, the main factor causing insincere bidding in Vickrey auction experiments is not human interaction but a lack of understanding of SP.
    Date: 2024–02
  2. By: Ariel Kalil; Susan Mayer; Philip Oreopoulos; Rohen Shah
    Abstract: Programs that engage young children in movement and song to help them learn are popular but experimental evidence on their impact is sparse. We use an RCT to evaluate the effectiveness of Big Word Club (BWC), a classroom program that uses music and dance videos for 3-5 minutes per day to increase vocabulary. We conducted a field experiment with 818 preschool and kindergarten students in 47 schools in three U.S. states. We find that treated students scored higher on a test of words targeted by the program (0.30 SD) after four months of use and this effect persisted for two months.
    JEL: D91 I20 J10 O15
    Date: 2024–02
  3. By: Pietro Battiston; Simona Gamba; Sharon G. Harrison
    Abstract: We run an experiment where subjects play a standard repeated two player public good game looking at the effect of being matched to a subject with different endowment - and keeping fixed the overall distribution of endowments. Differently from the existing literature, all subjects are aware of the existing heterogeneity in endowments, regardless of whether they are assigned to a homogeneous or heterogeneous group. Moreover, since in modern societies financial heterogeneity typically correlates with many other forms of heterogeneity, including habits, tastes and membership in given social groups, we look at how financial heterogeneity interacts with in-group vs. out-group feeling, using randomly formed groups. While neither economic integration nor group membership alone significantly affect overall contributions, and hence welfare, the two strongly interact: being matched to a partner with a different endowment and from the other group results in particularly low contributions. Similarly, being matched to a partner who is from the other group and has low endowment results in particularly low contributions.
    Keywords: public good game, economic segregation, in-group effect, laboratory experiment
    JEL: C90 H41 C92 D31
    Date: 2024–02–01
  4. By: Nacka, Marina; Drichoutis, Andreas C.; Nayga, Rodolfo
    Abstract: We assess the effectiveness of the Abbreviated Women's Empowerment in Agriculture Index (A-WEAI) in predicting intra-household bargaining power. We conducted a lab-in-the-field experiment with 464 agricultural households, where spouses made decisions about money allocations. The experiment tested whether they would choose efficient overall household gains or favor individual monetary benefits. Our findings demonstrate that women's empowerment levels, as measured by the A-WEAI, are predictive of decisions in the allocation task. This supports the A-WEAI's utility in representing and predicting intra-household dynamics.
    Keywords: A-WEAI; allocation task; dictator game; agricultural households
    JEL: C72 C93 D13
    Date: 2024–02–08
  5. By: Gönül Doğan (Faculty of Management, Economics and Social Sciences, Chair of Corporate Development and Business Ethics, University of Cologne); Kenan Kalayci (School of Economics, University of Queensland); Priscilla Man (School of Economics, University of Queensland)
    Abstract: We invite experiment participants to invest their endowment in a pyramid scheme with a negative expected return. More than half of the participants invest regardless of their age, gender, education, income, and trust and fairness beliefs. Four interventions probe instruction tools that may deter pyramid investments. Exposure to possible payoff distributions or making payoff calculations diminishes investment rates, whereas seeing example pyramid outcomes or being exposed to a smaller pyramid scheme has no effect. Higher risk tolerance, preference for positively-skewed risk, and lower cognitive skills positively correlate with investment but explain a relatively small portion of investments.
    Keywords: pyramid schemes, instruction methods, risk preferences, experiments
    JEL: C90 D14 D81 D91
    Date: 2024–02
  6. By: Antonia Grohmann; Lukas Menkhoff; Christoph Merkle; Renke Schmacker
    Abstract: This paper examines whether biased income expectations due to overconfidence lead to higher levels of debt-taking. We show suggestive evidence for a link between overconfidence and borrowing behavior in a representative survey of German households (GSOEP-IS). This motivates a laboratory experiment to study causality behind these effects. In two experiments, participants can purchase goods by borrowing against their future income. We exogenously manipulate overconfidence about income expectations by letting income depend on relative performance in hard and easy quiz tasks. In the main experiment, we successfully generate biased income expectations and show that participants with higher income expectations initially borrow more. Overconfident participants scale back their consumption after income feedback. However, they remain in higher debt at the end of the experiment, which has real financial consequences. In a robustness experiment, we rule out that over-borrowing is driven by low prices of goods. Even though the expected income manipulation works less well in this experiment, debt-taking behavior is very similar and correlates with income expectations and overconfidence.
    Keywords: Debt, consumption, borrowing, overconfidence, income expectations
    JEL: D14 D84 G40
    Date: 2023
  7. By: Begoña Cabeza;; Koen Decancq;
    Abstract: We propose an easily implemented method to compare the level of altruism of non-parametric social preferences over one’s own and another person’s monetary pay-off. The method was used in an online survey experiment with 573 decision makers to compare the level of altruism of their social preferences and study how much it is affected by randomized information about the effort and luck level of the other person. We find evidence supporting the hypothesis that decision makers become more altruistic when they learn that the other person exerted a high level of effort, and become less altruistic when they learn that the other person was lucky.
    Date: 2023–02
  8. By: Michael Thaler
    Abstract: People often receive good news that makes them feel better about the world around them, or bad news that makes them feel worse about it. This paper studies how the valence of news affects belief updating, absent functional and ego-relevant factors. Using experiments with over 1, 500 participants and 5, 600 observations, I test whether people engage in motivated reasoning to overly trust good news versus bad news on valence-relevant issues like cancer survival rates, others’ happiness, and infant mortality. The estimate for motivated reasoning towards good news is a precisely-estimated null. Modest effects, of one-third the size of motivated reasoning in politics and performance, can be ruled out. Complementary survey evidence shows that most people expect good news to increase happiness, but to not systematically lead to motivated reasoning. These results suggest that belief-based utility is not sufficient in leading people to distort belief updating in order to favor those beliefs.
    Keywords: motivated reasoning, belief-based utility, experimental economics
    JEL: C91 D83 D91
    Date: 2024
  9. By: Chao Qin; Daniel Russo
    Abstract: Practitioners conducting adaptive experiments often encounter two competing priorities: reducing the cost of experimentation by effectively assigning treatments during the experiment itself, and gathering information swiftly to conclude the experiment and implement a treatment across the population. Currently, the literature is divided, with studies on regret minimization addressing the former priority in isolation, and research on best-arm identification focusing solely on the latter. This paper proposes a unified model that accounts for both within-experiment performance and post-experiment outcomes. We then provide a sharp theory of optimal performance in large populations that unifies canonical results in the literature. This unification also uncovers novel insights. For example, the theory reveals that familiar algorithms, like the recently proposed top-two Thompson sampling algorithm, can be adapted to optimize a broad class of objectives by simply adjusting a single scalar parameter. In addition, the theory reveals that enormous reductions in experiment duration can sometimes be achieved with minimal impact on both within-experiment and post-experiment regret.
    Date: 2024–02
  10. By: Brice Corgnet (Emlyon Business School, GATE UMR); Mark DeSantis (Chapman University, Argyros School of Business and Economics; Economic Science Institute); Yan Peng (Xiamen University, Paula and Gregory Chow Institute for Studies in Economics); David Porter (Economic Science Institute, Chapman University); Jason Shachat (Durham University, Durham University Business School)
    Abstract: We investigate the causal efects of passive investing on informational efciency and market quality metrics by developing a novel laboratory experiment that introduces Index trackers with exogenous passive investment fows. We fnd that, while improving liquidity, Index tracking hurts informational efciency, confrming our main hypothesis. Furthermore, we observe violations of the law of one price, leading to widespread and persistent arbitrage opportunities. Additionally, our research uncovers that Active traders, particularly those with private information about asset values and high cognitive ability, reap benefts from the introduction of Index tracking.
    Keywords: Passive Trading, Index Tracking Experimental Markets, Informational Efciency
    JEL: C92 G12 G14 G41
    Date: 2024
  11. By: Lisa Bruttel (University of Potsdam, CEPA); Gerald Eisenkopf (University of Vechta); Juri Nithammer (University of Potsdam)
    Abstract: Leadership plays an important role for the efficient and fair solution of social dilemmas but the effectiveness of a leader can vary substantially. Two main factors of leadership impact are the ability to induce high contributions by all group members and the (expected) fair use of power. Participants in our experiment decide about contributions to a public good. After all contributions are made, the leader can choose how much of the joint earnings to assign to herself; the remainder is distributed equally among the followers. Using machine learning techniques, we study whether the content of initial open statements by the group members predicts their behavior as a leader and whether groups are able to identify such clues and endogenously appoint a “good” leader to solve the dilemma. We find that leaders who promise fairness are more likely to behave fairly, and that followers appoint as leaders those who write more explicitly about fairness and efficiency. However, in their contribution decision, followers focus on the leader’s first-move contribution and place less importance on the content of the leader’s statements.
    Keywords: Leadership, Public good, Voting, Promises, Experiment
    JEL: C92 D23 D72 D83
    Date: 2024–02
  12. By: Vilcassim, Naufel J.
    Abstract: Among the millions of entrepreneurs in developing economies, few are able to earn a decent livelihood. To help these entrepreneurs succeed, governmental and nongovernmental organizations invest billions of dollars every year in providing training programs. Many of these programs involve providing entrepreneurs with mentors. Unfortunately, the effects of these programs are often muted, or even null, for woman-owned firms. Against this backdrop, we tested whether gender matching, where female entrepreneurs are randomly paired with a female mentor, could help address the gender gap. Findings from a randomized controlled field experiment with 930 Ugandan entrepreneurs show that mentor gender has a powerful impact on female entrepreneurs. Firm sales and profits of female entrepreneurs guided by a female mentor increased by, on average, 32% and 31% compared with the control group, and these estimates are even larger for female entrepreneurs with high aspirations. In contrast, female entrepreneurs guided by a male mentor did not significantly improve performance compared with the control group. We provide suggestive mechanism evidence that female mentor-mentee arrangements were characterized by more positive engagements.
    Keywords: female entrepreneurs; gender gap; glass ceiling; mentorship gender-matching; randomized controlled field experiment; small firm growth; developing economies; (ESRC) joint Growth Research Program; the Deloitte Institute for Innovation and Entrepreneurship (DIIE); and the universities the authors were affiliated with when the research was conducted.
    JEL: L20 J16
    Date: 2023–12–22
  13. By: Shohei Yamamoto; Shotaro Shiba; Nobuyuki Hanaki
    Abstract: Previous research consistently identified differences in time preferences between effort and monetary decisions. However, the root cause of this difference—whether it stemmed from the intrinsic nature of the outcomes or the associated pleasurable or unpleasurable experiences—remained undefined. In response, we devised a novel two-stage experiment employing a 2 x 2 design contrasting outcomes (money and effort) and domains (pleasant and unpleasant). This approach allowed for the incentivization of all decisions, including those involving future monetary losses. Our study reveals sign-dependent preferences, showing varying degrees of impatience across pleasant or unpleasant experiences in monetary or effort-related choices. We also observed outcome-dependent preferences, particularly highlighting a higher level of impatience in unpleasant monetary choices compared with their effort-based counterparts. However, the degree of present bias did not differ across the four conditions.
    Date: 2024–02
  14. By: Lesley J. Turner; Oded Gurantz
    Abstract: College attendance has increased significantly over the last few decades, but dropout rates remain high, with fewer than half of all adults ultimately obtaining a postsecondary credential. This project investigates whether one-on-one college coaching improves college attendance and completion outcomes for former low- and middle-income income state aid recipients who attended college but left prior to earning a degree. We conducted a randomized control trial with approximately 8, 000 former students in their early- to mid-20s. Half of participants assigned to the treatment group were offered the opportunity to receive coaching services from InsideTrack, with all communication done remotely via phone or video. Intent-to-treat analyses based on assignment to coaching shows no impacts on college enrollment and we can rule out effects larger than a two-percentage point (5%) increase in subsequent Fall enrollment.
    JEL: I23 I24
    Date: 2024–02
  15. By: Henning Hermes; Philipp Lergetporer; Fabian Mierisch; Guido Schwerdt; Simon Wiederhold
    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
  16. By: Cesi Cruz; Julien Labonne; Francesco Trebbi
    Abstract: Populist politicians have leveraged direct connections with voters to win elections worldwide, often using emotional rather than policy appeals. Do these forms of campaigning work for programmatic politicians as well? We partner with a mainstream opposition political party to implement a field experiment during the 2019 Philippine Senatorial election to test the effectiveness of: (i) direct in-person appeals providing policy information; (ii) the addition of an activity designed to engender positive emotion. We show that direct engagement providing policy information increases vote share for the party, even in a clientelistic context. Additionally, while the emotional activity increases engagement with the campaign in the short term, the information-only treatment was more effective. Last, we present evidence that the treatments operated through learning and persuasion channels: treated voters were more likely to know the party, more certain about their knowledge, and gave higher ratings to the party’s quality and proposed policies.
    JEL: D7 D73 P0
    Date: 2024–02
  17. By: Anton Kolotilin (School of Economics, UNSW); Alexander Wolitzky (Department of Economics, MIT)
    Abstract: We offer a simple analysis of the problem of choosing a statistical exper- iment to optimize the induced distribution of posterior medians, or more generally q-quantiles for any q ∈ (0, 1). We show that all implementable distributions of the posterior q-quantile are implemented by a single experiment, the q-quantile matching experiment, which pools pairs of states across the q-quantile of the prior in a positively assortative manner, with weight q on the lower state in each pair. A dense subset of implementable distributions of posterior q-quantiles can be uniquely implemented by perturbing the q-quantile matching experiment. A linear functional is optimized over distributions of posterior q-quantiles by taking the optimal selection from each set of q-quantiles induced by the q-quantile matching experiment. The q-quantile matching experiment is the only experiment that simultaneously implements all implementable distributions of the posterior q-quantile.
    Keywords: quantiles, statistical experiments, overconfidence, gerrymandering, persuasion
    JEL: C61 D72 D82
    Date: 2024–02
  18. By: Cristina Cattaneo; Daniela Grieco; Nicola Lacetera; Mario Macis
    Abstract: We study out-group biases in attitudes toward refugees, and the effect of European Union (EU) immigration policies on these views, using an online survey experiment including 4, 087 Italian participants. We assess attitudes using donations to a randomly assigned group: Italian victims of violence or refugees fleeing wars in Ukraine or African countries. We also employ a novel measure, the share donated in cash. While donations indicated less support for African and Ukrainian refugees compared to Italian victims, the cash measure revealed a stronger prejudice against distant out-groups, with participants giving African refugees a smaller proportion of cash donations. This result was mainly driven by individuals with right-leaning political views. Providing information about immigration policy reforms that give the EU a more substantial role in receiving and allocating refugees had no impact. Textual analysis supports these findings.
    JEL: C99 D02 D64 J15
    Date: 2024–02
  19. By: Eßer, Jana; Flörchinger, Daniela; Frondel, Manuel; Sommer, Stephan
    Abstract: Cognitive dissonance may arise from the inconsistency between an individual's behavior and her self-image. We investigate whether the provision of information that induces cognitive dissonance can increase sustainable consumption, and specifically whether individuals avoid cognitive dissonance by (a) a change in behavior to comply with own attitudes and by (b) two types of self-deception: the denial of attitudes and the denial of knowledge about the criticism of conventional online shopping. To this end, we develop a rational choice model and embed an incentivized discrete-choice task in a large-scale survey conducted in Germany in 2021, with the choice being between a voucher for either a conventional or a sustainable online market place. In an experimental setting, we aim to induce cognitive dissonance by either randomly reminding participants of their previously stated attitudes towards sustainable production or by informing them about the typical criticism of conventional online shopping. Results indicate that individuals adapt their behavior after having received the reminder of their stated attitudes and the criticism about conventional online shopping. Yet, participants do not deceive themselves by aligning their attitudes with their behavior or by denying to have been aware of the criticism.
    Abstract: Kognitive Dissonanz kann aus der Inkonsistenz zwischen dem Verhalten einer Person und ihrem Selbstbild entstehen. Wir untersuchen, ob die Bereitstellung von Informationen, die kognitive Dissonanz hervorrufen, den nachhaltigen Konsum steigern kann, und insbesondere, ob Individuen kognitive Dissonanz vermeiden, indem sie (a) ihr Verhalten ändern, um den eigenen Einstellungen zu entsprechen, und (b) zwei Arten von Selbsttäuschung betreiben: die Verleugnung von Einstellungen und die Verleugnung von Wissen über die Kritik am konventionellen Online-Shopping. Zu diesem Zweck entwickeln wir ein Rational-Choice-Modell und betten eine incentivierte Discrete-Choice-Aufgabe in eine groß angelegte Umfrage ein, die 2021 in Deutschland durchgeführt wird, wobei die Wahl zwischen einem Gutschein für einen konventionellen oder einen nachhaltigen Online-Marktplatz besteht. In einem experimentellen Setting zielen wir darauf ab, kognitive Dissonanz zu induzieren, indem wir die Teilnehmenden entweder zufällig an ihre zuvor geäußerte Einstellung zu nachhaltiger Produktion erinnern oder sie über die typische Kritik am konventionellen Online-Einkauf informieren. Die Ergebnisse zeigen, dass die Teilnehmenden ihr Verhalten anpassen, nachdem sie an ihre Einstellungen erinnert und über die Kritik am konventionellen Online-Shopping informiert wurden. Sie täuschen sich jedoch nicht selbst, indem sie ihre Einstellungen mit ihrem Verhalten in Einklang bringen oder leugnen, von der Kritik gewusst zu haben.
    Keywords: Behavioral economics, cognitive dissonance, sustainable behavior
    JEL: A13 H23 D91
    Date: 2024
  20. By: Holzmeister, Felix; Johannesson, Magnus; Böhm, Robert; Dreber, Anna; Huber, Jürgen; Kirchler, Michael
    Abstract: A typical empirical study involves choosing a sample, a research design, and an analysis path. Variation in such choices across studies leads to heterogeneity in results that introduce an additional layer of uncertainty not accounted for in reported standard errors and confi dence intervals. We provide a framework for studying heterogeneity in the social sciences and divide heterogeneity into population heterogeneity, design heterogeneity, and analytical heterogeneity. We estimate each type's heterogeneity from multi-lab replication studies, prospective meta-analyses of studies varying experimental designs, and multi-analyst studies. Our results suggest that population heterogeneity tends to be relatively small, whereas design and analytical heterogeneity are large. A conservative interpretation of the estimates suggests that incorporating the uncertainty due to heterogeneity would approximately double sample standard errors and confi dence intervals. We illustrate that heterogeneity of this magnitude-unless properly accounted for-has severe implications for statistical inference with strongly increased rates of false scientifi c claims.
    Date: 2024
  21. By: Eungik Lee; Kathleen Ngangoue; Andrew Schotter; Maryse Kathleen Ngangoue
    Abstract: We compare preferences for temporal resolution when uncertainty is resolved over a probability rather than a value. In various frameworks–e.g., Kreps and Porteus (1978)–, preferences over gradual versus one-shot resolution do not depend on whether values or probabilities define the main object of uncertainty. In our experiment, however, most subjects resolved uncertain values gradually but uncertain probabilities all at once–both in the gain and loss frames. This systematic discrepancy motivates an explanation for it that we call “process utility”, which highlights the importance of information processing when deducing revealed preferences for temporal resolution from choice data.
    Keywords: resolution of uncertainty, probability, gradual resolution, one-shot resolution, process utility, non-instrumental information, Kreps-Porteus
    Date: 2024
  22. By: Barile, Lory (Department of Economics, University of Warwick); Drouvelis, Michalis (Department of Economics, University of Birmingham)
    Abstract: A substantial body of literature has shown that women shy away from competition against men, which has been put forward as an explanation for the significant gender differences observed in career promotions and salary negotiations. It is therefore of crucial importance to understand the conditions under which the gender gap in competitiveness can be reduced. In this study, we explore the role of priming. Our findings replicate previous work showing that, in the absence of primes, women compete less than men. By contrast, introducing a priming task can eliminate gender disparities in competitiveness, ceteris paribus; however, the effects are stronger when neutral primes are used. We perform sentiment analysis and attribute this to the more negative emotions triggered in the neutral priming condition, making women more competitive. Overall, our results indicate that costless and simple tools such as priming can be adopted by organisations aiming at reducing gender inequalities in the workplace.
    Keywords: competitiveness ; gender differences ; priming ; laboratory experiment JEL Codes: C92 ; D03
    Date: 2024
  23. By: Anderson, Stephen J.; Chintagunta, Pradeep; Vilcassim, Naufel J.
    Abstract: This paper studies the impact of international business coaching via virtual collaboration technology on the strategies and sales of emerging market entrepreneurs. It sheds light on three novel research questions: (1) What is the effect of virtual business coaching on firm sales? (2) What is the mechanism through which this effect occurs; specifically, does virtual coaching stimulate shifts in marketing strategy? (3) Do entrepreneurs benefit more from virtual coaching when they are less strategic in their decision-making? We conducted a randomized controlled field experiment with 930 entrepreneurs in Uganda to examine the impact of a virtual coaching intervention that connects management professionals in primarily advanced markets and entrepreneurs in emerging markets with the aim of improving business performance. The analysis finds a positive and significant main effect on firm sales – treatment entrepreneurs increase monthly sales by 27.6% on average. In addition, entrepreneurs who receive virtual coaching are 52.8% more likely to have shifted their marketing strategy in a new direction. Moreover, consistent with this mechanism of inducing strategic business changes, the results show that entrepreneurs who receive virtual coaching tend to do better when they (ex ante) lack strategic focus. These results have important implications for the development of marketing strategies by entrepreneurs and multinational managers, as well as for policymakers interested in improving the performance of small firms in emerging markets and beyond.
    Keywords: marketing strategy innovation; strategic shift; business model change; pivoting; international business coaching; virtual collaboration technology; Covid-19 and remote work; small firm growth; entrepreneurship; joint Growth Research Program; Marshall Institute
    JEL: J50
    Date: 2023–11–10
  24. By: Xavier Ramos (Universitat Autònoma de Barcelona); Marcela Gomez-Ruiz (Universitat Autònoma de Barcelona); María Cervini-Plá (Universitat Autònoma de Barcelona)
    Abstract: We investigate the impact of a change in the gender composition of the pool of candidates on the academic performance of women in an entrance exam. We use data from a natural experiment that altered the gender composition of the candidates for a nation-wide admission exam to a coding educational program. Our identification strategy exploits the fact that both men and women were accepted for the admission exam in all years except for 2019, when only women were allowed to take it. Our results reveal that in the absence of men, women exhibit enhanced performance, particularly in subjects where men do traditionally better, such as mathematics and logical reasoning. Conversely, we observe no significant effects in verbal tasks, where men do not typically outperform. The improvement in performance stems from both increased attempts at questions and a higher rate of correct answers. Women improve their academic performance by exerting greater effort when men are not present. Our findings are consistent with the hypothesis that the stereotype threat is deactivated in the absence of men, highlighting the nuanced impact of gender composition on women's performance in high-stakes exams.
    Keywords: Gender, performance, effort, stereotype threat, competition
    JEL: I20 I24 J16 J24
    Date: 2024–02
  25. By: Julia M. Puaschunder (Columbia University, USA)
    Abstract: Behavioral economics is an innovative applied science. In the 1950s economic rational choice models came under scrutiny. A theoretical critique emerged that not all human beings strive for efficiency and rationality all the time. Behavioral economics first drew attention to deviations from rationality and discussed the non-applicability of rational choice models for depicting the actual behavior of humans. During the 1970s, Amartya Sen formalized the rational choice critique and published powerful examples of how economics needs a reality check and backtesting of its core axioms of rationality, efficiency and time consistency for actual real-world relevancy and external validity of the standard rational choice claims. By 1979, the two psychologists Daniel Kahneman and Amos Tversky presented a line of laboratory experiments at universities that proved the rational choice theory to be inaccurate to explain the real-world decision-making patterns of individuals. The following behavioral economics revolution rewrote economics for accuracy and predictability for actual human day-to-day choices and behavior. Sociologists, political scientists, psychologists created a line of research to describe how individuals actually decide during the first decade of the 2000s. Behavioral insights were then used to find ways how to ‘nudge’ individuals, communities and leaders to help others make better choices in different domains, for instance such as finance, marketing, health and well-being. Around the world, governmental officials and governance experts adopted behavioral nudges and winks to create better choice architectures and decision-making patterns. This paper describes the history of behavioral economics with attention to North American roots and European interpretations in order to then prospect future trends in behavioral economics. First, given the enormous popularity behavioral economics has enjoyed in the most recent decades, a general knowledge has formed about behavioral nudges. Libertarian paternalism is – by now – limited when it comes to implicitly tricking people into making choices based on well-known insights. A common body of knowledge on behavioral aspects of choice patterns may lead to reactance if people notice manipulation. The general population should therefore be trained to make self-empowered choices that meet their individual principles, needs and wants based on their behavioral expertise. Behavioral economists should move from manipulating nudges to educating trainings of the layperson. Second, the field of behavioral sciences has experienced a deep replication crisis given major data cheating scandals and contemporary fraud allegations. General oversight mechanism between co-authors, backtesting of effects for validity and their general applicability is therefore warranted. he general population should be trained to be critical of behavioral insights presented to them and be encouraged by behavioral economists to feedback on the potential non-applicability of p-hacked results. Third, online searchplace distortion of behavioral economics results has become a sad reality for young behavioral economists in the strategic search engine results manipulation through Search Engine Disoptimization (SEDO). This implicit internet harassment calls for a democratization of information and whole-rounded inclusion of thoughts online. Behavioral economists should raise awareness for this negative competitive behavior and work together with global governance institutions, regulatory bodies but also industry professionals to curb negative internet search engine manipulation and empower the upcoming generation of behavioral economists to speak up when this is happening. Professional bodies should be informed to help those whose career has been hit by competitive internet manipulation. All these trends are speculated to lead to a revamped behavioral economics revolution that demands for behavioral economics for all. The future of behavioral economics is believed to lie in self-empowered leadership, not manipulation. A democratization of behavioral economics information leading to a general knowledge basis on actual behavioral patterns will guide a self-empowered decision-making cadre within the general population. Search for true and credible behavioral insights can lift the entire field to a more helpful stage to become a standing guidepost for wise quality decision-making. The digital millennium calling for fair internet use will hopefully prosper an inclusive and diversified information on behavioral insights to be accessible, useful and meaningful for all.
    Keywords: Behavioral Economics, Behavioral Finance, Behavioral Insights
    Date: 2023–08
  26. By: Choi, Eseul; DePaula, Guilherme; Kyveryga, Peter; Fey, Suzanne
    Abstract: Climate change is expected to intensify rainfall, thereby raising the likelihood of nitrogen leaching in agriculture. This study incorporates the effects of excessive rainfall on crop yield and water pollution into a simple economic model for managing nitrogen. We then empirically test this model using data from on-farm experiments conducted in Iowa. Our findings indicate that both optimal nitrogen application rates and environmental damage increase with excessive rainfall. As nitrogen becomes more productive under increased rainfall, the cost of controlling nitrogen pollution escalates. However, our study highlights management practices resilient to heavy rainfall such as split nitrogen application with sidedressing.
    Date: 2024–02–22

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.