|
on Experimental Economics |
|
Issue of 2024‒07‒08
29 papers chosen by |
| By: | Michael Gechter; Keisuke Hirano; Jean Lee; Mahreen Mahmud; Orville Mondal; Jonathan Morduch; Saravana Ravindran; Abu S. Shonchoy |
| Abstract: | Policy decisions often depend on evidence generated elsewhere. We take a Bayesian decision-theoretic approach to choosing where to experiment to optimize external validity. We frame external validity through a policy lens, developing a prior specification for the joint distribution of site-level treatment effects using a microeconometric structural model and allowing for other sources of heterogeneity. With data from South Asia, we show that, relative to basing policies on experiments in optimal sites, large efficiency losses result from instead using evidence from randomly-selected sites or, conversely, from sites with the largest expected treatment effects. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.13241&r= |
| By: | Ingela Alger; Jos\'e Ignacio Rivero-Wildemauwe |
| Abstract: | We conduct a laboratory experiment using framing to assess the willingness to ``sell a lemon'', i.e., to undertake an action that benefits self but hurts the other (the ``buyer''). We seek to disentangle the role of other-regarding preferences and (Kantian) moral concerns, and to test if it matters whether the decision is described in neutral terms or as a market situation. When evaluating an action, morally motivated individuals consider what their own payoff would be if -- hypothetically -- the roles were reversed and the other subject chose the same action (universalization). We vary the salience of role uncertainty, thus varying the ease for participants to envisage the role-reversal scenario. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.13186&r= |
| By: | Dan Anderberg; Rachel Cassidy; Anaya Dam; Wendy Janssens; Karlijn Morsink; Anouk van Veldhoven |
| Abstract: | We study the effects on intimate partner violence (IPV) of new information received by women only, men only, or both, relevant to a high-stakes joint household decision. We model communication between spouses as Bayesian persuasion where disagreements elevate the risk of IPV. Our framework predicts that IPV will be lower when only one spouse is informed, compared to when both are, as the opportunity for persuasion by one spouse leads to more agreement. To test the model’s predictions we leverage an existing randomized controlled trial of an edutainment intervention addressing child marriage decisions for girls in rural Pakistan, targeted at men, women, or both. Our empirical findings confirm the prediction that the likelihood of IPV is highest when men and women are jointly targeted. Due to systematic gender differences in preferences, our persuasion model further predicts that marriage delays are largest when targeting men alone or jointly with women and smallest when targeting women alone, predictions that are also confirmed in the data. |
| Keywords: | gender, intimate partner violence, Bayesian persuasion, targeting, edutainment, field experiment |
| JEL: | J12 J16 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11133&r= |
| By: | Gabriele Camera (Economic Science Institute, Chapman University); Rod Garratt (BIS); Cyril Monnet (University of Bern; Study Center Gerzensee) |
| Abstract: | Truthful reporting about publicly observed events cannot be guaranteed by a consensus process. This fact, which we establish theoretically and verify empirically, holds true even if some individuals are compelled to tell the truth, regardless of economic incentives. In an experiment, subjects routinely misreported a commonly known event when they could monetarily gain from it. Relying on majority consensus did not help uncover the truth, especially if complying with the majority granted small personal monetary gains. This highlights the difficulties in relying on shared consensus protocols to agree on specific events, and the importance of institutions with trusted, impartial observers. |
| Keywords: | coordination, experiments, DeFi, digital currency, dishonesty, trust |
| JEL: | C70 C90 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:chu:wpaper:24-10&r= |
| By: | Pascaline Dupas; Marcel Fafchamps; Laura Hernandez-Nunez |
| Abstract: | We investigate the potential welfare cost of relative rank considerations using a series of vignettes and lab-in-the-field experiments with over 2, 000 individuals in Abidjan, Ivory Coast. We show that: (1) individuals judged to be of a lower rank are perceived as more likely to be sidelined from beneficial opportunities in many aspects of life; and (2) in response, individuals distort their appearance and consumption choices in order to appear of higher rank. These effects are strong and economically significant. As predicted by a simple signaling model, the distortion is larger for individuals with low (but not too low) socio-economic status. |
| JEL: | C90 D91 J70 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32491&r= |
| By: | Osea Giuntella; Silvia Saccardo; Sally Sadoff |
| Abstract: | There is growing evidence on the importance of sleep for productivity, but little is known about the impact of interventions targeting sleep. In a field experiment among U.S. university students, we show that incentives for sleep increase both sleep and academic performance. Motivated by theories of cue-based habit formation, our primary intervention couples personalized bedtime reminders with morning feedback and immediate rewards for sleeping at least seven hours on weeknights. The intervention increases the share of nights with at least seven hours of sleep by 26 percent and average weeknight sleep by an estimated 19 minutes during a four-week treatment period, with persistent effects of about eight minutes per night during a one to five-week post-treatment period. Comparisons to secondary treatments show that immediate incentives have larger impacts on sleep than delayed incentives or reminders and feedback alone during the treatment period, but do not have statistically distinguishable impacts on longer-term sleep habits in the post-treatment period. We estimate that immediate incentives improve average semester course performance by 0.075--0.088 grade points, a 0.10--0.11 standard deviation increase. Our results demonstrate that incentives to sleep can be a cost-effective tool for improving educational outcomes. |
| JEL: | C93 I1 I20 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32550&r= |
| By: | Manzoni, Elena (University of Bergamo); Murard, Elie (University of Trento); Quercia, Simone (University of Verona); Tonini, Sara (Universidad de Alicante) |
| Abstract: | How do emotions affect policy views on immigration? How do they influence the way people process and respond to factual information? We address these questions using a survey experiment in Italy, which randomly exposes around 7, 000 participants to (i) sensational news about immigrant crimes, (ii) statistical information about immigration, or to (iii) the combination of both. First, we find different effects of news depending on the severity of the reported crime: while the news of a rape against a young woman significantly increases the demand for anti-immigration policies, there is no impact of the news of a petty theft. Consistent with a causal role of emotions, we find that the rape news triggers a stronger emotional reaction than the theft news, while having a similar effect on factual beliefs. Second, we document that information provision corrects beliefs, irrespective of whether participants are also exposed to the rape news. Yet, the exposure to the rape news strongly influences whether belief updating translates into change in policy views: when presented in isolation, information tends to reduce anti-immigration views; when combined with the rape news, the impact of the latter dominates and participants increase their anti-immigration views to the same extent as when exposed to the rape news only. This evidence suggests that, once negative emotions are triggered, having more accurate factual knowledge no longer matters for forming policy views on immigration. |
| Keywords: | news, information, immigration, experiment, belief, emotions |
| JEL: | F22 C90 D91 D72 D83 J15 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17017&r= |
| By: | Rajibul Alam (Ministry of Public Administration, Dhaka, Bangladesh); Yoko Kijima (National Graduate Institute for Policy Studies, Tokyo, Japan) |
| Abstract: | This study provides empirical evidence on how financial and non-financial incentives improve service delivery of government agricultural extension agents. A randomized control trial was conducted in 40 sub-district agriculture offices in Bangladesh, with 807 agricultural extension officers, randomly allocated into five groups (one control and four treatment). The financial incentive was a one-time monetary reward, while the non-financial incentive was recognition by the district director. In the non-financial incentive treatment, we added another treatment in which the two worst performers, instead of best, are selected for inspection. In the financial incentive, we created another treatment where the best performer is selected based on performance level. We find that financial and non-financial incentives have positive effects of equal magnitude, about one standard deviation of total performance index on average. Giving a disadvantage to better performers does not decrease effort by better performers. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:23-08&r= |
| By: | Erwin Bulte; Andreas Kontoleon; John List; Ty Turley; Maarten Voors |
| Abstract: | We use a field experiment in Sierra Leone to examine how the identity of the manager influences rent seeking and performance in participatory development projects. Specifically, we vary the composition of a committee responsible for implementing a development project-local elites or randomly selected villagers. The design is unique in that it permits us to explore the effectiveness of two alternative local governance modalities and the extent of elite capture in community projects. We find little evidence that local elites capture project resources. We do observe they are better managers of development projects. Improved performance covaries with a proxy for power of the local chief. |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:feb:natura:00789&r= |
| By: | Cl\'ement de Chaisemartin; Antoine Deeb |
| Abstract: | We consider multi-site randomized controlled trials with a large number of small sites and imperfect compliance, conducted in non-random convenience samples in each site. We show that an Empirical-Bayes (EB) estimator can be used to estimate a lower bound of the variance of intention-to-treat (ITT) effects across sites. We also propose bounds for the coefficient from a regression of site-level ITTs on sites' control-group outcome. Turning to local average treatment effects (LATEs), the EB estimator cannot be used to estimate their variance, because site-level LATE estimators are biased. Instead, we propose two testable assumptions under which the LATEs' variance can be written as a function of sites' ITT and first-stage (FS) effects, thus allowing us to use an EB estimator leveraging only unbiased ITT and FS estimators. We revisit Behaghel et al. (2014), who study the effect of counselling programs on job seekers job-finding rate, in more than 200 job placement agencies in France. We find considerable ITT heterogeneity, and even more LATE heterogeneity: our lower bounds on ITTs' (resp. LATEs') standard deviation are more than three (resp. four) times larger than the average ITT (resp. LATE) across sites. Sites with a lower job-finding rate in the control group have larger ITT effects. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.17254&r= |
| By: | Antonio Estache; Renaud Foucart; Konstantinos Georgalos |
| Abstract: | In a laboratory experiment, we find that subjects do not exhibit preference for control when the alternative is a random dictatorship, a lottery implementing either their choice or the choice of someone else with equal probability. In contrast, we replicate Owens et al. (2014)’s result that they do so when the alternative is to have the choice of someone else implemented with certainty. This implies that the introduction of random dictatorships in discrete procedures such as those used for the allocation of some public procurement contracts does not necessarily involve a loss of perceived autonomy. |
| Keywords: | control, lotteries, random dictatorship |
| JEL: | C91 D44 D8 H57 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:lan:wpaper:413554011&r= |
| By: | Skjold, Benjamin; Steinkamp, Simon Richard; Connaughton, Colm; Hulme, Oliver J; Peters, Ole |
| Abstract: | Decision theories commonly assume that risk preferences can be expressed as utility functions, which vary from person to person but are stable over time. A recent model from ergodicity economics reveals that if people want their wealth to grow at the fastest rate they need to adjust their utility functions depending on the dynamics of their wealth. Here, we ask whether humans make such adjustments by exposing them to different wealth dynamics. We carried out an experiment in which participants made consequential risky decisions under two different conditions, additive and multiplicative wealth dynamics. We estimated risk aversion parameters separately in the two conditions for each participant, fitting isoelastic functions via hierarchical Bayesian models. In our pre-registered analyses, we found strong evidence for a change in utility function, namely an increase in the risk aversion parameter under the multiplicative condition, as predicted by ergodicity economics. Apart from evidence for a large effect of wealth dynamics, we also recover trait-like differences between participants that persist across the two conditions. Our study introduces a new experimental design and contains two independent replications between pilot data and a larger cohort. Together, these results provide evidence that human risk-taking behaviour is sensitive to the dynamical context in which decisions are made and that long-term wealth maximization is an important explanatory principle. |
| Date: | 2024–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:c96yd&r= |
| By: | Flagner, Stefan (Maastricht University); Meissner, Thomas (Maastricht University); Künn, Steffen (Maastricht University); Eichholtz, Piet (Maastricht University); Kok, Nils (Maastricht University); Kramer, Rick (Eindhoven University of Technology); van Marken-Lichtenbelt, Wouter (Maastricht University); Ly, Cynthia (Maastricht University); Plasqui, Guy (Maastricht University) |
| Abstract: | This study provides novel evidence on the isolated effect of carbon dioxide on cognition, economic decision-making, and the physiological response in healthy office workers. The experiment took place in an air-tight respiration chamber fully controlling the environmental conditions. In a single-blind, within-subject study design, 20 healthy participants were exposed to carbon dioxide concentrations of 3, 000 ppm and 900 ppm in randomized order, with each exposure lasting for 8 hours. We do not find evidence on a statistically significant effect on either cognitive or physiological outcome variables. Thus, the evidence shows that the human body appears to be able to deal with exposure to indoor carbon dioxide concentration of 3, 000 ppm without suffering significant cognitive decline, changes in decision-making or showing any physiological response. |
| Keywords: | carbon dioxide, indoor air quality, cognition, economic decision-making, physiological response |
| JEL: | D87 J24 Q54 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17019&r= |
| By: | Herz, Holger (University of Fribourg, Switzerland); Zihlmann, Christian |
| Abstract: | Organizational structures are an important determinant of individual incentives and thus individual motivation in organizations. We study whether their effects on individual motivation go beyond incentives and how they relate to the perceived legitimacy of organizational structure. To this end, we design a laboratory experiment in which we exogenously manipulate the organizational structure in a way that leaves the incentives of all individuals unaffected, but changes the perceived legitimacy of the organizational structure. Our data show that organizational structure indeed affects behavior beyond monetary incentive effects and that the observed changes are significantly associated with changes in perceived legitimacy.. |
| Keywords: | Legitimacy, Organization, Motivation |
| JEL: | D01 D23 D91 M5 |
| Date: | 2024–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:fri:fribow:fribow00533&r= |
| By: | Yuehao Bai; Shunzhuang Huang; Sarah Moon; Azeem M. Shaikh; Edward J. Vytlacil |
| Abstract: | In the context of a binary outcome, treatment, and instrument, Balke and Pearl (1993, 1997) establish that adding monotonicity to the instrument exogeneity assumption does not decrease the identified sets for average potential outcomes and average treatment effect parameters when those assumptions are consistent with the distribution of the observable data. We show that the same results hold in the broader context of multi-valued outcome, treatment, and instrument. An important example of such a setting is a multi-arm randomized controlled trial with noncompliance. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.14104&r= |
| By: | Bo Cowgill; Patryk Perkowski |
| Abstract: | Firms increasingly delegate job screening to third-party recruiters, who must not only satisfy employers’ demand for different types of candidates, but also manage yield by anticipating candidates’ likelihood of accepting offers. We study how recruiters balance these objectives in a novel, two-sided field experiment. Our results suggest that candidates’ behavior towards employers is very correlated, but that employers’ hiring behavior is more idiosyncratic. Workers discriminate using the race and gender of the employer’s leaders more than employers discriminate against the candidate’s race and gender. Black and female candidates face particularly high uncertainty, as their callback rates vary widely across employers. Callback decisions place about two thirds weight on employer’s expected behavior and one third on yield management. We conclude by discussing the accuracy of recruiter beliefs and how they impact labor market sorting. |
| Keywords: | hiring, recruiting, discrimination, field experiments |
| JEL: | M51 C93 J71 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11129&r= |
| By: | Pablo Guillen; Archer Kirk; Lokendra Nedunuri |
| Abstract: | We use an online experiment to test the effect of an extreme kind of altruistic punishment, labelled hereafter Mutually Assured Destruction (MAD), on cooperation. We study the effect of MAD punishment under both symmetric and asymmetric versions of a Prisoners’ Dilemma (PD) game. Participants were asked to read explicit instructions, in which the outcomes of the PD game were explained in detail. Their understanding was then thoroughly tested by a battery of test questions. In order to rule out any fraudulent participation, those who failed to provide correct answers were excluded from participation, which resulted in relatively high attrition. The availability of MAD punishment dramatically increased cooperation. That resulted on efficiency gains, compensating for the rare instances of destructive punishment, in the symmetric treatment. We conclude that the threat of extreme forms of altruistic punishment might be likely at play in many real-life social dilemma situations. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:syd:wpaper:2024-10&r= |
| By: | Ning Li; Huaikang Zhou; Kris Mikel-Hong |
| Abstract: | Recent advancements in generative artificial intelligence (AI) have transformed collaborative work processes, yet the impact on team performance remains underexplored. Here we examine the role of generative AI in enhancing or replacing traditional team dynamics using a randomized controlled experiment with 435 participants across 122 teams. We show that teams augmented with generative AI significantly outperformed those relying solely on human collaboration across various performance measures. Interestingly, teams with multiple AIs did not exhibit further gains, indicating diminishing returns with increased AI integration. Our analysis suggests that centralized AI usage by a few team members is more effective than distributed engagement. Additionally, individual-AI pairs matched the performance of conventional teams, suggesting a reduced need for traditional team structures in some contexts. However, despite this capability, individual-AI pairs still fell short of the performance levels achieved by AI-assisted teams. These findings underscore that while generative AI can replace some traditional team functions, more comprehensively integrating AI within team structures provides superior benefits, enhancing overall effectiveness beyond individual efforts. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.17924&r= |
| By: | Monica P. Bhatt; Jonathan Guryan; Salman A. Khan; Michael LaForest-Tucker; Bhavya Mishra |
| Abstract: | High-dosage tutoring is an effective way to improve student learning (Nickow et al., 2024; Guryan et al., 2023). Finding ways to deliver high-dosage tutoring at large scale remains a challenge. Two primary challenges to scaling are cost and staffing. One possible solution is to reduce costs by substituting some tutor time with computer-assisted learning (CAL) technology. The question is: Does doing so compromise effectiveness? This paper provides evidence from a randomized controlled trial (RCT) of over 4, 000 students in two large school districts in 2018- 19 and 2019-20. The RCT tested the effectiveness of an in-school math tutoring program where students worked in groups of four, with two students working with an in-person tutor while the other two worked on CAL, alternating every other day. The tutoring model had per-pupil costs approximately 30 percent lower than the 2- to-1 tutoring model studied in Guryan et al. (2023). We find gains in students’ math standardized test scores of 0.23 standard deviations for participating students, which are almost as large as the effect sizes of the 2-to-1 tutoring model reported in Guryan et al. (2023). These findings suggest strategic use of technology may be a way to increase the scalability of HDT. |
| JEL: | I21 J24 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32510&r= |
| By: | Michela Chessa (Université Côte d'Azur, France; GREDEG CNRS); Benjamin Prissé (Singapore University of Technology and Design, Singapour) |
| Abstract: | Creativity is the basis of any innovation. However, there is a long and well documented academic dispute about how to best assess creativity. The Consensual Assessment Technique (CAT) is the most widely used instrument for this task. The CAT is based on a consensual definition of creativity: a product is creative to the extent that expert raters independently agree upon this judgment. It operates on the principle that no external factors should impact the assessment. In this paper, we ask whether this holds true, and we scrutinize the CAT by experimentally investigating potential discrepancies in evaluations of drawings due to three external factors: order effects, social norms, and communication. Our results confirm the robustness of the CAT in serving as a valuable method for assessing creativity at the aggregate level. However, we also identify certain weaknesses atthe individual level, particularly regarding the evaluation of drawings in first positions and when subjects are allowed to communicate. |
| Keywords: | Creativity, Innovation, Consensual Assessment Technique, Experiments |
| JEL: | C91 I25 O31 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2024-16&r= |
| By: | Antonio Estache; Renaud Foucart; Konstantinos Georgalos |
| Abstract: | In a laboratory experiment, we find that subjects do not exhibit preference for control when the alternative is a random dictatorship, a lottery implementing either their choice or the choice of someone else with equal probability. In contrast, we replicate Owens et al. (2014)’s result that they do so when the alternative is to have the choice of someone else implemented with certainty. This implies that the introduction of random dictatorships in discrete procedures such as those used for the allocation of some public procurement contracts does not necessarily involve aloss of perceived autonomy. |
| Keywords: | control, lotteries, random dictatorship, procurement |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:eca:wpaper:2013/374605&r= |
| By: | Vega-Redondo, Fernando; Pin, Paolo; Ubfal, Diego; Benedetti, Priscilla; Domínguez, Magdalena; Rubera, Gaia; Hovy, Dirk; Fornaciari, Tommaso |
| Abstract: | Can peer interaction foster entrepreneurship in large-scale environments? This paper addresses the question empirically and theoretically. Empirically, we tested the effects of peer interaction on the number and quality of business plans submitted in a Pan-African RCT including 5, 000 entrepreneurs. Thetreatment provided the possibility of interaction in different interaction settings (face-to-face or virtual, peers being of the same or diverse nationalities). We find that, while estimated network effects are almost always strong, the treatment effect is not so and displays a non-monotone trade-off between diversity and interaction "bandwidth." We develop a model that sheds light on this behavior by differentiating between constructive and disruptive interaction. It is also qualitatively supported by our experimental evidence |
| Keywords: | Social Networks; Peer Effects; Entrepreneurship; Innovation; Semantic analysis |
| Date: | 2024–06–06 |
| URL: | https://d.repec.org/n?u=RePEc:cte:werepe:43954&r= |
| By: | Mark Whitmeyer; Cole Williams |
| Abstract: | For three natural classes of dynamic decision problems; 1. additively separable problems, 2. discounted problems, and 3. discounted problems for a fixed discount factor; we provide necessary and sufficient conditions for one sequential experiment to dominate another in the sense that the dominant experiment is preferred to the other for any decision problem in the specified class. We use these results to study the timing of information arrival in additively separable problems. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.13709&r= |
| By: | Grieco, Kevin |
| Abstract: | How can weak states build fiscal capacity? I argue that governments in weak states can build fiscal capacity by collaborating with non-state, traditional political institutions (TPIs). Using a mix of experimental and qualitative evidence, I show that this collaboration increases citizens’ compliance because TPIs possess legitimacy and coercive capacity. Collaborating with the local government in Kono District, Sierra Leone, I embedded an experiment in their campaign to collect property taxes. Potential taxpayers were shown awareness videos that varied in their content, particularly in terms of whether and how their local paramount chief characterised his involvement in tax collection. I find that state collaboration with TPIs increases a preregistered proxy of citizens’ compliance with a newly introduced property tax and that TPIs’ authority stems from both their legitimacy and coercive capacity. Qualitative evidence from 300 semi-structured interviews adds a richer description of legitimacy and coercive capacity in my context. I argue, based on qualitative evidence, that legitimacy and coercion are complementary mechanisms of TPIs’ authority enabling them to effectively coordinate collective action to produce local public goods in the absence of the state. |
| Keywords: | Finance, |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:idq:ictduk:18360&r= |
| By: | Zhou, Peng (Cardiff Business School) |
| Abstract: | This paper proposes a nonlinear teaching approach, based on learning theories in cognitive psychology, with a special focus on large-cohort economics modules. The fundamental rationale is to match the features of teaching with the nature of learning. This approach was implemented in an undergraduate economics module, which received qualitative feedback and quantitative evaluation. Formal econometric models with both binary and continuous treatment effects were developed and estimated to quantify the effects of the proposed approach. Evidence shows that the nonlinear teaching approach significantly improves the effectiveness and efficiency of the learning-teaching process but does not promote student attendance. |
| Keywords: | nonlinear teaching approach; higher education; experimental action research; treatment effects |
| JEL: | A22 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:cdf:wpaper:2024/12&r= |
| By: | Thomas Graeber; Christopher Roth; Constantin Schesch; Thomas W. Graeber |
| Abstract: | When people exchange ideas, both truths and falsehoods can proliferate. We study the role of explanations for the spread of truths and falsehoods in 15 financial decision tasks. Participants record the reasoning behind each of their answers with incentives for accuracy of their listeners’ responses, providing over 6, 900 unique verbal explanations in total. A separate group of participants either only observe one orator’s choice or additionally listen to the corresponding explanation before making their own choice. Listening to explanations strongly improves aggregate accuracy. This effect is asymmetric: explanations enable the spread of truths, but do not curb the contagion of falsehoods. To study mechanisms, we extract every single argument provided in the explanations alongside a large collection of speech features, revealing the nature of financial reasoning on each topic. Explanations for truths exhibit a significantly richer message space and higher argument quality than explanations for falsehoods. These content differences in the supply of explanations for truths versus falsehoods account for 60% of their asymmetric benefit, whereas orator and receiver characteristics play a minor role. |
| Keywords: | explanations, social learning, speech data, financial knowledge, financial reasoning |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11131&r= |
| By: | Gaia Narciso (Department of Economics, Trinity College Dublin); Carol Newman (Department of Economics, Trinity College Dublin); Finn Tarp (Department of Economics, University of Copenhagen) |
| Abstract: | We present experimental evidence on the impact of a role model intervention to encourage ethnic minorities in Vietnam to start businesses and diversify income sources. We distinguish between relatable ethnic minority role models and ethnic majority role models allowing us to investigate the effect of increasing the social distance of the role model from the target population while keeping the information content constant. We find that relatability is important for inspiring individuals and inducing behavioral change. Diversification into business activities, however, does not always lead to improved household outcomes, particularly for those exposed to natural shocks. |
| Keywords: | role models, RCT, ethnic minorities, Vietnam |
| JEL: | D1 D3 I3 Q12 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:tcd:tcduee:tep0424&r= |
| By: | Wu, Keyu (University of Zurich); Fehr, Ernst (University of Zurich); Hofland, Sean (Lucerne School of Business); Schonger, Martin (Lucerne School of Business) |
| Abstract: | Ambiguous prospects are ubiquitous in social and economic life, but the psychological foundations of behavior under ambiguity are still not well understood. One of the most robust empirical regularities is the strong correlation between attitudes towards ambiguity and compound risk which suggests that compound risk aversion may provide a psychological foundation for ambiguity aversion. However, compound risk aversion and ambiguity aversion may also be independent psychological phenomena, but what would then explain their strong correlation? We tackle these questions by training a treatment group’s ability to reduce compound to simple risks, and analyzing how this affects their compound risk and ambiguity attitudes in comparison to a control group who is taught something unrelated to reducing compound risk. We find that aversion to compound risk disappears almost entirely in the treatment group, while the aversion towards both artificial and natural sources of ambiguity remain high and are basically unaffected by the teaching of how to reduce compound lotteries. Moreover, similar to previous studies, we observe a strong correlation between compound risk aversion and ambiguity aversion, but this correlation only exists in the control group while in the treatment group it is rather low and insignificant. These findings suggest that ambiguity attitudes are not a psychological relative, and derived from, attitudes towards compound risk, i.e., compound risk aversion and ambiguity aversion do not share the same psychological foundations. While compound risk aversion is primarily driven by a form of bounded rationality – the inability to reduce compound lotteries – ambiguity aversion is unrelated to this inability, suggesting that ambiguity aversion may be a genuine preference in its own right. |
| Keywords: | ambiguity aversion, compound risk aversion, bounded rationality, reduction of compound lotteries |
| JEL: | C91 D01 D91 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17032&r= |
| By: | David Card; Stefano DellaVigna; Chenxi Jiang; Dmitry Taubinsky |
| Abstract: | Laboratory experiments find a robust relationship between decision times and perceived values of alternatives. This paper investigates how these findings translate to experts' decision making and information acquisition in the field. In a stylized model of expert choice between two alternatives, we show that (i) less-commonly chosen alternatives are more likely to be chosen later than earlier; (ii) decision time is higher when the likelihood of choosing each alternative is closer to fifty percent; and (iii) the ultimate quality of the chosen alternative may increase or decrease with decision time, depending on whether earlier or later signals are more informative. We test these predictions in the editorial setting, where we observe proxies for paper quality and signals available to editors. We document that (i) the probability of a positive decision rises with decision time; (ii) average decision time is higher when our estimated probability of a positive decision is closer to fifty percent; and (iii) paper quality is positively (negatively) related to decision time for papers with Reject (R&R) decisions. Structural estimates show that the additional information acquired in editorial delays is modest, and has little impact on the quality of decisions. |
| JEL: | D03 O30 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32515&r= |