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on Experimental Economics |
| By: | Hoa Ho (LMU Munich); Maren Mickeler (ESSEC); SIlvia Castro (LMU Munich) |
| Abstract: | Organizations rely on peer-to-peer knowledge exchange among employees, yet incentivizing cooperative behaviors is a challenge. This study evaluates an intervention designed to encourage peer support in the largest bank in Uganda. Using a cluster randomized controlled trial, we introduced a public recognition incentive-awarding employees identified as the most supportive by their peers and supervisors. The intervention increases employees' willingness to help by 21% in expertise-sharing and 12% in mentoring. The incentive's effectiveness stems from its role in enhancing professional reputation and career prospects. A replication exercise in a second bank confirms the findings and the external validity of the results. |
| Keywords: | workplace cooperation; peer recognition; organizational incentives; knowledge sharing; field experiment; employee motivation; randomized controlled trial (RCT); |
| JEL: | M52 D23 J24 M54 C93 D83 |
| Date: | 2025–04–25 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:531 |
| By: | Marie-Pierre Dargnies (University of Paris Dauphine); Rustamdjan Hakimov (University of Lausanne); Dorothea Kübler (WZB Berlin, Technische Universität Berlin, CES Ifo) |
| Abstract: | The adoption of Artificial Intelligence (AI) for hiring processes is often impeded by a scarcity of comprehensive employee data. We hypothesize that the inclusion of behavioral measures elicited from applicants can enhance the predictive accuracy of AI in hiring. We study this hypothesis in the context of microfinance loan officers. Our findings suggest that survey-based behavioral measures markedly improve the predictions of a random-forest algorithm trained to predict productivity within sample relative to demographic information alone. We then validate the algorithm’s robustness to the selectivity of the training sample and potential strategic responses by applicants by running two out-of-sample tests: one forecasting the future performance of novice employees, and another with a field experiment on hiring. Both tests corroborate the effectiveness of incorporating behavioral data to predict performance. The comparison of workers hired by the algorithm with those hired by human managers in the field experiment reveals that algorithmic hiring is marginally more efficient than managerial hiring. |
| Keywords: | hiring; ai; economic and behavioral measures; selective labels; |
| Date: | 2025–04–29 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:532 |
| By: | Cuong Viet Nguyen; Quynh Thien Thi Pham; Tung Duc Phung |
| Abstract: | In this study, we examine whether a nudging intervention increases eyeglass use among primary and lower-secondary students in Vietnam through a randomized controlled trial. Students with refractive errors in 34 schools in one province were provided with free eyeglasses. Half of the schools were randomly selected, allowing students in these schools to choose from 10 available eyeglass frames. Six months after receiving their eyeglasses, we assessed the impact of frame choice. We find no significant effect of frame choice on students' eyeglass-wearing behavior. |
| Keywords: | Education, Health, Randomized Control Trial, Nudge, Vietnam |
| JEL: | I12 I20 C93 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1605 |
| By: | Jared Gars; Laura Prada; Egon Tripodi; Santiago Borda |
| Abstract: | A large share of the global workforce lacks access to employer-sponsored retirement plans. In Colombia, where labor informality is high, the government introduced the Beneficios Economicos Periodicos (BEPS) program to promote voluntary retirement savings. However, many enrollees fail to contribute regularly. We conduct a randomized controlled trial with 2, 819 BEPS users, assigning them to different planning and monthly reminder treatments, where reminders are tailored in their timing. We find that personalized reminders significantly increase both the frequency and amount of savings, with individuals who recognize their forgetfulness more likely to demand reminders. Our findings highlight the role of reminders tailored to individuals’ preferred timing in sustaining engagement in voluntary savings programs. |
| Keywords: | retirement savings, personalized reminders, limited attention, financial inclusion |
| JEL: | D91 G41 O16 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11738 |
| By: | Mari Rege; Edvin Bru; Ingeborg F. Solli; Maximiliaan W. P. T. Thijssen; Kjersti B. Tharaldsen; Lene Vestad; Sigrun K. Ertesvåg; Terje Ogden; Paul N. Stallard |
| Abstract: | Effective and scalable strategies for promoting youth mental health are urgently needed. We conducted a randomized controlled trial to assess the impact of school-based, teacher-led coping skills instruction on youth mental health and academic achievement. The trial included 84 classes and 1, 879 ninth-grade students (ages 14–15) in Norway. Findings indicate improved mental well-being and reduced emotional distress at a one-year follow-up, particularly among students with low baseline well-being. The intervention also enhanced academic motivation and increased the likelihood of choosing an academic high school track. Additionally, it had a positive effect on math performance among students with initially low academic motivation, but no significant effects on performance in English or Norwegian. |
| Keywords: | social and emotional skills, preventive mental health policy, school-based intervention, teacher led intervention, education policy |
| JEL: | I20 J00 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11742 |
| By: | Alice Pizzo; Christina Gravert; Jan M. Bauer; Lucia Reisch |
| Abstract: | We examine the impact of a carbon tax on consumer choices via a large-scale online randomized controlled trial. Higher taxes generally reduce the demand for high-carbon goods. Compared to an import tax, a carbon tax reduces demand when the tax is zero (i.e., announced but not levied) but leads to relatively higher demand for high-carbon goods when a positive tax is introduced. This contradiction of basic price theory is entirely driven by climate-concerned consumers. Our findings suggest that carbon taxes can crowd out climate concerns, leading to important implications for policy. |
| Keywords: | behavioral response, carbon pricing, climate change, climate policy, experiment, moral licensing |
| JEL: | Q58 C90 D03 D90 Q50 Q51 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11719 |
| By: | Paul M. Lohmann; Elisabeth Gsottbauer; Christina Gravert; Lucia A. Reisch |
| Abstract: | Understanding when and why nudges work is crucial for designing interventions that consistently and reliably change behaviour. This paper explores the relationship between decision-making speed and the effectiveness of two nudges – carbon footprint labelling and menu repositioning – aimed at encouraging climate-friendly food choices. Using an incentivized online randomized controlled trial with a quasi-representative sample of British consumers (N=3, 052) ordering meals through an experimental food-delivery platform, we introduced a time-pressure mechanism to capture both fast and slow decision-making processes. Our findings suggest that menu repositioning is an effective tool for promoting climate-friendly choices when decisions are made quickly, though the effect fades when subjects have time to revise their choices. Carbon labels, in contrast, showed minimal impact overall but reduced emissions among highly educated and climate-conscious individuals when they made fast decisions. The results imply that choice architects should apply both interventions in contexts where consumers make fast decisions, such as digital platforms, canteens, or fast-food restaurants to help mitigate climate externalities. More broadly, our findings suggest that the available decision time in different contexts might at least partly explain differences in effect sizes found in previous studies of these nudges. |
| Keywords: | carbon-footprint labelling, choice architecture, food-delivery apps, low-carbon diets, dual-process models, system 1 |
| JEL: | C90 D04 I18 D90 Q18 Q50 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11718 |
| By: | Baumgartner, Stefanie S. (University of Fribourg); Galeotti, Fabio (CNRS, GATE); Madies, Thierry (University of Fribourg); Villeval, Marie Claire (CNRS) |
| Abstract: | Trust plays a crucial role in refugees’ integration. This study examines how social information about trust levels among peers from home and host countries affects non-Western refugees’ trust. Using a trust game, we measured experimentally trust levels among Swiss citizens, Turkish refugees, and Afghan refugees. We found that Turkish refugees exhibited higher trust levels than Afghan refugees, but no significant trust differences were found between Swiss participants and either refugee group. Turkish refugees adjusted their trust to match Swiss levels when receiving social information, but observation by compatriots reduced this effect. By contrast, Afghan refugees exhibited a more limited response to social information, except when told their behavior would be revealed, which led them to align more closely with Swiss trust levels. These findings highlight the complex impact of social information on refugee trust behavior and suggest that trust can be a social norm. |
| Keywords: | refugees, trust, social information, lab-in-the-field experiment |
| JEL: | C91 D83 D91 F22 J61 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17822 |
| By: | Riedl, Arno (Maastricht University); Schmeets, Hans (Maastricht University); Werner, Peter (Maastricht University) |
| Abstract: | Using an artefactual field experiment, we elicit revealed preferences for solidarity of different age groups toward the same and other age groups among a large, diverse Dutch population sample. Preferences are measured with a solidarity game and linked to a unique administrative database, allowing exploration of demographic and socio-economic correlates. In the game, a winner of a money amount is asked ex-ante how much they are willing to transfer to a loser who gets nothing. Participants, on average, show a strong preference for ex-ante solidarity, willing to transfer about 40% of the money. However, participants are overly pessimistic about what others will transfer. We also observe age-based discrimination, as many show stronger solidarity with their own age group. Using questionnaires, we measure stated preferences in various domains and find revealed preferences correlate with some self-reported attitudes and with opinions on social security and solidarity-related field behavior. |
| Keywords: | social security systems, group identity, age groups, solidarity, large population sample |
| JEL: | D63 D64 D91 C93 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17858 |
| By: | Justin Valasek; Weijia Wang; Justin Mattias Valasek |
| Abstract: | The experimental literature on preferences for redistribution has established that individual perceptions of what earning distributions are fair depend greatly on context. In this paper, we study an important and novel dimension of context: whether the choice to redistribute occurs before workers work and accrue earnings, or after. Contrary to the predictions of our theoretical framework, we find no evidence that spectators are less likely to equalize earnings ex ante than to equalize earnings ex post. Interestingly, our study also suggests that, relative to American subjects, Scandinavian subjects are more likely to equalize ex post earnings, but we find no evidence that Scandinavian and American subjects make different choices ex ante. A follow-up analysis suggests that the latter result is largely due to Scandinavian and American subjects having similar preferences over ex ante redistribution when equalizing earnings comes at a cost to efficiency. Overall, our results suggest that context-dependent preferences for redistribution are sensitive to the relative timing of the redistribution choice. |
| Keywords: | inequality, fairness, institutions, experiment. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11804 |
| By: | Carol Luengo (University of Waikato); Steven Tucker (University of Waikato); Yilong Xu (Utrecht School of Economics, Utrecht University); Kun Zhang (Business School, University of Jinan) |
| Abstract: | This study investigates the effect of continuous, free-form communication among traders on mispricing in experimental asset markets. Using laboratory experiments, we compare three asset types with varying complexity regarding their payoff structures: a simple constant fundamental value, a moderately complex decreasing fundamental value, and a highly complex constant fundamental value with dividends and interest. Communication's impact is examined by allowing participants to engage in unrestricted text chat during market trading sessions. We hypothesize that the potential benefits of communication-such as reducing confusion, correcting misconceptions, and promoting common beliefs-would be more pronounced in more complex asset markets. However, results indicate that communication's effects are generally modest, with only a slight reduction in mispricing observed in the most complex asset scenario. Content analysis employing large language models reveals significant differences in the communication topics discussed, particularly highlighting strategy-related conversations in highly mispriced markets. Despite expectations that communication could substantially improve market efficiency, our findings suggest limited effectiveness, contingent upon the nature and complexity of the asset traded. This research contributes to understanding how trader communication influences asset pricing dynamics and extends insights into the institutional factors impacting market efficiency. |
| Keywords: | communication; experimental asset markets; mispricing |
| JEL: | C90 C91 G12 |
| Date: | 2025–04–25 |
| URL: | https://d.repec.org/n?u=RePEc:wai:econwp:25/04 |
| By: | Jesper Akesson; Robert Hahn; Rajat Kochhar; Robert Metcalfe |
| Abstract: | Water suppliers are showing greater interest in using different mechanisms to promote conservation. One such mechanism is conducting home water audits, which involves assessing water use and providing tailored suggestions for conserving water for residential customers. Yet, very little is known about the economic impacts of these water audits. This paper helps fill this gap by implementing a natural field experiment in the United Kingdom. The experiment randomly allocates 45, 000 water customers to a control group or to treatment groups that receive different behavioral encouragements to take-up an online water audit. Our analysis yields three main findings. First, encouraging subjects to participate in an audit with financial incentives reduces household consumption by about 17 percent over two months. Furthermore, we find that the size of the financial incentive used to encourage conservation matters for take-up, but not conservation. Second, although there are substantial improvements in water conservation for some interventions, they do not appear to yield net benefits of more than 1 pound per person under various sensitivity analyses. We also implement a marginal value of public funds approach that considers benefits and costs and reach a similar conclusion. Third, we find that targeting high users could double the effectiveness of the financial incentive interventions. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:feb:natura:00820 |
| By: | Mirjam Bächli; Rafael Lalive; Michele Pellizzari |
| Abstract: | Searching for jobs is challenging, and online platforms now often offer tailored job recommendations. In a randomized controlled trial with over 1, 250 participants, we evaluate recommendations based on prior experience or based on skill profiles assessed at study enrolment. We find that, on average, both types of recommendations improve job finding rates. Profile-based recommendations are particularly effective for individuals with limited experience and mismatch in the prior job, while experience-based recommendations may slow down job finding for those with limited experience but a well-matched previous job. These findings highlight the need to align job search advice with jobseekers’ skills. |
| Keywords: | jobseekers, online job search, job recommendations |
| JEL: | J24 J62 J64 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11702 |
| By: | Römer, Nathalie; Schröder, Marina |
| Abstract: | Written self-promotion is crucial in numerous decision-making scenarios, including job applications, securing funds for start-ups, or academic grant proposals. In two experiments, we study the effects of written self-promotion on decision quality and gender bias. We show that, if anything, written self-promotion slightly improves decision quality. Concerning gender bias, we find that self-promotion does not induce a gender bias that harms women. While women in our sample face adverse effects of written self-promotion due to lower performance beliefs, they can compensate for this disadvantage by applying a more modest writing style and by providing more informative written self-promotion. Finally, we show that the provision of self-promotion can mitigate pre-existing gender biases. |
| Keywords: | Gender bias, self-promotion, real-effort, experiment |
| JEL: | C9 M51 J16 D91 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:han:dpaper:dp-737 |
| By: | Jesper Akesson; Robert Hahn; Robert Metcalfe; Manuel Monti-Nussbaum |
| Abstract: | Although fake online customer reviews have become prevalent on platforms such as Amazon, Google, and Facebook, little is known about how these reviews influence consumer behavior. This paper provides the first experimental estimates of the effects of fake reviews on individual demand and welfare. We conduct an incentive-compatible online experiment with a nationally representative sample of respondents from the United Kingdom. Consumers are asked to choose a product category, browse a platform resembling Amazon, and select one of five equally priced products. One of the products is of inferior quality, one is of superior quality, and three are of average quality. We randomly allocate participants to variants of the platform: five treatment groups see positive fake reviews for an inferior product, and the control group does not see fake reviews. Moreover, some participants are randomly selected to receive an educational intervention that aims to mitigate the potential effects of fake reviews. Our analysis of the experimental data yields four findings. First, fake reviews make consumers more likely to choose lower-quality products. Second, we estimate that welfare losses from such reviews may be important - on the order of .12 dollars for each dollar spent in the setting we study. Third, we find that fake reviews have heterogeneous effects. For example, the effect of fake reviews is smaller for those who do not trust customer reviews. Fake reviews also have larger effects on those who shop online more frequently. Fourth, we show that the educational intervention reduces the adverse welfare impact of fake reviews by 44%. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:feb:framed:00821 |
| By: | Andlib, Zubaria |
| Abstract: | This study examines the causal impact of addictive patterns of social media use on mental health outcomes through a randomized controlled trial conducted among young individuals (18 to 24 years) in Pakistan. Participants in the treatment group received an intervention designed to limit their social media use, while the control group maintained their usual usage patterns. The findings indicate that limiting social media use leads to significant improvements in mental health, including reductions in depression and anxiety, alongside notable increases in self-esteem and overall well-being among young adults. The intervention improves sleep quality and reduces perceived stress, demonstrating that excessive use of social media apps significantly affects psychological and behavioural health. The findings highlight the potential for policy interventions, including behavioural nudges, youth-targeted awareness campaigns, and regulatory actions, to decrease the negative externalities associated with unregulated social media use. Future research should evaluate the long-term effects of addictive patterns of social media use and the differential impacts across diverse socio-demographic groups, considering the increasing integration of digital platforms into everyday life. |
| Keywords: | Social Media, Mental Health, Randomized Controlled Trial, Digital Well-being, Behavioural Nudges |
| JEL: | I12 I31 D91 O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1603 |
| By: | Innocenti, Stefania; Bharadwaj, Preethika (School of Geography and the Environment, University of Oxford) |
| Abstract: | Fossil fuel subsidies pose a significant barrier to achieving decarbonisation goals, yet their removal remains challenging due to concerns about public opposition and the potential impact on vulnerable groups. In Malaysia, where a petrol subsidy reform is underway, we conducted a mixed-methods study to explore strategies to increase public support for the reform. The study combined an incentivised experimental online survey (N=1, 208) and interviews with policymakers (N=12). The survey tested redistributive and environmental framing interventions, while the interviews examined policymakers' perceptions of public support and its interplay with other reform considerations. Results show that emphasising the redistributive benefits of the reform can increase public support by at least 8 percentage points from a baseline of 25%, while the environmental framing increases support by at least 5 percentage points from a 39% baseline among prior opposers. Policymakers acknowledged the challenges posed by the unpopularity of subsidy reforms, but underscored the critical role of strategic communication in addressing public concerns. By crafting transparent and resonant narratives, policymakers can garner greater support for implementing the reform. |
| Keywords: | climate policy, fuel subsidy reform, public support, communication, survey-based experiment, Malaysia |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2025-03 |
| By: | Chiara Aina; Florian H. Schneider |
| Abstract: | We study how individuals update their beliefs in the presence of competing data-generating processes, or models, that could explain observed data. Through experiments, we identify the weights participants assign to different models and find that the most common updating rule gives full weight to the model that best fits the data. While some participants assign positive weights to multiple models—consistent with Bayesian updating—they often do so in a systematically biased manner. Moreover, these biases in model weighting frequently lead participants to become more certain about a state regardless of the data, violating a core property of Bayesian updating. |
| Keywords: | belief updating, narratives, mental models, experiments |
| JEL: | D83 D90 C90 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11757 |
| By: | Celina Högn; Lea Mayer; Johannes Rincke; Erwin Winkler |
| Abstract: | This paper examines preferences for gender diversity among co-workers. Using stated-choice experiments with 5, 400 PhD students and university students in Germany, we uncover a substantial willingness to pay (WTP) for gender diversity of up to 5% of earnings on average. Importantly, we find that women have a much higher WTP for gender diversity than men. While the WTP differs by career ambition, competitiveness, and family preferences, we find that gender differences in traits and preferences cannot explain gender differences in the WTP for diversity. Our findings provide an explanation for differential sorting of men and women into high-profile jobs based on the share of female co-workers. |
| Keywords: | gender diversity, gender differences, preferences, willingness to pay, stated choice experiment |
| JEL: | J16 J24 J31 J33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11732 |
| By: | Jiang, Shuguang (Shandong University); Villeval, Marie Claire (CNRS); Zhang, Zhengping (Shandong University); Zheng, Jie (Shandong University) |
| Abstract: | We experimentally study how economic prospects and power shifts affect the risk of conflict through a dynamic power rivalry game. Players decide whether to maintain the status quo or challenge a rival under declining, constant, or growing economic prospects. We find that conflict rates are highest when economic prospects decline and lowest when they improve. A behavioral model incorporating psychological costs and reciprocity can explain these differences. A survey on U.S.-China relations supports the real-world relevance of these findings. Inspired by the Thucydides’s Trap, this study highlights how economic expectations shape conflict dynamics, offering key insights into geopolitical stability. |
| Keywords: | conflict, economic prospects, Thucydides’s Trap, power shift, experiment |
| JEL: | C83 C91 D74 D91 F51 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17823 |
| By: | Hochleitner, Anna (Norwegian School of Economics at Bergen (NHH)); Tufano, Fabio (University of Leicester); Facchini, Giovanni (University of Nottingham); Rueda, Valeria (University of Nottingham); Eberhardt, Markus (University of Nottingham) |
| Abstract: | We study the gendered impact of recommendations at different stages of the hiring process. First, using a large sample of reference letters from the academic job market for economists, we document that women receive fewer `ability' and more `grindstone' letters. Next, we conduct two experiments --- with academic economists and a broader, college-educated, population ---analyzing both recommendation and recruitment stages. These confirm that recommendations are gendered and impact recruitment. We elicit gender views and beliefs about the effectiveness of different letter types, uncovering that gender attitudes and strategic behavior based on erroneous beliefs explain referees’ choices. Finally, we decompose gender recruitment gaps into two components: one capturing differences in treatment of candidates with identical qualities, the other reflecting recruiters’ failure to account for gendered patterns in recommendations. We show that recruiters' failure to recognize the gendered nature of reference letters undermines visible efforts to improve diversity in hiring. |
| Keywords: | gender, recruitment, diversity, experiments |
| JEL: | J16 A11 D9 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17813 |
| By: | Imai, Taisuke (Osaka University); Toussaert, Séverine (University of Oxford); Baillon, Aurélien (EMLYON Business School); Dreber Almenberg, Anna (Stockholm School of Economics); Ertaç, Seda (Koc University); Johannesson, Magnus (Stockholm School of Economics); Neyse, Levent (DIW Berlin); Villeval, Marie Claire (CNRS) |
| Abstract: | The open science movement has gained significant momentum over the past decade, with pre-registration and the use of pre-analysis plans being central to ongoing debates. Combining observational evidence on trends in adoption with survey data from 519 researchers, this study examines the adoption of pre-registration in experimental economics. Pooling statistics from 19 leading journals published between 2017 and 2023, we observe that the number of papers containing a pre-registration grew from seven per year to 190 per year. Our findings indicate that pre-registration has now become mainstream in experimental economics, with two-thirds of respondents expressing favorable views and 86% having pre-registered at least one study. However, opinions are divided on the scope and comprehensiveness of pre-registration, highlighting the need for clearer guidelines. Researchers assign a credibility premium to pre-registered tests, although the exact channels remain to be understood. Our results suggest growing support for open science practices among experimental economists, with demand for professional associations to guide researchers and reviewers on best practices for pre-registration and other open science initiatives. |
| Keywords: | pre-registration, pre-analysis plans, experimental economics, open science |
| JEL: | A14 C12 C18 C80 C90 I23 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17821 |
| By: | Andrea Diem; Christian Gschwendt; Stefan C. Wolter |
| Abstract: | A university degree is a risky investment because of the non-negligible risk of having to drop out of university without graduating. However, the costs of this risk are controversial, as it is often argued that even an uncertified year of study has a value in the labor market. To determine this value causally, however, alternatives to studying must also be considered, which is done here with the help of a discrete choice experiment with a representative sample of over 2, 500 HR recruiters. The result is that dropping out of university with a major closely related to an advertised job leads to similar labor market outcomes as if someone had not studied at all. Without a direct link to a job, however, dropping out of university significantly reduces lifetime earnings. Furthermore, HR recruiters clearly prefer applicants who have used the years without studying for human capital accumulation in an alternative way, for example in the form of a traineeship. |
| Keywords: | dropouts, hiring decisions, discrete choice experiment, sheepskin effect, willingness to pay, tertiary education |
| JEL: | I26 J23 J24 J31 M51 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11688 |
| By: | Robert Metcalfe; Sefi Roth |
| Abstract: | Exposure to ambient air pollution has been shown to be detrimental to human health and productivity, and has motivated many policies to reduce such pollution. However, given that humans spend 90% of their time indoors, it is important to understand the degree of exposure to Indoor Air Pollution (IAP), and, if high, ways to reduce it. We design and implement a field experiment in London that monitors households' IAP and then randomly reveals their IAP in real-time. At baseline, we find that IAP is worse than ambient air pollution when residents are at home and that for 38% of the time, IAP is above World Health Organization standards. Additionally, we observe a large household income-IAP gradient, larger than the income-ambient pollution gradient, highlighting large income disparities in IAP exposure. During our field experiment, we find that the randomized revelation reduces IAP by 17% (1.9 ug/m3) overall and 34% (5 ug/m3) during occupancy time. We show that the mechanism is households using more natural ventilation as a result of the feedback (i.e., opening up doors and windows). Finally, in terms of welfare, we find that: (i) households have a willingness to pay of 4.8 pounds (6 dollars) for every 1 ug/m3 reduction in indoor PM2.5; (ii) households have a higher willingness to pay for mitigation than for full information; (iii) households have a price elasticity of IAP monitor demand around -0.75; and (iv) a 1 pound subsidy for an IAP monitor or an air purifier has an infinite marginal value of public funds, i.e., a Pareto improvement. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:feb:framed:00819 |
| By: | Evgeny Kagan; Brett Hathaway; Maqbool Dada |
| Abstract: | Despite recent advances in Artificial Intelligence, the use of chatbot technology in customer service continues to face adoption hurdles. This paper explores reasons for these adoption hurdles and tests several service design levers to increase chatbot uptake. We use incentivized online experiments to study chatbot uptake in a variety of scenarios. The results of these experiments are threefold. First, people respond positively to improvements in chatbot performance; however, the chatbot channel is utilized less frequently than expected-time minimization would predict. A key driver of this underutilization is the reluctance to engage with a gatekeeper process, i.e., a process with an imperfect initial service stage and possible transfer to a second, expert service stage -- a behavior we term "gatekeeper aversion". We show that gatekeeper aversion can be further amplified by a secondary hurdle, algorithm aversion. Second, chatbot uptake can be increased by providing customers with average waiting times in the chatbot channel, as well as by being more transparent about chatbot capabilities and limitations. Third, methodologically, we show that chatbot adoption can depend on experimental implementation. In particular, chatbot adoption decreases further as (i) stakes are increased, (ii) the human/algorithmic nature of the server is manipulated with more realism. Our results suggest that firms should continue to prioritize investments in chatbot technology. However, less expensive, process-related interventions can also be effective. These may include being more transparent about the types of queries that are (or are not) suitable for chatbots, emphasizing chatbot reliability and quick resolution times, as well as providing faster live agent access to customers who experienced chatbot failure. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.06145 |
| By: | Pei Kuang; Michael Weber; Shihan Xie; Michael Weber |
| Abstract: | This paper examines the impact of political polarization on public trust in the Fed and its influence on macroeconomic expectations. Using a large-scale survey experiment which we fielded on President Trump’s 2025 inauguration day, we study how households form beliefs about the Fed regarding its political leaning, independence, and trustworthiness. Political alignment significantly shapes perceptions: individuals who view the Fed as politically aligned report higher independence of and trust in the Fed, leading to lower inflation expectations and uncertainty. Strategic communication on institutional structure and policy objectives effectively mitigates perception biases, reinforcing the Fed’s credibility and enhancing its policy effectivenes. |
| Keywords: | central bank communication, partisan, trust, expectations |
| JEL: | D83 D84 D72 E70 E31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11708 |
| By: | Daryl Fairweather; Matthew Kahn; Robert Metcalfe; Sebastian Sandoval-Olascoaga |
| Abstract: | Climate change presents new risks for property in the United States. Due to the high cost and sometimes unavailability of location-specific property risk data, home buyers can greatly benefit from acquiring knowledge about these risks. To explore this, a large-scale nationwide natural field experiment was conducted through Redfin to estimate the causal impact of providing home-specific flood risk information on the behavior of home buyers in terms of their search, bidding, and purchasing decisions. Redfin randomly assigned 17.5 million users to receive information detailing the flood risk associated with the properties they searched for on the platform. Our analysis reveals several key findings: (1) the flood risk information influences every stage of the house buying process, including the initial search, bidding activities, and final purchase; (2) individuals are willing to make trade-offs concerning property amenities in order to own a property with a lower flood risk; (3) the impact of the flood risk information on behavior is more pronounced for users conducting searches in high flood risk areas, but does not differ significantly between buyers in Republican and Democrat Counties; and (4) the information resulted in changes to property prices and altered the market's hedonic equilibrium, providing a new finding that climate adaptation can be forward-thinking and proactive. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:feb:natura:00818 |
| By: | Alston, Mackenzie (University of Illinois at Urbana-Champaign); Deryugina, Tatyana (University of Illinois at Urbana-Champaign); Shurchkov, Olga (Wellesley College) |
| Abstract: | There is much disagreement about the extent to which financial incentives motivate study participants. We elicit preferences for being paid for completing a survey, including a one-in-twenty chance of winning a $100 electronic gift card, a guaranteed electronic gift card with the same expected value, and an option to refuse payment. More than twice as many participants chose the lottery as chose the guaranteed payment. Given that most people are risk averse, this pattern suggests that factors beyond risk preferences—such as hassle costs—influenced their decision-making. Almost 20 percent of participants actively refused payment, demonstrating low monetary motivation. We find both systematic and unobserved heterogeneity in the characteristics of who turned down payment. The propensity to refuse payment is more than four times as large among individuals 50 and older compared to younger individuals, suggesting a tradeoff between financially motivating participants and obtaining a representative sample. Overall, our results suggest that modest electronic gift card payments violate key requirements of Vernon Smith’s induced value theory. |
| Keywords: | induced value theory, motivation, incentives |
| JEL: | C83 C90 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17812 |
| By: | Martin Vaeth |
| Abstract: | This paper studies how imprecision in noisy signals attenuates Bayesian updating toward the prior. This phenomenon is well-known under a normal prior and normal noise, where less precise signals yield posterior means closer to the prior mean. We show this effect extends to any symmetric, log-concave prior and any symmetric, quasi-concave location experiment, using a newly introduced precision order. Our main result is that for any such prior and any signal realization, the posterior mean under location experiment S is closer to the prior mean than is the posterior mean S', if and only if S is less precise than S'. We discuss applications to cognitive imprecision, prior precision, and overconfidence. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.02238 |
| By: | Antonio Cabrales; Lorenzo Ductor; Ericka Rascón-Ramírez; Ismael Rodriguez-Lara |
| Abstract: | Women often find themselves in teams that hinder their productivity and earnings. We analyze the role of homophily and gender stereotypes in preferences for team formation and examine the effect of information on changing these preferences. We find that women are expected to perform better in female-type tasks (such as text and emotion-recognition). However, people prefer forming teams with their same gender. Our findings suggest that information can mitigate -but it does not eliminate- the influence of homophily on team formation. |
| Keywords: | gender differences, expectations, collaboration, network formation, team production |
| JEL: | C91 D03 D60 D81 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11706 |
| By: | Burtraw, Dallas (Resources for the Future, Washington, DC, USA); Holt, Charles (University of Virginia, Charlottesville, VA, USA); Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Shobe, William (University of Virginia, Charlottesville, VA, USA) |
| Abstract: | Many climate solutions including carbon dioxide removal (CDR) technologies require investments in capital intensive technologies that require large capacity investments and exhibit modest unit costs. Governments seeking to achieve net zero goals may invest directly in CDR to procure negative emissions credits to offset emissions in hard-to-abate sectors such as agriculture. In a procurement auction for a declining cost industry, the optimal allocation will generally require all winning bidders operating at full capacity. Because of the lumpy nature of investments, this may not fit within the government’s budget, leaving one or more winning bidders at the margin, operating at less than full capacity, and consequently with higher average costs. Protection can be provided to the marginal bidder by letting bids specify a range of acceptable quantities up to full capacity. The auction can be executed with sealed bids (specifying prices with associated minimum quantities) or by having the proposed bid price be lowered sequentially in a “clock auction” with quantity intervals specified by bidders at the current clock price. We consider the performance of sealed bid and clock auctions, in the presence of 1) a fixed government procurement budget, 2) “common value” uncertainty about the true per-unit production cost, and 3) the presence of a large, fixed cost. Laboratory experiment simulations with financially motivated human subjects are valuable for testing and developing auction designs that have never been used before, without relying on theoretical properties that depend on strong assumptions of perfect cost information and “truthful bidding.” Preliminary experiment results indicate that winner’s curse effects (bidder losses) are infrequent in both auction formats (clock and sealed bid), but the clock tends to restrict bidder profits in a manner that reduces the average cost for the buyer of the “units” representing CDR. Our experiments are informed by the projected use of auctions by the government of Sweden to procure carbon capture and sequestration from its domestic wood products and energy industry. |
| Keywords: | Carbon dioxide removal (CDR); Procurement auctions; Common value uncertainty; Capital-intensive technologies |
| JEL: | C92 D44 H57 Q54 Q55 Q58 |
| Date: | 2025–04–28 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:gunwpe:0854 |
| By: | Gaddis, S. Michael (NWEA); Quadlin, Natasha; Larsen, Edvard Nergård; Crabtree, Charles (Dartmouth College); Holbein, John B. |
| Abstract: | Intersectionality theory argues that race and gender cannot be fully understood in isolation or through an additive approach. However, field experiments frequently examine aggregate racial or gender discrimination without accounting for within-category differences (e.g., gendered variations in racial discrimination) or intersectionality. Building on theoretical perspectives of intersectionality, we introduce a systematically comparative analytic framework designed to (a) identify missing results of correspondence audits and (b) provide recommendations to help scholars conduct more holistic analyses. We conduct a meta-analysis of 52 correspondence audits, encompassing nearly 330, 000 tests for discrimination, and a re-examination of each study using seven discrimination ratios. The meta-analysis reveals a previously overlooked pattern in rental housing discrimination: compared to White men, Black men experience discrimination, Black women's outcomes are statistically similar, and White women receive preferential treatment. Additionally, our re-examination uncovers ten ways scholars may unintentionally miss key findings when failing to adopt a systematically comparative intersectional approach. We conclude with best-practice recommendations to guide scholars in designing, analyzing, and citing correspondence audits, helping them avoid these problematic scenarios. Importantly, our framework extends beyond field experiments focused on race and gender and can be broadly applied to research on disparities, enabling more comprehensive analyses across numerous dimensions. |
| Date: | 2025–04–23 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:nd2y6_v1 |
| By: | Nie, Zihan (Beijing Normal University, China); Jiang, Yu (Southwestern University of Finance and Economics, China.); Salazar, César (University of Bío-Bío, Chile); Jaime, Marcela (University of Concepción, Chile.); Ho, Thong (University of Economics Ho Chi Minh City, Vietnam.) |
| Abstract: | Harmful algal blooms (HAB) are an increasing global threat to food safety in the seafood industry. The impact of HABs and the losses from policies addressing them are significant. However, little is known regarding the extent to which the perceived risk of HAB affects consumers' preferences for seafood products and how this translates into welfare losses from the demand side. In this paper, we conducted choice experiments in Chile, China, and Vietnam to explore consumers’ preferences for reducing the risk of HAB contamination in a mussel consumption framework. We find that consumers strongly prefer a test that eliminates the risk of purchasing mussels contaminated by the HAB on the market in all three countries. These strong preferences translate into large WTPs. Perceptions towards HAB and mussel’s attributes play a role in explaining heterogeneity in consumers’ preferences. However, the link between perceptions and preferences varies across countries, possibly due to country-specific contexts. These results imply that the increasing occurrence of HAB globally might have caused sizable welfare losses for consumers and that policies to ensure food safety in seafood markets could significantly improve social welfare. |
| Keywords: | mussel aquaculture; harmful algal bloom; choice experiment; consumers’ preferences |
| JEL: | Q22 Q51 Q53 |
| Date: | 2025–04–09 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:gunefd:2025_001 |
| By: | Takehiro Takayanagi; Kiyoshi Izumi; Javier Sanz-Cruzado; Richard McCreadie; Iadh Ounis |
| Abstract: | Large language model-based agents are becoming increasingly popular as a low-cost mechanism to provide personalized, conversational advice, and have demonstrated impressive capabilities in relatively simple scenarios, such as movie recommendations. But how do these agents perform in complex high-stakes domains, where domain expertise is essential and mistakes carry substantial risk? This paper investigates the effectiveness of LLM-advisors in the finance domain, focusing on three distinct challenges: (1) eliciting user preferences when users themselves may be unsure of their needs, (2) providing personalized guidance for diverse investment preferences, and (3) leveraging advisor personality to build relationships and foster trust. Via a lab-based user study with 64 participants, we show that LLM-advisors often match human advisor performance when eliciting preferences, although they can struggle to resolve conflicting user needs. When providing personalized advice, the LLM was able to positively influence user behavior, but demonstrated clear failure modes. Our results show that accurate preference elicitation is key, otherwise, the LLM-advisor has little impact, or can even direct the investor toward unsuitable assets. More worryingly, users appear insensitive to the quality of advice being given, or worse these can have an inverse relationship. Indeed, users reported a preference for and increased satisfaction as well as emotional trust with LLMs adopting an extroverted persona, even though those agents provided worse advice. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.05862 |
| By: | Margaret Samahita (Department of Economics and Geary Institute for Public Policy, University College Dublin); Martina Zanella (Department of Economics, Trinity College Dublin) |
| Abstract: | This paper examines the gender influence gap in an academic setting, focusing on the Irish Economic Association (IEA) Conference review process. Using data from 2017 to 2023, we analyze whether organizers follow the recommendations of male and female reviewers equally and whether any difference can be attributed to a gender gap in the confidence of reviewers. Our findings reveal that organizers' decisions more closely align with male reviewers', particularly when the reviewer's confidence is high and when they have experience in the profession. The influence gap cannot be explained by female reviewers being less confident than males, which is the traditional explanation in the literature. Contrary to expectations, female reviewers report higher confidence than males. We explore potential mechanisms and find suggestive evidence that female reviewers strategically overstate their confidence in anticipation of discriminatory treatment by organizers. |
| Keywords: | discrimination; confidence; economics; strategic response |
| JEL: | J16 A14 D91 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:tcd:tcduee:tep0325 |
| By: | Pierre Bousseyroux; Gilles Z\'erah; Michael Benzaquen |
| Abstract: | Stabilizing cooperation among self-interested individuals presents a fundamental challenge in evolutionary theory and social science. While classical models predict the dominance of defection in social dilemmas, empirical and theoretical studies have identified various mechanisms that promote cooperation, including kin selection, reciprocity, and spatial structure. In this work, we investigate the role of localized imitation in the evolutionary dynamics of cooperation within an optional Public Goods Game (PGG). We introduce a model where individuals belong to distinct groups and adapt their strategies based solely on comparisons within their own group. We identify different dynamical regimes, including stable fixed points, limit cycles, and Rock-Scissors-Paper-type oscillations. Our analysis, grounded in a replicator-type framework, reveals that such group-level imitation can stabilize cooperative behavior, provided that groups are not initially polarized around a single strategy. In other words, restricting imitation to group-level interactions mitigates the destabilizing effects of global competition, providing a potential explanation for the resilience of cooperation in structured populations. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2504.05086 |