|
on Experimental Economics |
| By: | Ye Zhang; Eric Zou |
| Abstract: | We develop an experimental framework to identify the belief-based and taste-based drivers of demand for Environmental, Social, and Governance (ESG) partnerships. Our study implements two symmetric experiments with real startup founders and venture capital (VC) investors, who evaluate hypothetical profiles under the understanding that their responses will inform an algorithm generating personalized real-world matches. We find a significant ESG penalty: profiles randomly labeled with ESG attributes receive substantially lower collaboration interest from both founders and VCs. This penalty is primarily driven by negative performance beliefs—ESG-labeled profiles are perceived as less profitable and less accessible. To isolate taste-based preferences, we further implement a willingness-to-pay experiment in which participants may forgo part of a lottery reward to receive additional match recommendations of comparable quality. Participants randomly offered ESG-oriented recommendations are now significantly more likely to pay, revealing a latent preference for ESG once performance concerns are held constant. These findings highlight a tension between financial returns and personal values: in current market conditions, concerns about profitability obscure an underlying taste for ESG. |
| JEL: | C91 C93 G24 L26 M13 Q56 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34048 |
| By: | Balbuzanov, Ivan (Department of Economics, University of Melbourne); Gars, Jared (Food and Resource Economics Department, University of Florida); Stalinski, Mateusz (University of Warwick and CAGE); Tjernstrom, Emilia (Macquarie University) |
| Abstract: | Digital platforms increasingly compensate content creators based on engagement metrics, yet the effects of these incentives remain poorly understood. We conducted a field experiment with a Kenyan news outlet to study how high-intensity performance incentives affect content production, quality, and journalist well-being in digital media. We randomly assigned writers to either pay-per-click (PPC) or piece-rate contracts. The PPC contract tripled per-article pageviews and increased daily pageviews by 107%, but reduced the number of published articles by 74%. While PPC writers earned more per article, their overall earnings fell, lowering the firm’s wage bill and increasing profits. However, these gains came at a cost : PPC writers shifted content production away from local news and towards attention-grabbing political stories. PPC writers also used less positive language in both headlines and article bodies. Our results show that engagement-based pay boosts reader traffic but caution that this may come at the cost of compromised coverage diversity, local news provision, and journalist well-being. |
| Keywords: | performance pay ; labor productivity ; media engagement ; field experiment JEL Codes: C93 ; J24 ; J33 ; L82 ; M52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1570 |
| By: | Xiaoyue Shan; Ulf Zölitz; Uschi Backes-Gellner |
| Abstract: | We study the impact of online instruction with a field experiment that randomly assigns 1, 344 university students to different proportions of online and in-person lectures in multiple introductory courses. Increased online instruction leaves men’s exam performance unaffected but significantly lowers women’s performance, particularly in math-intensive courses. Online instruction also reduces women’s longer-run performance and increases their study dropout. Exploring mechanisms, we find that women exposed to more online lectures report greater difficulty in connecting with peers, less engaging instructors, and lower course satisfaction. Our findings suggest that shifting toward more online instruction may disproportionally harm women. |
| Keywords: | online instruction, field experiment, gender disparities |
| JEL: | J16 I23 C93 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11997 |
| By: | Zíka, Vojtěch; Alfonso, Tomáš; Flegr, Jaroslav |
| Abstract: | In an incentivized laboratory experiment (N = 212), we tested whether a measure capturing both the difference between offers in the Ultimatum and Dictator Games and their distance from zero may be a better predictor of intrinsic altruism than the commonly used Dictator Game offer. Participants took part in a within-subjects, dual-role Dictator Game and Ultimatum Game, followed by a modified version of the Die-under-the-cup Task, in which they could cheat either to benefit themselves or a charity. The experimental games were followed by the Self-Reported Altruism Scale and additional short surveys. The main results showed that although our measure outperformed the Dictator Game offer in predicting altruism, neither was significantly associated with task- or survey-based altruism. Perhaps the most interesting result emerged from the exploratory analysis: the Ultimatum–Dictator Gap—the difference between offers in the two games, and part of our proposed measure—appears to be the strongest predictor of survey-measured altruism. It also positively correlates with the time taken to make an Ultimatum Game offer (suggesting lower cognitive load when gauging the social norm) and with dishonesty. In contrast, it is negatively correlated with political orientation, with economically right-leaning participants showing a larger gap than left-leaning ones. This study offers preliminary support for the idea that integrating Dictator and Ultimatum Game offers—whether as a single gap or a more nuanced measure—may better capture altruistic tendencies than relying on the Dictator Game alone. Nonetheless, further research is needed to confirm and extend these findings. |
| Date: | 2025–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:bwz6m_v1 |
| By: | Balbuzanov, Ivan (Department of Economics, University of Melbourne); Gars, Jared (Food and Resource Economics Department, University of Florida); Stalinski, Mateusz (University of Warwick and CAGE); Tjernström, Emilia (Macquarie University) |
| Abstract: | Digital platforms increasingly compensate content creators based on engagement metrics, yet the effects of these incentives remain poorly understood. We conducted a field experiment with a Kenyan news outlet to study how high-intensity performance incentives affect content production, quality, and journalist well-being in digital media. We randomly assigned writers to either pay-per-click (PPC) or piece-rate contracts. The PPC contract tripled per-article pageviews and increased daily pageviews by 107%, but reduced the number of published articles by 74%. While PPC writers earned more per article, their overall earnings fell, lowering the firm’s wage bill and increasing profits. However, these gains came at a cost: PPC writers shifted content production away from local news and towards attention-grabbing political stories. PPC writers also used less positive language in both headlines and article bodies. Our results show that engagement-based pay boosts reader traffic but caution that this may come at the cost of compromised coverage diversity, local news provision, and journalist well-being. |
| Keywords: | performance pay, labor productivity, media engagement, field experiment JEL Classification: C93, J24, J33, L82, M52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:763 |
| By: | Xiaoyue Shan (National Univeristy of Singapore); Ulf Zoelitz (University of Zurich); Uschi Backes-Gellner (University of Zurich) |
| Abstract: | We study the impact of online instruction with a field experiment that randomly assigns 1, 344 university students to different proportions of online and in-person lectures in multiple introductory courses. Increased online instruction leaves men’s exam performance unaffected but significantly lowers women’s performance, particularly in math-intensive courses. Online instruction also reduces women’s longer-run performance and increases their study dropout. Exploring mechanisms, we find that women exposed to more online lectures report greater difficulty in connecting with peers, less engaging instructors, and lower course satisfaction. Our findings suggest that shifting toward more online instruction may disproportionally harm women. |
| Keywords: | Online instruction, field experiment, gender disparities |
| JEL: | J16 I23 C93 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:2533 |
| By: | Melisa Kurtis (Max Planck Institute for Research on Collective Goods, Bonn); Axel Ockenfels (Max Planck Institute for Research on Collective Goods, Bonn); Rastislav Rehák (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | Despite widespread concern about climate change, voluntary mitigation efforts often fail to maximize impact. In two online experiments (n = 1, 500), we elicit willingness to mitigate (WTM) by allowing subjects to delete actual CO2 allowances and examine how they allocate the WTM between their own and another’s footprint. While 75% contribute a nonzero WTM, allocations are often inefficient, and many avoid freely available footprint information, suggesting limited efficiency concerns. Self-reported motives show that only half prioritize impact, while others cite fairness, personal responsibility, or intuition. Moreover, both WTM and efficiency are malleable by impact-unrelated nudges: a video emphasizing personal responsibility increases both, whereas social image based on the own footprint raises WTM but reduces efficiency. Our results suggest that voluntary climate action is shaped as much by psychological and social factors as by concern for impact. |
| Keywords: | climate change, pro-environmental behavior, climate action, willingness to mitigate, impact, efficiency, consequentialism, warm glow, fairness, online experiment |
| JEL: | C90 D01 D61 D62 D64 D83 D91 H41 Q51 Q54 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:mpg:wpaper:2025_13 |
| By: | Esslinger, Anna; Pfeil, Katharina; Feld, Lars P. |
| Abstract: | Are the effects of tax aversion on labor supply symmetric? In a real-effort online experiment, participants are exposed to manipulated wages and taxes after first experiencing the same reference wage. We find no significant differences in their productivity; however, we find significant asymmetries in fairness perceptions of the treatments. We find that tax increases are viewed as more unfair than equivalent wage decreases and tax decreases are viewed as more fair than equivalent wage increases. Additionally, the negative effect of tax increases is larger than the positive effect of tax decreases. However, we find little to no evidence that these asymmetric fairness perceptions significantly shape working behavior. |
| Keywords: | Tax Aversion, Loss Aversion, Labor Supply Asymmetry, Online Experiment |
| JEL: | H20 H30 D91 J22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:aluord:323932 |
| By: | Andrej Angelovski (Middlesex University Business School); Praveen Kujal (Economic Science Institute, Chapman University and Middlesex University Business School); Jose M. Ortiz (Zayed University) |
| Abstract: | We study how three widely discussed cues—source of income (merit vs luck), own performance, and information about others’ work status and performance—shape redistribution. Prior to the dictator game, all 306 dictators and most of the 306 recipients complete the same real-effort matrix task in an online experiment that would yield either $4 or $1 for the dictators. In the Performance treatment the dictator’s payoff is based on their performance; in Luck, it is assigned by a 50-50 draw. We find that: (i) Earned entitlement is prevalent for high-performing dictators: they keep more for themselves; (ii) Earned entitlement is conditional on performance or luck where high-performing dictators keep more when their high payoff is earned and give more when luck dictated the high payoff; (iii) Regarding recipients, deservingness arises from working and not performance. Dictators give around 20% more to anyone who worked, regardless of others’ performance. Taken together, the results show that dictators use own performance to justify keeping a larger share, yet apply a far coarser rule to others, i.e. they reward work and ignore relative performance. The findings refine the notion of earned entitlement and highlight asymmetric fairness criteria in redistributions. |
| Keywords: | Redistribution, Earned Entitlement, Deservingness, Luck, Performance. |
| JEL: | D31 D91 C91 D63 D64 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:chu:wpaper:25-07 |
| By: | Cevat Giray Aksoy; Mathias Dolls; Justyna Klejdysz; Andreas Peichl; Lisa Windsteiger; Yunus Aksoy |
| Abstract: | This paper is the first to causally identify the effect of language on attitudes and behaviors toward debt. Using observational data, randomized survey experiments, incentivized borrowing-to-invest decisions, and textual analyses, we show that the moral connotations inherent in debt-related language influence how individuals, firms, and policymakers perceive borrowing. In several languages, including German, Dutch, and Swedish, the standard term for “debt” also connotes “guilt.” Leveraging this semantic overlap, we conduct survey experiments embedded in three household surveys across seven countries and one business survey. By randomizing debt-related wording, we find that guilt-connoted language significantly reduces individuals’ willingness to borrow, their approval of public debt, and debt-financing plans among firm managers. This effect extends to an incentivized experiment, in which guilt-laden wording significantly reduces both the probability of borrowing and the amount borrowed. To complement the experimental results, we analyze three decades of German parliamentary speeches and find that politicians who oppose public debt systematically use guilt-connoted terms. A similar pattern emerges in financial advertising: guilt-laden language is concentrated in debt-relief campaigns, while neutral terminology dominates transactional promotions. Together, our findings demonstrate that moral connotations embedded in language shape economic behavior and are strategically employed in political and commercial discourse. |
| Keywords: | public debt, private debt, linguistic framing, survey experiment, NLP |
| JEL: | D83 H63 G51 Z13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12060 |
| By: | Yoan Hermstrüwer (University of Zurich, Switzerland); Mahdi Khesali (University of Hamburg & Max Planck Institute for Research on Collective Goods) |
| Abstract: | Why do people obey the law when it is not formally enforced? In this study, we explore the expressive power of democracy as a behavioral channel of compliance with the law. Using a modified version of the stealing game, we examine the effect of two distinct democratic interventions on stealing under normative ambiguity: a voting procedure in which the outcome is revealed, and a voting procedure in which the outcome of the vote remains unknown. We find that revealing the outcome of a vote significantly reduces stealing relative to a baseline treatment without a vote and the treatment in which the outcome of the vote remains unknown. We also observe suggestive evidence that participants who support the social norm proscribing theft are more likely to steal nonetheless when the outcome remains unknown. Our findings have important implications for the design of expressive law and of democratic voting procedures. |
| JEL: | C91 D72 D91 K14 K42 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:mpg:wpaper:2025_06 |
| By: | Katarzyna Bech - Wysocka (Group for Research in Applied Economics (GRAPE); Warsaw School of Economics); Magdalena Smyk (Group for Research in Applied Economics (GRAPE); Warsaw School of Economics) |
| Abstract: | Statistical discrimination theory explains wage differences between demographic groups by referring to differences in group averages or heuristic-based decision-making. This study investigates whether providing employers with accurate information about individual productivity affects wage-setting practices. We replicate a labor market scenario in which employers determine wages based on perceived productivity differences between male and female workers. Our experimental findings suggest that statistical discrimination influences initial wage decisions, but access to individual performance data reduces reliance on group-based heuristics. The dominant strategy when the actual information about performance is to share the resources according to contribution. We observe that in tasks where women statistically outperform, higher-scoring individuals tend to receive slightly less than their proportional contribution, whereas in tasks where men perform better, they tend to receive slightly more than their contribution. Furthermore, we show that with only statistical information, significant gender-based wage discrimination aligned with performance stereotypes occurs, but there is no gender discrimination under full information about performance. Our results contribute to the broader discussion on labour market inequalities and approaches to reducing statistical discrimination. |
| Keywords: | statistical discrimination, productivity, information, gender |
| JEL: | J71 J16 C91 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:fme:wpaper:106 |
| By: | Elisabeth Beckmann; Söhnke Bergmann; Christa Hainz; Sarah Kiesl-Reiter |
| Abstract: | Loan guarantees can enhance access to credit, but serving as a private guarantor may also increase financial vulnerability. We examine, through a randomized information experiment in the UK, how providing information about the legal ramifications and risks of loan guarantees affects individuals’ willingness to act as guarantors. We find that providing information about legal risks reduces the willingness to guarantee loans, with stronger effects for larger loan amounts. Social preferences influence individuals’ willingness to act as guarantors. Information about legal ramifications increases the willingness to grant a guarantee among altruists but decreases it among those high in positive reciprocity. While information about the UK default rate reduces willingness, individuals are less likely to update their expectations for someone they know personally, indicating in-group bias. |
| Keywords: | third-party loan guarantees, survey experiment, social preferences, loan default expectations |
| JEL: | D14 G41 G51 G53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12022 |
| By: | Raanan Sulitzeanu-Kenan; Micha Mandel; Yosef Rinott |
| Abstract: | A central challenge in any study of the effects of beliefs on outcomes, such as decisions and behavior, is the risk of omitted variables bias. Omitted variables, frequently unmeasured or even unknown, can induce correlations between beliefs and decisions that are not genuinely causal, in which case the omitted variables are referred to as confounders. To address the challenge of causal inference, researchers frequently rely on information provision experiments to randomly manipulate beliefs. The information supplied in these experiments can serve as an instrumental variable (IV), enabling causal inference, so long as it influences decisions exclusively through its impact on beliefs. However, providing varying information to participants to shape their beliefs can raise both methodological and ethical concerns. Methodological concerns arise from potential violations of the exclusion restriction assumption. Such violations may stem from information source effects, when attitudes toward the source affect the outcome decision directly, thereby introducing a confounder. An ethical concern arises from manipulating the provided information, as it may involve deceiving participants. This paper proposes and empirically demonstrates a new method for treating beliefs and estimating their effects, the Anchoring-Based Causal Design (ABCD), which avoids deception and source influences. ABCD combines the cognitive mechanism known as anchoring with instrumental variable (IV) estimation. Instead of providing substantive information, the method employs a deliberately non-informative procedure in which participants compare their self-assessment of a concept to a randomly assigned anchor value. We present the method and the results of eight experiments demonstrating its application, strengths, and limitations. We conclude by discussing the potential of this design for advancing experimental social science. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.01677 |
| By: | Marius Protte |
| Abstract: | This study replicates and adapts the experiment of Hoelzl and Rustichini (2005), which examined overplacement, i.e., overconfidence in relative self-assessments, by analyzing individuals' voting preferences between a performance-based and a lottery-based bonus payment mechanism. The original study found underplacement - the majority of their sample apparently expected to perform worse than others - in difficult tasks with monetary incentives, contradicting the widely held assumption of a general human tendency toward overconfidence. This paper challenges the comparability of the two payment schemes, arguing that differences in outcome structures and non-monetary motives may have influenced participants' choices beyond misconfidence. In an online replication, a fixed-outcome distribution lottery mechanism with interdependent success probabilities and no variance in the number of winners - designed to better align with the performance-based payment scheme - is compared against the probabilistic-outcome distribution lottery used in the original study, which features an independent success probability and a variable number of winners. The results align more closely with traditional overplacement patterns than underplacement, as nearly three-fourths of participants prefer the performance-based option regardless of lottery design. Key predictors of voting behavior include expected performance, group performance estimations, and sample question outcomes, while factors such as social comparison tendencies and risk attitudes play no significant role. Self-reported voting rationales highlight the influence of normative beliefs, control preferences, and feedback signals beyond confidence. These results contribute to methodological discussions in overconfidence research by reassessing choice-based overconfidence measures and exploring alternative explanations for observed misplacement effects. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.15568 |
| By: | Marius Protte; Behnud Mir Djawadi |
| Abstract: | While most of the existing literature focused on human-machine interactions with algorithmic systems in advisory roles, research on human behavior in monitoring or verification processes that are conducted by automated systems remains largely absent. Our study examines how human dishonesty changes when detection of untrue statements is performed by machines versus humans, and how ambiguity in the verification process influences dishonest behavior. We design an incentivized laboratory experiment using a modified die-roll paradigm where participants privately observe a random draw and report the result, with higher reported numbers yielding greater monetary rewards. A probabilistic verification process introduces risk of detection and punishment, with treatments varying by verification entity (human vs. machine) and degree of ambiguity in the verification process (transparent vs. ambiguous). Our results show that under transparent verification rules, cheating magnitude does not significantly differ between human and machine auditors. However, under ambiguous conditions, cheating magnitude is significantly higher when machines verify participants' reports, reducing the prevalence of partial cheating while leading to behavioral polarization manifested as either complete honesty or maximal overreporting. The same applies when comparing reports to a machine entity under ambiguous and transparent verification rules. These findings emphasize the behavioral implications of algorithmic opacity in verification contexts. While machines can serve as effective and cost-efficient auditors under transparent conditions, their black box nature combined with ambiguous verification processes may unintentionally incentivize more severe dishonesty. These insights have practical implications for designing automated oversight systems in tax audits, compliance, and workplace monitoring. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.15439 |
| By: | Leonardo Bursztyn; Matthew Gentzkow; Rafael Jimenez-Duran; Aaron Leonard; Filip Milojevic; Christopher Roth; Matthew Gentzkow |
| Abstract: | Market definition is essential for antitrust analysis, but challenging in settings with network effects, where substitution patterns depend on changes in network size. To address this challenge, we conduct an incentivized experiment to measure substitution patterns for TikTok, a popular social media platform. Our experiment, conducted during a time of high uncertainty about a potential U.S. TikTok ban, compares changes in the valuation of other social apps under individual and collective TikTok deactivations. Consistent with a simple framework, the valuations of alternative social apps increase more in response to a collective TikTok ban than to an individual TikTok deactivation. Our framework and estimates highlight that individual and collective treatments can even lead to qualitatively different conclusions about which alternative goods are substitutes. |
| Keywords: | markets, network goods, coordination, collective interventions |
| JEL: | D83 D91 P16 J15 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12049 |
| By: | Erik Snowberg; Leeat Yariv |
| Abstract: | This introductory chapter outlines key criteria for evaluating experimental measures, and connects these criteria to the selection of experimental parameters across various contexts. We aim for this chapter to serve as a framework for assessing the different measures, elicitations, and designs explored throughout the handbook. |
| JEL: | D9 D90 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34031 |
| By: | Justin Katz; Hunt Allcott |
| Abstract: | We present a new model of competition between digital media platforms with targeted advertising. The model adds new insights around how user heterogeneity and overlap, along with user and advertiser substitution patterns, determine equilibrium ad load. We apply the model to evaluate the proposed separation of Facebook and Instagram. We estimate structural parameters using evidence on diminishing returns to advertising from a new randomized experiment and information on user overlap, diversion ratios, and price elasticity from earlier experiments. In counterfactual simulations, a Facebook-Instagram separation increases ad loads, transferring surplus from platforms and users to advertisers, with limited total surplus effects. |
| JEL: | D12 L1 L4 L86 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34028 |
| By: | Abate, Gashaw T.; Bernard, Tanguy; Deutschmann, Joshua; Fall, Fatou |
| Abstract: | Individuals often make decisions considering both private returns and welfare impacts on others. Food safety decisions by smallholder agricultural producers exemplify this choice, particularly in low-income countries where farmers often consume some of the food crops they produce and sell or donate the rest. We conduct a lab-in-the-field experiment with peanuts producers in Senegal to study the decision to invest in food safety information, exogenously varying the degree of private returns (monetary or health-wise) and welfare impacts on others. Producers are willing to pay real money for food safety information even absent the potential for private returns, but willingness to pay increases with the potential for private returns. A randomized information treatment significantly increases willingness to pay in all scenarios. Our results shed light on the complex interplay between altruism and economic decisions in the presence of externalities, and point to the potential of timely and targeted information to address food safety issues. |
| Keywords: | food safety; health; groundnuts; aflatoxins; smallholders; returns; Senegal; Africa; Sub-Saharan Africa; Western Africa |
| Date: | 2025–07–07 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ifprid:175569 |
| By: | Berlingieri, Francesco; d'Hombres, Béatrice; Kovacic, Matija |
| Abstract: | This paper explores the relationship between loneliness, trust, and populist voting across both extremes of the ideological spectrum. The contribution of this research is mainly two-fold. First, it considers different dimensions of loneliness and accounts for its predetermined component stemming from social isolation in childhood and adverse childhood experiences. Second, it disentangles the effects of loneliness and trust by incorporating actual trust behaviour from a large-scale trust game experiment conducted in 27 European member states, involving more than 25, 000 individuals. The richness of the data allows to account for and disentangle the impact of competitive explanatory factors such as emotions, objective social isolation, social media use and economic preferences. The main findings suggest the following: (i) social loneliness significantly impacts populist voting, particularly on the extreme right, whereas the emotional dimension of loneliness is associated with more left-leaning, but non-populist, voting preferences; (ii) higher levels of actual trust are associated with lower support for right-wing populist parties; (iii) loneliness and trust operate through distinct channels: loneliness exerts a greater impact on women and older individuals, while trust plays a more significant role among men and middle-aged individuals, and (iv) the effect of social loneliness on support of populist parties is significantly attenuated in contexts with a history of recurrent economic crises, suggesting a potential experience-based learning mechanism. |
| Keywords: | Loneliness, interpersonal trust, political polarisation, populism |
| JEL: | D72 D91 P00 C91 Z13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1634 |
| By: | Hubert János Kiss; Alfonso Rosa García; Lukas Voellmy |
| Abstract: | Liquidity management tools - such as redemption fees (which impose a cost on withdrawals) or gates (which suspend withdrawals when they become excessive) - are commonly used in the fund industry with the aim of mitigating run behavior and reducing fund fragility. Recent attention has been paid to the fact that these tools may give rise to preemptive runs, where investors withdraw preemptively to avoid the risk of being affected by temporary redemption restrictions. Since real-market testing is not feasible, we use laboratory experiments to evaluate the effectiveness of redemption fees and gates in reducing money market fund runs, in a setting where investors may withdraw preemptively. We find that fees significantly reduce the propensity to run compared to the baseline without liquidity management tools, whereas gates do not lower the propensity to run. However, the effect of fees on withdrawal behavior is relatively small and takes some time to materialize. Overall, our experimental results indicate that preemptive runs are a real concern and that liquidity management tools are unlikely to eliminate fund fragility, which is consistent with the experience of the 2020 money market fund turmoil. |
| Keywords: | Coordination problem, Experimental economics, Money market funds, Redemption fees, Runs, Suspension of convertibility |
| JEL: | G01 G28 C92 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:snb:snbwpa:2025-10 |
| By: | Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn); Yoan Hermstrüwer (University of Zurich); Alison Kim (University of Zurich) |
| Abstract: | Recent advances in AI create possibilities for delegating legal decision-making to machines or enhancing human adjudication through AI assistance. Using classic normative conflicts-the trolley problem and similar moral dilemmas-as a proof of concept, we examine the alignment between AI legal reasoning and human judgment. In our baseline experiment, we find a pronounced mismatch between decisions made by GPT and those of human subjects. This misalignment raises substantive concerns for AI-powered legal decision-aids. We investigate whether explicit normative guidance can address this misalignment, with mixed results. GPT-3.5 is susceptible to such intervention, but frequently refuses to decide when faced with a moral dilemma. GPT-4 is outright utilitarian, and essentially ignores the instruction to decide on deontological grounds. GPT-o3-mini faithfully implements this instruction, but is unwilling to balance deontological and utilitarian concerns if instructed to do so. At least for the time being, explicit normative instructions are not fully able to realign AI advice with the normative convictions of the legislator. |
| Keywords: | large language models, human-AI alignment, rule of law, moral dilemmas, trolley problems |
| JEL: | C99 D63 D81 K10 K40 Z13 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:mpg:wpaper:2025_03 |
| By: | Zhi Hao Lim |
| Abstract: | Peer information is pervasive in the workplace, but workers differ in whether and why they value such information. We develop a portable, theory-driven methodology to study heterogeneity in information preferences and the underlying mechanisms. In a real-effort experiment with 793 workers, we elicit willingness-to-pay for peer information delivered either before or after a task. We identify four worker types (indifferent, stress-avoidant, competitive, and learning-oriented) whose effort responses align with theoretical predictions. Workers' stated motivations in free-text responses strongly correlate with their revealed preferences and behavior, validating our classification. Notably, a nontrivial share (15%) strictly prefers to avoid information ex ante due to stress and exhibit no productivity gains from it. Tailoring the timing of information by worker type improves welfare by up to 48% relative to a uniform policy. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.06162 |
| By: | Elisabeth Grewenig (Kreditanstalt für Wiederaufbau (KfW)); Katharina Wedel (ifo Institute, University of Munich); Katharina Werner (Business School Pforzheim, ifo Institute) |
| Abstract: | Perceptions about students’ personal responsibility for their own success might have crucial implications for public approval of targeted financial support. Using a survey experiment among the German adult population, we find that information about the correlation of education outcomes and parental background strongly increases the perception that external circumstances determine educational success. These effects persist in a follow-up survey conducted two weeks later. Information also significantly increases private donations to charities supporting students from disadvantaged socio-economic backgrounds but does not affect demand for redistributive education spending by the government. This pattern of results is consistent with differences in the perceived opportunity costs of funds used in both spending decisions. |
| Keywords: | circumstances; effort; information; survey experiment; charitable donations; equality of opportunity; policy preferences; |
| JEL: | I24 H52 H11 D83 D63 D64 |
| Date: | 2025–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:543 |
| By: | Massimo Bordignon; Nicolò Gatti; Gilberto Turati |
| Abstract: | This paper investigates how raising awareness of public debt sustainability affects individual attitudes toward debt reduction and fiscal policy preferences. Using a survey experiment on a representative sample of the Italian population, we randomly assign objective information about government debt to citizens, who become more sensitive to the risks of tax increases, spending cuts, and imbalances for future generations. We find no effect on the perception of debt reduction as an urgent policy priority. While remaining highly averse to any tax increase, treated respondents support spending cuts (but not in education and health care) as a policy to reduce the debt burden. We also show that subjects with distorted beliefs about government debt are no more responsive to the information treatment than subjects with correct beliefs, shedding light on the challenges of building a voting majority for debt-stabilizing policies. |
| Keywords: | public debt, fiscal policies, beliefs, information |
| JEL: | H63 H31 D83 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12013 |
| By: | Tahir Andrabi; Jishnu Das; Asim Ijaz Khwaja; Selcuk Ozyurt |
| Abstract: | Low-cost private schools have increased educational access in low-income countries, but frequent school closures lead to costly disruptions in children’s schooling. We provide experimental evidence from Pakistan that both school loans and educational products and services (EPS) are (a) commercially viable products and (b) substantially and similarly improve school survival rates. Moreover, loans decrease closure rates more for schools with larger initial enrollments and lower baseline test scores, while EPS show no such differential impact. These results demonstrate how financial and educational input constraints can significantly affect school survival while underscoring that the fungibility of entrepreneurial support matters. |
| JEL: | C93 I22 I25 O15 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34042 |
| By: | Thomas Graeber; Christopher Roth; Marco Sammon; Thomas W. Graeber |
| Abstract: | Most news stories contain both granular quantitative information and coarse categorizations. For instance, company earnings are typically reported as a dollar figure alongside categorizations, such as whether earnings beat or missed market expectations. We study the hypothesis that when a decision is harder, people rely more on easier-to-process signals: people still discriminate between coarse categories but distinguish less granularly within them, creating higher sensitivity around category thresholds but lower sensitivity elsewhere. Using stock market reactions to earnings announcements, we document that hard-to-value stocks are associated with a more pronounced S-shaped response pattern around category thresholds. Experiments that exogenously manipulate the problem difficulty provide supporting causal evidence in individual investor behavior. We then exploit variation in investor familiarity with earnings surprises of different sizes to show that returns exhibit greater sensitivity in regions with more historical density. |
| Keywords: | categorical information, numerical information, earnings surprises, cognitive constraints, behavioral finance |
| JEL: | D01 D83 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12032 |
| By: | Jeffrey Yusof; Simona Sartor |
| Abstract: | Market forces beyond individual control are a central driver of income inequality, a phenomenon we refer to as market luck. In meritocratic societies, this raises the question of whether individuals perceive such inequalities as fair. To address this question, we conduct experiments in the US, France, and China in which inequality between workers emerges due to random matching with buyers who require specific skills, creating inequality driven by market luck. Our findings from the US indicate that individuals are more accepting of inequalities resulting from market luck than those caused by brute luck, even though both are beyond workers’ control and unrelated to their effort. The results are directionally consistent across all three countries, though with varying magnitudes of treatment effects, suggesting that redistributive preferences are sensitive to cultural differences and exposure to market institutions. We further validate our findings in survey experiments using more natural contexts and show that behavior in the experiments predicts support for real-world policies. Our results provide a novel explanation for the muted demand for redistribution amid rising inequality. |
| Keywords: | Inequality, meritocracy, fairness, redistribution, luck, markets |
| JEL: | C91 D31 D63 D91 H23 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:zur:econwp:475 |
| By: | Baute, Sharon (University of Konstanz); Bellani, Luna (Ulm University); Hecht, Katharina (Northeastern University) |
| Abstract: | Wealth is increasingly unequally distributed in many countries. This study examines public perceptions of wealth deservingness and preferences for taxing the wealth of the rich, focusing on how opinions vary based on the amount, use, and origin of wealth. Drawing on an original vignette experiment conducted in Germany (n=6, 018), our results show a consistent pattern: as wealth increases, its perceived deservingness declines, while support for taxation rises. Similarly, spending on luxury items is seen as less deserving than philanthropic or nonprofit investments, leading to greater support for taxing the wealth of luxury spending rich people. However, wealth obtained through inheritance presents a puzzling exception: although it is perceived as the least deserving compared to wealth gained through entrepreneurship or management, this does not translate into a stronger preference for taxing inheritors over managers. These findings, which hold across different income and wealth groups as well as political affiliations, highlight the complex and sometimes contradictory public attitudes toward the rich and the taxation of their wealth. |
| Keywords: | survey experiment, richness, redistribution, inequality, wealth taxation |
| JEL: | D3 D6 H2 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18043 |
| By: | Sinclair, Maddie (University of Glasgow); Combet, Emilie; Papies, Esther K. |
| Abstract: | Food-based dietary guidelines (FBDG) communicate government-supported nutrition guidance and can support people in making sustainable food choices. However, FBDGs rarely contain explicit references to environmental sustainability. Here, we report the results of a mixed-methods survey to understand how UK participants (n = 305) interpret guidelines in the Eatwell Guide concerning sustainability, particularly the consumption of animal-based and plant-based foods. To contextualise findings through participants’ lifestyles, we also assessed dietary habits and priorities, and how they access nutrition information. Participants reported high familiarity with, but low use of, the Eatwell Guide, accessing nutrition information instead through online sources and food labels. Most participants felt the Eatwell Guide recommended a diet including plant-based foods and lower in animal-based foods; however, meat-eaters found the guidelines consistent with their diet and interpreted a diet supporting the consumption of animal-based foods. Participants were motivated to eat sustainably while prioritising food prices and animal welfare. Furthermore, participants struggled with accessing, trusting, and processing information about sustainability and food. These findings highlight a unique opportunity for the Eatwell Guide, and possibly other countries’ FBDGs, to convey consistent and accessible nutrition guidelines that integrate health and sustainability. Featuring clearer information in FBDGs to increase capacity in adopting sustainable dietary practices should happen alongside other initiatives (e.g. food labelling, prioritising plant-based foods in public procurement, subsidising fruits and vegetables) to support people in the transition towards environmentally sustainable diets. |
| Date: | 2025–08–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:fu5a8_v1 |
| By: | Shiang-Hung Hu; Po-Hsuan Lin; Thomas R. Palfrey; Joseph Tao-yi Wang; Yu-Hsiang Wang |
| Abstract: | We explore the twin questions of when and why the strategy method creates behavioral distortions in the elicitation of choices in laboratory studies of sequential games. While such distortions have been widely documented, the theoretical forces driving these distortions remain poorly understood. In this paper, we compare behavior in six optimally designed centipede games, implemented under three different choice elicitation methods: the direct response method, the reduced strategy method and the full strategy method. These methods elicit behavioral strategies, reduced strategies, and complete strategies, respectively. We find significant behavioral differences across these elicitation methods -- differences that cannot be explained by standard game theory, but are consistent with the predictions of the Dynamic Cognitive Hierarchy solution (Lin and Palfrey, 2024), combined with quantal responses. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.06425 |