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on Experimental Economics |
| By: | Jung, Alexander; Mongelli, Francesco Paolo |
| Abstract: | We would like to thank Philipp Lane, Klaus Adam, Michael Ehrmann, Christophe Kamps, Timo Reinelt, Annalisa Ferrando, Philippine Cour-Thimann, Felix Hammermann, Davide Romelli, Andreas Kapounek, and colleagues from DG Communication for for their valuable feedback on earlier versions of this paper. This paper was presented at the 2025 AEA Conference in San Francisco, and we appreciate the feedback and suggestions received from the participants. We would also like to thank colleagues from 11 Business Areas of the ECB for their presentations to visitors, as well as colleagues from DG Communications for their support in conducting the surveys with the visitor groups, especially Alexandra Kroppenstedt, Nadia Bates, Christian Scherf, and Emma-Katharina David. This experiment is pre-registered in the AEA RCT registry (ID: AEARCTR-0012902). Declaration of Interest: Jung is employed by the European Central Bank. The views expressed in this article are those of the authors and do not necessarily reflect those of the ECB. The authors remain responsible for any errors or omissions. JEL Classification: C83, C93, D83, D84, E31, E58 |
| Keywords: | behavioral economics, central bank communication, inflation expectations, monetary policy knowledge, randomized controlled trial |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253103 |
| By: | Lisa Bruttel (University Potsdam, CEPA); Holger A. Rau (University Duisburg-Essen, University Göttingen); Vasilisa Werner (University Potsdam) |
| Abstract: | This paper investigates partial cartels, which laboratory studies have neglected despite their empirical prevalence. We conduct two laboratory experiments to understand how they function compared to all-inclusive cartels and respond to antitrust policies. First, we compare partial cartel formation with all-inclusive settings typically studied experimentally. Second, we test how ringleader discrimination policies perform within partial cartel environments. Our first study reveals that partial cartels create opposing effects: while individual willingness to communicate decreases due to free-riding incentives, communication occurs more frequently overall and prices are higher when sufficient firms participate. We find that all-inclusive cartels prove essential for achieving high prices. Our second study discovers that ringleader discrimination policies can backfire by facilitating cartel formation through leading-by-example effects. These findings highlight distinct coordination mechanisms of partial cartels and demonstrate the need for careful antitrust policy design. |
| Keywords: | (partial) cartel, collusion, communication, experiment, ringleader discrimination |
| JEL: | C92 D43 L41 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:92 |
| By: | Grund, Christian (RWTH Aachen University); Monschau, Philipp (RWTH Aachen University) |
| Abstract: | We study the role of purpose-based rules for behavior and outcomes in a threshold public good game. Rules can be sufficient or even inflated in terms of proposing a fulfilling behavior. We conduct a lab experiment to describe the implications caused by the inflation of a rule. Our study shows that inflated rules are obeyed less. Yet, rule-following occurs also with inflated rules which leads to lower efficiency regarding exactly providing the threshold. A fair share option can help to coordinate efficiently. We complement our analysis by the investigation of the role of the implemented rules for the ex-post optimal behavior, i.e. evaluating the individual contribution depending on the individual payoff. |
| Keywords: | thresholds, groups, cooperation, coordination, rule-following, public goods |
| JEL: | C9 H41 M5 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18075 |
| By: | Crépon, Bruno (CREST); Elsayed, Ahmed (American University in Cairo); Gazeaud, Jules (Jameel Poverty Action Lab (JPAL)) |
| Abstract: | Prevailing methods for measuring sensitive outcomes confront researchers with an inherent bias-variance trade- off: direct questioning is prone to a sensitivity bias, while indirect methods such as list experiments are substantially less precise. We introduce the ballot-bag, a novel technique that relaxes this trade-off by mitigating bias in direct questioning while improving precision over indirect methods. In a field experiment in Egypt, where direct questions on irregular migration are biased, ballot-bag estimates closely align with those from a list experiment but exhibit significantly lower variance. Consequently, treatment effects are highly significant via the ballot-bag and not via the list experiment. |
| Keywords: | field experiments, sensitivity bias, survey methods, sensitive behaviors, irregular migration |
| JEL: | C83 C93 J61 O15 D83 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18072 |
| By: | Mohammed Alsobay; David G. Rand; Duncan J. Watts; Abdullah Almaatouq |
| Abstract: | Punishment as a mechanism for promoting cooperation has been studied extensively for more than two decades, but its effectiveness remains a matter of dispute. Here, we examine how punishment's impact varies across cooperative settings through a large-scale integrative experiment. We vary 14 parameters that characterize public goods games, sampling 360 experimental conditions and collecting 147, 618 decisions from 7, 100 participants. Our results reveal striking heterogeneity in punishment effectiveness: while punishment consistently increases contributions, its impact on payoffs (i.e., efficiency) ranges from dramatically enhancing welfare (up to 43% improvement) to severely undermining it (up to 44% reduction) depending on the cooperative context. To characterize these patterns, we developed models that outperformed human forecasters (laypeople and domain experts) in predicting punishment outcomes in new experiments. Communication emerged as the most predictive feature, followed by contribution framing (opt-out vs. opt-in), contribution type (variable vs. all-or-nothing), game length (number of rounds), peer outcome visibility (whether participants can see others' earnings), and the availability of a reward mechanism. Interestingly, however, most of these features interact to influence punishment effectiveness rather than operating independently. For example, the extent to which longer games increase the effectiveness of punishment depends on whether groups can communicate. Together, our results refocus the debate over punishment from whether or not it "works" to the specific conditions under which it does and does not work. More broadly, our study demonstrates how integrative experiments can be combined with machine learning to uncover generalizable patterns, potentially involving interactions between multiple features, and help generate novel explanations in complex social phenomena. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.17151 |
| By: | Sarah Xue Dong; Agung Satyadini; Mathias Sinning |
| Abstract: | Tax compliance among small businesses remains low in developing countries, yet little is known about how regional context shapes the effectiveness of enforcement strategies. Both theory and evidence suggest an ambiguous relationship between compliance and geographic proximity to tax offices. We study this issue using a large-scale natural field experiment with Indonesia's tax authority involving 12, 000 micro, small, and medium enterprises (MSMEs). Businesses were randomly assigned to receive deterrence, information, or public goods letters, or no message. All letters improved compliance, with deterrence messages producing the largest gains - substantially increasing filing rates and raising monthly tax payments. Each dollar spent on deterrence letters generated about US$30 in additional revenue over the course of a year. We observe high compliance among non-treated MSMEs near metropolitan tax offices and find that enforcement messages successfully raise compliance in non-metropolitan regions to comparable levels. However, targeting already compliant MSMEs near metropolitan tax offices backfires, underscoring the need for geographically tailored tax administration strategies. These results provide novel experimental evidence on the relation between geographic proximity and the effectiveness of tax enforcement, helping to reconcile mixed findings in the tax compliance literature. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.02328 |
| By: | Beknazar-Yuzbashev, George; Jiménez Durán, Rafael; McCrosky, Jesse; Stalinski, Mateusz |
| Abstract: | Most social media users have encountered harassment online, but there is scarce evidence of how this type of toxic content impacts engagement. In a pre-registered browser extension field experiment, we randomly hid toxic content for six weeks on Facebook, Twitter, and YouTube. Lowering exposure to toxicity reduced advertising impressions, time spent, and other measures of engagement, and reduced the toxicity of user-generated content. A survey experiment provides evidence that toxicity triggers curiosity and that engagement and welfare are not necessarily aligned. Taken together, our results suggest that platforms face a trade-off between curbing toxicity and increasing engagement |
| Keywords: | toxic content, moderation, social media, user engagement, browser experiment |
| JEL: | C93 D12 D83 D90 I31 L82 L86 M37 Z13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:324647 |
| By: | Rebecca Mary Myerson; Allison Espeseth; Laura Dague |
| Abstract: | Millions of people lose access to safety-net programs each year because they do not complete the required administrative processes. In a large-scale field experiment, we randomized outreach offering personalized assistance during the Medicaid renewal window to identify the impact of transaction costs on coverage loss. Our intervention – which provided information and assistance – simplified the renewal process without affecting eligibility, ensuring that avoidable coverage loss among eligible beneficiaries accounts for any effects we find. Sending pre-recorded calls offering free one-on-one assistance from health insurance navigators increased Medicaid renewal by 1 percentage point, a 1.5% increase relative to the control arm. However, the phone number on file was likely no longer valid for at least one-fifth of beneficiaries, suggesting some people did not receive their calls. Receiving the call increased successful renewals the most for tribal members (by 8 percentage points or 13%) and children (by 3 percentage points or 4%); receiving the call also increased renewals for people with income below the sample median (by 2 percentage points or 4%) and people with chronic disease (by 3 percentage points or 4%). Together, these data suggest that some eligible people, including those who need care, lose Medicaid because they struggle with the required administrative processes. The findings do not support the typical rationale for allowing barriers or costs to enrollment—namely, that they efficiently discourage participation by those who do not need or value the benefits. |
| JEL: | C93 D73 H75 I13 I38 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34191 |
| By: | Zíka, Vojtěch; Tracy, J Dustin (Augusta University) |
| Abstract: | Overconfidence research often involves estimating performance within a fixed range. Recent studies suggest that overprecision is affected by central tendency bias, the tendency to estimate near the center of a perceived distribution. This paper examines whether a similar pattern influences the other two overconfidence types, overestimation and overplacement. In a laboratory experiment (N = 120), participants estimated their own and the average performance over five rounds of ten Rock–Paper–Scissors games. Each round earned for up to 40 points, but average performance varied across three treatments, with means of 16.6, 20, and 23.3 points. The main question was whether this manipulation would result in the sample appearing overconfident, underconfident, or well-calibrated. The results suggest that calibration depends on the relative position of mean performance to the midpoint of the range. When the mean aligned with half of the range maximum, participants appeared well-calibrated. A lower mean resulted in apparent overestimation, while a higher mean led to apparent overplacement. Experience shifted some estimates toward the actual mean and improved calibration, but only when feedback was not overly noisy. Monetary incentives and gender were controlled for but showed no significant effect on estimation accuracy. This study provides evidence that the one-half heuristic—the tendency to estimate at half the maximum of a given range—can mechanically bias confidence judgments. While further research is needed to confirm its effect in more traditional overconfidence tasks, caution is warranted when interpreting studies in which mean performance deviates from the range midpoint. |
| Date: | 2025–09–04 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:jbh7g_v1 |
| By: | Dinarte, Lelys; Gresham, James; Lemos, Renata Freitas; Patrinos, Harry A.; Rodriguez-Ramirez, Rony |
| Abstract: | This paper provides insights into human capital investments during wartime by presenting evidence from three experiments of an online tutoring program for Ukrainian students amid Russia’s invasion of Ukraine. Conducted between early 2023 and mid-2024, the experiments reached nearly 10, 000 students across all regions of Ukraine. The program offered three hours per week of small-group tutoring in math and Ukrainian language over six weeks and used academic and psychosocial tools to address student challenges at different intensities of disruption. Results show that the program led to substantial improvements in learning—up to 0.49 standard deviations in math and 0.40 standard deviations in Ukrainian language—and consistent reductions in stress—up to 0.12 standard deviations. High take-up and engagement rates were observed, and four mechanisms were identified as drivers of impact: structured peer interactions, improved attitudes toward learning, enhanced socio-emotional skills, and increased student investments. A complementary experiment using information nudges to increase parental engagement highlights challenges in promoting parental investments in a conflict setting. The program was cost-effective across all experiments, with benefit-to-cost ratios ranging from 31 to 56, and scalable given its reliance on existing infrastructure and teaching capacity. |
| Date: | 2025–09–02 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11196 |
| By: | Andlib, Zubaria |
| Abstract: | This study examines the effectiveness of a digital financial literacy intervention aimed at improving financial knowledge, confidence, and behaviour among rural women in Pakistan. Using a randomized controlled trial conducted in two selected villages in the Rawalpindi district, women were assigned to receive digital financial literacy training either individually or jointly with a male household member. The intervention, delivered in person and via mobile phones, focused on core topics including budgeting, saving, and secure digital transactions. The training substantially improved women's financial knowledge, digital confidence, and self-efficacy. The intervention also increased the use of mobile wallets, greater engagement with formal savings mechanisms, and encouraged more consistent budgeting practices. When male household members participated alongside women, the intervention further enhanced women's financial autonomy and promoted more active joint decision-making over household finances. These findings demonstrate the potential of contextually grounded digital interventions to expand women's financial inclusion and highlight the value of household engagement in reinforcing women's economic agency. |
| Keywords: | Digital Financial Literacy, Financial Inclusion, Women's Empowerment, Behavioral Interventions, Randomized Controlled Trial |
| JEL: | C93 D14 O16 J16 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1656 |
| By: | Rawadee Jarungrattanapong; Therese Lindahl |
| Abstract: | Artisanal fisheries are significant for poverty alleviation, but they are severely threatened by overfishing and climate change effects. Governance solutions can be hard to find when their implementation and success depend on both social and ecological contexts. In this study, our objective is to increase our understanding of behavioral strategies adopted by artisanal fisheries under different types of regulations using a field experiment in the form of a so-called common-pool resource (CPR) experiment with 540 artisanal fishers in Nakorn Si Thammarat province, Thailand. Our results reveal that: (i) a quota treatment provide higher overall efficiency and leads to more sustainable management compared to the treatment with an unregulated fishery. (ii) the higher probability of punishment in the quota treatment promotes more equal sharing of payoffs from the experiment among group members compared to a quota treatment with a low probability of punishment; and (iii) a higher degree of monitoring in the quota system prevents resource depletion. Our results suggest that the community empowerment in these artisanal fishery communities is not strong enough to make fishers cooperate effectively without regulation and that a quota system may be one plausible solution. Our results also suggest, however, that the design of the monitoring and punishment systems may need careful consideration to ensure a sustainable solution. |
| Keywords: | Quota; Self-governance; Total allowance catches; Artisanal fisheries; Lab-in-the-field experiment |
| JEL: | Q22 Q28 C93 D70 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:pui:dpaper:237 |
| By: | Olivier Bos; Nicolas Fugger; Sander Onderstal |
| Abstract: | We investigate profit-share auctions in a procurement context, comparing them with traditional cash auctions to identify which mechanism yields lower expenses for buyers. We also explore whether specifying a high project value in profit-share auction contracts influences supplier bidding behavior. Using theoretical analysis and experimental methods, we observe that profit-share auctions lead to lower buyer expenses compared to traditional cash auctions. Furthermore, we find that the buyer benefits from specifying a high project value in the contract, as this commitment induces more aggressive bidding from the suppliers. While profit-share auctions result in significantly lower buyer expenses than cash auctions, the observed differences are smaller than predicted. This discrepancy is due to (i) more pronounced underbidding in cash auctions and (ii) lower efficiency in profit-share auctions caused by noisy bidding. Our findings suggest that managers can reduce procurement costs by adopting profit-share auctions and strategically committing to a high project value in contracts. However, they should be aware that real-world savings may be smaller than theoretically predicted due to supplier bidding behavior. |
| Keywords: | procurement, profit-share auctions, experiment |
| JEL: | D44 C92 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12071 |
| By: | Michele Bernasconi (Ca’ Foscari University of Venice); Irene Maria Buso (University of Bologna); Anna Marenzi (Ca’ Foscari University of Venice); Dino Rizzi (Ca’ Foscari University of Venice) |
| Abstract: | Several empirical studies find large behavioural responses to the incentives created by tax notches, highlighting the challenge of distinguishing between responses driven by real effects and by tax reporting. In a lab experiment, we find strong evidence of excessive bunching in a tax notch system, both with and without evasion possibilities. The effort adjustments are mainly from above the threshold, while the evasion adjustments are mainly from below the threshold. Both adjustments contribute to a reduction in the underreporting rate. We also confirm evidence of optimisation frictions. They are stronger when evasion is possible than when it is not. A gender breakdown highlights both the robustness of the effects found and the impact that heterogeneous preferences can have on the overall responses to tax notches. |
| Keywords: | Tax Evasion, Effort, Bunching, Lab Experiment |
| JEL: | H24 H26 C91 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2025:15 |
| By: | Fernandez Sierra, Manuel (Universidad de los Andes); Gonzalez-Navarro, Marco (University of California, Berkeley); Quintana-Domeque, Climent (University of Exeter) |
| Abstract: | Developing countries often face a cycle where weak tax compliance limits public goods, cutting incentives to pay taxes. We test whether improved local infrastructure can disrupt this cycle, using a randomized street paving experiment in Acayucan, Mexico. Of 56 eligible street projects, 28 were randomly selected. A model highlights two mechanisms: belief updating about government efficiency and reciprocity from direct benefits. Three implications follow: (1) belief updating occurs through exposure to paving anywhere in the network; (2) compliance rises with broader exposure; (3) reciprocity boosts compliance among directly treated owners. Survey data supports belief updating: among initially dissatisfied residents, a one-SD increase in exposure to assigned paving lowered dissatisfaction by 7.9 pp, while exposure to actual paving lowered it by 8.8 pp, with no effect among the satisfied. Property tax records show exposure to assigned paving raised compliance by 1.5 pp, and to actual paving by 2.6 pp (3% above baseline). Reciprocity mattered too: owners whose street was assigned paving (or actually paved) increased compliance by 3.2 pp (4.8 pp, or 5.5% above baseline). Belief updating yields four times as much revenue as reciprocity. |
| Keywords: | government efficiency, reciprocity, belief updating, infrastructure, roads, taxpayer behavior, public investment, satisfaction with local government |
| JEL: | C93 H26 H41 H54 O12 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18082 |
| By: | Chikazoe, Junichi; Kawaguchi, Kohei; Suzuki, Kanji; Uetake, Kosuke; Watanabe, Yasutora; Yamada, Katsunori |
| Abstract: | Default nudges are widely used and effective, but their mechanisms remain unclear. We test whether ease, endowment, or endorsement effects drive choices. In an online randomized experiment, the endowment channel emerges as the principal driver. We then use a novel fMRI approach that constructs brain activity maps of cognitions and uses them to trace their variation in each cognition during decision-making. This approach validates treatments by confirming they elicit the intended cognitions and uses them as instruments to identify the causal effect of cognition on choice. Results show that endowment drives default nudge effectiveness, suggesting policy designs should leverage it. |
| Date: | 2025–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:wfrsp_v1 |
| By: | Luca Bonacini; Giuseppe Pignataro; Veronica Rattini |
| Abstract: | Understanding the role of information among disadvantaged students is crucial in explaining their investment decisions in higher education. Indeed, information barriers on the returns and the gains from completing college may explain a substantial share of variation in students' degree completion. We conduct a field experiment with 7, 806 university students in Italy who benefit from financial aid assistance, by providing information, either on the labor market returns of completing college or on the education returns of meeting the academic requirements attached to the financial aid. Our results suggest that only the latter information treatment has a positive effect on academic performance, increasing the number of credits obtained by around 3, and by decreasing the probability of dropout by around 4 percentage points. We also find that the results are mediated by an aspiration lift generated by our treatment. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.02560 |
| By: | Us-Salam, Danish (Central Bank of Ireland) |
| Abstract: | The growing popularity of crypto assets has driven increased engagement, often fuelled by promotional content that highlights past returns while downplaying risks. This paper evaluates the effectiveness of behaviourally informed risk warnings in such a setting. Using an online randomized controlled trial, participants viewed simulated investment promotions for two financial products: stocks and crypto assets. Treatments combined behaviorally informed risk warnings with past return information, the same information but with returns shown before warnings, or risk warnings paired with price volatility cues. The first treatment significantly improved risk comprehension and perception by 5% and 4%. These effects are further magnified by the order in which information is presented and by increasing the salience of risk information. Showing risk warnings after potential returns increases risk comprehension by 12% and risk perception by 6%, suggesting evidence in favor of recency bias. Similarly, showing risk warnings and price volatility cues improves risk comprehension by 10% and risk perception by 7%, reflecting the effect of heightened risk salience. These effects are driven by at-risk investors, defined as individuals who follow crypto market updates on social media but have not yet invested in crypto assets. In line with prior evidence, we find no effect among those who have previously invested in crypto assets, likely because their decisions are shaped more by past investment outcomes than by ex-ante warnings. |
| Keywords: | Crypto Assets, Risk Warnings, Order of Information, Recency Bias, Salience. |
| JEL: | D83 G11 G41 C93 G53 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:cbi:wpaper:9/rt/25 |
| By: | Robin Musolff; Florian Zimmermann |
| Abstract: | Mental models help people navigate complex environments. This paper studies how people deal with model uncertainty. In an experiment, participants estimate a company’s value, facing uncertainty about which one of two models correctly determines its true value. Using a between subjects design, we vary the degree of model complexity. Results show that in high-complexity conditions people fully neglect model uncertainty in their actions. However, their beliefs continue to reflect model uncertainty. This disconnect between beliefs and actions suggests that complexity leads to biased decision-making, while beliefs remain more nuanced. Furthermore, we show that complexity, via full uncertainty neglect, leads to higher confidence in the optimality of own actions. |
| Keywords: | Mental Models, Beliefs, Attention, Confidence, Representations |
| JEL: | D01 D83 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_697 |
| By: | Botelho Azevedo, Alda (Universidade Nova de Lisboa); Gonçalves, Inês (Universidade Nova de Lisboa); Pereira dos Santos, João (Queen Mary University of London) |
| Abstract: | Our study investigates public opinion on the housing affordability crisis in Portugal through a nationally representative survey combined with an information provision experiment. Participants were asked to identify perceived causes of rising housing prices, assess their factual knowledge of the housing market and sociodemographic trends, and indicate their preferred policy solutions, carefully framed to reflect trade-offs. Half of the respondents were randomly assigned to receive official statistical information on these trends before indicating their policy preferences. The findings reveal significant heterogeneity in beliefs about the causes of the crisis, pervasive misperceptions regarding market trends, and a limited impact of information provision on policy preferences. These results underscore the challenges of addressing housing policy through informational interventions alone and highlight the need for strategies that integrate behavioral and contextual factors to foster informed public engagement. |
| Keywords: | information provision experiment, housing, Portugal |
| JEL: | R31 F60 H1 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18073 |
| By: | Takuya Iinuma; Yoshiyuki Nakazono; Kento Tango |
| Abstract: | This paper investigates how social identity influences the assimilation of monetary policy information. We conduct a randomized control trial in Japan to test whether consumers respond more strongly to inflation forecasts from the Bank of Japan (BOJ) when the message is delivered by a narrator who shares their social identity. Respondents are randomly assigned to hear the BOJ’s forecast in either standard Japanese or the Osaka dialect, both narrated by a female speaker. We find that individuals are significantly more likely to revise their inflation expectations toward the BOJ’s forecast when the narrator shares the respondent’s gender, dialect, or political alignment. Women are more responsive to forecasts delivered by a female narrator; Osaka residents react more strongly to messages in the Osaka dialect; and government supporters exhibit greater belief updating in response to BOJ forecasts. These findings suggest that central banks can enhance the effectiveness of their communication by tailoring messages to align with the social identities of target audiences, although it is essential to recognize potential risks. |
| Date: | 2025–08–13 |
| URL: | https://d.repec.org/n?u=RePEc:toh:tupdaa:74 |
| By: | Raphaëlle Aulagnon; Julian Cristia; Santiago Cueto; Ofer Malamud |
| Abstract: | We examine whether highlighting streaks—instances of repeated and consecutive behavior when completing learning tasks—encourages 4th to 6th grade students in Peru to increase their use of an online math platform and improve learning. 60, 000 students were randomly assigned to receive messages that (i) highlighted streaks, (ii) provided personalized reminders with positive reinforcement, (iii) provided generic reminders, or (iv) to a control group. Highlighting streaks and providing personalized reminders significantly increased platform use compared to generic reminders and the control group, with streaks more effective on the intensive margin and personalized reminders more effective on the extensive margin. Highlighting streaks also significantly improved math achievement compared to the control group among the 1, 500 students who took an endline test, although differences with other treatment arms were not significant. |
| JEL: | I21 I25 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34173 |
| By: | Thimo De Schouwer; Elisabeth Gsottbauer; Iris Kesternich; Heiner Schumacher |
| Abstract: | Work meaning can be an important driver of labor supply. Since, by definition, work meaning is associated with benefits for others, it also has an important fairness dimension. In a theoretical model, we show that workers’ willingness to pay for work meaning can be positive or negative, depending on the relative strength of fairness concerns and meaning preferences. To examine the importance of these behavioral motives for labor supply, we conduct a survey experiment with representative samples from the Netherlands and Germany in which we vary within-subject the benefits that a job creates for others. We find that only a minority of workers are actually willing to sacrifice wage for work meaning. The average willingness to pay for work meaning is positive, but substantially lower than the willingness to pay for job flexibility. There is a strong negative relationship between fairness concerns and willingness to pay for work meaning. Thus, individuals who prioritize fairness are less likely to accept lower wages for meaningful work. |
| Keywords: | work meaning, labor supply, fairness preferences |
| JEL: | C83 C90 M52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12068 |
| By: | Chiara Farronato; Andrey Fradkin; Alexander MacKay |
| Abstract: | Platforms, retailers, and other firms often offer their own products alongside products sold by competitors. We study the effects of this practice by combining a field experiment that hides brands owned by Amazon (i.e., private labels) from shoppers on Amazon.com with model-based counterfactuals and welfare analysis. In the absence of private labels, consumers substitute toward products that are similar along most observable dimensions. Removing Amazon brands does not change consumers' search effort or their propensity to shop at other retail websites. Despite the ample availability of observably similar alternatives, our welfare estimates imply that, for the categories we study, removing Amazon brands would reduce consumer surplus by 5.5 percent in the short run, with approximately 10 percent of the impact due to equilibrium price increases by other sellers. The effects are heterogeneous, with consumer surplus reductions exceeding 10 percent in some categories, while other categories realize much smaller decreases when Amazon brands are removed. Demoting private labels in search results to counteract potential self-preferencing does not lead to gains in consumer surplus. This outcome arises because a subset of consumers derive greater utility from private labels and benefit from their high placement in search results. |
| JEL: | C93 D12 K21 L13 L40 L81 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34135 |
| By: | Katherine B. Coffman; Scott Kostyshak; Perihan O. Saygin |
| Abstract: | We use a controlled experiment to study how information acquisition impacts candidate evaluations. We provide evaluators with group-level information on performance and the opportunity to acquire additional, individual-level performance information before making a final evaluation. We find that, on average, evaluators under-acquire individual-level information, leading to more stereotypical evaluations of candidates. Consistent with stereotyping, we find that (irrelevant) group-level comparisons have a significant impact on how candidates are evaluated; group-level comparisons bias initial assessments, responses to information, and final evaluations. This leads to under-recognition of talented candidates from comparatively weaker groups and over-selection of untalented candidates from comparatively stronger groups. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.13798 |
| By: | Tomás Larroucau; Ignacio A. Rios; Anaïs Fabre; Christopher Neilson |
| Abstract: | We examine whether large-scale information interventions can improve college application outcomes in a centralized admissions system. Using nationwide surveys from Chile, we document widespread information frictions and frequent application mistakes, such as omitting attainable preferred programs or failing to include safety options. To address these frictions, we partnered with the Ministry of Education to implement a large-scale field experiment that provided applicants with personalized information on admission probabilities and program characteristics through customized online platforms. The intervention increased the probability that previously unmatched students received an assignment by 44% and improved placement into higher-ranked programs by 20%. Building on these results, the policy was scaled nationwide, reaching all applicants. The scaled-up version, evaluated via an encouragement design, confirmed substantial gains, including higher admission rates for initially unmatched students and persistent enrollment improvements. Our findings show that low-cost, personalized information policies, when integrated into centralized admissions platforms, can substantially reduce application mistakes and improve student outcomes at scale. The results also highlight how leveraging existing market design infrastructure can enable scalable, cost-effective interventions that enhance efficiency and equity in higher education access. |
| JEL: | C93 D47 D83 I0 I23 I28 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34164 |
| By: | Hui-Kuan Chung; Nick Doren; Lasse Mononen; Mia Lu; Marcus Grueschow; Helen Hayward Könnecke; Alexander Jetter; Boris B. Quednow; Nick Netzer; Philippe N. Tobler |
| Abstract: | Models of limited attention have the potential to become a new unifying paradigm that could replace the rational choice approach. In this paper, we test the limited attention hypothesis by enhancing attention using pharmacological substances. A total of 160 subjects participated in our randomized, placebo-controlled, and double-blind experimental study. We find that enhancing attention through boosting the noradrenergic system with reboxetine improves the quality of choice as captured by multiple different measures of rationality. Eye-tracking suggests that boosting noradrenaline promotes more rational choice by efficiently directing attention to more valuable options. Other attention-enhancing drugs (methylphenidate, which boosts the dopaminergic system, and nicotine, which boosts the cholinergic system) improve rationality to a lesser extent. Aside from testing the limited attention hypothesis directly, our results have implications for welfare economics, policy-design, and public health. |
| Keywords: | limited attention, rationality, pharmacology |
| JEL: | B41 C91 D01 D60 D91 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12078 |
| By: | Simone Alfarano (Universitat Jaume I); Albert Banal-Estañol (Universitat Pompeu Fabra; Barcelona School of Economics; Barcelona School of Management; City, University of London); Eva Camacho (Universitat Jaume I); Giulia Iori (Ca’ Foscari University of Venice; City, University of London); Burcu Kapar (University of Wollongong); Rohit Rahi (London School of Economics) |
| Abstract: | We consider a setting in which privately informed agents are located in a network and trade a risky asset with other agents with whom they are directly connected. We compare the performance, both theoretically and experimentally, of a complete network (centralized market) to incomplete networks with differing levels of connectivity (decentralized markets). We show that decentralized markets can deliver higher informational efficiency, with prices closer to fundamentals, as well as higher welfare for mean-variance investors. |
| Keywords: | Networks, heuristic learning, informational efficiency, experimental asset markets |
| JEL: | C92 D82 G14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2025:13 |
| By: | Rusch, Hannes (RS: GSBE UM-BIC, Microeconomics & Public Economics, RS: GSBE other - not theme-related research) |
| Abstract: | Humans are a group-living species. Our evolutionary past could thus have shaped the ways in which we think and behave in group contexts. One such candidate feature of human social cognition and behavior is ingroup favoritism. Indeed, recent work revealed that at least some people are ingroup favoring and ‘strongly groupy’. Such individuals readily discriminate negatively against outgroup members across all group contexts they are put into, even these contexts are minimal and even if discriminating does not entail any benefits. However, so far, it has not been tested whether ingroup favoring behavior in general or ’groupy’ social preferences in particular are stable within persons over longer periods of time. Here, we present the results of a longitudinal lab-in-the-field study of ingroup favoritism and ’groupiness’ over one year. We find that neither ingroup favoritism nor ‘groupiness’ are particularly time-stable. Thus, our findings are hard to reconcile with notions of ingroup favoritism or ‘groupiness’ as individual traits. Instead, our observations underscore that group-based discrimination is malleable—for better or for worse. Our results reemphasize the need to understand which situational factors trigger ‘groupy’ behavior and how these interact with individual characteristics. |
| JEL: | C90 D01 D80 D90 J15 |
| Date: | 2025–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:unm:umagsb:2025006 |
| By: | Nobuyuki Hanaki (Institute of Social and Economic Research, Osaka University); Giulia Iori (City, University of London); Pietro Vassallo (Bank of Italy) |
| Abstract: | In this paper we present the results of experiments and computational analyses of trading in decentralized markets with asymmetric information. We consider three trading configurations, namely the ring, the small-world, and the Erdös-Rényi random network, which allow us to introduce heterogeneity in nodes degree, centrality and clustering, while keeping the number of possible trading relationships fixed. We analyze how the prices of a traded risky asset and the profits of differently informed traders are affected by the distribution of the trading links, and by the location of the traders in the network. This allows us to infer key features in the dynamics of learning and information diffusion through the market. Experimental results show that learning is enhanced locally by clustering rather than degree, pointing to a learning dynamic driven by interdependent, successive trading events, rather than independent exposures to informed traders. By calibrating a behavioural agent-based model to the experimental data we are able to estimate the speed at which agents learn and to locate where information accumulates in the market. Interestingly, simulations indicate that proximity to the insiders leads to more information in regular networks but not so in random networks. |
| Keywords: | OTC markets; Asymmetric information; Learning; Information diffusion; Networks; Insider trading |
| JEL: | G1 C6 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2025:12 |
| By: | Hirst, Scott; Kastiel, Kobi; Kricheli-Katz, Tamar |
| Abstract: | Perhaps the most important corporate law debate over the last several years concerns whether directors and executives should manage the corporation to maximize value for investors or also take into account the interests of other stakeholders and society. But, do investors themselves wish to maximize returns, or are they willing to forgo returns for social purposes? And more broadly, do market participants, such as investors and consumers, differ from donors in the ways in which they prioritize monetary gains and the promotion of social goals? This project attempts to answer these questions with evidence from an experiment conducted with 279 participants that involved real monetary gains for participants. Our empirical analysis provides four main results: First, investors are generally willing to forgo some monetary gains to promote social interests. Second, individuals are willing to forgo greater amounts when consuming and making donations than when investing. Third, whereas most investors are willing to forgo gains to promote social interests, a significant percentage of investors (thirty-two percent in our study) have a strong preference for maximizing monetary gains and are unwilling to forgo even very small amounts to advance any social goals. Fourth, there is significant heterogeneity in individuals' willingness to forgo in each of the three channels (investment, consumption, and donation), which is related to their political affiliation, gender, and income. Our evidence suggests that Democrats, women, and higher-income participants tend to forgo more frequently and in greater amounts compared to Republicans, men, and lower-income participants, though these relationships vary with the cause in question. These findings have important implications for the current debate regarding corporate social responsibility and for the actions of corporate executives and investment managers. |
| Keywords: | social responsibility, stakeholders, corporate purpose, socially responsible investing |
| JEL: | K22 G23 G34 G41 M14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:324650 |
| By: | Joonhwi Joo |
| Abstract: | We develop a frequentist decision-theoretic framework for selecting the best arm in one-shot, multi-arm randomized controlled trials (RCTs). Our approach characterizes the minimax-regret (MMR) optimal decision rule for any location-family reward distribution with full support. We show that the MMR rule is deterministic, unique, and computationally tractable, as it can be derived by solving the dual problem with nature's least-favorable prior. We then specialize to the case of multivariate normal (MVN) rewards with an arbitrary covariance matrix, and establish the local asymptotic minimaxity of a plug-in version of the rule when only estimated means and covariances are available. This asymptotic MMR (AMMR) procedure maps a covariance-matrix estimate directly into decision boundaries, allowing straightforward implementation in practice. Our analysis highlights a sharp contrast between two-arm and multi-arm designs. With two arms, the empirical success rule ("pick-the-winner") remains MMR-optimal, regardless of the arm-specific variances. By contrast, with three or more arms and heterogeneous variances, the empirical success rule is no longer optimal: the MMR decision boundaries become nonlinear and systematically penalize high-variance arms, requiring stronger evidence to select them. This result underscores that variance plays no role in optimal two-arm comparisons, but it matters critically when more than two options are on the table. Our multi-arm AMMR framework extends classical decision theory to multi-arm RCTs, offering a rigorous foundation and a practical tool for comparing multiple policies simultaneously. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.03796 |
| By: | Atiyeh Yeganloo; Cahal Moran; Juvaria Jafri |
| Keywords: | Charitable giving, donation, public goods, choice overload, choice deprivation, satisfaction, regret |
| JEL: | C91 D64 D91 H00 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:enp:wpaper:eprg2518 |
| By: | Jonathan Bendor; Lukas Bolte; Nicole Immorlica; Matthew O. Jackson |
| Abstract: | It is socially beneficial for teams to cooperate in some situations (``good games'') and not in others (``bad games;'' e.g., those that allow for corruption). A team's cooperation in any given game depends on expectations of cooperation in future iterations of both good and bad games. We identify when sustaining cooperation on good games necessitates cooperation on bad games. We then characterize how a designer should optimally assign workers to teams and teams to tasks that involve varying arrival rates of good and bad games. Our results show how organizational design can be used to promote cooperation while minimizing corruption. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.03030 |