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on Experimental Economics |
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Issue of 2019‒03‒25
39 papers chosen by |
| By: | Astrid Dannenberg (University of Kassel); Corina Haita-Falah (University of Kassel); Sonja Zitzelsberger (University of Kassel) |
| Abstract: | Ostracism is practiced by virtually all societies around the world as a means of enforcing cooperation and excluding members who show anti-social behaviors or attitudes. In this paper, we use a public goods experiment to study whether groups choose to implement an institution that allows for the exclusion of members. We distinguish between a costless exclusion institution and a costly exclusion institution that, if chosen, reduces the endowment of all players. We also provide a comparison with an exclusion institution that is exogenously imposed upon groups. A significant share of the experimental groups choose the exclusion institution, even when it comes at a cost, and the support for the institution increases over time. Average contributions to the public good are significantly higher when the exclusion option is available, not only because low contributors are excluded but also because high contributors sustain a higher cooperation level under the exclusion institution. Subjects who vote in favor of the exclusion institution contribute more than those who vote against it, but only when the institution is implemented. These results are largely inconsistent with standard economic theory but can be better explained by assuming heterogeneous groups in which some players have selfish and others have social preferences. |
| Keywords: | public goods experiment; cooperation; ostracism; institutional choice; social preferences |
| JEL: | C72 C91 C92 D02 D71 H41 |
| Date: | 2019 |
| URL: | https://d.repec.org/n?u=RePEc:mar:magkse:201908&r=all |
| By: | Katharina Momsen; Markus Ohndorf |
| Abstract: | We investigate if decision makers exploit moral wiggle room in green market set- tings. We therefore implement a laboratory experiment in which subjects purchase products associated with externalities. In six between-subjects treatments, we alter the availability of information on the externalities, the price of revealing information as well as the nature of the externality, which could either affect another subject or change the amount spent by the experimenters on carbon offsets. We find that subjects do not exploit moral wiggle room when revealing information is costless. When a very small cost of revealing information is introduced, their behavior de- pends on the relation between prices and externalities. In situations in which it is relatively cheap to have a large impact on the recipient’s payoff, subjects exploit moral wiggle room in order to choose selfishly. For other parametrizations, subjects behave either honestly egoistically or altruistically. |
| Keywords: | Information avoidance, experiment, carbon offsets, moral wiggle room, ethical consumption |
| JEL: | C91 D12 D64 D89 Q50 |
| Date: | 2019–03 |
| URL: | https://d.repec.org/n?u=RePEc:inn:wpaper:2019-03&r=all |
| By: | Grewenig, Elisabeth (ifo Institute); Lergetporer, Philipp (ifo Institute); Werner, Katharina (ifo Institute); Woessmann, Ludger (ifo Institute and LMU Munich) |
| Abstract: | A large literature studies subjective beliefs about economic facts using unincentivized survey questions. We devise randomized experiments in a representative online survey to investigate whether incentivizing belief accuracy affects stated beliefs about average earnings by professional degree and average public school spending. Incentive provision does not impact earnings beliefs, but improves school-spending beliefs. Response patterns suggest that the latter effect likely reflects increased online-search activity. Consistently, an experiment that just encourages search-engine usage produces very similar results. Another experiment provides no evidence of experimenter-demand effects. Overall, results suggest that incentive provision does not reduce bias in our survey-based belief measures. |
| Keywords: | beliefs; incentives; online search; survey experiment; |
| JEL: | D83 C83 C90 |
| Date: | 2019–03–11 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:146&r=all |
| By: | Alexander Cappelen (Norwegian School of Economics); Ranveig Falch (NHH Norwegian School of Economics); Bertil Tungodden (Norwegian School of Economics) |
| Abstract: | The "boy crisis" prompts the question of whether people interpret inequalities differently depending on whether males or females are lagging behind. We study this question in a novel large-scale distributive experiment involving more than 5,000 Americans. Our data provide strong evidence of a gender bias against low-performing males, particularly among female participants. A large set of additional treatments establishes that the gender bias reflects statistical fairness discrimination. The study provides novel evidence on the nature of discrimination and on how males falling behind are perceived by society. |
| Keywords: | gender bias, boy crisis, statistical fairness discrimination, large-scale experiment |
| JEL: | C91 D63 J16 |
| Date: | 2019–03 |
| URL: | https://d.repec.org/n?u=RePEc:hka:wpaper:2019-014&r=all |
| By: | Cappelen, Alexander W. (Dept. of Economics, Norwegian School of Economics and Business Administration); Falch, Ranveig (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | Abstract The ‘boy crisis’ prompts the question of whether people interpret inequalities differently depending on whether males or females are lagging behind. We study this question in a novel large-scale distributive experiment involving more than 5,000 Americans. Our data provide strong evidence of a gender bias against low-performing males, particularly among female participants. A large set of additional treatments establishes that the gender bias reflects statistical fairness discrimination. The study provides novel evidence on the nature of discrimination and on how males falling behind are perceived by society. |
| Keywords: | Gender bias; boy crisis; statistical fairness discrimination; large-scale experiment |
| JEL: | C91 D63 J16 |
| Date: | 2019–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2019_006&r=all |
| By: | Anders Poulsen (University of East Anglia); Axel Sonntag (University of Vienna) |
| Abstract: | We experimentally examine the effects of varying time pressure in a coordination game with a label salient focal equilibrium. We consider both a pure coordination game (payoff symmetry) and a battle of the sexes game with conflict of interest (payoff asymmetry). In symmetric games, there are no effects of time pressure, since the label-salient outcome is highly focal regardless of how much time subjects have to decide. In asymmetric games, less time results in greater focality of the the label-salient action, and it becomes significantly more likely that any coordination is on the focal outcome. |
| Keywords: | Coordination game; focal point; time pressure; response times; social heuristics hypothesis; experiment. |
| JEL: | C70 C72 C92 |
| Date: | 2019–01 |
| URL: | https://d.repec.org/n?u=RePEc:uea:wcbess:19-01&r=all |
| By: | Albert, Philipp (WZB Berlin); Kübler, Dorothea (WZB Berlin); Silva-Goncalves, Juliana (University of Sydney) |
| Abstract: | Ambition as the desire for personal achievement is an important driver of behavior. Using laboratory experiments, we study the role of social influence on ambition in two distinct domains of achievement, namely performance goals and task complexity. In the first case, participants set themselves a performance goal for a task they have to work on. The goal is associated with a proportional bonus that is added to a piece rate if the goal is reached. In the second case, they choose the complexity of the task, which is positively associated with the piece rate compensation and effort. In both cases we test whether observing peer choices influences own choices. We find strong evidence of peer effects on performance goals. In contrast, we find no support for peer effects on the choice of task complexity. |
| Keywords: | peer effects; ambition; goal setting; task difficulty; laboratory experiment; |
| JEL: | C91 D83 D91 I24 |
| Date: | 2019–03–18 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:148&r=all |
| By: | Nora Grote (Johannes Gutenberg University Mainz); Tim Klausmann (Johannes Gutenberg University Mainz); Mario Scharfbillig (Johannes Gutenberg University Mainz) |
| Abstract: | Social identity greatly affects behavior. However, less is known about individual’s preference for identification, i.e. how individuals choose their identity and more specifically whether and how subjects invest into belonging to a social group. We design a field experiment that allows us to make effort as an investment into a new group identity salient. The social identity in our treatment is refugee’s identification with the host society. We modified a mailing to 5600 refugees who use an online language-learning platform to learn the host countries’ language. These treatment emails make salient that improving the host country’s language ability increases the belonging to the host society. Our analysis reveals that the treatment has a significant positive effect on the effort exerted on the language-learning platform, leading to more completed exercises and more time spent learning the host country’s language. This suggests that refugees’ value being part of the host country’s society for its social identity component, which in turn reveals a general preference for identification. |
| JEL: | C93 D91 J15 |
| Date: | 2019–03–11 |
| URL: | https://d.repec.org/n?u=RePEc:jgu:wpaper:1905&r=all |
| By: | Alice Solda (Queensland University of Technology; University of Lyon); Changxia Ke (Queensland University of Technology); Lionel Page (Queensland University of Technology; University of Technology Sydney); William von Hippel (University of Queensland) |
| Abstract: | We aim to test the hypothesis that overconfidence arises as a strategy to influence others in social interactions. We design an experiment in which participants are incentivised either to form accurate beliefs about their performance at a test, or to convince a group of other participants that they performed well. We also vary participants’ ability to gather information about their performance. Our results provide, the different empirical links of von Hippel and Trivers’ (2011) theory of strategic overconfidence. |
| Keywords: | Overconfidence; motivated cognition; self-deception; persuasion; information sampling; experiment |
| JEL: | C91 D03 D83 |
| Date: | 2019–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:uts:ecowps:59&r=all |
| By: | Mike Brock (University of East Anglia); Natalia Borzino (ETH Zurich) |
| Abstract: | Improving the efficiency with which people consume domestic energy has become a show-piece of how behavioural psychology can be applied to the field of environmental economics. This study builds upon the literature by providing subjects with energy performance information at group-level in a controlled field experiment setting. Its novelty is that it seeks to test the persistence of energy-saving habits, whether extrinsic incentives accentuate or crowd-out a motivation to save energy, and how heterogeneity in environmental attitudes impact upon action. Results suggest that providing relative information does stimulate energy-conserving behaviour, with this being most effective among those who held pre-trial preferences for sustainable living. However, the treatment variations indicate that subjects regularly fail to maintain ‘good habits’ once an intervention stops. Furthermore, we find evidence to imply that rewarding groups in this competitive environment may create perverse long-run effects. This has an important relevance for energy policy: whilst providing relative information could improve both consumer welfare and energy demand forecasting, the timescale, frequency and mechanism by which this is undertaken requires careful scrutiny and planning if these potential benefits are to be maximised and undesirable side effects prevented. |
| Keywords: | Behavioural Nudging, Extrinsic Motivation, Energy Economics, Group Co-ordination, Sustainability, Environmental Economics |
| JEL: | Q4 Q56 H31 L94 |
| Date: | 2018–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:uea:ueaeco:2018_02&r=all |
| By: | Andrea Isoni (Warwick Business School); Robert Sugden (University of East Anglia); Jiwei Zheng (University of East Anglia) |
| Abstract: | We report the results of a new tacit bargaining experiment that provides two key insights on the effects of payoff inequality on coordination and cooperation towards mutually beneficial outcomes. The experiment features the novel Pizza Night game, which can disentangle the effects of payoff inequality from those of conflict of interest. When coordination relies on focal points based on labelling properties, payoff inequality does not interfere with the successful use of those properties. When coordination results in mutual benefit, payoff inequality is not an obstacle to the realisation of efficiency. Conflict of interest is the main barrier to successful coordination. |
| Keywords: | Pizza Night game, tacit bargaining, conflict of interest, payoff inequality, focal points |
| JEL: | C72 C78 C91 |
| Date: | 2018–05 |
| URL: | https://d.repec.org/n?u=RePEc:uea:wcbess:18-01&r=all |
| By: | Annarita Colasante (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Simone Alfarano (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Eva Camacho-Cuena (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain) |
| Abstract: | We compare the performance of two learning algorithms in replicating individual short and long-run expectations: the Exploration-Explotation Algorithm (EEA) and the Heuristic Switching Model (HSM). Individual expectations are elicited in a series of Learning-to-Forecast Experiments (LtFEs) with different feedback mechanisms between expectations and market price: positive and negative feedback markets. We implement the EEA proposed by Colasante et al. (2018c). Moreover, we modify the existing version of the HSM in order to incorporate the long-run predictions. Although the two algorithms provide a fairly good description of marker prices in the short- run, the EEA outperforms the HSM in replicating the main characteristics of individual expectation in the long-run, both in terms of coordination of individual expectations and convergence of expectations to the fundamental value. |
| Keywords: | Expectations, Experiment, Evolutionary Learning |
| JEL: | D03 G12 C91 |
| Date: | 2019 |
| URL: | https://d.repec.org/n?u=RePEc:jau:wpaper:2019/02&r=all |
| By: | Ambroise Descamps (School of Economics and Finance, Queensland University of Technology; Oxera Consulting LLP); Sebastien Massoni (School of Economics and Finance, Queensland University of Technology); Lionel Page (University of Technology Sydney) |
| Abstract: | We investigate how people make choices when they are unsure about the value of the options they face and have to decide whether to choose now or wait and acquire more information first. We design a laboratory experiment to study whether human behaviour is able to approximate the optimal solution to this problem. We find that participants deviate from it in a systematic manner: they acquire too much information (when costly) or not enough (when cheap). These deviations costs participants between 10% and 25% of their potential payoffs. With time, participants tend to learn to approximate the optimal strategy. |
| Keywords: | search; decision under uncertainty; information; optimal stopping; real option |
| JEL: | C91 D81 D83 |
| Date: | 2019–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:uts:ecowps:58&r=all |
| By: | Kerschbamer, Rudolf (University of Innsbruck); Neururer, Daniel (University of Innsbruck); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | Credence goods markets are characterized by pronounced informational asymmetries between consumers and expert sellers. As a consequence, consumers are often exploited and market efficiency is threatened. However, in the digital age, it has become easy and cheap for consumers to self-diagnose their needs using specialized webpages or to access other consumers' reviews on social media platforms in search for trustworthy sellers. We present a natural field experiment that examines the causal effect of information acquisition from new media on the level of sellers' price charges for computer repairs. We find that even a correct self-diagnosis of a consumer about the appropriate repair does not reduce prices, and that an incorrect diagnosis more than doubles them. Internet ratings of repair shops are a good predictor of prices. However, the predictive valued of reviews depends on whether they are judged as reliable or not. For reviews recommended by the platform Yelp we find that good ratings are associated with lower prices and bad ratings with higher prices, while non-recommended reviews have a clearly misleading effect, because non-recommended positive ratings increase the price. |
| Keywords: | credence goods, fraud, information acquisition, internet, field experiment |
| JEL: | C93 D82 |
| Date: | 2019–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp12184&r=all |
| By: | Mike Brock (University of East Anglia) |
| Abstract: | Using tools from behavioural economics and psychology to establish non-financial ways to incentivise people to reduce domestic energy usage has become a popular and ever-expanding area of research. This study builds upon the existing literature by providing subjects with energy performance information at group-level in a controlled field experiment setting. Results suggest that the provision of relative information does stimulate energy-conserving behaviour, with this being most pronounced among those who held pre-trial preferences for sustainable living. These variations in usage and responsiveness indicate that the attitudes and structure of social groups are key drivers in determining the extent to which behavioural change is achievable. This in turn has relevance for energy policy, and implies that whilst both regulators and firms could improve consumer welfare and competition within the industry by issuing relative information on performance, the role of group cohesion and affiliation could heavily determine the magnitude of these benefits. |
| Keywords: | Energy Monitoring, Behavioural Nudges, Energy Economics, Group Co-ordination, Sustainability, Environmental Economics |
| JEL: | Q4 Q56 H31 L94 |
| Date: | 2018–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:uea:ueaeco:2018_04&r=all |
| By: | Haoran He; David Neumark; Qian Weng |
| Abstract: | We explore compensating differentials for job flexibility, using a field experiment conducted on a Chinese job board. Our job ads differ randomly regarding when one works (time flexibility) and where one works (place flexibility). We find strong evidence that workers value job flexibility - especially regarding place of work. Application rates are higher to flexible jobs, conditional on the salary offered. Additional survey evidence indicates that workers are willing to take lower pay for more flexible jobs. Non-experimental job board data do not indicate that workers value job flexibility, reinforcing the difficulty of estimating compensating differentials from observational data. |
| Date: | 2019 |
| URL: | https://d.repec.org/n?u=RePEc:feb:natura:00667&r=all |
| By: | Arbel, Yuval (School of Business, Carmel Academic Center); Bar-El, Ronen (Open University of Israel); Schwarz, Mordechai E. (Open University of Israel); Tobol, Yossi (Jerusalem College of Technology (JTC)) |
| Abstract: | We study how the objective of the contributions affects the willingness to contribute to real-life public goods. We conducted three treatments of a fundraising experiment among religious Jewish students in which the contributions were assigned to finance sustainable supplies and the ongoing operations of their campus synagogue. In each treatment, we informed the subject of the different allocation of their contributions between funding sustainable supplies and ongoing operations. The results show that contributions increase significantly with the share of contributions assigned to the procurement of sustainable supplies. We use the results to derive practical implications for the design of fundraising for public goods. |
| Keywords: | experiment, Nash equilibrium, public goods, voluntary provision |
| JEL: | C73 C91 C92 H41 |
| Date: | 2019–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp12180&r=all |
| By: | Giovanna d’Adda; Martin Dufwenberg; Francesco Passarelli; Guido Tabellini |
| Abstract: | We consider an expanded notion of social norms that render them belief-dependent and partial, formulate a series of related testable predictions, and design an experiment based on a variant of the dictator game that tests for empirical relevance. Main results: Normative beliefs influence generosity, as predicted. Degree of partiality leads to more dispersion in giving behavior, as predicted. Keywords: Social norms, partial norms, normative expectations, consensus, experiment. JEL codes: C91, D91 |
| Date: | 2019 |
| URL: | https://d.repec.org/n?u=RePEc:igi:igierp:643&r=all |
| By: | Manuel Hoffmann; Roberto Mosquera; Adrian Chadi |
| Abstract: | Influenza imposes substantial costs worldwide in terms of human lives and productivity losses. Vaccination could be a cost-effective way to reduce these costs for firms and public health institutions, but low take-up rates, particularly of working adults, and vaccination unintendingly causing moral hazard may decrease its benefits. We ran a natural field experiment in cooperation with a major bank in Ecuador where we modified a company-wide vaccination campaign. Experimentally manipulating incentives to participate in this health intervention allows us to study peer effects with organizational data and to determine the personal consequences of being randomly encouraged to take part in the campaign. We find that assigning employees to get vaccinated during the workweek increased take-up by 112% compared to employees assigned to the weekend, which indicates that reducing opportunity costs plays an important role to increase vaccination rates. Peer take-up also increased individual take-up significantly. Contrary to the company's expectations, we find that the effect of vaccination on health outcomes is a precise zero with no measurable health externalities from coworkers. Using a dataset of administrative records on sickness diagnoses and employee surveys, we find evidence consistent with vaccination causing moral hazard, which could decrease the effectiveness of vaccination. |
| Keywords: | Health Intervention, Flu Vaccination, Sickness-Related Absence, Field Experiment, Random Encouragement Design, Moral Hazard, Technology Adoption |
| Date: | 2019 |
| URL: | https://d.repec.org/n?u=RePEc:twi:respas:0116&r=all |
| By: | Philippos Louis; Matias Núñez; Dimitrios Xefteris |
| Abstract: | Collective choice mechanisms are used by groups to reach decisions in the presence of diverging preferences. But can the employed mechanism affect the degree of post-decision actual agreement (i.e. preference homogeneity) within a group? And if yes, which are the features of the choice mechanisms that matter? Since it is difficult to address these questions in natural settings, we employ a theory-driven experiment where, after the group collectively decides on an issue, individual preferences can be properly elicited. We find that the use of procedures that promote apparent consensus with an outcome (i.e. agreement in manifest behaviors) generate substantially higher levels of actual agreement compared to outcome-wise identical mechanisms that push subjects to exaggerate their differences. |
| Keywords: | implementation, mechanism design, consensus, agreement, congruence, experiment, endorsements |
| JEL: | D71 D72 |
| Date: | 2019–03 |
| URL: | https://d.repec.org/n?u=RePEc:ucy:cypeua:04-2019&r=all |
| By: | Jan Hausfeld; Konstantin Hesler; Susanne Goldlücke |
| Abstract: | We present an interactive eye-tracking study that explores the strategic use of gaze. We analyze gaze behavior in an experiment with four simple games. The game can either be a competitive (hide and seek) game in which players want to be unpredictable, or a game of common interest in which players want to be predictable. Gaze is either transmitted in real time to another subject, or it is not transmitted and therefore non-strategic. We find that subjects are able to interpret non-strategic gaze, obtaining substantially higher payoffs than subjects who did not see gaze patterns. If gaze is transmitted in real time, eye movements become more informative in the common interest games and players predominantly succeed to coordinate on efficient outcomes. In contrast, eye movements become less informative in the competitive game. |
| Keywords: | Eye-tracking, focal points, signaling, hide and seek |
| Date: | 2018 |
| URL: | https://d.repec.org/n?u=RePEc:twi:respas:0114&r=all |
| By: | Baert, Stijn (Ghent University); Neyt, Brecht (Ghent University); Siedler, Thomas (University of Hamburg); Tobback, Ilse (KU Leuven); Verhaest, Dieter (KU Leuven) |
| Abstract: | Internships during tertiary education have become substantially more common over the past decades in many industrialised countries. This study examines the impact of a voluntary intra-curricular internship experience during university studies on the probability of being invited to a job interview. To estimate a causal relationship, we conducted a randomised field experiment in which we sent 1,248 fictitious, but realistic, resumes to real job openings. We find that applicants with internship experience have, on average, a 12.6% higher probability of being invited to a job interview. |
| Keywords: | internship, hiring, human capital, signalling, field experiment |
| JEL: | C93 I21 J23 J24 |
| Date: | 2019–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp12183&r=all |
| By: | Lergetporer, Philipp (Ifo Institute for Economic Research); Woessmann, Ludger (Ifo Institute for Economic Research) |
| Abstract: | Public preferences for charging tuition are important for determining higher education finance. To test whether public support for tuition depends on information and design, we devise several survey experiments in representative samples of the German electorate (N>19,500). The electorate is divided, with a slight plurality opposing tuition. Providing information on the university earnings premium raises support for tuition by 7 percentage points, turning the plurality in favor. The opposition-reducing effect persists two weeks after treatment. Information on fiscal costs and unequal access does not affect public preferences. Designing tuition as deferred income-contingent payments raises support by 16 percentage points, creating a strong majority favoring tuition. The same effect emerges when framed as loan payments. Support decreases with higher tuition levels and increases when targeted at non-EU students. |
| Keywords: | tuition, higher education, political economy, survey experiments, information, earnings premium, income-contingent loans, voting |
| JEL: | I22 H52 D72 D83 |
| Date: | 2019–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp12175&r=all |
| By: | Chakravorty, Ujjayant; Dar, Manzoor H.; Emerick, Kyle |
| Abstract: | We use two randomized controlled trials in Bangladesh to study a simple water conservation technology for rice production called "Alternate Wetting and Drying (AWD)." Despite proven results in agronomic trials, our first experiment shows that AWD only saves water and increases profits in villages where farmers pay a marginal price for water, but not when they pay fixed seasonal charges. The second RCT randomly distributed debit cards that can be used to pay volumetric prices for irrigation water. This low-cost, scalable intervention causes farmers to place more value on the water-saving technology. Demand for the technology becomes less price-sensitive. |
| Date: | 2019–03–14 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:122864&r=all |
| By: | Aminou Arouna; Jeffrey D. Michler; Jourdain C. Lokossou |
| Abstract: | In recent decades contract farming has emerged as a popular mechanism to encourage vertical coordination in developing country agriculture. The goal of such coordination is to better integrate smallholder farmers into the modern agricultural food system, fostering rural transformation. We use panel data from a randomized control trial to quantify the impact of different contract attributes on rural transformation and welfare of smallholder rice farmers in Benin. We vary the terms of contract, with some farmers being offered a contract that only guarantees a price, while other contracts add extension training or input loans. While all three types of contracts had positive and significant effects, we find that contracts which only included an agreement on price had nearly as large of an impact as did contracts with additional attributes. This suggests that once price uncertainty is resolved, farmers are able to address other constraints on their own. |
| JEL: | C93 L14 O13 Q12 |
| Date: | 2019–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:25665&r=all |
| By: | Marta Serra-Garcia (University of California, San Diego); Nora Szech (Karlsruher Institut für Technologie) |
| Abstract: | We investigate the elasticity of moral ignorance with respect to monetary incentives and social norm information. We propose that individuals suffer from higher moral costs when rejecting a certain donation, and thus pay for moral ignorance. Consistent with our model, we find significant willingness to pay for ignorance, which we calibrate against morally neutral benchmark treatments. We show that the demand curve for moral ignorance exhibits a sharp kink, of about 50 percent, when moving from small negative to small positive monetary incentives. By contrast, while social norms strongly favor information acquisition, they have little impact on curbing moral ignorance. |
| Keywords: | information avoidance, morality, unethical behavior, social norms |
| JEL: | D83 D91 C91 |
| Date: | 2019–03 |
| URL: | https://d.repec.org/n?u=RePEc:hka:wpaper:2019-017&r=all |
| By: | Sandro Casal; Francesco Guala; Luigi Mittone |
| Abstract: | We investigate the effects that transparency may have on people’s reactions to a simple nudge. Using an incentivized task and eliminating possible confounds due to strategic reasoning, we test two behavioral predictions: (a) that increasing the quantity and quality of information affects significantly the efficacy of nudges; and (b) that people mind about being nudged and reverse their decisions when the behavioral policy is transparent. Our results indicate that transparency does not necessarily trigger reactance (people in general do not mind being nudged), but the quality and quantity of information can have a significant effect on the efficacy of a behavioral policy. |
| Keywords: | Nudge, Overconfidence, Transparency, Reactance |
| Date: | 2019 |
| URL: | https://d.repec.org/n?u=RePEc:trn:utwpce:1902&r=all |
| By: | Sheheryar Banuri (University of East Anglia); Stefan Dercon (University of Oxford); Varun Gauri (World Bank) |
| Abstract: | Although the decisions of policy professionals are often more consequential than those of individuals in their private capacity, there is a dearth of studies on the biases of policy professionals: those who prepare and implement policy on behalf of elected politicians. Experiments conducted on a novel subject pool of development policy professionals (public servants of the World Bank and the Department for International Development in the UK) show that policy professionals are indeed subject to decision making traps, including the effects of framing outcomes as losses or gains, and most strikingly, confirmation bias driven by ideological predisposition, despite having an explicit mission to promote evidence-informed and impartial decision making. These findings should worry policy professionals and their principals in governments and large organizations, as well as citizens themselves. A further experiment, in which policy professionals engage in discussion, shows that deliberation may be able to mitigate the effects of some of these biases. |
| Keywords: | Biases, decision making, policy professionals, framing, confirmation bias, behavioural economics |
| JEL: | C90 H83 Z18 |
| Date: | 2018–05 |
| URL: | https://d.repec.org/n?u=RePEc:uea:wcbess:18-02&r=all |
| By: | Grewenig, Elisabeth (ifo Institute); Lergetporer, Philipp (ifo Institute); Werner, Katharina (ifo Institute); Woessmann, Ludger (ifo Institute and LMU Munich) |
| Abstract: | The standard assumption of exogenous policy preferences implies that parties set their positions according to their voters\' preferences. We investigate the reverse effect: Are the electorates\' policy preferences responsive to party positions? In a representative German survey, we inform randomized treatment groups about the positions of political parties on two family policies, child care subsidy and universal student aid. In both experiments, results show that the treatment aligns the preferences of specific partisan groups with their preferred party\'s position on the policy under consideration, implying endogeneity of policy preferences. The information treatment also affects non-partisan swing voters. |
| Keywords: | political parties; partisanship; survey experiment; information; endogenous preferences; voters; family policy; |
| JEL: | D72 D83 H52 J13 I28 P16 |
| Date: | 2019–03–20 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:149&r=all |
| By: | Gonzalez-Lira, Andres (University of California, Berkeley); Mobarak, Ahmed Mushfiq (Yale University) |
| Abstract: | Attempts to curb illegal activity through regulation gets complicated when agents can adapt to circumvent enforcement. Economic theory suggests that conducting audits on a predictable schedule, and (counter-intuitively) at high frequency, can undermine the effectiveness of audits. We conduct a large-scale randomized controlled trial to test these ideas by auditing Chilean vendors selling illegal fish. Vendors circumvent penalties through hidden sales and other means, which we track using mystery shoppers. Instituting monitoring visits on an unpredictable schedule is more effective at reducing illegal sales. High frequency monitoring to prevent displacement across weekdays to other markets backfires, because targeted agents learn faster and cheat more effectively. Sophisticated policy design is therefore crucial for determining the sustained, longer-term effects of enforcement. A simpler demand-side information campaign generates two-thirds of the gains compared to the most effective monitoring scheme, it is easier for the government to implement, and is almost as cost-effective. The government subsequently chose to scale up that simpler strategy. |
| Keywords: | enforcement, regulation, law and economics, fisheries |
| JEL: | K42 O1 L51 |
| Date: | 2019–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp12179&r=all |
| By: | Osorio, António (António Miguel) |
| Abstract: | This paper investigates the implications of the unequal division of the domestic labor in men and women’s participation and effort incentives in competitive relations, in which the labor market is the main example. We found that moderate levels of affirmative action (i.e., bias in favor of women) incentivize men and women to exert more effort and women’s participation. However, it cannot guarantee full participation and equal effort among men and women without inducing economic inefficiency or even distorting the labor market. Given these limitations, we consider the effects of an alternative policy that supports the men’s involvement in the domestic tasks. The main conclusion is that if we want men and women to have the same opportunities in the labor market, we must solve the household problem first. While women hold a larger share of the domestic labor, they are in a weaker position to compete with men. We expect that our findings will guide researchers and decision-makers implementing effective policies that can allow men and women to have the same labor market opportunities. Keywords: Gender equality; Affirmative action; Cost reduction policies; Efficiency; Women participation. JEL classification: J16, J78, D63, C72. |
| Keywords: | Igualtat entre els sexes, Programes d'acció positiva, 331 - Treball. Relacions laborals. Ocupació. Organització del treball, |
| Date: | 2019 |
| URL: | https://d.repec.org/n?u=RePEc:urv:wpaper:2072/351587&r=all |
| By: | Johannes Haushofer; Charlotte Ringdal; Jeremy P. Shapiro; Xiao Yu Wang |
| Abstract: | We study the impact of randomized unconditional cash transfers to both men and women on intimate partner violence in Kenya. Transfers to women averaging USD 709 reduced physical and sexual violence (–0.26, –0.22 standard deviations). Transfers to men reduced only physical violence (–0.18 SD). We find evidence of spillovers: physical violence towards non-recipient women in treatment villages decreased (–0.16 SD). We show theoretically that transfers to both men and women are needed to understand why violence occurs. Our theory suggests that husbands use physical violence to extract resources, but dislike it, while the converse may be true for sexual violence. |
| JEL: | C93 D13 O12 |
| Date: | 2019–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:25627&r=all |
| By: | Mike Brock (University of East Anglia); Joel Russell (University of East Anglia) |
| Abstract: | This report outlines and reviews the findings of a collaborative project between researchers at The University of East Anglia (UEA) and Brandon Country Park. The former were commissioned to undertake two surveys to elicit the opinions of current users and stakeholders regarding their perceptions of the park, with particular emphasis on how this improves their mental, physical and social well-being. Information was then used to identify how the facility might be improved. 200 surveys were conducted through July 2016, asking questions which referred to park usage, attitudes and socio-demographic status. These responses were combined with a qualitative focus group, and using these mixed-methods field experiment techniques provided an in-depth examination of user perspectives on how to best manage this woodland amenity. The overall results pinpoint some key interactions between the key mental and physical benefits of such a facility, and yet the trade-offs that these human sources of welfare may create for wider biodiversity conservation. |
| Keywords: | Collective Decision-Making; Local Public Goods; Forest Management; Environmental Sustainability, Biodiversity Conservation; |
| JEL: | D71 H4 Q23 Q26 Q28 Q57 |
| Date: | 2018–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:uea:ueaeco:2018_03&r=all |
| By: | Simone Manganelli |
| Abstract: | A decision maker starts from a judgmental decision and moves to the closest boundary of the confidence interval. This statistical decision rule is admissible and does not perform worse than the judgmental decision with a probability equal to the confidence level, which is interpreted as a coefficient of statistical risk aversion. The confidence level is related to the decision maker's aversion to uncertainty and can be elicited with laboratory experiments using urns a la Ellsberg. The decision rule is applied to a problem of asset allocation for an investor whose judgmental decision is to keep all her wealth in cash. |
| Date: | 2019–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:1903.06980&r=all |
| By: | Almås, Ingvild (IIES, Stockholm University); Kotsadam, Andreas (Ragnar Frisch Centre for Economic Research); Moen, Espen R. (Norwegian Business School (BI)); Røed, Knut (Ragnar Frisch Centre for Economic Research) |
| Abstract: | Partner selection is a vital feature of human behavior with important consequences for individuals, families, and society. Hypergamy occurs when a husband’s earning capacity systematically exceeds that of his wife. We provide a theoretical framework that rationalizes hypergamy even in the absence of gender differences in the distribution of earnings capacity. Using parental earnings rank, a predetermined measure of earnings capacity that solves the simultaneity problem of matching affecting earnings outcomes, we show that hypergamy is an important feature of Norwegian mating patterns. A vignette experiment identifies gender differences in preferences that can explain the observed patterns. |
| Keywords: | marriage, gender identity, labor supply, household specialization |
| JEL: | J12 D10 J22 |
| Date: | 2019–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp12185&r=all |
| By: | Mark T. Le Quement (University of East Anglia); Amrish Patel (University of East Anglia) |
| Abstract: | We study psychological games of cheap talk communication involving players who have misaligned material interests and reciprocity preferences. We find that full and efficient information transmission is often impossible if reciprocity concerns are too high. Furthermore, higher material preference misalignment may facilitate the achievement of full information transmission. A key driver of our results is that truth-telling is not per se a kind action by the sender. We contrast discrete and continuous environments, alternative conceptions of reciprocity preferences and consider one-sided reciprocity models. |
| Keywords: | Cheap talk, Gift-Exchange, Incomplete Information, Psychological Game, Reciprocity. |
| JEL: | D81 D83 D91 |
| Date: | 2018–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:uea:ueaeco:2018_06&r=all |
| By: | Sarah Tahamont; Zubin Jelveh; Aaron Chalfin; Shi Yan; Benjamin Hansen |
| Abstract: | The increasing availability of administrative data has led to a particularly exciting innovation in public policy research, that of the “low-cost” randomized trial in which administrative data are used to measure outcomes in lieu of costly primary data collection. Linking data from an experimental intervention to administrative records that track outcomes of interest typically requires matching datasets without a common unique identifier. In order to minimize mistaken linkages, researchers will often use “exact matching” (retaining an individual only if all their demographic variables match exactly in two or more datasets) in order to ensure that speculative matches do not lead to errors in an analytic dataset. We argue that when this approach is used to detect the presence of a binary outcome, this seemingly conservative approach leads to attenuated estimates of treatment effects, and critically, to underpowered experiments. For marginally powered studies, which are common in empirical social science, exact matching is particularly problematic. In this paper, we derive an analytic result for the consequences of linking errors on statistical power and show how the problem varies across different combinations of relevant inputs, including the matching error rate, the outcome density and the sample size. We conclude on an optimistic note by showing that machine learning-based probabilistic matching algorithms allow researchers to recover a considerable share of the statistical power that is lost to errors in data linking. |
| JEL: | C1 C12 K42 |
| Date: | 2019–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:25657&r=all |
| By: | Amanda E. Kowalski |
| Abstract: | I develop a model of a randomized experiment with a binary intervention and a binary outcome. Potential outcomes in the intervention and control groups give rise to four types of participants. Fixing ideas such that the outcome is mortality, some participants would live regardless, others would be saved, others would be killed, and others would die regardless. These potential outcome types are not observable. However, I use the model to develop estimators of the number of participants of each type. The model relies on the randomization within the experiment and on deductive reasoning. I apply the model to an important clinical trial, the PROWESS trial, and I perform a Monte Carlo simulation calibrated to estimates from the trial. The reduced form from the trial shows a reduction in mortality, which provided a rationale for FDA approval. However, I find that the intervention killed two participants for every three it saved. |
| JEL: | C1 H0 I1 |
| Date: | 2019–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:25670&r=all |
| By: | Amanda E. Kowalski |
| Abstract: | The LATE monotonicity assumption of Imbens and Angrist (1994) precludes “defiers,” individuals whose treatment always runs counter to the instrument, in the terminology of Balke and Pearl (1993) and Angrist et al. (1996). I allow for defiers in a model with a binary instrument and a binary treatment. The model is explicit about the randomization process that gives rise to the instrument. I use the model to develop estimators of the counts of defiers, always takers, compliers, and never takers. I propose separate versions of the estimators for contexts in which the parameter of the randomization process is unspecified, which I intend for use with natural experiments with virtual random assignment. I present an empirical application that revisits Angrist and Evans (1998), which examines the impact of virtual random assignment of the sex of the first two children on subsequent fertility. I find that subsequent fertility is much more responsive to the sex mix of the first two children when defiers are allowed. |
| JEL: | C1 C9 H10 J01 |
| Date: | 2019–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:25671&r=all |