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on Experimental Economics |
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Issue of 2023‒12‒11
nineteen papers chosen by |
| By: | Vojtěch Bartoš; Ian Levely; Vojtech Bartos |
| Abstract: | For the past two decades, studies measuring social preferences in developing settings have played an important role in building our understanding of economic development and poverty. This book chapter reviews lab-in-the-field experiments that measure social preferences, summarizes categories of social preferences, the standard experimental games that have been developed to test them, and why they are of interest to development economists. We describe experimental methodology adapted for developing contexts, give an overview of some recent advances in measuring social preferences in developing settings, we comment on the external validity of standard experimental games, and discuss unincentivized measures of social preferences. Finally, we review studies that explain variations in social preferences between and within individuals, with a focus on environmental factors. We comment on possible paths forward. |
| Keywords: | social preferences, development economics, measurement, experimental methodology |
| JEL: | A33 B41 C90 D90 O12 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_10744&r=exp |
| By: | Brian Jabarian; Simon Lazarus |
| Abstract: | We conduct an incentivized experiment on a nationally representative US sample (N=708) to test whether people prefer to avoid ambiguity even when it means choosing dominated options. In contrast to the literature, we find that 55% of subjects prefer a risky act to an ambiguous act that always provides a larger probability of winning. Our experimental design shows that such a preference is not mainly due to a lack of understanding. We conclude that subjects avoid ambiguity per se rather than avoiding ambiguity because it may yield a worse outcome. Such behavior cannot be reconciled with existing models of ambiguity aversion in a straightforward manner. |
| Keywords: | uncertainty, complexity, ambiguity, decision-making |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_10745&r=exp |
| By: | Aaron S. Berman (Economic Science Institute, Chapman University); Laurence R. Iannaccone (Institute for the Study of Religion, Economics and Society, Argyros School of Business and Economics, Chapman University); Mouli Modak (Smith Institute for Political Economy and Philosophy, Chapman University) |
| Abstract: | People belong to many diferent groups, and few belong to the same network of groups. Moreover, people routinely reduce their involvement in dysfunctional groups while increasing involvement in those they fnd more attractive. The net efect can be an increase in overall cooperation and the partial isolation of free-riders, even if free-riders are never punished, excluded, or recognized. We formalize and test this conjecture with an agent-based social simulation and a multi-good extension of the standard repeated public goods game. The experiment places 16 subjects in two four-person groups arranged in a 16-group checkerboard lattice that ensures no two subjects share membership in more than one group. Our initial results from ffteen sessions (fve in each of three diferent treatments) strongly suggest that multi-group settings can indeed raise overall cooperation and reduce the impact of free-riders. We extend our understanding of this setting by imposing greater heterogeneity between groups through interweaving AI players amongst the human subjects; whereby initial sessions of this amplifes the aforementioned efects. |
| Keywords: | cooperation, public goods game, lab experiment, multi-group |
| JEL: | C72 C73 C91 C92 H41 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:chu:wpaper:23-12&r=exp |
| By: | Francesca Barigozzi; José J. Domínguez; Natalia Montinari |
| Abstract: | Although women often outperform men in school and college, they still face higher unemployment rates and lower wages when employed. Are prospective workers aware of these inequalities, or do they expect to enter a gender-neutral workplace? This paper investigates college students’ expectations and the effect of information provision about gender gaps in academic performance and early labor market outcomes on the two sides of the labor market. Our lab experiment comprises a questionnaire to elicit students’ beliefs about academic performance and labor market inequalities, a demand-side game, and a supply-side game. In the demand-side game, subjects act as employers and are asked to hire three candidates and assign them to tasks that differ in complexity and profitability. In the supply-side game, we elicit individual willingness to compete. Information provision takes the form of feedback on the elicited beliefs. Our treatments vary the timing of the feedback: subjects in the feedback treatment received feedback before facing the other two games, while subjects in the priming and the control treatments only received feedback at the end of the experiment. First, our findings indicate that participants are largely unaware of gender gaps. Second, while information provision doesn't substantially alter employers’ hiring decisions, it increases the likelihood of assigning women to challenging tasks. Third, while feedback enhances willingness to compete among job market candidates, it does not significantly alter the gender gap in competitiveness. Overall, our experiment suggests potential positive effects of information provision on women’s labor market outcomes. |
| JEL: | D03 C91 J71 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:bol:bodewp:wp1188&r=exp |
| By: | Daido Kido |
| Abstract: | This study investigates the problem of individualizing treatment allocations using stated preferences for treatments. If individuals know in advance how the assignment will be individualized based on their stated preferences, they may state false preferences. We derive an individualized treatment rule (ITR) that maximizes welfare when individuals strategically state their preferences. We also show that the optimal ITR is strategy-proof, that is, individuals do not have a strong incentive to lie even if they know the optimal ITR a priori. Constructing the optimal ITR requires information on the distribution of true preferences and the average treatment effect conditioned on true preferences. In practice, the information must be identified and estimated from the data. As true preferences are hidden information, the identification is not straightforward. We discuss two experimental designs that allow the identification: strictly strategy-proof randomized controlled trials and doubly randomized preference trials. Under the presumption that data comes from one of these experiments, we develop data-dependent procedures for determining ITR, that is, statistical treatment rules (STRs). The maximum regret of the proposed STRs converges to zero at a rate of the square root of the sample size. An empirical application demonstrates our proposed STRs. |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2311.08963&r=exp |
| By: | Le Thanh Binh (University of HawaiÕi at Manoa) |
| Abstract: | This study aims to investigate and decompose the effect of peers on work performance through two specific channels: peer performance information and peer communication. The participants performed a real-effort task of adding two highest numbers from a pair of 4x4 matrices and were paid by piece rate under four different treatments. The treatments differed in whether peer performance information on a randomly matched other participant was provided, and whether the matched participants could communicate via chatbox. Overall, I found no evidence of the significant peer effects through either peer performance information or through communication. However, the effects of these channels on the individual performance are found for some subsets of participants. The high performers reported communication to be a distraction rather than a cooperation opportunity with their partner; their productivity is reduced in the presence of the chatbox. For females, the individual productivity is significantly reduced in the presence of both peer performance information and communication via chatbox. My experimental results also connect to the literature on gender differences in the competitive environment. |
| Keywords: | Communication, Peer Information, Individual Performance, Piece rate |
| JEL: | D81 D91 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:hai:wpaper:202309&r=exp |
| By: | McGee, Andrew (University of Alberta); McGee, Peter (University of Arkansas, Fayetteville) |
| Abstract: | Women report setting lower reservation wages than men in survey data. We show that women set reservation wages that are 14 to 18 percent lower than men's in laboratory search experiments that control for factors not fully observed in surveys such as offer distributions and outside options. This gender gap—which exists even controlling for overconfidence, preferences, personality, and intelligence—leads women to spend less time searching than men while accepting lower wages. Women—but not men—set reservation wages that are too low relative to theoretically optimal values given their risk preferences early in search, reducing their earnings. |
| Keywords: | reservation wages, gender wage gaps, search experiments |
| JEL: | J16 J64 C91 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp16577&r=exp |
| By: | Giuseppe Attanasi (UNIROMA - Università degli Studi di Roma "La Sapienza" = Sapienza University [Rome]); Claire Rimbaud (Leopold Franzens Universität Innsbruck - University of Innsbruck); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We investigate whether a player's guilt aversion is modulated by the co-players' vulnerability. To this goal, we introduce new variations of a three-player Trust game in which we manipulate payoff vulnerability and endowment vulnerability. The former is the traditional vulnerability which arises when a player's material payoff depends on another player's action (e.g., recipient's payoff in a Dictator game). The latter arises when a player's initial endowment is entrusted to another player (e.g., trustor's endowment in a Trust game). Treatments vary whether trustees can condition their decision on the belief of a co-player who is payoff-vulnerable and/or endowment-vulnerable, or not vulnerable at all, and the decision rights of the vulnerable player. We find that trustees' guilt aversion is insensitive to both the dimension of the co-player's vulnerability and to the decision rights of the co-player. Guilt is activated even absent vulnerability of the co-player whose beliefs are disappointed. It is triggered by the willingness to respond to the co-player's beliefs on his strategy, regardless of whether this strategy concerns this player or a third player's vulnerability, that is, indirect vulnerability. |
| Keywords: | Guilt Aversion, Vulnerability, Psychological Game Theory, Trust Game, Dictator Game, Experiment |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:halshs-03620418&r=exp |
| By: | Robbins, Blaine G (New York University Abu Dhabi); Karell, Daniel; Siegenthaler, Simon; Kamm, Aaron |
| Abstract: | Leaders are a part of virtually every group and organization, and while they help solve the various collective action problems that groups face, they can also be unprincipled and incompetent, pursuing their own interests over those of the group. What types of circumstances foster prosocial leadership and motivate leaders to pursue group interests? In a modified dictator game (N = 798), we examine the effects of piece-rate subsidies (or pay per unit of work performed) and the relative price of giving (or the size of the benefit to others for giving) on prosocial behavior and norms about giving. We find that subsidies increase giving by leaders, that the relative price of giving is unrelated to prosocial behavior, and that neither affects norms about giving. Furthermore, the introduction and removal of a subsidy does not undermine giving over time. Our results imply that subsidies increase group welfare by motivating leaders to allocate a larger share of resources to group members. |
| Date: | 2023–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:3umys&r=exp |
| By: | Shibly Shahrier; Koji Kotani; Tatsuyoshi Saijo |
| Abstract: | We examine whether the future ahead and back (FAB) mechanism improves intergenerational sustainability (IS) in competitive societies, conducting lab-in-the-field experiments of IS dilemma games. In baseline, each generation of three members in a lineup decides between maintaining IS (sustainable option) and prioritizing their payoff by imposing costs on subsequent generations (unsustainable option). In FAB, members in each generation first role-play those in the next generation, requesting what they want the current generation to choose. Second, they decide between two options as the current generation. Results demonstrate that FAB enhances IS, changing generations of proself people to choose sustainable options. |
| Keywords: | Intergenerational, sustainability dilemma, proself people, future ahead and back mechanism |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2023-7&r=exp |
| By: | Ksenia Panidi; Yaroslava Grebenschikova; Vasily Klucharev |
| Abstract: | In the present study, we use an experimental setting to explore the effects of sugar-free labels on the willingness to pay for food products. In our experiment, participants placed bids for sugar-containing and analogous sugar-free products in a Becker-deGroot-Marschak auction to determine the willingness to pay. Additionally, they rated each product on the level of perceived healthiness, sweetness, tastiness and familiarity with the product. We then used structural equation modelling to estimate the direct, indirect and total effect of the label on the willingness to pay. The results suggest that sugar-free labels significantly increase the willingness to pay due to the perception of sugar-free products as healthier than sugar-containing ones. However, this positive effect is overridden by a significant decrease in perceived sweetness (and hence, tastiness) of products labelled as sugar-free compared to sugar-containing products. As in our sample, healthiness and tastiness are positively related, while healthiness and sweetness are related negatively, these results suggest that it is health-sweetness rather than health-tastiness tradeoff that decreases the efficiency of the sugar-free labelling in nudging consumers towards healthier options. |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2311.09885&r=exp |
| By: | Moens, Eline (Ghent University); Verhofstadt, Elsy (Ghent University); Van Ootegem, Luc (Ghent University); Baert, Stijn (Ghent University) |
| Abstract: | Many applicants want a job with the possibility of telework. However, the literature is unclear on whether being explicit about this wish and the reason for it leads to negative consequences on hiring intentions. In this paper we therefore investigate how expressing a desire for telework, for work-life balance and for productivity in particular, impacts the probability of receiving an interview and what it signals to recruiters. To this end, we set up a state-of-the-art vignette experiment in which recruiters evaluate fictitious applicants for different jobs. As a result of this experimental set-up, the answers to our research questions can be interpreted causally, and external validity benefits from the heterogeneity of the jobs. We find that if the desire for work-life balance is the stated motivation, the preference is punished more severely than if the motivation is productivity. Compared to applicants who do not mention a preference for telework, recruiters are 5.1 percentage points less inclined to invite applicants who pronounce this desire for work-life balance to an interview and 2.1 percentage points less inclined to invite applicants for whom the motivation is productivity. Lastly, mentioning a telework preference for work-life balance has a clear negative effect on anticipated achievement striving, commitment, and availability. |
| Keywords: | telework, interview probability, factorial survey experiment |
| JEL: | M51 M54 J22 J32 J63 J81 |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp16560&r=exp |
| By: | Massimo Morelli; Tito Boeri; Matteo Gamalerio; Margherita Negri |
| Abstract: | We study whether a better knowledge of the functioning of pay-as-you-go pension systems and recent demographic trends affects natives’ attitudes towards immigration. In two online experiments conducted in Italy and Spain, we randomly treated participants with a video explaining how, in pay-as-you-go systems, the payment of current pensions depends on the contributions paid by current workers. The video also informs participants about population aging trends in their countries. The treatment increases knowledge of pay-as-you-go systems and future demographic trends for all participants. However, it improves attitudes towards migrants only for treated participants who do not support populist and anti-immigrant parties. Keywords: Information provision, experiment, immigration, pay-as-you-go pension systems, population aging, populism JEL:C90, D83, H55, J15, F22. |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:igi:igierp:705&r=exp |
| By: | Heczko, Alexander; Kittsteiner, Thomas; Ott, Marion |
| Abstract: | In a lab experiment, we analyze the benefits of increasing competition on auction platforms hosting multiple auctioneers of a homogeneous good. We find that increasing competition by merging separated individual auctions increases market efficiency and also buyers' payoffs, while there is no evidence of an increase in the auctioneers' expected revenues. Furthermore, competing auctioneers decrease reserve prices significantly when the number of competitors increases. Then, auctioneers' revenues decrease whereas buyers' payoffs and efficiency are enhanced. Different to previous findings for the monopolistic seller case, competing auctioneers do not increase reserve prices significantly when the number of buyers increases. For our theoretical model, we provide closed-form equilibrium reserve-price functions of competing auctioneers. |
| Keywords: | Competing auctions, merging markets, parallel auctions, reserve price, experiment |
| JEL: | D44 D47 D82 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:279549&r=exp |
| By: | Clement E. Bohr; Charles A. Holt; Alexandra V. Schubert |
| Abstract: | Motivated by a popular perception that Roth accounts are welfare-improving for most people, this paper compares the effects of mandated Traditional (tax-deferred) or Roth (taxprepaid) retirement policies in a controlled laboratory setting. Selection effects, which complicate analyses of observational data, are avoided by random assignment to policies. Subjects receive exogenous incomes during “working” periods, followed by no-income “retirement” periods. In each period, subjects decide how many lab dollars to convert into “takehome pay, ” akin to consumption with diminishing returns. Subjects’ decisions determine retirement savings and tax payments. Flat income and tax-rate profiles facilitate the analysis of behavioral factors like present-period tax avoidance, while optimal consumption and after-tax savings are identical for both treatments. Our results show that observed savings are suboptimal in both treatments and are influenced by gender, patience, and risk aversion measures. In contrast to conventional wisdom, there are no significant differences between policies; if anything, the Traditional treatment leads to marginally higher post-retirement consumption. |
| Keywords: | Retirement, tax-deferred savings, Roth, IRA, compound interest bias, laboratory experiments |
| JEL: | C91 D84 D91 E21 H24 J32 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:zur:econwp:440&r=exp |
| By: | Fang, Ximeng; Innocenti, Stefania |
| Abstract: | Green transitions require ambitious policy. This poses a political economy challenge. We study how social norms and economic reasoning jointly shape public views towards carbon taxation with uniform redistribution, using a representative survey experiment in the U.S. (N=2, 688). Video interventions that correct misperceived norms about climate action and/or explain the policy lead to an initial boost in support that fades away after several months and does not increase environmental donations. However, the combined intervention persistently reduces strong opposition by over 20%, pointing towards the joint roles of different motives in shifting the Overton window for climate policy. |
| Keywords: | climate policy, carbon pricing, policy understanding, social norms, pluralistic ignorance, information intervention, survey experiment |
| JEL: | Q54 Q58 D78 D91 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2023-25&r=exp |
| By: | Junqian Li (School of Economics, Shandong University); Yuqing Liu (School of Economics, University of Queensland, Brisbane, Australia); Nhan Buu Phan (School of Economics, University of Queensland, Brisbane, Australia); Shino Takayama (School of Economics, University of Queensland, Brisbane, Australia) |
| Abstract: | In this paper, we study the trading strategies of informed traders in a simulated asset market. There is a risky asset with two possible values, and participants receive private information about the value of the asset. Market maker’s quotes are computationally simulated. We study whether the trading behavior of informed traders—specifically, the frequency of manipulative trading versus honest trading—is influenced by various conditions, including the bid–ask spread, retrading possibilities, and the risk attitude of traders. Our findings suggest that manipulation occurs in both long (e.g., 15 periods) and short (e.g., five periods) trading rounds. Furthermore, there is a significant increase in the number of manipulators when the bid–ask spread is narrow rather than wide. Our results also indicate that risk-seeking participants engage in manipulation more frequently than other participants. |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:qld:uq2004:665&r=exp |
| By: | Andrea Amado; Koji Kotani; Makoto Kakinaka; Shunsuke Managi |
| Abstract: | People worldwide aim to reduce the adverse impacts from carbon emissions by adopting clean energy sources. While the literature identifies potential policies, such as carbon taxes, to address this issue, few studies have investigated how these policies can be concretely designed to facilitate cleaner-energy transition. We pose a question of how a carbon tax can be an effective instrument at transitioning to clean energy and hypothesize that providing a set of crucial information with respect to the tax persuades people to support it. We experimentally examine the determinants influencing public support for the introduction of a carbon tax via a vignette experiment with 1500 Japanese subjects. The vignette policy dimensions include “who pays the tax, †“how the tax gets paid, †“where the revenue gets used†and “how much the burden becomes, †each of which is introduced as a treatment with the baseline of “no information†provision. The results indicate that public support comparatively increases when the entities specified to pay are producers, when the tax revenue is used towards renewable energies and when the burden is sufficiently low. Overall, we demonstrate that a carbon tax can be an effective policy instrument for cleaner-energy transition, while garnering public support and ample revenue. To this end, it is necessary to inform people that the carbon-tax policy design targets producers and renewable energy along with a per-capita burden between 500 JPY to 3000 JPY a month. |
| Keywords: | carbon tax, clean energy, policy design, vignette experiment |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2023-6&r=exp |
| By: | Blom, Angelica (Marketing and Strategy); Fors, Maja (Marketing and Strategy); Lange, Fredrik (Marketing and Strategy) |
| Abstract: | In this working paper we set out to investigate whether retailers can use targeted communication to encourage sustainable consumer behavior in online grocery retailing. More specifically, in two scenario-based experiments we explore if targeted communication can increase purchase intentions of sustainable food, if this effect can be explained by perceived relevance of the communication, as well as be moderated by customer sustainability knowledge and product category. The results from the two studies indicate that targeted communication might be more effective in encouraging sustainable purchase decisions for some product categories than others. However, the results from the two studies raise several questions. These can be seen as guidance for retailers and researchers interested in exploring targeted communication and its effects on sustainable consumer behavior further. |
| Keywords: | Sustainability; Retailing; Grocery Retailing; Purchase Intention; Targeted Communication |
| Date: | 2023–08–09 |
| URL: | https://d.repec.org/n?u=RePEc:hhb:hastma:2023_002&r=exp |