nep-exp New Economics Papers
on Experimental Economics
Issue of 2017‒03‒12
thirty papers chosen by



  1. Discrimination as favoritism: The private benefits and social costs of in-group favoritism in an experimental labor market. By David L. Dickinson; David Masclet; Emmanuel Peterle
  2. Endogenous Sanctioning Institutions and Migration Patterns: Experimental Evidence By Ramon Cobo-Reyes; Gabriel Katz; Simone Meraglia?
  3. Leveling up? An inter-neighborhood experiment on parochialism and the efficiency of multi-level public goods provision By Gallier, Carlo; Goeschl, Timo; Kesternich, Martin; Lohse, Johannes; Reif, Christiane; Römer, Daniel
  4. Hiring a Homosexual, Taking a Risk? A Lab Experiment on Employment Discrimination and Risk Aversion By Baert, Stijn
  5. Doing it once is good, doing it twice is even better. On the dynamics of altruistic behavior By Timme, Florian; Sass, Markus
  6. Cooperation, Framing and Political Attitudes By Fosgaard, Toke R.; Hansen, Lars G.; Wengström, Erik
  7. Does the reliability of institutions affect public good contributions? Evidence from a laboratory experiment By Jahnke, Björn; Fochmann, Martin; Wagener, Andreas
  8. Conditional Punishment in England By Kamei, Kenju
  9. Risk and Cooperation: Experimental Evidence from Stochastic Public Good Games By Vesely, Stepan; Wengström, Erik
  10. Do Terrorist Attacks Affect Ethnic Discrimination in the Labour Market? Evidence from Two Randomised Field Experiments By Gunn Elisabeth Birkelund; Elisabeth Ugreninov; Tak Wing Chan; Arnfinn Midtbøen; Jon Rogstad
  11. True Overconfidence, Revealed through Actions: An Experiment By Cheung, Stephen L.; Johnstone, Lachlan
  12. Peer Effects and Risk-Taking Among Entrepreneurs: Lab-in-the-Field Evidence By Steeve Marchand; Maria Adelaida Lopera
  13. The Effectiveness of Incentive Schemes in the Presence of Implicit Effort Costs By Goerg, Sebastian J.; Kube, Sebastian; Radbruch, Jonas
  14. Ceding Control: An Experimental Analysis of Participatory Management By Mellizo, Philip; Carpenter, Jeffrey P.; Matthews, Peter Hans
  15. Gender, Communication Styles, and Leader Effectiveness By Timko, Krisztina
  16. Opportunity cost, inattention and the bidder's curse By Freeman, David; Kimbrough, Erik O.; Reiss, J. Philipp
  17. Flip a coin or vote: An Experiment on Choosing Group Decision Rules By Hoffmann, Timo; Renes, Sander
  18. Men and Women Are Equally Effective Leaders By Timko, Krisztina
  19. Is Adversity a School of Wisdom? Experimental Evidence on Cooperative Protection Against Stochastic Losses By Nicklisch, Andreas; Köke, Sonja; Lange, Andreas
  20. Gender and Peer Effects in Social Networks By Beugnot, Julie; Fortin, Bernard; Lacroix, Guy; Villeval, Marie Claire
  21. A Firm of One's Own: Experimental Evidence on Credit Constraints and Occupational Choice By Brudevold-Newman, Andrew; Honorati, Maddalena; Jakiela, Pamela; Ozier, Owen
  22. Inflated Reputations Uncertainty, Leniency & Moral Wiggle Room in Trader Feedback Systems By Kusterer, David; Bolton, Gary; Mans, Johannes
  23. Statistical tests of the demand for insurance: an “all or nothing” decision By Anne Corcos; François Pannequin; Claude Montmarquette
  24. One Size Does Not Fit All: A Field Experiment on the Drivers of Tax Compliance and Delivery Methods in Rwanda By Mascagni, Giulia; Nell, Christopher; Monkam, Nara
  25. More Effort with Less Pay: On Information Avoidance, Belief Design, and Performance By Szech, Nora; Huck, Steffen; Wenner, Lukas
  26. Equilibrium Selection in Monetary Search Models: An Experimental Approach By Kazuya Kamiya; Hajime Kobayashi; Tatsuhiro Shichijo; Takashi Shimizu
  27. Social Networks and Peer Effects at Works By Julie Beugnot; Bernard Fortin; Guy Lacroix; Marie Claire Villeval
  28. Choosing whether to compete: Price and format competition with consumer confusion By Gaudeul, Alexia; Crosetto, Paolo
  29. Handbook of Game Theory and Industrial Organization: An Introduction By Marini, Marco A.; Corchon, Luis
  30. The "Sales Agent" Problem: Effort Choice under Performance Pay as Behavior toward Risk By Zubanov, Nick; Cadsby, Bram; Song, Fei

  1. By: David L. Dickinson; David Masclet; Emmanuel Peterle
    Abstract: In this paper, we examine labor market favoritism in a unique laboratory experiment design that can shed light on both the private benefits and spillover costs of employer favoritism (or discrimination). Group identity is induced on subjects such that each laboratory « society » consists of eight individuals each belonging to one of two different identity groups. In some treatments randomly assigned employer-subjects give preference rankings of potential worker-subjects who would make effort choices that impact employer payoffs. Though it is common knowledge that group identity in this environment provides no special productivity information and cannot facilitate communication or otherwise lower costs for the employer, employers preferentially rank in-group members. In such instances, the unemployed workers are aware that an intentional preference ranking resulted in their unemployment. Unemployed workers are allowed to destroy resources in a final stage of the game, which is a simple measure of the spillover effects of favoritism in our design. Though we find evidence that favoritism may privately benefit a firm in terms of higher worker effort, the spillover costs that result highlight a reason to combat favoritism/discrimination. This result also identifies one potential micro-foundation of societal unrest that may link back to labor market opportunity. Key Words: Discrimination, Experimental Economics, Social identity, Conflicts
    JEL: C90 C92 J15 J16
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:apl:wpaper:17-02&r=exp
  2. By: Ramon Cobo-Reyes (Department of Economics, University of Exeter); Gabriel Katz (Department of Politics, University of Exeter); Simone Meraglia? (Department of Economics, University of Exeter)
    Abstract: We experimentally analyze the effect of the endogenous choice of sanctioning institutions on cooperation and migration patterns across societies. In our experiment, subjects are allocated to one of two groups, are endowed with group-specific preferences, and play a public goods game for 30 periods. Each period, subjects can move between groups and, at fixed intervals, can vote on whether to implement formal (centralized) sanctioning institutions in their group. We compare this environment to one in which only one group is exogenously endowed with sanctioning institutions. We find that subjects' ability to vote on institutions leads to (i) a more efficient partition of subjects between groups, (ii) a lower migration rate, (iii) an increase in overall payoffs, and (iv) a decrease in both inter- and intra-groups (payoff) inequality. Over time, subjects tend to vote for sanctioning institutions and contribute to the public good.
    Keywords: Formal Sanctions, Cooperation, Migration, Voting, Experiment.
    JEL: C73 C91 C92 D72 H41 H73
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:exe:wpaper:1702&r=exp
  3. By: Gallier, Carlo; Goeschl, Timo; Kesternich, Martin; Lohse, Johannes; Reif, Christiane; Römer, Daniel
    Abstract: Many public goods can be provided at different spatial levels. Evidence from social identity theory and in-group favoritism raises the possibility that where higher-level provision is more efficient, subjects' narrow concern for local outcomes (parochialism) could harm efficiency. Building on the experimental paradigm of multi-level public good games and the 'neighborhood attachment' concept, we conduct an artefactual field experiment with 600 participants in a setting conducive to parochial behavior. In an inter-neighborhood intra-region design, subjects allocate an endowment between a personal account, a local, and a regional public good account. The between-subjects design varies across two dimensions: One informs subjects that the smaller local group consists of members from their own neighborhood ('neighbors'). The other varies the relative productivity at the two public goods provision levels. We find evidence for parochialism, but contrary to our hypothesis, parochialism does not interfere with efficiency: The average subject responds to a change in relative productivities at the local and regional level in the same way, whether aware of their neighbors' presence in the small group or not. The results even hold for subjects with above-median neighborhood attachment and subjects primed on neighborhood attachment.
    Keywords: social identity,parochialism,multi-level public goods,artefactual field experiment
    JEL: C9 D7 H4
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:zbw:zewdip:17012&r=exp
  4. By: Baert, Stijn
    Abstract: We investigate risk aversion as a driver of labour market discrimination against homosexual men. We show that more hiring discrimination by more risk-averse employers is consistent with taste-based and statistical discrimination. To test this hypothesis we conduct a scenario experiment in which experimental employers make a hiring decision concerning a heterosexual or homosexual job candidate. In addition, participants are surveyed on their risk aversion and other characteristics that might correlate with this risk aversion. Analysis of the (post-)experimental data confirms our hypothesis. The probability of a beneficial hiring decision for homosexual candidates decreases by 31.7% when employers are a standard deviation more risk-averse.
    Keywords: Hiring discrimination,statistical discrimination,sexual orientation,scenario experiment,risk aversion
    JEL: C91 J15 J71
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:zbw:glodps:2&r=exp
  5. By: Timme, Florian; Sass, Markus
    Abstract: We study a series of dictator games repeated a number of times at considerably large time intervals. The experimental design is such that reputation and learning effects can be ruled out. Treatments differ with respect to the number of repetitions, the time span between repetitions and observability of behavior. We observe in all treatments a strong tendency towards more selfish behavior over the course of the repeated experiment. We argue that this behavior can be rationalized if giving in dictator games is driven by a social norm that approves repeated gifts more than a single altruistic act. We report experimental evidence for the existence of such a norm using the norm elicitation method introduced by Krupka and Weber (2013).
    JEL: C91 C73 B41
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc16:145536&r=exp
  6. By: Fosgaard, Toke R. (Department of Food and Resource Economics, University of Copenhagen); Hansen, Lars G. (Department of Food and Resource Economics, University of Copenhagen); Wengström, Erik (Department of Economics, Lund University)
    Abstract: This paper shows that political attitudes are linked to cooperative behavior in an incentivized experiment with a large sample randomly drawn from the Danish population. However, this relationship depends on the way the experiment is framed. In the standard game in which subjects give to a public good, contributions are the same regardless of political attitudes. In an economically equivalent version, in which subjects take from a public good, left-wingers cooperate significantly more than subjects in the middle or to the right of the political spectrum. Through simulation techniques we find that this difference in the framing effect across political point of views is to some extent explained by differences in beliefs and basic cooperation preferences.
    Keywords: Cooperation; Social Dilemma; Political Ideology; Experiment; Simulation
    JEL: C90 D03 H41
    Date: 2017–03–02
    URL: http://d.repec.org/n?u=RePEc:hhs:lunewp:2017_004&r=exp
  7. By: Jahnke, Björn; Fochmann, Martin; Wagener, Andreas
    Abstract: Reliable institutions - i.e., institutions that live up to the norms that agents expect them to keep - foment cooperative behavior. We experimentally confirm this hypothesis in a public goods game with a salient norm that cooperation was socially demanded and corruption ought not to occur. When nevertheless corruption attempts came up, groups that were told that "the system" had fended off the attempts made considerably higher contributions to the public good than groups that only learned that the attempt did not aect their payoffs or that were not at all exposed to corruption.
    JEL: H41 A13 C91
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc16:145646&r=exp
  8. By: Kamei, Kenju
    Abstract: A large body of literature has shown that peer-to-peer punishment is effective in enforcing cooperation norms in dilemmas. Kamei [2014, Economics Letters 124, pp.199-202] provides experimental evidence on the prevalence of heterogeneous conditional punishment types by conducting an experiment with a strategy method in the United States. This note reports a replication experiment using subjects in England. As consistent with Kamei (2014), the experiment indicates that people’s punishment decisions are on average positively proportional to the others’ punishment toward the target. However, it also indicates interesting cross-country differences in the distribution of human conditional punishment types.
    Keywords: experiment, cooperation, punishment, dilemma
    JEL: C92 D79 H41
    Date: 2017–02–28
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:77198&r=exp
  9. By: Vesely, Stepan (Department of Psychology, Norwegian University of Science and Technology); Wengström, Erik (Department of Economics, Lund University)
    Abstract: Outcomes in social dilemmas often have a stochastic component. We report experimental findings from public good games with both correlated and independent risk across players. We find that the presence of both types of risk prevents the decay of cooperation typically observed in the standard deterministic public good game. The results further suggest that it is greater relative importance of social norms or warm glow giving, rather than risk sharing opportunities that foster cooperation in our stochastic public good game.
    Keywords: risk pooling; risk sharing; social norms; linear public goods game; cooperation decay; stable cooperation
    JEL: D03 D80 H41
    Date: 2017–03–02
    URL: http://d.repec.org/n?u=RePEc:hhs:lunewp:2017_003&r=exp
  10. By: Gunn Elisabeth Birkelund (Department of Sociology and Human Geography, University of Oslo); Elisabeth Ugreninov (Department of Sociology and Human Geography, University of Oslo); Tak Wing Chan (Department of Social Science, UCL Institute of Education); Arnfinn Midtbøen (Institute for Social Research, Oslo); Jon Rogstad (Institute for Labour and Social Research, Oslo)
    Abstract: Terrorist attacks are known to influence public opinion. But do they also change behaviour? We address this question by comparing the results of two identical randomised field experiments on ethnic discrimination in hiring that we conducted in Oslo. The first experiment was conducted before the 2011 terrorist attacks in Norway; the second experiment was conducted after the attacks. In both experiments, applicants with a typical Pakistani name were significantly less likely to get a job interview compared to those with a typical Norwegian name. But the ethnic gap in call-back rates were very similar in the two experiments. Thus, Pakistanis in Norway still experienced the same level of discrimination, despite claims that Norwegians have become more positive about migrants after the terrorist attacks.
    Keywords: Terrorist attack; Randomised field experiment; Ethnic discrimination
    Date: 2017–01–19
    URL: http://d.repec.org/n?u=RePEc:qss:dqsswp:1702&r=exp
  11. By: Cheung, Stephen L. (University of Sydney); Johnstone, Lachlan (University of Sydney)
    Abstract: We report an experiment that infers true overconfidence in relative ability through actions, as opposed to reported beliefs. Subjects choose how to invest earnings from a skill task when the returns depend solely upon risk, or both risk and relative placement, enabling joint estimation of individual risk preferences and implied subjective beliefs of placing in the top half. We find evidence of aggregate overconfidence only in a treatment that receives minimal feedback on performance in a trial task. In treatments that receive more detailed feedback, aggregate overconfidence is not observed although identifiable segments of overand underconfident individuals persist.
    Keywords: true overconfidence, overplacement, subjective beliefs, joint estimation
    JEL: C91 D03 D81 D83
    Date: 2017–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp10545&r=exp
  12. By: Steeve Marchand; Maria Adelaida Lopera
    Abstract: We study how social interactions influence entrepreneurs' attitudes toward risk. We conduct two risk-taking experiments within workshops organized for young Ugandan entrepreneurs. Between the two experiments, the entrepreneurs participate in a networking activity where they build relationships and discuss with each other. We collect detailed data on peer network formation and on participants' choices before and after the networking activity. Our design implicitly controls for homophily effects (i.e. the tendency of individuals to develop relationships with people who have similar characteristics). We find that risk aversion is affected by social conformity. Participants tend to become more (less) risk averse in the second experiment if the peers they discuss with are on average more (less) risk averse in the first experiment. This suggests that social interactions play a role in shaping risk preferences.
    Keywords: preference, risk aversion, entrepreneur, social norms
    JEL: D03 D81 M13 Z13
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:lvl:crrecr:1703&r=exp
  13. By: Goerg, Sebastian J. (Florida State University); Kube, Sebastian (University of Bonn); Radbruch, Jonas (IZA)
    Abstract: Agents' decisions to exert effort depends on the provided incentives as well as the potential costs for doing so. So far most of the attention has been on the incentive side. However, our lab experiments underline that both the incentive and cost side can be used separately to shape work performance. In our experiment, subjects work on a real-effort task. Between treatments, we vary the incentive scheme used for compensating workers. Additionally, by varying the available outside options, we explore the role of implicit costs of effort in determining workers' performance. We observe that incentive contracts and implicit costs interact in a non-trivial manner. Performance reacts significantly to changes in implicit effort costs under low-powered piece-rate and target-based bonus contracts, but not under a high piece rate contract. In addition, comparisons between the incentive schemes depend crucially on the implicit costs.
    Keywords: workers' performance, work environments, implicit cost, opportunity costs, incentive schemes
    JEL: C91 D01 D03 D24 J22 J24 J33 L23 M52
    Date: 2017–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp10546&r=exp
  14. By: Mellizo, Philip (College of Wooster); Carpenter, Jeffrey P. (Middlebury College); Matthews, Peter Hans (Middlebury College)
    Abstract: We use an experiment to evaluate the effects of participatory management on firm performance. Participants are randomly assigned roles as managers or workers in firms that generate output via real effort. To identify the causal effect of participation on effort, workers are exogenously assigned to one of two treatments: one in which the manager implements a compensation scheme unilaterally or another in which the manager cedes control over compensation to the workers who vote to implement a scheme. We find that output is between seven and twelve percentage points higher in participatory firms.
    Keywords: voice, control, intrinsic motivation, participatory management, real effort, experiment
    JEL: C92 J33 J53 J54 M50
    Date: 2017–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp10576&r=exp
  15. By: Timko, Krisztina
    Abstract: We study gender differences in the behavior, communication, and effectiveness of randomly selected leaders in a laboratory experiment using the turnaround game. Leaders can send nonbinding pre‐play text messages to try to convince followers to coordinate on the Pareto‐efficient equilibrium. The treatment variations consist of the gender of the leader, and whether the communication is one‐way (only leaders send messages) or two‐way (first followers send messages to their leader, and subsequently the leader sends messages to the group). We find that male leaders communicate more assertively. Communication with the followers induces female leaders to express significantly more often that they are part of the group, rather than standing above the group. Despite the different paths in communication, both men and women are equally likely to request the highest effort contribution. Men and women are equally effective leaders.
    Keywords: gender differences; leadership; leader effectiveness; coordination
    JEL: C92 J16 M14 M54
    Date: 2017–02–16
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:77021&r=exp
  16. By: Freeman, David; Kimbrough, Erik O.; Reiss, J. Philipp
    Abstract: Recent research suggests that auction winners sometimes fall prey to a "bidder's curse", paying more for an item at auction than they would have paid at a posted price. One explanation for this phenomenon is that bidders are inattentive to posted prices. We develop a model in which bidders' inattention, and subsequent overbidding, is driven by a rational response to the opportunity cost of acquiring information about the posted price. We test our model in a laboratory experiment in which subjects bid in an auction while facing an opportunity cost of looking up the posted price. We vary the opportunity cost, and we show that information acquisition decreases and consequently overbidding increases with opportunity cost as predicted.
    Keywords: Auctions,Bidder's Curse,Limited Attention,Experiments,Rational Ignorance
    JEL: C72 C92 D44
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:zbw:kitwps:101&r=exp
  17. By: Hoffmann, Timo; Renes, Sander
    Abstract: Before a group can take a decision, its members must agree on a mechanism to aggregate individual preferences. In this paper we present the results of an experiment on the influence of private payoff information and the role of the available alternatives on individuals’ mechanism choices in such group choice situations. While efficient mechanisms are desirable, we experimentally show that participation constraints can prevent their implementation. We find strong indications that individual preferences for choice rules are sensitive to individual expected payoffs. Our results highlight the importance of considering participation constraints when designing choice institutions.
    JEL: C91 D70 D82
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc16:145474&r=exp
  18. By: Timko, Krisztina
    Abstract: We study gender differences in the behavior and effectiveness of randomly selected leaders in a laboratory experiment using the minimum effort coordination game. Leaders can send non‐binding numeric messages to try to convince followers to coordinate on the Pareto‐efficient equilibrium. The treatment variations consist of the gender of the leader, and whether participants know or do not know the gender of the leader in their group. We find that female leaders choose more often to send a riskier high message in the beginning of the game, which hurts their effectiveness especially if gender is not revealed. However, if gender is revealed, both male and female leaders make more careful choices, and thus we do not observe any significant gender difference in leader effectiveness.
    Keywords: gender differences; leadership; leader effectiveness; coordination
    JEL: C92 J16 M14 M54
    Date: 2017–02–16
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:77022&r=exp
  19. By: Nicklisch, Andreas; Köke, Sonja; Lange, Andreas
    Abstract: We investigate the dynamics of voluntary cooperation to either reduce the size or the probability of stochastic losses. For variants of a repeated four person prisoner’s dilemma game, we show that cooperation is larger and more stable when it affects the probability rather than the size of the adverse event. We provide crucial insights on behavioral adaptation: defecting players are more likely to switch to cooperation after experiencing an adverse event, while existing cooperation is reinforced when the losses do not occur. This behavior is consistent with simple learning dynamics based on ex post evaluations of the chosen strategy.
    JEL: Q54 H41 C92
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc16:145716&r=exp
  20. By: Beugnot, Julie (Université de Franche Comté); Fortin, Bernard (Université Laval); Lacroix, Guy (Université Laval); Villeval, Marie Claire (CNRS, GATE)
    Abstract: We investigate whether peer effects at work differ by gender and whether the gender difference in peer effects – if any – depends on work organization, precisely the structure of social networks. We develop a social network model with gender heterogeneity that we test by means of a real-effort laboratory experiment. We compare sequential networks in which information on peers flows exclusively downward (from peers to the worker) and simultaneous networks where it disseminates bi-directionally along an undirected line (from peers to the worker and from the worker to peers). We identify strong gender differences in peer effects, as males' effort increases with peers' performance in both types of network, whereas females behave conditionally. While they are influenced by peers in sequential networks, females disregard their peers' performance when information flows in both directions. We reject that the difference between networks is driven by having one's performance observed by others or by the presence of peers in the same session in simultaneous networks. We interpret the gender difference in terms of perception of a higher competitiveness of the environment in simultaneous than in sequential networks because of the bi-directional flow of information.
    Keywords: gender, peer effects, social networks, work effort, experiment
    JEL: C91 J16 J24 J31 M52
    Date: 2017–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp10588&r=exp
  21. By: Brudevold-Newman, Andrew (University of Maryland); Honorati, Maddalena (World Bank); Jakiela, Pamela (University of Maryland); Ozier, Owen (World Bank)
    Abstract: We conducted a randomized evaluation of two labor market interventions targeted to young women aged 18 to 19 in three of Nairobi's poorest neighborhoods. One treatment offered participants a bundled intervention designed to simultaneously relieve credit and human capital constraints; a second treatment provided women with an unrestricted cash grant, but no training or other support. Both interventions had economically large and statistically significant impacts on income over the medium-term (7 to 10 months after the end of the interventions), but these impacts dissipated in the second year after treatment. Our results are consistent with a model in which savings constraints prevent women from smoothing consumption after receiving large transfers – even in the absence of credit constraints, and when participants have no intention of remaining in entrepreneurship. We also show that participants hold remarkably accurate beliefs about the impacts of the treatments on occupational choice.
    Keywords: youth unemployment, microenterprises, entrepreneurship, credit constraints, cash grants, training, Africa, gender
    JEL: J24 M53 O12
    Date: 2017–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp10583&r=exp
  22. By: Kusterer, David; Bolton, Gary; Mans, Johannes
    Abstract: Reputation systems associated with Internet markets are known to be subject to strategic manipulation. The experiment we present suggests that this manipulation can extend to factors that have heretofore been overlooked: the leniency and moral wiggle room that arise from uncertainty about the source of transaction problems. Uncertainty about seller culpability leads to behaviors that reduce the informativeness of the feedback system, thereby diminishing the incentives for honest seller behavior. Under uncertainty, buyers pay about the same prices but get significantly less.
    JEL: C90 D47 D83
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc16:145794&r=exp
  23. By: Anne Corcos; François Pannequin; Claude Montmarquette
    Abstract: We developed and experimentally tested an extended version of Mossin’s traditional theoretical demand for insurance for both risk averters and risk lovers. Both the theoretical model and the experimental data show that the demand for insurance is tantamount to an all or nothing choice. This bimodal distribution of decisions requires an appropriate statistical analysis to confront the data with the model. Thus, this article presents two complementary statistical tests. The first one uses a graphical representation of the experimental results along with a χ2 test to assess the general goodness of fit of the theoretical model with the data. The second, an econometric model, complements the analysis by assessing the effects of the contractual parameters and risk attitudes on individual demand for insurance. The econometric results show primarily that an increase in the unit price consists in an exit of the insurance market rather than in a contraction of the coverage: as the unit price increases, risk lovers, followed by risk averters, significantly withdraw from the insurance market as they forgo the full insurance contract. However, from the χ2 test, regardless of their risk attitude, the participants exhibit insufficient demand elasticity to price. Finally, the lack of effect of the fixed cost on risk averters’ demand for partial insurance refutes the inferiority assumption of the demand for insurance.
    Keywords: demand for insurance, experimental study, parametric tests,
    JEL: C40 C91 D81
    Date: 2017–02–28
    URL: http://d.repec.org/n?u=RePEc:cir:cirwor:2017s-07&r=exp
  24. By: Mascagni, Giulia; Nell, Christopher; Monkam, Nara
    Abstract: Although field experiments in tax compliance represent a growing area of research, the literature has so far focussed exclusively on high and middle-income countries. This paper starts to fill this gap by reporting the results of a tax field experiment in Rwanda, while also highlighting some characteristics that may be common to other low-income countries. We evaluate an intervention carried out by the Rwanda Revenue Authority (RRA), which involved sending messages to taxpayers to nudge their declaration behaviour during the filing period of January-March 2016. Focussing particularly on business profits tax, our study is designed to address two interrelated questions. First, what are the key drivers of compliance in Rwanda? Second, what is the best delivery method to reach taxpayers with messages designed to improve compliance? Although other studies have explored delivery methods in the context of taxpayer communication, our study is the first one to interact these methods with different message contents. As a result, we evaluate a set of nine treatments that combine three message contents (deterrence, fiscal exchange, reminders) and three delivery methods (letters, SMS, emails) – as compared to a control group that received no message. We find that friendly approaches to taxpayers are generally more effective than deterrence. However, small taxpayers are still quite responsive to the possibility of being fined and prosecuted (deterrence). We also show that low-cost delivery methods like SMS and emails can be highly effective as compared to letters.
    Keywords: Economic Development, Finance, Governance, Poverty,
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:idq:ictduk:12838&r=exp
  25. By: Szech, Nora; Huck, Steffen; Wenner, Lukas
    Abstract: In a tedious real effort task, subjects know that their piece rate is either low or ten times higher. When subjects are informed about their piece rate realization, they adapt their performance. One third of subjects nevertheless forego this instrumental information when given the choice — and perform stunningly well. Agents who are uninformed regarding their piece rate tend to outperform all others, even those who know that their piece rate is high. This also holds for enforced instead of self-selected information avoidance. All our findings can be captured by a model of optimally distorted expectations following Brunnermeier and Parker (2005).
    JEL: D83 D84 J31
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc16:145644&r=exp
  26. By: Kazuya Kamiya (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Hajime Kobayashi (Kansai University, Japan); Tatsuhiro Shichijo (Osaka Prefecture University, Japan); Takashi Shimizu (Kobe University, Japan)
    Abstract: It is known that there exists a multiplicity (indeterminacy) of stationary equilibria in search models with divisible money. This paper investigate whether some specific stationary equilibrium is selected through economic experiments. We observe that in some treatments there is a tendency to converge to the most efficient equilibrium. However, as a whole, there remains some degree of indeterminacy.
    Keywords: Real Indeterminacy, Random Matching, Money, Experiment, Equilibrium Selection.
    Date: 2017–03
    URL: http://d.repec.org/n?u=RePEc:kob:dpaper:dp2017-03&r=exp
  27. By: Julie Beugnot (CRESE EA3190, Univ. Bourgogne Franche-Comté, F-25000 Besançon, France); Bernard Fortin (Department of economics, Université Laval, CRREP and CIRANO, Canada); Guy Lacroix (Department of economics, Université Laval, CRREP, IZA and CIRANO, Canada); Marie Claire Villeval (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69130 Ecully, France; IZA, Bonn, Germany)
    Abstract: This paper extends the standard work effort model by allowing workers to interact through networks. We investigate experimentally whether peer performances and peer contextual effects influence individual performances. Two types of network are considered. Participants in Recursive networks are paired with participants who played previously in isolation. In Simultaneous networks, participants interact in real-time along an undirected line. Mean peer effects are identified in both cases. Individual performances increase with peer performances in the recursive network. In the simultaneous network, endogenous peer effects vary according to gender : they are large for men but not statistically different from zero for women.
    Keywords: Peer effects, social networks, work effort, piece rate, experiment
    JEL: C91 J16 J24 J31 M52
    Date: 2017
    URL: http://d.repec.org/n?u=RePEc:gat:wpaper:1711&r=exp
  28. By: Gaudeul, Alexia; Crosetto, Paolo
    Abstract: We present results from a market experiment where firms with identical products can choose not only their price but also the format of their product. Products with different formats are difficult to compare but products with the same format are directly comparable. Savvy consumers buy the lowest priced of those products with the same format. We find that firms are unlikely to adopt the same format if there are many savvy consumers and firms can observe each other’s decisions. Increases in the number of savvy consumers then lead to higher average prices. We argue that tacit collusion is at the origin of this result. Patterns in the evolution of prices give further support to this hypothesis.
    JEL: L15 D18 D43
    Date: 2016
    URL: http://d.repec.org/n?u=RePEc:zbw:vfsc16:145875&r=exp
  29. By: Marini, Marco A.; Corchon, Luis
    Abstract: We introduce here the volume Handbook of Game Theory and Industrial Organization, by L. C. Corchón and M. A. Marini (ed.), Edward Elgar, Cheltenam, UK and Northampton, MA, by describing its main aim and its basic structure.
    Keywords: Industrial Organization, Game Theory.
    JEL: C0 C7 C72 D2 D21 D22 D23 D24 D4 D42 D43 D44 D47 D8 I0 L1 L11 L15 L4 L44 L6 L7
    Date: 2016–12–15
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:77169&r=exp
  30. By: Zubanov, Nick (University of Konstanz); Cadsby, Bram (University of Guelph); Song, Fei (Ryerson University)
    Abstract: We present a model and an experiment that show, in a very general setting, that effort choice under a given linear pay-for-performance contract depends on how the financial risk associated with the scheme interacts with effort. We find that, under a given contract, if risk increases with effort, risk-averse (loving) individuals exert less (more) effort. In contrast, when risk is independent of effort, risk preferences do not affect effort choice. Our findings complement the larger literature on selection into incentive pay by showing that lower effort exerted by the risk-averse under a given incentive contract is another type of behaviour toward risk.
    Keywords: incentives, effort, risk aversion
    JEL: M52
    Date: 2017–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp10542&r=exp

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