nep-exp New Economics Papers
on Experimental Economics
Issue of 2020‒03‒30
twenty-six papers chosen by



  1. Knowledge acquisition or incentive to foster coordination ? A real-effort weak-link experiment with craftsmen. By Mathieu Lefebvre; Lucie Martin-Bonnel de Longchamp
  2. Power to Ignore: An Experimental Study By Chulyoung Kim; Sang-Hyun Kim; Myunghwan Lee
  3. Belief updating: Does the 'good-news, bad-news' asymmetry extend to purely financial domains? By Barron, Kai
  4. Game of Prejudice – Experiments at the Extensive and Intensive Margin By Dasgupta, Utteeyo; Mani, Subha; Vecci, Joe; Želinský, Tomáš
  5. Ethnic and Social Class Discrimination in Education: Experimental Evidence from Germany By Wenz, Sebastian Ernst; Hoenig, Kerstin
  6. Flexible Work Arrangements and Precautionary Behavior: Theory and Experimental Evidence By Orland, Andreas; Rostam-Afschar, Davud
  7. Multilateral Bargaining with Proposer Selection Contest By Duk Gyoo Kim; Sang-Hyun Kim
  8. Mobilizing parents at home and at school: an experiment on primary education in Angola By Vincenzo Di Maro; Stefan Leeffers; Danila Serra; Pedro C. Vicente
  9. Lords and Vassals : Power, Patronage, and the Emergence of Inequality By Akerlof, Robert; Li, Hongyi; Yeo, Jonathan
  10. A Kuhn-Tucker Model for Behaviour in Dictator Games By Peter G Moffatt; Graciela Zevallos-Porles
  11. DO WOMEN SHY AWAY FROM PUBLIC SPEAKING? A FIELD EXPERIMENT By Maria De Paola; Rosetta Lombarso; Valeria Pupo; Vincenzo Scoppa
  12. The effect of a "none of the above" ballot paper option on voting behavior and election outcomes By Ambrus, Attila; Greiner, Ben; Zednik, Anita
  13. How to Improve Tax Compliance? Evidence from Population-wide Experiments in Belgium By De Neve, Jan-Emmanuel; Imbert Clement; Spinnewijn, Johannes; Tsankova, Teodora; Luts, Maarten
  14. Overestimate yourself or underestimate others? Two sources of bias in bargaining with joint production By Quentin Cavalan; Vincent Gardelle; Jean-Christophe Vergnaud
  15. Overestimate yourself or underestimate others? Two sources of bias in bargaining with joint production By Quentin Cavalan; Vincent Gardelle; Jean-Christophe Vergnaud
  16. Provision of noxious facilities using a market-like mechanism: A simple implementation in the lab By Alberti, Federica; Mantilla, César
  17. Ask and You Shall Receive? Gender Differences in Regrades in College By Li, Cher; Zafar, Basit
  18. The Impact of an Adult Literacy Program on the Next Generation: Evidence from India By Ashwini Deshpande; Christopher Ksoll; Annemie Maertens; Vinitha R. Varghese
  19. Perceptions of Coronavirus Mortality and Contagiousness Weaken Economic Sentiment By Thiemo Fetzer; Lukas Hensel; Johannes Hermle; Christopher Roth
  20. What You See Is All There Is By Benjamin Enke
  21. Misinterpreting Others and the Fragility of Social Learning By Mira Frick; Ryota Iijima; Yuhta Ishii
  22. Early Childhood Education and Life-cycle Health By Jorge Luis Garcia; James J. Heckman
  23. Preferences for demand side management—a review of choice experiment studies By Bernadeta Gołębiowska
  24. Who withdraws first? Line formation during bank runs By Hubert J. Kiss; Ismael Rodriguez-Lara; Alfonso Rosa-Garcia
  25. Peer Effects on Violence : Experimental Evidence from El Salvador By Dinarte Diaz,Lelys Ileana
  26. Provision of noxious facilities using a market-like mechanism: A simple implementation in the lab By Mantilla, Cesar; Alberti, Federica

  1. By: Mathieu Lefebvre; Lucie Martin-Bonnel de Longchamp
    Abstract: This paper presents a lab-in-the-field experiment with craftsmen working on renovation projects to assess the effect of training programs and incentive scheme on coordination and cooperation. Workers frequently fail to cooperate and coordinate their tasks when not supervised by a project coordinator. This is particularly important in the construction sector where it leads to a lack of final performance in buildings. We introduce two different incentives: a first contract paying craftsmen only according to their individual performance, and a second contract paying a group of three craftsmen with a weak-link payment according to the group’s worst performance. In addition, we test these incentives on two different subject groups: one is composed of craftsmen trained to coordinate their tasks, and the others are not. The results suggest that trained subjects coordinate at significantly higher effort levels than non-trained subjects when facing an individual-based incentive. However, when facing a group-based incentive, non-trained subjects seem to "catch up" trained subjects in terms of coordination level, while these latter subjects do not significantly increase their performance level.
    Keywords: Coordination, Real-effort weak-link experiment, Semi-Field Experiment, Individual Incentive, Group Incentive.
    JEL: C01 C91 C92 C93
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:ulp:sbbeta:2020-09&r=all
  2. By: Chulyoung Kim (Yonsei Univ); Sang-Hyun Kim (Yonsei Univ); Myunghwan Lee (Yonsei Univ)
    Abstract: Recent studies in experimental economics have documented that communication encourages individuals' altruism and charitable giving in various contexts. Building upon these findings, this paper incorporates and studies the influence of power differences in communication on giving behavior. We conducted a variant of dictator game experiments where a dictator is explicitly allowed to ignore a recipient's message before deciding the split. Power differences between players varied across different treatments on provision of information regarding the dictator’s reception of the message and framing on the property right of the endowment. We find evidence that dictators tend to be more generous toward recipients' messages when recipients cannot verify whether dictators have read the message. We interpret these behaviors as a demonstration of psychological mechanisms of individuals being more generous to less powerful counterparts. However, recipient behaviors imply that they have failed at anticipating dictators behaviors, as they asked for more when they had more power and asked less otherwise.
    Keywords: Dictator game; Communication; Power; Empathy gap
    JEL: C91 D91
    Date: 2020–03
    URL: http://d.repec.org/n?u=RePEc:yon:wpaper:2020rwp-169&r=all
  3. By: Barron, Kai
    Abstract: Bayes' statistical rule remains the status quo for modeling belief updating in both normative and descriptive models of behavior under uncertainty. Some recent research has questioned the use of Bayes' rule in descriptive models of behavior, presenting evidence that people overweight 'good news' relative to 'bad news' when updating ego-relevant beliefs. In this paper, we present experimental evidence testing whether this 'good-news, bad-news' effect is present in a financial decision making context (i.e. a domain that is important for understanding much economic decision making). We find no evidence of asymmetric updating in this domain. In contrast, in our experiment, belief updating is close to the Bayesian benchmark on average. However, we show that this average behavior masks substantial heterogeneity in individual updating behavior. We find no evidence in support of a sizeable subgroup of asymmetric updators.
    Keywords: economic experiments,Bayes' rule,belief updating,belief measurement,proper scoring rules,motivated beliefs
    JEL: C11 C91 D83
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2016309r2&r=all
  4. By: Dasgupta, Utteeyo; Mani, Subha; Vecci, Joe; Želinský, Tomáš
    Abstract: In an unique lab-in-the-field experiment we design a novel labor market environment, the Game of Prejudice, to elicit preferences for discrimination towards the largest minority group in Europe (the Roma) at the intensive margins as well as at the extensive margins. Our unique experiment design allows us to separate taste-based discrimination from statistical discrimination and examine the impacts of raising the costs of discrimination in such situations. We find discrimination to be commonplace at both margins, with stronger incidence at the extensive margin. We also find higher incidence of taste-based discrimination compared to statistical discrimination. Importantly, we find that when the cost of taste-based discrimination is made sufficiently high, such behaviour disappears at the intensive and extensive margins, providing support for labor market policies that make discrimination very costly for the employer.
    Keywords: discrimination,extensive margin,intensive margin,lab-in-the field experiment,Slovakia
    JEL: C9 D3 I1 O1
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:zbw:glodps:499&r=all
  5. By: Wenz, Sebastian Ernst; Hoenig, Kerstin
    Abstract: Even though social class is at least as predictive of educational achievement as ethnicity in virtually all developed countries, experimental research on discrimination in education has overwhelmingly focused on the latter. We investigate both ethnic discrimination and social class discrimination by elementary school teachers in Germany. We conceptualize discrimination as causal effects of signals and use directed acyclic graphs (DAGs) to disentangle ethnic from social class discrimination. In our experiment, we asked randomly sampled elementary school teachers who teach immigrants to evaluate an essay written by a fourth-grader. Employing a 2x2x3 factorial design, we varied essay quality, child's gender, and ethnic and socioeconomic background using names as stimuli. We do not find evidence for discrimination in grading. However, our findings for teachers’ expectations of children's future performance suggest a discriminatory bias along the lines of both ethnicity and social class. The effect is conditional on essay quality---it only holds true for the better essay. We interpret our findings as evidence for models that highlight situational moderators such as the richness of information and ambiguity---e.g., statistical discrimination---but as evidence against simpler models of ingroup-favoritism or outgroup derogation, e.g., social identity theory or taste discrimination.
    Date: 2019–12–24
    URL: http://d.repec.org/n?u=RePEc:osf:socarx:3g4hb&r=all
  6. By: Orland, Andreas; Rostam-Afschar, Davud
    Abstract: In the past years, work time in many industries has become increasingly flexible opening up a new channel for intertemporal substitution. To study this, we set up a two-period model with wage uncertainty. This extends the standard savings model by allowing a worker to allocate a fixed time budget between two work-shifts or to save. To test the existence of these channels, we conduct laboratory consumption/saving experiments. A novel feature of our experiments is that we tie them to a real-effort style task. In four treatments, we turn on and off the two channels for consumption smoothing: saving and time allocation. Our four main findings are: (i) subjects exercise more effort under certainty than under risk; (ii) savings are strictly positive for at least 85 percent of subjects (iii) a majority of subjects uses time allocation to smooth consumption; (iv) saving and time shifting are substitutes, though not perfect substitutes.
    Keywords: precautionary saving,labor supply,intertemporal substitution,experiment
    JEL: D14 E21 J22 C91 D81
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:zbw:glodps:493&r=all
  7. By: Duk Gyoo Kim (Univ of Mannheim); Sang-Hyun Kim (Yonsei Univ)
    Abstract: This study investigates the competition to be selected as the proposer in a subsequent multilateral bargaining game experimentally. The experimental environment varies in two dimensions: reservation payoffs (homogeneous or heterogeneous) and information on the extent of each subject’s investment in the competition (public or private). The proposer’s share was significantly lower than what theory predicts, and with taking into account the proposer’s partial rent extraction, subjects over-invest to increase their chances of winning the right of proposal. More importantly, we find that inefficiency (due to the levels of spending) and inequality go hand in hand; the surplus was distributed most efficiently and most equally when the reservation payoffs were heterogeneous, and subjects were informed of who had spent how much in the competition. The proportion of proposals being rejected was smaller in public treatments than in private treatments. This study contributes to the literature by identifying formal rules that are more effective in establishing efficient informal norms.
    Keywords: Multilateral bargaining, Contest, Public choice, Laboratory experiments
    JEL: C72 C92 D72
    Date: 2019–10
    URL: http://d.repec.org/n?u=RePEc:yon:wpaper:2020rwp-168&r=all
  8. By: Vincenzo Di Maro; Stefan Leeffers; Danila Serra; Pedro C. Vicente
    Abstract: In this paper we test ways to mobilize parents for education. We implemented a field experiment in 126 Angolan primary schools, including three treatments: an information campaign at home, simple parents’ meetings at school, and the combination of both. Our measures of parental mobilization include beneficial practices at home, contacts with teachers, and participation in school institutions. We find that the information increased parents’ involvement at home but had no impact on engagement at school, while the meetings had the opposite effects. After mobilizing parents, the combined treatment improved management practices and facilities in schools, teachers’ attitudes, and parents’ satisfaction.
    Keywords: Parental involvement, information, coordination, field experiment, Angola
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:unl:novafr:wp2002&r=all
  9. By: Akerlof, Robert (University of Warwick); Li, Hongyi (UNSW Business School); Yeo, Jonathan (University of Warwick)
    Abstract: This paper uses a laboratory experiment to study competitions for power — and the role of patronage in such competitions. We construct and analyze a new game — the “chicken-and-egg game” — in which chickens correspond to positions of power and eggs are the game’s currency. We find that power tends to accumulate, through a “power begets power” dynamic, in the hands of “lords.” Other subjects behave like their vassals in the sense that they take lords’ handouts rather than compete against them. We observe substantial wealth inequality as well as power inequality. There are also striking gender differences in outcomes — particularly in rates of lordship. In a second treatment, where we eliminate patronage by knocking out the ability to transfer eggs, inequality is vastly reduced and the “power begets power” dynamic disappears
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:wrk:warwec:1251&r=all
  10. By: Peter G Moffatt (School of Economics and CBESS, University of East Anglia, Norwich.); Graciela Zevallos-Porles (School of International Development and CBESS, University of East Angle, Norwich.)
    Abstract: We consider data from a dictator game experiment in which each dictator is repeatedly exposed to two different treatments: a Giving treatment in which the amount given to the recipient is constrained to be non-negative; and a Taking treatment in which the amount taken from the recipient is constrained to be non-negative. Another key design feature is that the price of transferring is varied between tasks. The data is used to estimate the parameters of a Stone-Geary utility function over own-payoff and other’spayoff. Between-subject heterogeneity is assumed in one of the selfishness parameters. The econometric model incorporates zero observations (e.g. zero-giving or zero-taking) by applying a version of the Kuhn-Tucker theorem and treating zeros as corner solutions in the Dictator’s constrained optimisation problem. The method of maximum simulated likelihood (MSL) is used for estimation. We find that the average dictator exhibits a strong degree of selfishness in the sense of having a high subsistence level for own payoff. However, once this basic need is met, dictators appear willing to share the remaining endowment equally. Above all, we find that selfishness is lower in taking tasks than in giving tasks, and we attribute this difference to the "cold prickle of taking".
    Keywords: Dictator games; Taking games; Kuhn-Tucker conditions; Experimetrics.
    JEL: C57 C91 D64 D91
    Date: 2020–03
    URL: http://d.repec.org/n?u=RePEc:uea:wcbess:20-03&r=all
  11. By: Maria De Paola (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Rosetta Lombarso (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Valeria Pupo (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria); Vincenzo Scoppa (Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF, Università della Calabria)
    Abstract: Public speaking is an important skill for career prospects and for leadership positions, but many people tend to avoid it because it generates anxiety. We run a field experiment to analyze whether in an incentivized setting men and women show differences in their willingness to speak in public. The experiment involved more than 500 undergraduate students who could gain two points to add to the final grade of their exam by orally presenting solutions to a problem set. Students were randomly assigned to present only to the instructor or in front of a large audience (a class of 100 or more). We find that while women are more willing to present faceto-face, they are considerably less likely to give a public presentation. Female aversion to public speaking does not depend on differences in ability, risk aversion, self-confidence and self-esteem. The aversion to public speaking greatly reduces for daughters of working women. From data obtained through an on-line Survey we also show that neither increasing the gains deriving from public speaking nor allowing participants more time to prepare enable to close the gender gap.
    Keywords: Public Speaking, Psychological Gender differences, Gender, Leadership, Glass Ceiling, Field Experiment
    Date: 2020–02
    URL: http://d.repec.org/n?u=RePEc:clb:wpaper:202001&r=all
  12. By: Ambrus, Attila; Greiner, Ben; Zednik, Anita
    Abstract: We investigate how voter and political candidate behavior and election results are affected by an explicit blank vote option “None of the above” (NOTA) on the ballot paper. We report evidence from two online survey experiments conducted in the weeks preceding the 2016 U.S. Presidential Election and the 2016 Austrian run-off election for President. We subjected participants either to the original ballot paper or to a manipulated ballot paper where we added a NOTA option. We find that introducing a NOTA option on the ballot increases participation and reduces the vote shares of non-establishment candidates. NOTA is chosen more frequently by voters with a protest motive, who are either unhappy with the candidate set or with the political establishment in general. Using a laboratory experiment we further explore the reaction of political candidates to the existence of a NOTA option. We replicate our field evidence that NOTA diverts votes from a protest option (e.g. an inferior candidate or policy), thus decreasing the likelihood that the protest option actually wins. However, (establishment) candidates anticipate this shift and become more likely to make unfair policy proposals when NOTA is present. As a result, a NOTA option on the ballot in our laboratory setting improves efficiency but increases inequality.
    Keywords: protest voting, expressive voting
    Date: 2020–03–17
    URL: http://d.repec.org/n?u=RePEc:wiw:wus055:7522&r=all
  13. By: De Neve, Jan-Emmanuel (University of Oxford); Imbert Clement (University of Warwick); Spinnewijn, Johannes (London School of Economics); Tsankova, Teodora (University of Warwick); Luts, Maarten (FPS Finance)
    Abstract: We study the impact of simplification, deterrence and tax morale on tax compliance. We ran five natural field experiments varying the communication of the tax administration with the universe of income taxpayers in Belgium throughout the tax process. A consistent picture emerges across experiments: (i) simplifying communication substantially increases compliance, (ii) deterrence messages have an additional positive effect, (iii) invoking tax morale is not effective, and often backfires. A discontinuity in enforcement intensity, combined with the experimental variation, allows us to compare simplification with standard enforcement measures. We find that simplification is far more cost-effective, allowing for substantial savings on enforcement costs.
    Keywords: Tax Compliance ; Field Experiments ; Simplification ; Enforcement JEL codes: C93 ; D91 ; H20
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:wrk:warwec:1252&r=all
  14. By: Quentin Cavalan (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Panthéon-Sorbonne, PSE - Paris School of Economics); Vincent Gardelle (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Jean-Christophe Vergnaud (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique)
    Abstract: Although conflicts in bargaining have attracted a lot of attention in the literature, situations in which bargainers have to share the product of their performance have been rarely investigated theoretically and empirically. Here, by decomposing the well-known overplacement effect, we show that two types of biases can lead to conflict in these situations: players might be overconfident in their own production (overconfidence bias) and / or underestimate the production of others (other-underestimation bias). To quantify these biases, we develop a novel experimental setting using a psychophysically controlled production task within a bargaining game. In comparison to Bayesian agents, participants tend to disagree too often, partly because they exhibit both cognitive biases. We test interventions to mitigate these biases, and are able to increase settlements mainly by reducing the other-underestimation bias. Our approach illustrates how combining psychophysical methods and economic analyses could prove helpful to identify the impact of cognitive biases on individuals' behavior.
    Keywords: overconfidence,bargaining,joint production,belief updating
    Date: 2020–02
    URL: http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-02492289&r=all
  15. By: Quentin Cavalan (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne, UP1 - Université Panthéon-Sorbonne, PSE - Paris School of Economics); Vincent Gardelle (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne, CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Jean-Christophe Vergnaud (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne, CNRS - Centre National de la Recherche Scientifique)
    Abstract: Although conflicts in bargaining have attracted a lot of attention in the literature, situations in which bargainers have to share the product of their performance have been rarely investigated theoretically and empirically. Here, by decomposing the well-known overplacement effect, we show that two types of biases can lead to conflict in these situations: players might be overconfident in their own production (overconfidence bias) and / or underestimate the production of others (other-underestimation bias). To quantify these biases, we develop a novel experimental setting using a psychophysically controlled production task within a bargaining game. In comparison to Bayesian agents, participants tend to disagree too often, partly because they exhibit both cognitive biases. We test interventions to mitigate these biases, and are able to increase settlements mainly by reducing the other-underestimation bias. Our approach illustrates how combining psychophysical methods and economic analyses could prove helpful to identify the impact of cognitive biases on individuals' behavior.
    Keywords: overconfidence,bargaining,joint production,belief updating
    Date: 2020–02
    URL: http://d.repec.org/n?u=RePEc:hal:journl:halshs-02492289&r=all
  16. By: Alberti, Federica; Mantilla, César
    Abstract: We study the provision of a public project that globally behaves as a public good but locally behaves as a private bad. This scenario imposes two problems: (i) find a compensation that makes the project acceptable for the pre-determined host, and (ii) secure the budget to pay for the project and the required compensation. We use a market-like mechanism with two useful properties for this scenario: players can either contribute or request subsidies to fund the public project, and players have veto power over the desired project quantity. In our game, two players benefit from a waste incinerator, whereas the third group member, the host, is harmed if the facility is too large. We analyze the efficiency and the redistributive potential of this mechanism, with and without communication among group members. We find that the probability of positive provision did not differ with and without communication. However, average provided quantities with respect to the efficient quantity increased from 54% to 81% with communication. We also find that contributions fell below the Lindahl taxes, allowing the players who benefit from a larger facility to accrue most of the efficiency gains. The latter result is consistent with the infrequent evidence of veto threats as a bargaining strategy.
    Keywords: Lab experiment; NIMBY; LULU; Public goods
    JEL: C92 H4 Q58
    Date: 2020–03
    URL: http://d.repec.org/n?u=RePEc:rie:riecdt:35&r=all
  17. By: Li, Cher (Colorado State University); Zafar, Basit (Federal Reserve Bank of New York)
    Abstract: Using administrative data from a large 4-year public university, we show that male students are 18.6 percent more likely than female students to receive favorable grade changes. These gender differences cannot be explained by observable characteristics of the students, instructors, and the classes. Surveys of students and instructors reveal that regrade requests are prevalent, and that male students are more likely than female students to ask for regrades on the intensive margin. We corroborate the gender differences in regrade requests in an incentivized controlled experiment where participants receive noisy grade signals, and where they can ask for regrades: we find that males have a higher willingness to pay (WTP) for regrades. Almost half of the gender difference in the WTP is due to gender differences in confidence, uncertainty in beliefs, and the Big Five personality traits.
    Keywords: education, gender, inequality, negotiation, experiment
    JEL: C9 I2 J7
    Date: 2020–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp12983&r=all
  18. By: Ashwini Deshpande (Ashoka University); Christopher Ksoll (Mathematica Policy Research); Annemie Maertens (University of Sussex); Vinitha R. Varghese (University of Illinois at Chicago)
    Abstract: We use a randomized controlled trial to evaluate the impacts of an adult literacy program, targeting women in rural India, on a broad range of outcomes one year later. We show that the program had significant impacts on multiple aspects of the women’s lives, such as improvements in the women’s health and hygiene practices, as well as increased involvement in their children’s education (but noted no differences in terms of health and educational outcomes of the children). In terms of mechanisms, we find that the program not only increased the women’s literacy and numeracy, but also made the women more knowledgeable, and confident in dealing with people outside their family. We document positive effects on women’s mobility, and some measures of bargaining power, but overall decision-making power appears not to have been affected.
    Keywords: adult literacy; gender, India, child health; child education
    Date: 2020–03
    URL: http://d.repec.org/n?u=RePEc:ash:wpaper:26&r=all
  19. By: Thiemo Fetzer; Lukas Hensel; Johannes Hermle; Christopher Roth
    Abstract: We provide the first analysis on how fear of the novel coronavirus affects current economic sentiment. First, we collect a global dataset on internet searches indicative of economic anxieties, which serve as a leading indicator of subsequent aggregate demand contractions. We find that the arrival of coronavirus in a country leads to a substantial increase in such internet searches of up to 58 percent. Second, to understand how information about the coronavirus drives economic anxieties, we conduct a survey experiment in a representative sample of the US population. We find that participants vastly overestimate mortality from and contagiousness of the virus. Providing participants with information regarding these statistics substantially lowers participants' expectations about the severity of the crisis and participants' worries regarding the aggregate economy and their personal economic situation. These results suggest that factual public education about the virus will help to contain spreading economic anxiety and improve economic sentiment.
    Date: 2020–03
    URL: http://d.repec.org/n?u=RePEc:arx:papers:2003.03848&r=all
  20. By: Benjamin Enke
    Abstract: News reports and communication are inherently constrained by space, time, and attention. As a result, news sources often condition the decision of whether to share a piece of information on the similarity between the signal and the prior belief of the audience, which generates a sample selection problem. This paper experimentally studies how people form beliefs in these contexts, in particular the mechanisms behind errors in statistical reasoning. I document that a substantial fraction of experimental participants follows a simple “what you see is all there is” heuristic, according to which they exclusively take into account information that is right in front of them, and directly use the sample mean to estimate the population mean. A series of treatments aimed at identifying mechanisms suggests that for many participants unobserved signals do not even come to mind. I provide causal evidence that the frequency of such incorrect mental models is a function of the computational complexity of the decision problem. These results point to the context-dependence of what comes to mind and the resulting errors in belief updating.
    Keywords: bounded rationality, mental models, complexity, beliefs
    JEL: D03 D80 D84
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_8131&r=all
  21. By: Mira Frick (Cowles Foundation, Yale University); Ryota Iijima (Cowles Foundation, Yale University); Yuhta Ishii (Centro de Investigación Económica, ITAM)
    Abstract: We exhibit a natural environment, social learning among heterogeneous agents, where even slight misperceptions can have a large negative impact on long-run learning outcomes. We consider a population of agents who obtain information about the state of the world both from initial private signals and by observing a random sample of other agents' actions over time, where agents' actions depend not only on their beliefs about the state but also on their idiosyncratic types (e.g., tastes or risk attitudes). When agents are correct about the type distribution in the population, they learn the true state in the long run. By contrast, we show, first, that even arbitrarily small amounts of misperception about the type distribution can generate extreme breakdowns of information aggregation, where in the long run all agents incorrectly assign probability 1 to some fixed state of the world, regardless of the true underlying state. Second, any misperception of the type distribution leads long-run beliefs and behavior to vary only coarsely with the state, and we provide systematic predictions for how the nature of misperception shapes these coarse long-run outcomes. Third, we show that how fragile information aggregation is against misperception depends on the richness of agents' payoff-relevant uncertainty; a design implication is that information aggregation can be improved by simplifying agents' learning environment. The key feature behind our findings is that agents' belief-updating becomes "decoupled" from the true state over time. We point to other environments where this feature is present and leads to similar fragility results.
    Keywords: Misspecification, Social learning, Information aggregation, Fragility
    JEL: C70 D80 D83
    Date: 2019–01
    URL: http://d.repec.org/n?u=RePEc:cwl:cwldpp:2160r&r=all
  22. By: Jorge Luis Garcia (Clemson University); James J. Heckman (The University of Chicago)
    Abstract: This paper forecasts the life-cycle treatment effects on health of a high-quality early childhood program. Our predictions combine microsimulation using non-experimental data with experimental data from a midlife long-term follow-up. The follow-up incorporated a full epidemiological exam. The program mainly benefits males and significantly reduces the prevalence of heart disease, stroke, cancer, and mortality across the life-cycle. For men, we estimate an average reduction of 3.8 disability-adjusted years (DALYs). The reduction in DALYs is relatively small for women. The gain in quality-adjusted life years (QALYs) is almost enough to offset all of the costs associated with program implementation for males and half of program costs for women.
    Keywords: early childhood education, life-cycle health, long-term forecasts, program evaluation, randomized trials
    JEL: I10 J13 I28 C93
    Date: 2020–03
    URL: http://d.repec.org/n?u=RePEc:hka:wpaper:2020-011&r=all
  23. By: Bernadeta Gołębiowska (Faculty of Economic Sciences, University of Warsaw)
    Abstract: This review of choice experiment (CE) studies deals with the valuation of electricity supply attributes in the residential sector. We consider the willingness to pay and the willingness to accept changes in the electricity supply. The results could be used to determine consumers’ preferences for demand-side management (DSM) programs and could serve as a reference for formulating policies. DSM is an option for constructing a low-carbon electricity system, improving energy efficiency, and achieving the sustainable development of an economy. The results from CEs justify investment in new solutions. The research shows that consumers are open to DSM, but they prefer simple programs to complex ones. Decision-makers could introduce DSM programs that enable power outages and provide compensation for households. The societal advantages of DSM are not obvious to consumers, so the implementation of DSM requires communication and more research on peoples’ preferences.
    Keywords: choice experiments, demand-side management, energy, households, review
    JEL: C25 D19 Q41 Q48
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:war:wpaper:2020-05&r=all
  24. By: Hubert J. Kiss (Department of Economics, Eotvos Lorand University.); Ismael Rodriguez-Lara (Department of Economic Theory and Economic History, University of Granada.); Alfonso Rosa-Garcia (Department of Economics, University of Murcia.)
    Abstract: We study how lines form in front of banks. In our model, depositors choose first the level of effort to arrive early at the bank and then whether or not to withdraw their deposit. We argue that the informational environment (i.e. the possibility of observing the action of others) affects the emergence of bank runs and should, therefore, influence the line formation. We test it experimentally and find that the informational environment has no effect on the line formation, while expectations on the occurrence of bank runs, irrationality of depositors and their loss aversion are important factors to explain it.
    Keywords: bank run, beliefs, experimental economics, line formation, loss aversion, observability.
    JEL: C91 D90 G21 J16
    Date: 2020–03–15
    URL: http://d.repec.org/n?u=RePEc:gra:wpaper:20/02&r=all
  25. By: Dinarte Diaz,Lelys Ileana
    Abstract: This paper provides experimental evidence of the effect of having peers with different propensities for violence in the context of an afterschool program. By randomly assigning students to participate in the program with a set of similar or diverse peers in terms of violence, the study measures the effects of segregation or integration on students'behavioral, neurophysiological, and academic outcomes. The paper also exploits a discontinuity around the median of the propensity for violence distribution, to measure the impacts of segregation on marginal students. The results indicate that integrating students with different propensities for violence is better for highly and less violent children than segregating them. In particular, the intervention can have unintended effects on misbehavior and stress, if highly violent students are segregated and treated separately from their less violent peers.
    Date: 2020–03–17
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:9187&r=all
  26. By: Mantilla, Cesar; Alberti, Federica
    Abstract: We study the provision of a public project that globally behaves as a public good but locally behaves as a private bad. This scenario imposes two problems: (i) finding a compensation that makes the project acceptable for the pre-determined host, and (ii) securing the budget to pay for the project and the required compensation. We use a market-like mechanism with two useful properties for this scenario: players can either contribute or request subsidies to fund the public project, and players have veto power over the desired project quantity. In our game, two players benefit from a waste incinerator facility, whereas the third group member, the host, is harmed if the facility is too large. We analyze the efficiency and the re-distributive potential of this mechanism, with and without communication, among group members. We find that the probability of positive provision did not differ with and without communication. However, average provided quantities with respect to the efficient quantity increased from 54% to 81% with communication. We also find that contributions fell below the Lindahl taxes, allowing the players who benefit from a larger facility to accrue most of the efficiency gains. The latter result is consistent with the infrequent evidence of veto threats as a bargaining strategy.
    Date: 2020–03–19
    URL: http://d.repec.org/n?u=RePEc:osf:socarx:5qtac&r=all

General information on the NEP project can be found at https://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.