nep-exp New Economics Papers
on Experimental Economics
Issue of 2021‒02‒22
twenty-two papers chosen by



  1. Classroom experiments on technology licensing: Royalty stacking, cross-licensing and patent pools By Haugen, Atle; Juranek, Steffen
  2. Does flood experience modify risk preferences? Evidence from an artefactual field experiment in Vietnam By Arnaud Reynaud; Cécile Aubert
  3. Gender Differences in Repeated Dishonest Behavior: Experimental Evidence By Subhasish M. Chowdhury; Joo Young Jeon; Chulyoung Kim; Sang-Hyun Kim
  4. How to Design the Ask? Funding Units vs. Giving Money By Diederich, Johannes; Epperson, Raphael; Goeschl, Timo
  5. Economic Preferences and Personality Traits Among Finance Professionals and the General Population By Martin Holmen; Felix Holzmeister; Michael Kirchler; Matthias Stefan; Erik Wengström
  6. Beliefs in Repeated Games By Masaki Aoyagi; Guillaume Frechette; Sevgi Yuksel
  7. Hiding Behind Machines: When Blame Is Shifted to Artificial Agents By Till Feier; Jan Gogoll; Matthias Uhl
  8. Biases in information selection and processing: Survey evidence from the pandemic By Faia, Ester; Fuster, Andreas; Pezone, Vincenzo; Zafar, Basit
  9. The Banker's Oath And Financial Advice By Utz Weitzel; Michael Kirchler
  10. The corruptive force of AI-generated advice By Margarita Leib; Nils C. K\"obis; Rainer Michael Rilke; Marloes Hagens; Bernd Irlenbusch
  11. Checking Out Checkout Charity: A Study of Point-of-Sale Donation Campaigns By Adrienne W. Sudbury; Christian A. Vossler
  12. Strategic Uncertainty and Probabilistic Sophistication By Masaki Aoyagi; Takehito Masuda; Naoko Nishimura
  13. The Influence of Dietary Patterns on Outcomes in a Bayesian Choice Task By David L. Dickinson; Eugenio Caleb Garbuio
  14. The Status Quo and Belief Polarization of Inattentive Agents: Theory and Experiment By Vladimir Novak; Andrei Matveenko; Silvio Ravaioli
  15. Effective Policy Communication: Targets versus Instruments By Francesco D'Acunto; Daniel Hoang; Maritta Paloviita; Michael Weber
  16. Productivity Versus Motivation in Adolescent Human Capital Production: Evidence from a Structurally-Motivated Field Experiment By Christopher S. Cotton; Brent R. Hickman; John A. List; Joseph Price; Sutanuka Roy
  17. Evaluating Contradictory Experimental and Non-Experimental Estimates of Neighborhood Effects on Economic Outcomes for Adults By David J. Harding; Lisa Sanbonmatsu; Greg J. Duncan; Lisa A. Gennetian; Lawrence F. Katz; Ronald C. Kessler; Jeffrey R. Kling; Matthew Sciandra; Jens Ludwig
  18. Conditional Cash Transfers and the Learning Crisis : Evidence from Tayssir Scale-up in Morocco By Jules Gazeaud; Claire Ricard
  19. A Theory of Choice Bracketing under Risk By Mu Zhang
  20. Eliciting Time Preferences When Income and Consumption Vary: Theory, Validation & Application to Job Search By Belot, Michèle; Kircher, Philipp; Muller, Paul
  21. How Do People Trade Off Resources Between Quick and Slow Learners? By Ranveig Falch
  22. Kinks as Goals: Accelerating Commissions and the Performance of Sales Teams By Kuhn, Peter J.; Yu, Lizi

  1. By: Haugen, Atle (Dept. of Business and Management Science, Norwegian School of Economics); Juranek, Steffen (Dept. of Business and Management Science, Norwegian School of Economics)
    Abstract: We present two classroom experiments on technology licensing. The first classroom experiment introduces the concept of royalty stacking. The students learn that non-cooperative pricing of royalties for complementary intellectual property rights leads to a double-marginalization effect. Cooperation solves the problem and is welfare improving. The second classroom experiment introduces students to cross-licensing. It shows that reciprocal royalty payments dampen competition. The classroom experiments stimulate discussions of technology licensing, intellectual property rights, different royalty structures, patent pools and technology standards. We present the experimental procedures, and suggests routes for the discussion.
    Keywords: Licensing; royalty stacking; cross-licensing; patent pools; classroom experiment
    JEL: A20 L24 O30
    Date: 2021–02–11
    URL: http://d.repec.org/n?u=RePEc:hhs:nhhfms:2021_003&r=all
  2. By: Arnaud Reynaud (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Cécile Aubert (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: We conducted an artefactual field experiment in Vietnam to investigate whether and how experiencing a natural disaster affects individual attitudes toward risks. Using experimental and real household data, we show that households in villages affected by a flood in recent years exhibit more risk aversion, compared with individuals living in similar but unaffected villages. Interestingly, this result holds for the loss domain, but not the gain domain. In line with Prospect Theory, Vietnamese households distort probabilities. The distortion is related to aid received and social networks participation, but is unrelated to flood experience.
    Keywords: Field experiment,Vietnam,Flood,Non-expected utility,Risk preferences
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:hal:journl:hal-03050685&r=all
  3. By: Subhasish M. Chowdhury (University of Bath); Joo Young Jeon (University of Reading); Chulyoung Kim (Yonsei Univ); Sang-Hyun Kim (Yonsei Univ)
    Abstract: We investigate gender difference in lying behavior when the opportunity to tell lies is repeated. In specific, we distinguish the situations in which such an opportunity can be planned versus when it comes as a surprise. We use data from an existing study (Chowdhury et al., 2021) and show that when the opportunity to tell a lie comes as a surprise, then on the first occasion, males lie more than females. However, when telling lies can be planned, there is no gender difference in telling a lie. When planning is possible, females tell more lies in the first occasion than when it is not. Males do not show such behavior. On the second and final occasion, males lie more than females only when they either could not plan but had an opportunity to lie before or could plan but did not have to tell a lie before.
    Keywords: Dishonesty; Lying; Pre-planning; Gender
    JEL: C91 D01 D91 J16
    Date: 2021–01
    URL: http://d.repec.org/n?u=RePEc:yon:wpaper:2021rwp-184&r=all
  4. By: Diederich, Johannes; Epperson, Raphael; Goeschl, Timo
    Abstract: Charities frequently deviate from the standard donation scheme in which potential donors are asked how much money they are willing to give. Instead, they ask donors to choose how many units of a charitable good (e.g. meals, bed nets, or trees) to fund at a given unit price. In an onlne donation experiment, we compare the performance of such a "unit donation" scheme with that of the standard "money donation" and investigate the factors that could explain differences. We find that despite the additional demands that it imposes on the charity, the unit donation does not outperform the money donation scheme in terms of overall donations. It significantly differs, however, with respect tot the propensity to give. The sign of the difference depends on the granularity of the scheme. When one unit of the charitable good is cheap, unit donation schemes increase the propensity to give and can serve as an effective tool for recruiting donors.
    Keywords: charitable giving; unit donation; aid effectiveness; restricted choice; Framing-Effekt
    Date: 2021–02–01
    URL: http://d.repec.org/n?u=RePEc:awi:wpaper:0698&r=all
  5. By: Martin Holmen; Felix Holzmeister; Michael Kirchler; Matthias Stefan; Erik Wengström
    Abstract: Since the financial crisis, the behavior and personality traits of finance professionals have come under scrutiny. As comprehensive scientific findings are lacking, we run artefactual field experiments with finance professionals and a random sample of the working population to investigate differences across industry-relevant economic preferences and personality traits. We report that finance professionals are more risk tolerant, more selfish, less trustworthy, and show higher levels of narcissism, psychopathy, and Machiavellianism. However, we find that many of these differences disappear after adjusting for socioeconomic characteristics, indicating that finance professionals are similar to employees in other industries with a comparable socio-economic background.
    Keywords: experimental finance, economic preferences, personality traits, finance professionals, general working population
    JEL: C93 G11 G41
    Date: 2021–03
    URL: http://d.repec.org/n?u=RePEc:inn:wpaper:2021-03&r=all
  6. By: Masaki Aoyagi; Guillaume Frechette; Sevgi Yuksel
    Abstract: This paper uses a laboratory experiment to study beliefs and their relationship to action and strategy choices in finitely and indefinitely repeated prisoners' dilemma games. We find subjects' beliefs about the other player's action are accurate despite some systematic deviations corresponding to early pessimism in the indefinitely repeated game and late optimism in the finitely repeated game. The data reveals a close link between beliefs and actions that differs between the two games. In particular, the same history of play leads to different beliefs, and the same belief leads to different action choices in each game. Moreover, we find beliefs anticipate the evolution of behavior within a supergame, changing in response to the history of play (in both games) and the number of rounds played (in the finitely repeated game). We then use the subjects' beliefs over actions in each round to identify their beliefs over supergame strategies played by the other player. We find these beliefs correctly capture the different classes of strategies used in each game. Importantly, subjects using different strategies have different beliefs, and for the most part, strategies are subjectively rational given beliefs. The results also suggest subjects tend to overestimate the likelihood that others use the same strategy as them, while underestimating the likelihood that others use less cooperative strategies.
    Date: 2021–02
    URL: http://d.repec.org/n?u=RePEc:dpr:wpaper:1119&r=all
  7. By: Till Feier; Jan Gogoll; Matthias Uhl
    Abstract: The transfer of tasks with sometimes far-reaching moral implications to autonomous systems raises a number of ethical questions. In addition to fundamental questions about the moral agency of these systems, behavioral issues arise. This article focuses on the responsibility of agents who decide on our behalf. We investigate the empirically accessible question of whether the production of moral outcomes by an agent is systematically judged differently when the agent is artificial and not human. The results of a laboratory experiment suggest that decision-makers can actually rid themselves of guilt more easily by delegating to machines than by delegating to other people. Our results imply that the availability of artificial agents could provide stronger incentives for decision makers to delegate morally sensitive decisions.
    Date: 2021–01
    URL: http://d.repec.org/n?u=RePEc:arx:papers:2101.11465&r=all
  8. By: Faia, Ester; Fuster, Andreas; Pezone, Vincenzo; Zafar, Basit
    Abstract: How people form beliefs is crucial for understanding decision-making under uncertainty. This is particularly true in a situation such as a pandemic, where beliefs will affect behaviors that impact public health as well as the aggregate economy. We conduct two survey experiments to shed light on potential biases in belief formation, focusing in particular on the tone of information people choose to consume and how they incorporate this information into their beliefs. In the first experiment, people express their preferences over pandemic-related articles with optimistic and pessimistic headlines, and are then randomly shown one of the articles. We find that respondents with more pessimistic prior beliefs about the pandemic are substantially more likely to prefer pessimistic articles, which we interpret as evidence of confirmation bias. In line with this, respondents assigned to the less preferred article rate it as less reliable and informative (relative to those who prefer it); they also discount information from the article when it is less preferred. We further find that these motivated beliefs end up impacting incentivized behavior. In a second experiment, we study how partisan views interact with information selection and processing. We find strong evidence of source dependence: revealing the news source further distorts information acquisition and processing, eliminating the role of prior beliefs in article choice.
    Keywords: Belief updating,confirmatory biases,endogenous information acquisition,media polarization,source dependence,COVID-19
    JEL: D84 D91 E71 I12
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:zbw:safewp:307&r=all
  9. By: Utz Weitzel; Michael Kirchler
    Abstract: Financial misbehavior is widespread and costly. The Dutch government legally requires every employee in the financial sector to take a Hippocratic oath, the so-called "banker's oath." We investigate whether moral nudges that directly and indirectly remind financial advisers of their oath affect their service. In a large-scale audit study, professional auditors confronted 201 Dutch financial advisers with a conflict of interest. We find that when auditors apply a moral nudge, referring to the banker's oath, advisers are less likely to prioritize bank's interests. In additional prediction tasks, we find that Dutch regulators expect stronger effects of the oath than observed.
    Keywords: experimental finance, audit study, banker?s oath, moral nudges, financial advice
    JEL: C92 D84 G02 G14
    Date: 2021–04
    URL: http://d.repec.org/n?u=RePEc:inn:wpaper:2021-04&r=all
  10. By: Margarita Leib; Nils C. K\"obis; Rainer Michael Rilke; Marloes Hagens; Bernd Irlenbusch
    Abstract: Artificial Intelligence (AI) is increasingly becoming a trusted advisor in people's lives. A new concern arises if AI persuades people to break ethical rules for profit. Employing a large-scale behavioural experiment (N = 1,572), we test whether AI-generated advice can corrupt people. We further test whether transparency about AI presence, a commonly proposed policy, mitigates potential harm of AI-generated advice. Using the Natural Language Processing algorithm, GPT-2, we generated honesty-promoting and dishonesty-promoting advice. Participants read one type of advice before engaging in a task in which they could lie for profit. Testing human behaviour in interaction with actual AI outputs, we provide first behavioural insights into the role of AI as an advisor. Results reveal that AI-generated advice corrupts people, even when they know the source of the advice. In fact, AI's corrupting force is as strong as humans'.
    Date: 2021–02
    URL: http://d.repec.org/n?u=RePEc:arx:papers:2102.07536&r=all
  11. By: Adrienne W. Sudbury (College of Business and Economics, Longwood University, VA 23909); Christian A. Vossler (Department of Economics, University of Tennessee)
    Abstract: There has been a proliferation of point-of-sale donation campaigns, where people are asked to donate following an unrelated transaction, and it is natural to ask how giving varies according to the solicitation methods used. We use an experiment to compare three popular solicitation mechanisms: a fixed donation request (yes or no to a randomly assigned amount); a rounding request (yes or no to an endogenous amount); and an open-ended ask. For requested amounts less than $1, participants in the rounding treatments were much more likely to donate. Differences in donation rates between the rounding and fixed request treatments appear to be driven by “loose-change effects,†whereby individuals are more likely to donate if they would have less change as a result of the prior cash transaction. The fixed donation request results in a higher mean willingness-to-donate and a lower income elasticity of donating when compared to open-ended. We also examine the effects of providing (limited) information on the charity, and find that this increases revenue and donation rates, but only for the fixed request mechanism. This result may also be explained by loose-change effects.
    Keywords: charitable giving; checkout charity; solicitation methods; altruism; social pressure; experiments
    JEL: C91 D64 H00
    Date: 2021–02
    URL: http://d.repec.org/n?u=RePEc:ten:wpaper:2021-01&r=all
  12. By: Masaki Aoyagi; Takehito Masuda; Naoko Nishimura
    Abstract: This paper uses laboratory experiments to study subjects' assessment of uncertainty resulting from strategic and non-strategic decisions of other players. Non-strategic events are defined by the colors of balls drawn from urns, whereas strategic events are defined by the action choice in Stag Hunt (SH) and Prisoners' Dilemma (PD) games. We elicit subjects' matching probabilities and examine if they satisfy the law of probability including monotonicity and additivity. Violations from the law are observed for both uncertainty sources, but are more substantial for strategic uncertainty. In particular, we observe a coordination fallacy, a violation of monotonicity whereby the probability weight placed on a symmetric coordination profile of the games exceeds that placed on the corresponding action choice. The violation is found to be severer for an efficient coordination profile.
    URL: http://d.repec.org/n?u=RePEc:dpr:wpaper:1117&r=all
  13. By: David L. Dickinson; Eugenio Caleb Garbuio
    Abstract: This paper reports on a preregistered study aimed at testing for executive function differences across individuals who self-reported one of four distinct dietary patterns: No Diet, No Sugar, Vegetarian, and Mediterranean Diet patterns. The incentivized decision task involves Bayesian assessments where participants may use existing (base rate) as well as new information (sample draw evidence) in making probability assessments. Sample size, hypotheses, and analysis plans were all determined ex ante and registered on the Open Science Framework. Our hypotheses were aimed at testing whether adherence to a specialty diet improved decision making relative to those who reported following No Diet. Our data fail to support these hypotheses. In fact, we found some evidence that adherence to a No Sugar Diet predicted a reduced decision accuracy and was connected to an increased imbalance in how the participant weighted the two sources of information available. Our results suggest that decision making is nuanced among dietary groups, but that short-term incentivized decisions in an ecologically valid field setting are likely not improved solely by following a promoted diet such as the Mediterranean or Vegetarian diet. Key Words:
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:apl:wpaper:21-01&r=all
  14. By: Vladimir Novak; Andrei Matveenko; Silvio Ravaioli
    Abstract: We show that rational but inattentive agents can become polarized, even in expectation. This is driven by agents’ choice of not only how much information to acquire, but also what type of information. We present how optimal information acquisition, and subsequent belief formation, depends crucially on the agent-specific status quo valuation. Beliefs can systematically update away from the realized truth and even agents with the same initial beliefs might become polarized. We design a laboratory experiment to test the model’s predictions; the results confirm our predictions about the mechanism (rational information acquisition) and its effect on beliefs (systematic polarization). Keywords: polarization, beliefs updating, rational inattention, status quo, experiment. JEL codes: C92, D72, D83, D84, D91
    Date: 2021
    URL: http://d.repec.org/n?u=RePEc:igi:igierp:674&r=all
  15. By: Francesco D'Acunto (Boston College - Carroll School of Management); Daniel Hoang (Karlsruhe Institute of Technology - Department for Finance and Banking); Maritta Paloviita (Bank of Finland); Michael Weber (University of Chicago - Booth School of Business; NBER)
    Abstract: Communication targeting households and ï¬ rms has become a stand-alone policy tool of many central banks. But which forms of communication, if any, can reach ordinary people and manage their economic expectations effectively? In a large-scale randomized control trial, we show that communication manages expectations when it focuses on policy targets and objectives rather than on the instruments designed to reach such objectives. It is especially the least sophisticated demographic groups, which central banks typically struggle to reach, who react more to target-based communication. When exposed to target-based communication, these groups are also more likely to believe that policies will beneï¬ t households and the economy. Target-based communication enhances policy effectiveness and contributes to strengthen the public’s trust in central banks, which is crucial to guarantee the credibility of their policies.
    Keywords: Behavioral macroeconomics, heterogeneous beliefs, limited cognition, expectations formation, household finance
    JEL: D12 D84 D91 E21 E31 E32 E52 E65
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:bfi:wpaper:2020-148&r=all
  16. By: Christopher S. Cotton (Queen’s University - Department of Economics); Brent R. Hickman (Washington University in St. Louis - Olin Business School); John A. List (University of Chicago - Department of Economics; Australian National University; NBER); Joseph Price (Brigham Young University - Department of Economics); Sutanuka Roy (University of Chicago - Department of Economics, Australian National University)
    Abstract: We leverage a field experiment across three distinct school districts to identify key pieces of a structural model of adolescent human capital production. Our focus is inspired by the contemporary psychology of education literature, which expresses learning as a function of the ratio of the time spent on learning to the time needed to learn. By capturing two crucial student-level unobservables—which we denote as academic efficiency (turning inputs into outputs) and time preference (motivation)—our field experiment lends insights into the underpinnings of adolescent skill formation and provides a novel view of how to lessen racial and gender achievement gaps. One general insight is that students who are falling behind their peers, whether correlated to race, gender, or school district, are doing so because of academic efficiency rather than time preference. We view this result, and others found in our data, as fundamental to practitioners, academics, and policymakers interested in designing strategies to provide equal opportunities to students.
    Keywords: Adolescent human capital; field experiment; structural econometrics; psychology of education
    JEL: C93 I21 I24 J22 J24
    Date: 2020
    URL: http://d.repec.org/n?u=RePEc:bfi:wpaper:2020-150&r=all
  17. By: David J. Harding; Lisa Sanbonmatsu; Greg J. Duncan; Lisa A. Gennetian; Lawrence F. Katz; Ronald C. Kessler; Jeffrey R. Kling; Matthew Sciandra; Jens Ludwig
    Abstract: Although non-experimental studies find robust neighborhood effects on adults, such findings have been challenged by results from the Moving to Opportunity (MTO) residential mobility experiment. Using a within-study comparison design, this paper compares experimental and non-experimental estimates from MTO and a parallel analysis of the Panel Study of Income Dynamics (PSID). Striking similarities were found between non-experimental estimates based on MTO and PSID. No clear evidence was found that different estimates are related to duration of adult exposure to disadvantaged neighborhoods, non-linear effects of neighborhood conditions, magnitude of the change in neighborhood context, frequency of moves, treatment effect heterogeneity, or measurement, although uncertainty bands around our estimates were sometimes large. One other possibility is that MTO-induced moves might have been unusually disruptive, but results are inconsistent for that hypothesis. Taken together, the findings suggest that selection bias might account for evidence of neighborhood effects on adult economic outcomes in non-experimental studies.
    JEL: H0 I3 J0
    Date: 2021–02
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:28454&r=all
  18. By: Jules Gazeaud; Claire Ricard (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We use a regression discontinuity design in rural Morocco to study whether the enrollment gains from conditional cash transfer programs translate into learning benefits. Unlike most previous studies, we estimate the effects of a sustained exposure during whole primary school. We find small and seemingly negative effects on test scores at the end-of-primary school exam. Concomitant increases in class size suggest that the program constrained learning by putting additional pressure on existing resources in beneficiary areas. These results are particularly relevant for settings where transfers are geographically targeted with no measures to absorb the extra influx of students.
    Keywords: Learning outcomes,Conditional cash Transfers,Morocco
    Date: 2021–02
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03137463&r=all
  19. By: Mu Zhang
    Abstract: Aggregating risks from multiple sources can be complex and demanding, and decision makers usually adopt heuristics to simplify the decision process. This paper axiomatizes two such heuristics, narrow bracketing and correlation neglect, by relaxing the standard independence axiom in the expected utility benchmark. Our representation theorem allows for either narrow bracketing, or correlation neglect, or both of them. The flexibility of our framework allows for applications in various setups. For example, we accommodate the experimental evidence in narrow bracketing and risk aversion over small gambles with background risk. In intertemporal choices, we show how our framework unifies three seemingly distinct models in the literature and introduce a new model that can satisfy many desirable normative properties in time preferences simultaneously, including indifference to temporal resolution of uncertainty, dynamic consistency and separation of time and risk preferences. One special class of the model shares the same predictions as Epstein and Zin (1989) in macroeconomics and finance applications, and is immune to the critique in Epstein, Farhi, and Strzalecki (2014).
    Date: 2021–02
    URL: http://d.repec.org/n?u=RePEc:arx:papers:2102.07286&r=all
  20. By: Belot, Michèle (Cornell University); Kircher, Philipp (Cornell University); Muller, Paul (Vrije Universiteit Amsterdam)
    Abstract: We propose a simple method for eliciting individual time preferences without estimating utility functions even in settings where background consumption changes over time. It relies on lottery tickets with high rewards. In a standard intertemporal choice model high rewards decouple lottery choices from variation in background consumption. We validate our elicitation method experimentally on two student samples: one asked in December when their current budget is reduced by extraordinary expenditures for Christmas gifts; the other asked in February when no such extra constraints exist. We illustrate an application of our method with unemployed job seekers which naturally have income/consumption variation.
    Keywords: time preferences, experimental elicitation, job search, hyperbolic discounting
    JEL: D90 J64
    Date: 2021–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp14091&r=all
  21. By: Ranveig Falch (Max Planck Institute for Research on Collective Goods)
    Abstract: How society invests in human capital is important for economic growth and social welfare. The paper reports from the first experiment designed to elicit people’s preferences for how to prioritize educational resources, where 2,000 Americans trade off educational resources between quick and slow learners. I find that they give strong priority to slow learners and assign two thirds of the educational resources to this group. Both cost efficiency and the motivation of the learners causally affect the resource allocation. The findings provide important insights for the present policy debate on how to distribute educational resources in society.
    Keywords: Human capital investment, preferences, inequality, experiment, education
    JEL: C91 D01 D30 D63 I24 I28
    Date: 2021–02–09
    URL: http://d.repec.org/n?u=RePEc:mpg:wpaper:2021_04&r=all
  22. By: Kuhn, Peter J. (University of California, Santa Barbara); Yu, Lizi (University of Queensland)
    Abstract: We study the performance of small retail sales teams facing an incentive scheme that includes both a lump sum bonus and multiple accelerators (kinks where the piece rate jumps upward). Consistent with standard labor supply models, we find that the presence of an attainable bonus or kink on a work-day raises mean sales, and that sales are highly bunched at the bonus; inconsistent with those models we find that teams bunch at the kinks instead of avoiding them. Teams' responses to the kinks are consistent with models in which the kinks are perceived as symbolic rewards, and inconsistent with reference point models where kinks induce loss aversion.
    Keywords: teams, bonuses, bunching, accelerators, symbolic rewards, loss aversion
    JEL: J33 M12
    Date: 2021–02
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp14115&r=all

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