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on Experimental Economics |
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Issue of 2013‒07‒15
33 papers chosen by |
| By: | Jason Shachat (Wang Yanan Institute for Studies in Economics (WISE) and the MOE Key Laboratory in Econometrics, Xiamen University, Xiamen, Fujian Province, 361005, China); J. Todd Swarthout (Department of Economics, Georgia State University, Atlanta, GA, 30303, USA) |
| Abstract: | We conduct an experiment in which we auction the scarce rights to play the Proposer and Responder positions in subsequent ultimatum games. As a control treatment, we randomly allocate these rights and then charge exogenous participation fees according to the auction price sequences observed in the auction treatment. With endogenous selection into ultimatum games via auctions, we find that play converges to a session-specific Nash equilibrium and auction prices emerge which support this equilibrium by the principle of forward induction. With random assignment and exogenous participation fees, we find play also converges to a session-specific Nash equilibrium as predicted by the principle of loss avoidance. The Nash equilibrium observed within a session results in low ultimatum game offers, but the subgame perfect Nash equilibrium is never observed. |
| Keywords: | Ultimatum Bargaining, Auction, Forward Induction |
| JEL: | C92 C78 D44 |
| Date: | 2013–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:fee:wpaper:1301&r=exp |
| By: | Jason Shachat (The Wang Yanan Institute for Studies in Economics and MOE Key Laboratory in Econometrics, Xiamen University); Lijia Wei (School of Economics and Management,Wuhan University) |
| Abstract: | We present a hidden Markov model of discrete strategic heterogeneity and learning in first price independent private values auctions. The model includes three latent bidding rules: constant absolute mark-up, constant percentage mark-up, and strategic best response. Rule switching probabilities depend upon a bidder's past auction outcomes. We apply this model to a new experiment that varies the number of bidders, the auction frame between forward and reverse, and includes the collection of saliva samples - used to measure subjects' sex hormone levels. We find the proportion of bidders following constant absolute mark-up increases with experience, particularly when the number of bidders is large. The primary driver here is subjects' increased propensity to switch strategies when they experience a loss (win) reinforcement when following a strategic (heuristic) rule. This affect is stronger for women and leads them spend more time following boundedly rational rules. We also find women in the Luteal and Menstrual phases of their menstrual cycle bid less aggressively, in terms of surplus demanded, when following the best response rule. This combined with spending more time following simple rules of thumbs explains gender differences in earnings. |
| Keywords: | Private values auction, Discrete heterogeneity, Learning, Gender difference |
| JEL: | C91 D44 C72 C73 C92 D87 |
| Date: | 2013–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:fee:wpaper:1302&r=exp |
| By: | Bou, Silvia; Brandts, Jordi; Cayón, Magda; Guillén, Pablo |
| Abstract: | We find that the vast majority of students taking an advanced undergraduate finance course show a preference for luck in a classroom experiment. In Phase I of the experiment part of the students, group A, were asked to guess a coin toss five times in a row. In Phase II the rest of the students, group B, were given 10 EUR to bet on some of the Group A students taking a second go at guessing a sequence of five coin tosses (Phase III). Group B students' bets were by default allocated to the worse performing student in Phase I. Switching to better performing Group A students was costly. A total of 23 out of 28 students were willing to pay for switching and thus showed a preference for luck. |
| Keywords: | experiments; hot hand fallacy; Decision heuristics |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2123/9242&r=exp |
| By: | Riedl A.M.; Dariel A. (GSBE) |
| Abstract: | We elicit reciprocal preferences in a firm-worker gift-exchange setting and relate them to actual behavior in a repeated gift-exchange game. We find that only a small minority of 10 percent of workers is materially selfish whereas 90 percent exhibit reciprocal preferences. However, the intensity of reciprocal preferences is weak in the sense that firms maximize profits by not relying on gift-exchange but by offering the lowest possible wage. Workers behavior in the repeated gift-exchange game is predicted by their elicited preferences, but the correlation between preferences and behavior is imperfect. Together with profit maximizing behavior of firms these observations can explain the observed unraveling of gift-exchange over time in our experiment and some recent field experiments. |
| Keywords: | Noncooperative Games; Design of Experiments: Laboratory, Group Behavior; Labor-Management Relations, Trade Unions, and Collective Bargaining: Other; |
| JEL: | C72 C92 J59 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013034&r=exp |
| By: | Spiros Bougheas (School of Economics, University of Nottingham); Jeroen Nieboer (School of Economics, University of Nottingham); Martin Sefton (School of Economics, University of Nottingham) |
| Abstract: | We investigate experimentally the effect of consultation (unincentivized advice) on choices under risk in an incentivized investment task. We compare consultation to two benchmark treatments: one with isolated individual choices, and a second with group choice after communication. Our benchmark treatments replicate findings that groups take more risk than individuals in the investment task; content analysis of group discussions reveals that higher risktaking in groups is positively correlated with mentions of expected value. In our consultation treatments, we find evidence of peer effects: decisions within the peer group are significantly correlated. However, average risk-taking after consultation is not significantly different from isolated individual choices. We also find that risk-taking after consultation is not affected by adding a feedback stage in which subjects see the choices of their consultation peers. |
| Keywords: | experimental economics, choice under risk, advice, social influence, peer effects |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2013-04&r=exp |
| By: | Li X.; Peeters R.J.A.P. (GSBE) |
| Abstract: | We consider a cheap-talk setting that mimics the situation where an incumbent firm the sender is endowed with incentives to understate the true size of the market demand to two potential entrants the receivers. Although our experimental data reveals that senders messages convey truthful information and this is picked up by the receivers, this overcommunication relative to standard theoretical prediction does not enhance efficient entry levels and payoffs to beyond what can be achieved without any communication. The reason is that receivers fail to optimally translate the information received in their entry decision, possibly due to overcautiousness. |
| Keywords: | Noncooperative Games; Design of Experiments: Laboratory, Group Behavior; Asymmetric and Private Information; Mechanism Design; Search; Learning; Information and Knowledge; Communication; Belief; |
| JEL: | C72 C92 D82 D83 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013035&r=exp |
| By: | Ambec, S.; Garapin, A.; Muller, L.; Reynaud, A.; Sebi, C. |
| Abstract: | In a laboratory experiment we test the three regulations imposed on a common-pool resource game with heterougeneous users: an access fee and subsidy scheme, transferable quotas and non transferable quotas? We calibrate the game so that all regulations improve users' profits compared to free-access extraction. We compare the regulations according to five criteria: resource preservation, individual profits, profit difference, Pareto-improvement from free-access and sorting of the most efficient users. One of the main findings is that, even though it performs better in sorting out the most efficient subjects, the fee and subsidy scheme is not the more profitable than tradable quotas. |
| Keywords: | COMMON-POOL RESOURCE;REGULATION;QUOTA;PERMIT;TAX |
| JEL: | C91 Q28 Q38 Q58 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:2013-07&r=exp |
| By: | Baert, Stijn; Balcaen, Pieter |
| Abstract: | This study directly assesses the impact of military work experience compared with civilian work experience in similar jobs on the subsequent chances of being hired in the civilian labour market. It does so through a field experiment in the Belgian labour market. A statistical examination of our experimental dataset shows that in general we cannot reject that employers are indifferent to whether job candidates gained their experience in a civilian or a military environment. -- |
| Keywords: | field experiments,hiring discrimination,economics of defence |
| JEL: | C93 J45 J24 J71 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201334&r=exp |
| By: | Allred , Sarah; Duffy, Sean; Smith, John |
| Abstract: | We study the relationship between the cognitive load manipulation and strategic sophistication. The cognitive load manipulation is designed to reduce the subject's cognitive resources which are available for deliberation on a choice. In our experiment, subjects are placed under a large cognitive load (given a difficult number to remember) or a low cognitive load (given a number which is not difficult to remember). Subsequently, the subjects play a one-shot game then they are asked to recall the number. This procedure is repeated for various games, where a new number is given for each game. We find a nuanced and nonmonotonic relationship between cognitive load and strategic sophistication. This relationship is consistent with two effects. First, subjects under a high cognitive load tend to exhibit behavior consistent with the reduced ability to compute the optimal decision. Second, the cognitive load tends to affect the subject's perception of their relative standing in the distribution of cognitive ability. The net result of these two effects depends on the strategic setting. Our experiment provides indirect evidence on the literature which examines the relationship between measures of cognitive ability and strategic sophistication. |
| Keywords: | bounded rationality; experimental economics; working memory load; beauty contest; strategic sophistication; rational inattention |
| JEL: | C72 C91 |
| Date: | 2013–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:47997&r=exp |
| By: | Loukas Balafoutas; Rudolf Kerschbamer; Martin Kocher; Matthias Sutter |
| Abstract: | We compare experimentally the revealed distributional preferences of individuals and teams in allocation tasks. We find that teams are significantly more benevolent than individuals in the domain of disadvantageous inequality while the benevolence in the domain of advantageous inequality is similar across decision makers. A consequence for the frequency of preference types is that while a substantial fraction of individuals is classified as inequality averse, this type disappears completely in teams. Spiteful types are markedly more frequent among individuals than among teams. On the other hand, by far more teams than individuals are classified as efficiency lovers. |
| Keywords: | Distributional Preferences, Social Preferences, Team Decisions, Individual Decisions, Stability of Preferences, Behavioral Economics, Experimental Economics |
| JEL: | C91 C92 D03 D63 D64 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2013-17&r=exp |
| By: | Anastasios Koukoumelis (Max Planck Institute of Economics, Strategic Interaction Group, Jena); M. Vittoria Levati (Max Planck Institute of Economics, Strategic Interaction Group, Jena, and DSE, University of Verona); Matteo Ploner (Department of Economics, University of Trento) |
| Abstract: | Previous studies have shown that other-regarding concerns are weakened under risky situations. Daily experience also suggests that people care more about an identifiable than about an unidentifiable third person. We report on an experiment designed to explore whether rendering the other identifiable-via a speechless video and the revelation of personal information-affects the relationship between other-regarding concerns and risk preferences when there is risk to one's own and/or the other's payoff. We find that the acquisition of information about the other has no effect on behavior. Regardless of the treatment, most of the participants are other-regarding with respect to expected payoff but self-oriented with respect to risk allocation. |
| Keywords: | Risk attitudes, Other-regarding concerns, Identifiability |
| JEL: | C90 D63 D81 |
| Date: | 2013–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2013-028&r=exp |
| By: | Dessi, Roberta (IDEI, Toulouse School of Economics); Miquel-Florensa, Pepita (Toulouse School of Economics) |
| Abstract: | We study the role of status in an experimental Principal-Agent game.Status is awarded to subjects based on either talent or luck. In each randomly matched principal-agent pair, the principal chooses the agent's status-contingent piece rate for a task in which talent matters for performance (an IQ test). We perform the experiment in Cambridge (UK) and in HCMV (Vietnam). We find that in Cambridge piece rate others are significantly higher for high-status agents (only) when status signals talent. However, these higher offers are not payoff-maximizing for the principals.In contrast, Vietnam piece rate offers are significantly higher for high-status agents (only) when status is determined by luck. We explore possible explanations, and the implications for status and incentives. |
| Keywords: | , , incentives, status, identity, piece rate, principal-agent, signaling, culture. |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:27274&r=exp |
| By: | Karlan, Dean (Yale University); Zinman, Jonathan (Dartmouth College) |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:115&r=exp |
| By: | Pietro Battiston; Simona Gamba |
| Abstract: | We study the effect of social pressure on tax compliance, focusing on the compliance of shop sellers to the legal obligation of releasing tax receipts for each sale. We carry out a field experiment on bakeries in Italy, where a strong gap exists between the legal obligation and the actual behavior of sellers. Social pressure is manipulated by means of an explicit request for a receipt when not released. We find that a single request for a receipt causes a 17 per cent rise in the probability of a receipt being released for a sale occurring shortly thereafter. This provides evidence of a social scal multiplier: on average, a single request for a receipt causes 2.38 additional receipts being released overall. |
| Keywords: | Tax evasion, field experiments, social norms, social pressure |
| JEL: | H32 K34 E62 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:249&r=exp |
| By: | Angelucci, Manuela (University of Michigan); Karlan, Dean (Yale University); Zinman, Jonathan (Dartmouth College) |
| Abstract: | Theory and evidence have raised concerns that microcredit does more harm than good, particularly when offered at high interest rates. We use a clustered randomized trial, and household surveys of eligible borrowers and their businesses, to estimate impacts from an expansion of group lending at 110% APR by the largest microlender in Mexico. Average effects on a rich set of outcomes measured 18-34 months post-expansion suggest some good and little harm. Other estimators identify heterogeneous treatment effects and effects on outcome distributions, but again yield little support for the hypothesis that microcredit causes harm. |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:117&r=exp |
| By: | Gill, David; Prowse, Victoria |
| Abstract: | In this note, we present a novel computerized real effort task based on moving sliders across a screen which overcomes many of the drawbacks of existing real effort tasks. The task was first developed and used by us in Gill and Prowse (American Economic Review, 2012). We outline the design of our “slider task”, describe its advantages compared to existing real effort tasks and provide a statistical analysis of the behavior of subjects undertaking the task. We believe that the task will prove valuable to researchers in designing future real effort experiments, and to this end we provide z-Tree code and guidance to assist researchers wishing to implement the slider task. |
| Keywords: | Real effort task, Slider task, Design of laboratory experiments, Learning and time effects, Individual heterogeneity |
| JEL: | C90 C91 |
| Date: | 2013–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48081&r=exp |
| By: | Kiridaran Kanagaretnam; Stuart Mestelman; S. M. Khalid Nainar; Mohamed Shehata |
| Abstract: | In a laboratory-controlled environment we provide experimental evidence on the effects of transparency (complete over incomplete information) and empowerment on trust (investment by a principal) and trustworthiness (reciprocal behavior of an agent). We implement a simple two-person investment game. We find that when principals are empowered by being able to punish agents who may not act in a way the principal believes is in the principal’s best interest, trust and investment increases over that which is realized in the absence of empowerment regardless of the degree of transparency. In transparent environments the effect of empowerment is about the same regardless of whether empowerment is introduced or removed. However, in opaque environments, the loss of empowerment has a substantially greater negative effect on trust than the positive effect associated with the introduction of empowerment. While this environment is substantially abstracted from the naturally occurring environment, these results suggest that practical public policies designed to increase transparency in financial transactions are likely to have positive effects on investment. Furthermore, public policies designed to empower principals, such as the Say-on-Pay practices, are likely to increase investment while the limitation of the empowerment of principals with respect to their agents (consistent with deregulation) will have a much more dramatic negative impact on trust (and ultimately, investment). |
| Keywords: | Investment, Empowerment, Disempowerment, Veto, Trust, Reciprocity, Say-on-Pay |
| JEL: | C7 C9 D3 D8 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:mcm:deptwp:2013-09&r=exp |
| By: | Chad Kendall; Tommaso Nannicini; Francesco Trebbi |
| Abstract: | Rational voters update their subjective beliefs about candidates’ attributes with the arrival of information, and subsequently base their votes on these beliefs. Information accrual is, however, endogenous to voters’ types and difficult to identify in observational studies. In a large scale randomized trial conducted during an actual mayoral campaign in Italy, we expose different areas of the polity to controlled informational treatments about the valence and ideology of the incumbent through verifiable informative messages sent by the incumbent reelection campaign. Our treatments affect both actual vote shares at the precinct level and vote declarations at the individual level. We explicitly investigate the process of belief updating by comparing the elicited priors and posteriors of voters, finding heterogeneous responses to information. Based on the elicited beliefs, we are able to structurally assess the relative weights voters place upon a candidate’s valence and ideology. We find that both valence and ideological messages affect the first and second moments of the belief distribution, but only campaigning on valence brings more votes to the incumbent. With respect to ideology, cross-learning occurs, as voters who receive information about the incumbent also update their beliefs about the opponent. Finally, we illustrate how to perform counterfactual campaigns based upon the structural model. Keywords: voting, information, beliefs elicitation, randomized controlled trial. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:486&r=exp |
| By: | Arceo-Gomez, Eva O.; Campos-Vázquez, Raymundo M. |
| Abstract: | In Mexico, as in most Latin American countries with indigenous populations, it is commonly believed that European phenotypes are preferred to mestizo or indigenous phenotypes. However, it is hard to test for such racial biases in the labor market using official statistics since race can only be inferred from native language. Moreover, employers may think that married females have lower productivity, and hence they may be more reluctant to hire them. We are interested in testing both hypotheses through a field experiment in the labor market. The experiment consisted on sending fictitious curriculums (CVs) responding to job advertisements with randomized information of the applicants. The CVs included photographs representing three distinct phenotypes: Caucasian, mestizo and indigenous. We also randomly vary marital status across gender and phenotype. Hence, our test consists on finding whether there are significant differences in the callback rates. We find that females have 40 percent more callbacks than males. We also find that indigenous looking females are discriminated against, but the effect is not present for males. Interestingly, married females are penalized in the labor market and this penalty is higher for indigenous-looking women. We did not find an effect of marital status on males. |
| Keywords: | Discrimination; Gender; Race; Marriage; Labor market; Mexico; Hiring; Correspondence study. |
| JEL: | J12 J15 J16 J7 J71 J83 O54 |
| Date: | 2013–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48000&r=exp |
| By: | David Gill (University of Oxford); Victoria Prowse (Cornell University) |
| Abstract: | In a real effort experiment with repeated competition we find striking differences in how the work effort of men and women responds to previous wins and losses. For women losing per se is detrimental to productivity, but for men a loss impacts negatively on productivity only when the prize at stake is big enough. Responses to luck are more persistent and explain more of the variation in behavior for women, and account for about half of the gender performance gap in our experiment. Our findings shed new light on why women may be less inclined to pursue competition-intensive careers. |
| Keywords: | Labor market outcomes; Gender gap; Experiment; Real effort; Career development; Competition; Luck; Productivity; Relative performance evaluation; Tournament; Wining; Losing |
| JEL: | C91 D03 J16 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:cex:dpaper:2013001&r=exp |
| By: | Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany); Stephan Nüesch (Business Economics - Corporate Governance - Personnel Economics, University of Zurich, Switzerland) |
| Abstract: | Many scholars argue that the delegation of decision rights to independent institutions promotes trust and specific investments. We test this conjecture with variations of the trust game in which the back transfer decision is delegated to a third party. A randomly chosen third party with a fixed payment induces larger investments over time although the experimental design rules out reputation building. Changes in the third party’s selection procedure eliminate this benefit. If the third party gets a reward for the appointment, delegation actually destroys trust. Investors (unwarrantedly) fear a diffusion of responsibility and lower back transfers in this case. |
| Keywords: | Delegation, Trust, Third Party, Appointment procedures, Remuneration |
| JEL: | D33 J33 J41 |
| Date: | 2013–20–13 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1313&r=exp |
| By: | Adena, Maja; Huck, Steffen; Rasul, Imran |
| Abstract: | When asking for donations, charitable organizations often use suggestions concerning the amount of potential contributions. However, the evidence concerning the effects of such suggestions is scarce and inconsistent. Unlike the majority of existing studies concerned with small-money solicitations, we examine the effect of larger nonbinding suggestions in the context of middle-range donations which are relevant in practice. In our randomized field experiment, opera visitors received solicitation letters asking to support a social youth project organized by the opera house. The three different treatments were: no suggestion and suggestions of 100 and 200, respectively. Both suggestions were larger than average and median donations in this context. The findings are that suggestions substantially influence the distribution of donations received. The mean amounts given increase significantly if a suggestion is made. The increase is stronger in the 200 treatment. On the other hand, the participation rate decreases if a suggestion is made. Overall, the returns from the campaign increase non-significantly when a suggestion is made. The solicitation was repeated a year later, without any suggestion. There is weak evidence that suggestions have a long-term effect on individual contribution-level decisions. -- Karitative Organisationen suggerieren oft den Spendern eine bestimmte Beitragshöhe. Allerdings wissen wir wenig über die Wirkung solcher Empfehlungen. Es gibt wenig Literatur zu dem Thema und die Aussagen sind auch nicht immer konsistent. Wir untersuchen die Wirkung einer Spendenempfehlung in dem Kontext mittlerer Spenden, die in der Praxis relevanter sind als die Kleinspenden, die im Zentrum bisheriger Literatur lagen. In unserem randomisierten Feldexperiment haben Opernbesucher Anfragebriefe erhalten mit einer Bitte das Sozialprojekt der Oper für Kinder und Jugendliche zu fördern. Die drei unterschiedliche Treatments waren: keine Empfehlung, eine Empfehlung von 100 sowie 200 Euro. Der empfohlene Beitrag wurde so gewählt, dass er über dem aus ähnlichen Kampagnen bekanntem Durschnitt bzw. Median lag. Die Ergebnisse zeigen, dass die Empfehlungen die Verteilung der Spenden stark beeinflussen. Die durchschnittliche positive Spende ist höher mit Empfehlung. Der Anstieg ist größer, wenn 200 Euro suggeriert werden. Andererseits wird seltener gespendet im Fall einer Empfehlung. Die Spendeneinnahmen aus der Kampagne steigen insgesamt mit der Empfehlung, allerdings nicht signifikant. Die Teilnehmer erhielten eine weitere Spendenanfrage ohne Empfehlung ein Jahr später. Es zeigt sich, dass die Empfehlungen auch eine Langzeitwirkung auf die Entscheidung bezüglich der Spendenhöhe haben. |
| Keywords: | Charitable giving,Field experiment,Suggestions |
| JEL: | C93 D12 D64 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2013304&r=exp |
| By: | Thunström, Linda (Department of Economics and Finance, University of Wyoming); van 't Veld, Klaas (Department of Economics and Finance, University of Wyoming); Shogren, Jason F. (Department of Economics and Finance, University of Wyoming); Nordström, Jonas (Department of Economics, Lund University) |
| Abstract: | Are people strategically ignorant of the negative externalities their activities cause the environment? Herein we examine if people avoid costless information on those externalities and use ignorance as an excuse to reduce pro-environmental behavior. We develop a theoretical framework in which people feel guilt from causing harm to the environment (e.g., emitting carbon dioxide) and from deviating from the social norm for pro-environmental behavior (e.g., offsetting carbon emissions). Our model predicts that people may benefit from avoiding information on their harm to the environment, and that they use ignorance as an excuse to engage in less pro-environmental behavior. It also predicts that the cost of ignorance increases if people can learn about the social norm from the information. We test the model predictions empirically with an experiment that involves an imaginary long- distance flight and an option to buy offsets for the flight’s carbon footprint. More than half (53 percent) of the subjects choose to ignore information on the carbon footprint alone before deciding their offset purchase, but ignorance significantly decreases (to 29 percent) when the information additionally reveals the social norm, namely the share of air travelers who buy carbon offsets. We find evidence that some people use ignorance as an excuse to reduce pro-environmental behavior— ignorance significantly decreases the probability of buying carbon offsets. |
| Keywords: | Behavioral; Decision Making; Externality; Ignorance; Social norms |
| JEL: | D03 D81 D83 |
| Date: | 2013–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2013_022&r=exp |
| By: | Vincenzo Galasso; Tommaso Nannicini |
| Abstract: | This paper investigates the differential response of male and female voters to competitive persuasion in political campaigns. During the 2011 municipal elections in Milan, a sample of eligible voters was randomly divided into three groups. Two were exposed to the same incumbent’s campaign but to different opponent’s campaigns, with either a positive or a negative tone. The third—control—group received no electoral information. The campaigns were administered online and consisted of a bundle of advertising tools (videos, texts, slogans). Stark gender differences emerge. Negative advertising increases men’s turnout, but has no effect on women. Females, however, vote more for the opponent and less for the incumbent when they are exposed to the opponent’s positive campaign. Exactly the opposite occurs for males. Additional tests show that our results are not driven by gender identification with the candidate, ideology, or other voter’s observable attributes. Effective strategies of persuasive communication should thus take gender into account. Our results may also help to reconcile the conflicting evidence on the effect of negative vs. positive advertising, as the average impact may wash out when aggregated across gender. Keywords: gender differences, political campaigns, competitive persuasion. JEL classification: D72, J16, M37 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:487&r=exp |
| By: | Kohler, Stefan |
| Abstract: | This note presents a solution to Rubinstein (1982)'s open-ended, alternating-offer bargaining problem for two equally patient bargainers that exhibit similar degrees of inequality aversion. Inequality-averse bargainers may perceive envy if being worse off and guilt if being better off, but they still reach agreement in the first period under complete information. If the perceived guilt is strong, then the inequality-averse bargainers split the bargaining surplus equally regardless of their degree of envy. If guilt is weak, then the agreed split is tilted away from the Rubinstein division towards a more unequal split. Envy and weak guilt have opposite effects on the bargaining outcome, and envy has a greater marginal impact than weak guilt. Similarly inequality-averse bargainers agree on the Rubinstein division if the strength of envy equals the discounted strength of guilt. As both bargainers sensation of inequality aversion diminishes, the bargaining outcome converges to the Rubinstein division. |
| Keywords: | alternating offers; bargaining; bargaining power; behavioral economics; envy; equity; fairness; guilt; negotiation; social preferences |
| JEL: | C78 D3 D63 |
| Date: | 2013–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40764&r=exp |
| By: | Radu, Vranceanu (ESSEC Business School); Besancenot, Damien (Centre d'Economie de l'Université Paris Nord (CEPN)); Dubart, Delphine (ESSEC Business School) |
| Abstract: | This paper analyzes whether false information, rumors and other uninformative messages can cause illiquidity. In the model, a group of investors are invited to participate to a high-yield collective project. The project succeeds only if a minimum participation rate is reached. Before taking their decision, investors receive an uninformative but emotion loaded message. If investors believe that the message has an impact on the beliefs of the others, the problem can be analyzed as a typical global game. We solve the model for the critical message separating the success / fail states of the project. It turns out that lesser investors will participate to the collective project when they receive a negative message as compared to the case when they receive a positive message. Predictions of the theoretical model are corroborated by data provided by an Online and a Lab experiment. Insights apply to contagion and market manipulation episodes. |
| Keywords: | Experiments; Global Games; Illiquidity; Market Panic; Rumors; Strategic Uncertainty |
| JEL: | C91 D84 G10 G11 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-13009&r=exp |
| By: | Novarese, Marco; Wilson, Chris M. |
| Abstract: | By randomising the order in which new economics research papers are presented in email alerts and tracking economists’ subsequent download activity, this paper uses a natural field experiment to better understand the reasons why individuals show a disproportionate tendency to select items listed in top position. Using a novel method, the paper tests and rejects three common explanations regarding item order, choice fatigue and position as a quality signal. The paper then further demonstrates how the causes of top position effects vary significantly with list length, and points to some alternative explanations. |
| Keywords: | Position Effects, Order Effects, Primacy Effects, Recency Effects, Choice Fatigue, Prominence |
| JEL: | C93 D01 D03 L0 L00 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48074&r=exp |
| By: | Richard G. Newell; Juha V. Siikamäki |
| Abstract: | We evaluate the effectiveness of energy efficiency labeling in guiding household decisions. Using a carefully designed choice experiment with alternative labels, we disentangle the relative importance of different types of information and intertemporal behavior (i.e., discounting) in guiding energy efficiency behavior. We find that simple information on the economic value of saving energy was the most important element guiding more cost-efficient investments in energy efficiency, with information on physical energy use and carbon emissions having additional but lesser importance. The degree to which the current EnergyGuide label guided cost-efficient decisions depends importantly on the discount rate assumed. Using individual discount rates separately elicited in our study, we find that the current EnergyGuide label came very close to guiding cost-efficient decisions, on average. However, using a uniform five percent discount rate—which was much lower than the average elicited rate—the EnergyGuide label led to choices that result in a one-third undervaluation of energy efficiency. We find that labels that also endorsed a model (with Energy Star) or gave a suggestive grade to a model (EU-style label), encouraged substantially higher energy efficiency. Our results reinforce the centrality of views on intertemporal choice and discounting, both in terms of understanding individual behavior and in guiding policy. |
| JEL: | C91 D12 D83 D91 H43 Q41 Q48 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19224&r=exp |
| By: | Paul Gertler; James Heckman; Rodrigo Pinto; Arianna Zanolini; Christel Vermeersch; Susan Walker; Susan M. Chang; Sally Grantham-McGregor |
| Abstract: | We find large effects on the earnings of participants from a randomized intervention that gave psychosocial stimulation to stunted Jamaican toddlers living in poverty. The intervention consisted of one-hour weekly visits from community Jamaican health workers over a 2-year period that taught parenting skills and encouraged mothers to interact and play with their children in ways that would develop their children's cognitive and personality skills. We re-interviewed the study participants 20 years after the intervention. Stimulation increased the average earnings of participants by 42 percent. Treatment group earnings caught up to the earnings of a matched non-stunted comparison group. These findings show that psychosocial stimulation early in childhood in disadvantaged settings can have substantial effects on labor market outcomes and reduce later life inequality. |
| JEL: | I10 I20 I25 J20 O15 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19185&r=exp |
| By: | Pushkar Maitra (Monash University); Subha Mani (Fordham University) |
| Abstract: | This paper estimates the short-and-medium-run effects of participating in a subsidized vocational training program aimed at improving labor market outcomes of women residing in low-income households in a developing country. We combine pre-intervention data with two rounds of post-intervention data from a field experiment to quantify the short-and-medium-run effects of the program. In the short-run, we find that program participants are significantly more likely to be employed, work additional hours, and earn more. These short-run impact estimates are all sustained in the medium-run. We also identify credit constraints, local access, and lack of proper child care support as important barriers to program participation and completion. We are able to rule out two alternative mechanisms -- signalling and change in behavior that can drive these findings. Finally, a simple cost-benefit analysis suggests that the program is highly cost effective. |
| Keywords: | Vocational training, Field Experiment, Panel data, India |
| JEL: | I21 J19 J24 O15 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:frd:wpaper:dp2013-02&r=exp |
| By: | BONAN Jacopo; LEMAY-BOUCHER Philippe; TENIKUE Michel |
| Abstract: | In the region of Thies in Senegal community-based health insurance schemes(CBHI)have been present for years. And yet despite the benefits they offer, there remain low take-up rates. Our paper measures the willingness to pay (WTP) for CBHI premiums in such context. Our results highlight the role of income, wealth and risk preferences as determinants of WTP. We also provide an analysis of the predictive power of WTP on the actual take-up of insurance following our offering of membership to a sample of 360 households. WTP has a positive and significant impact on actual take-up. |
| Keywords: | Community-based health insurance; Willingness to pay; Africa; Senegal |
| JEL: | D10 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2013-15&r=exp |
| By: | Dorian Jullien; Judith Favereau; Cléo Chassonnery-Zaigouche |
| Abstract: | This paper investigates how foundational and conceptual issues around economic rationality, which are usually discussed with respect to economic theory, materialize into recent applied microeconomics. We concentrate on three radically different subfield of microeconomics – the economics of discrimination, development economics and the economics of insurance – to look at how the recent rise of experimental methods and behavioral economics within mainstream economics have changed the conceptual relationship between economic rationality and economic efficiency, without changing the substance of these notions. The perspective of going from applied work of microeconomics in the field to conceptual and foundational issues on rationality reveals another issue that has not been much discussed in the reflexive literature yet: how warranted is the analytical distinction made in economics among interpersonal preferences, intertemporal preferences and preferences for risk and uncertainty? We show that this issue has straightforward consequences both on both economic theory and on the real world through the policy recommendations made by microeconomists. |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2013-21&r=exp |
| By: | Hansen, Fredrik (Department of Economics, Lund University); Anell, Anders (Department of Business Administration, Lund University); Gerdtham, Ulf-G (Department of Economics, Lund University); Lyttkens, Carl Hampus (Department of Economics, Lund University) |
| Abstract: | The health care systems in the Nordic countries are facing key challenges. While the possibilities and willingness to expand health care resources are limited, the demand for health care are increasing due to continuous development of new medical technologies, changing demographics, increasing income level and greater expectations from patients. Consequently, health care organizations are increasingly required to take economic restrictions into account and there is an urgent need to improve the efficiency in the health care sector. A reasonable question to ask is if health economics of today is prepared and equipped to support in meeting these challenges. This article argues that behavioral and experimental economics are promising fields to consider when closing vital knowledge gaps. The aim of this paper is two-fold: introduce the fields of behavioral and experimental economics, and thereafter identify and characterize health economic issues where these two fields have a particularly promising application potential. We also address the advantages of applying a pluralistic view on health economics. Based on the analysis in this, and similar articles, on the development of health economics, we anticipate a dynamic future of health economics. |
| Keywords: | Health economics; Behavioral economics; Experimental economics; Pluralism |
| JEL: | B40 C90 D03 I10 |
| Date: | 2013–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2013_020&r=exp |