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on Experimental Economics |
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Issue of 2017‒07‒30
fifteen papers chosen by |
| By: | Friehe, Tim; Schildberg-Hörisch, Hannah |
| Abstract: | Low self-control is considered a fundamental cause of crime. The aim of our study is to provide causal evidence on the link between self-control and criminal behavior. We test whether individuals with lower self-control behave in a more antisocial manner and are less risk-averse and thus are, according to both the General Theory of Crime and the economic literature on criminal behavior, more likely to engage in criminal activities. In order to exogenously vary the level of self-control in a laboratory experiment, we use a wellestablished experimental manipulation, a so-called depletion task. We find that subjects with low self-control take more risk. The effect of self-control on antisocial behavior is small and not significant. In sum, our findings are consistent with the proposition that low selfcontrol is a facilitator of crime to the extent that individuals with lower levels of self-control are less effectively deterred by probabilistic sanctions. |
| Keywords: | self-control,risk taking,antisocial behavior,criminal behavior,ego-depletion,experiment |
| JEL: | C91 D03 K42 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:264&r=exp |
| By: | Kitessa, Rahel Jigi (Tilburg University, Center For Economic Research) |
| Abstract: | Standard economic theory suggests that agents make decision based on the outcomes. Subsequently, environmental valuation using contingent valuation method (CVM) assumes the agent’s valuation of a given environmental good is based on the (expected) results. However, Bulte et al. (2005) found that causes in addition to outcomes matter in valuation. I extended this notion to contribute to design of CVM that attenuate free riding, thus remove the downward bias of method. I used field experiment and tested if designing a scenario that reinforce responsibility in decision making (valuation), attenuates free riding. I do so by eliciting contributions to a reforestation program among farmers in an environmentally valuable area, the Bale eco-Region in Ethiopia, by including or omitting explicit information that one of the main forest related activities the respondents engage in, logging, is among the most important causes of local forest degradation. I find that explicitly stating that logging is one of the main causes of deforestation increases our respondents’ willingness to pay. More interestingly, I find that this “responsibility effect” is sufficiently strong to eliminate free rider behavior. When the information about the cause of deforestation is in place, the respondents’ willingness to pay for the reforestation project is not significantly different if they are informed of other forest protection projects, or not. |
| Keywords: | valuation of environment; incentive compatible valuation techniques; conservation; field experiment; forestry; public goods |
| JEL: | C93 D04 H41 O13 Q51 Q23 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:3d1f1a62-d62a-44d3-8c8a-65bad2f0d7a8&r=exp |
| By: | Bortolotti, Stefania (University of Cologne); Soraperra, Ivan (University of Amsterdam); Sutter, Matthias (University of Cologne); Zoller, Claudia (University of Cologne) |
| Abstract: | The steady increase in inequality over the past decades has revived a lively debate about what can be considered a fair distribution of income. Public support for the extent of redistribution typically depends on the perceived causes of income inequality, such as differences in effort, luck, or opportunities. We study how fairness views and the extent of redistribution are affected by a hitherto over-looked, but relevant factor: immoral self-serving behavior that can lead to increased inequality. We focus on situations in which the rich have potentially acquired their fortunes by means of cheating. In an experiment, we let third parties redistribute resources between two stakeholders who could earn money either by choosing a safe amount or by engaging in a risky, but potentially more profitable, in-vestment. In one treatment, the outcome of the risky investment is determined by a random move, while in another treatment stakeholders can cheat to obtain the more profitable outcome. Although third parties cannot verify cheating, we find that the mere suspicion of cheating changes fairness views of third parties considerably and leads to a strong polarization. When cheating opportunities are pre-sent, the share of subjects redistributing money from rich to poor stakeholders triples and becomes as large as the fraction of libertarians – i.e., participants who never redistribute. Without cheating opportunities, libertarian fairness views dominate, while egalitarian views are much less prevalent. These results indicate that fairness views and attitudes towards redistribution change significantly when people believe that income inequality is the result of cheating by the rich. |
| Keywords: | fairness views, redistribution, unethical behavior, inequality, experiment |
| JEL: | C91 D63 D81 H26 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10877&r=exp |
| By: | Wipada Promsing (Department of Western Languages, Faculty of Humanities, Srinakharinwirote University); Saiwaroon Chumpavan (Department of Western Languages, Faculty of Humanities, Srinakharinwirote University); Walaiporn Chaya (Department of Western Languages, Faculty of Humanities, Srinakharinwirote University) |
| Abstract: | The paper presents an experimental study with a pretest-posttest control group design. The study aimed to investigate the effectiveness of using English movie clips to enhance the listening ability of Thai university students and students' attitude toward their English lessons after learning through movie clips instruction. The study employed the English listening test and the attitude questionnaire as the main researh instruments for data collection. The participants involved in the study were sixty first-year students enrolled in English for Everyday Use course at Rajamagala University of Technology Krungthep. Two classes were randomly assigned in the experimental group and learned English through movie clips; while the other class, the control group, learned English with conventional teaching methods. The results clearly revealed that there were significant positive differences in the achievement of listening ability and attitudes toward learning listening through the English movie clips of students before and after the experiment and between those two groups. |
| Keywords: | Movie clips, Listening ability, Attitude |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:4607916&r=exp |
| By: | Yutaka Kayaba (Faculty of Economics, The University of Tokyo); Hitoshi Matsushima (Faculty of Economics, The University of Tokyo); Tomohisa Toyama (Division of Liberal Arts, Kogakuin University, The University of Tokyo) |
| Abstract: | We experimentally examine repeated prisoner’s dilemma with random termination, in which monitoring is imperfect and private. Our estimation indicates that a significant proportion of subjects follow generous tit-for-tat strategies, straightforward extensions of tit-for-tat. However, the observed retaliating policies are inconsistent with the generous tit-for-tat equilibria. Contrary to the theory, subjects tend to retaliate more with high accuracy than with low accuracy. Specifically, they tend to retaliate more than the theory predicts with high accuracy, while they tend to retaliate lesser with low accuracy. In order to describe these results as unique equilibrium, we demonstrate an alternative theory that incorporates naïveté and reciprocity. |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2017cf1056&r=exp |
| By: | James J. Heckman; Margaret L. Holland; Kevin K. Makino; Rodrigo Pinto; Maria Rosales-Rueda |
| Abstract: | This paper evaluates a randomized controlled trial of the Nurse-Family Partnership (NFP) program conducted in Memphis, TN in 1990. NFP offers home visits conducted by nurses for disadvantaged first-time mothers during pregnancy and early childhood. We test NFP treatment effects using permutation-based inference that accounts for the NFP randomization protocol. Our methodology is valid for small samples and corrects for multiple-hypothesis testing. We also analyze the underlying mechanisms generating these treatment effects. We decompose NFP treatment effects into components associated with the intervention-enhanced parenting and early childhood skills. The NFP improves home investments, parenting attitudes and mental health for mothers of infants at age 2. At age 6, the NFP boosts cognitive skills for both genders and socio-emotional skills for females. These treatment effects are explained by program-induced improvements in maternal traits and early-life family investments. At age 12, the treatment effects for males (but not for females) persist in the form of enhanced achievement test scores. Treatment effects are largely explained by enhanced cognitive skills at age 6. Our evidence of pronounced gender differences in response to early childhood interventions contributes to a growing literature on this topic. |
| JEL: | C5 H5 I1 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23610&r=exp |
| By: | Jasmina Arifovic; John Duffy; Janet Hua Jiang |
| Abstract: | We model the introduction of a new payment method, e.g., e-money, that competes with an existing payment method, e.g., cash. The new payment method involves relatively lower per-transaction costs for both buyers and sellers, but sellers must pay a fixed fee to accept the new payment method. As a result of the network effects, our model admits two symmetric pure strategy Nash equilibria. In one equilibrium, the new payment method is not adopted and all transactions continue to be carried out using the existing payment method. In the other equilibrium, the new payment method is adopted and completely replaces the existing payment method. The equilibrium involving only the new payment method is socially optimal as it minimizes total transaction costs. Using this model, we study the question of equilibrium selection by conducting a laboratory experiment. We find that, depending on the fixed fee charged for the adoption of the new payment method and on the choices made by participants on both sides of the market, either equilibrium can be selected. More precisely, a lower fixed fee for sellers favors very quick adoption of the new payment method by all participants, while for a sufficiently high fee, sellers gradually learn to refuse to accept the new payment method and transactions are largely conducted using the existing payment method. We also find that an evolutionary learning model captures the dynamics of the experimental data well. |
| Keywords: | Central bank research, Digital Currencies |
| JEL: | E41 C35 C83 C92 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:17-28&r=exp |
| By: | Orla Doyle (School of Economics and Geary Institute for Public Policy,University College Dublin) |
| Abstract: | Using a randomized experiment, this study investigates the impact of sustained investment in parenting, from pregnancy until age five, in the context of extensive welfare provision. Providing the Preparing for Life program, incorporating home visiting, group parenting, and baby massage, to disadvantaged Irish families raises children’s cognitive and socio-emotional/behavioral scores by two-thirds and one-quarter of a standard deviation respectively by school entry. There are few differential effects by gender and stronger gains for firstborns. The results also suggest that socioeconomic gaps in children’s skills are narrowed. Analyses account for small sample size, differential attrition, multiple testing, contamination, and performance bias. |
| Keywords: | Early childhood intervention; cognitive skills; socio-emotional and behavioral skills; randomized control trial; multiple hypothesis testing; permutation testing; inverse probability weighting. |
| JEL: | C93 D13 I26 J13 |
| Date: | 2017–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201706&r=exp |
| By: | Jonathan Gruber; Amalie Jensen; Henrik Kleven |
| Abstract: | Using linked housing and tax records from Denmark combined with a major reform of the mortgage interest deduction in the late 1980s, we carry out the first comprehensive long-term study of how tax subsidies affect housing decisions. The reform introduced a large and sharp reduction in the mortgage deduction for top-rate taxpayers, while reducing it much less or not at all for lower-rate taxpayers. We present three main findings. First, the mortgage deduction has a precisely estimated zero effect on homeownership. This holds even in the very long run. Second, the mortgage deduction has a sizeable impact on housing demand at the intensive margin, inducing homeowners to buy larger and more expensive houses. Third, the largest effect of the mortgage deduction is on household financial decisions, inducing them to increase indebtedness. These findings suggest that the mortgage interest deduction distorts the behavior of homeowners at the intensive margin, but is ineffective at promoting homeownership at the extensive margin and any externalities that may be associated with it. |
| JEL: | H24 H31 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23600&r=exp |
| By: | Osório, António (António Miguel) |
| Abstract: | In many economic situations, individuals with different bargaining power must agree on how to divide a given resource. For instance, in the dictator game the proposer has all the bargaining power. In spite of it, the majority of controlled experiments show that she shares an important amount of the resource with the receiver. In the present paper I consider how behavioural and psychological internal conflicting aspects, such as self-interest and equity concerns, determine the split of the resource. The individual allocation proposals are aggregated in terms of altruism and value for the resource under dispute to obtain a single allocation. The resulting allocation rule is generalized to the n-individuals case through eficiency and consistency. Finally, I show that it satisfies a set of desirable properties. The obtained results are of practical interest for a number of situations, such as river sharing problems, sequential allocation and rationing problems. Keywords: Behavioural operational research; Sharing rules; Altruism; Equity concerns; Self-interest. JEL classification: C91, D03, D63, D74. |
| Keywords: | Microeconomia, 33 - Economia, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/290757&r=exp |
| By: | Rahul Mukherjee (Indian Institute of Management Calcutta) |
| Abstract: | Recent years have witnessed a significant surge of interest in causal inference under a potential outcomes framework, with applications to such diverse fields as sociology, behavioral sciences, biomedical sciences, and so on. In a finite population setting, we consider causal inference on treatment contrasts from an experimental design using potential outcomes. Adopting an approach that integrates such causal inference with finite population sampling, this is done with reference to a general scheme for assigning experimental units to treatments, along with general linear unbiased estimators of the treatment means. The assignment scheme allows the possibility of randomization restrictions, such as stratification, and unequal replications. We examine how tools from finite population sampling can be employed to develop a unified theory for our general setup. As a major breakthrough, it is shown that unbiased estimation of the sampling variance of any treatment contrast estimator is possible under conditions milder than Neymannian strict additivity. The consequences of departure from such conditions are also touched upon. Our approach applies readily to the situation where the treatments have a general factorial structure. |
| Keywords: | Finite population sampling, linear unbiased estimator, Neymannian strict additivity, variance estimation. |
| JEL: | C13 C83 C90 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:4607283&r=exp |
| By: | Erik O. Kimbrough (Simon Fraser University); Kevin Laughren (Simon Fraser University); Roman Sheremeta (Case Western Reserve University) |
| Abstract: | We review the main economic models of war and conflict. These models vary in details, but their implications are qualitatively consistent, highlighting key commonalities across a variety of conflict settings. Recent empirical literature, employing both laboratory and field data, in many cases confirms the basic implications of conflict theory. However, this literature also presents important challenges to the way economists traditionally model conflict. We finish our review by suggesting ways to address these challenges. |
| Keywords: | conflict, war, contest, all-pay auction, war of attrition |
| JEL: | D72 D74 F51 F52 F54 H56 N4 Q34 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:sfu:sfudps:dp17-10&r=exp |
| By: | Egbert, Henrik |
| Abstract: | This paper addresses the similarity between behavioural economics and social anthropology with respect to approaches on repeated reciprocity. The case at hand is the application of the Centipede game to Marcel Mauss’s concept of the Gift. In a Centipede game players interact in an alternating sequence of decisions to take or to pass an endowment. Mauss describes sequences of reciprocal giving in potlatch cultures, in which strict obligations determine choice options. The paper shows that models developed in behavioural economics, such as the Centipede game, can also be applied to prominent contexts in economic anthropology. |
| Keywords: | Gift, Centipede game, Potlatch game, Marcel Mauss, reciprocity |
| JEL: | Z13 |
| Date: | 2017–07–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80324&r=exp |
| By: | Liu, Jia; Riyanto, Yohanes Eko; Zhang, Ruike |
| Abstract: | This paper evaluates the role of centralized punishment in boosting contribution to the provision of public goods. To avoid the race to the bottom in the provision of public goods, this centralized punishment mechanism relies on the use of the unilateral and tie punishment imposed on the lowest contributor(s). In this paper, we aim to examine how severe this unilateral and tie punishment should be to achieve the full-contribution equilibrium. Specifically, we are interested in investigating the size of the “bullets” that the “hired gun” should carry. We theoretically derive a range of punishment mechanisms which would lead to full contribution and which are also experimentally tested. Our experimental results generally substantiate the theoretical prediction except for the more lenient punishment parameters. This discrepancy is successfully explained by individual evolutionary learning. |
| Keywords: | Public Goods Provision, Centralized Punishment Mechanism, Unilateral Punishment, Tie Punishment, Individual Evolutionary Learning |
| JEL: | C63 C72 C92 D7 D83 H41 |
| Date: | 2017–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80388&r=exp |