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on Experimental Economics |
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Issue of 2020‒11‒16
23 papers chosen by |
| By: | Espinosa, Romain; Treich, Nicolas |
| Abstract: | NGOs often vary in terms of how radical they are. In this paper, we explore the effectiveness of NGO discourses in bringing about social change. We focus on animal advocacy: welfarist NGOs primarily seek to improve the conditions in which animals are raised and reduce meat consumption, while abolitionist NGOs categorically reject animal use and call for a vegan society. We design an experiment to study the respective impact of welfarist and abolitionist discourses on participants’ beliefs regarding pro-meat justifications and their actions, namely their propensity to engage in the short-run in animal welfare (charity donation, petition against intensive farming) and plant-based diets (subscription to a newsletter promoting plant-based diets, petition supporting vegetarian meals). We first show that both welfarist and abolitionist discourses significantly undermine participants’ pro-meat justifications. Second, the welfarist discourse does not significantly affect participants’ actions, while we detect a potential backlash effect of the abolitionist discourse. We show that the NGOs’ positive standard effect on actions through the change in beliefs is outweighed by a negative behavioral response to the discourses (reactance effect). Last, greater public-good contributions are associated with greater engagement in animal welfare in the presence of an NGO discourse. |
| Keywords: | moderate, radical, NGO, welfarist, abolitionist, animal-welfare, plant-based; diets, behavioral economics, experimental economics, reactance. |
| JEL: | C91 Q18 Q5 D71 |
| Date: | 2020–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:124875&r=all |
| By: | Gustav Agneman (DERG, Department of Economics, University of Copenhagen); Paolo Falco (DERG, Department of Economics, University of Copenhagen); Exaud Joel (Department of Economics, University of Dar Es Salaam); Onesmo Selejio (Department of Economics, University of Dar Es Salaam) |
| Abstract: | Cooperation is essential to reap efficiency gains from specialization, not least in poor communities where economic transactions often are informal. Yet, cooperation might be more difficult to sustain under scarcity, since defecting from a cooperative equilibrium can yield safe, short-run benefits. In this study, we investigate how scarcity affects cooperation by leveraging exogenous variation in economic conditions induced by the Msimu harvest in rural Tanzania. We document significant changes in food consumption between the pre- and post-harvest period, and show that lean season scarcity reduces socially efficient but personally risky investments in a framed Investment Game. This can contribute to what is commonly referred to as a behavioral poverty trap. |
| Keywords: | scarcity, cooperation, field experiment |
| JEL: | C71 C93 D91 |
| Date: | 2020–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuderg:2004&r=all |
| By: | Thomas Markussen (DERG, Department of Economics, University of Copenhagen); Smriti Sharma (Department of Economics, Newcastle University); Saurab Singhal (Department of Economics, Lancaster University & IZA); Finn Tarp (DERG, Department of Economics, University of Copenhagen) |
| Abstract: | We examine the effects of randomly introduced economic inequality on voluntary cooperation and whether this relationship is influenced by the quality of local institutions, as proxied by corruption. We use representative data from a large-scale lab-in-the-field public goods experiment with over 1,300 participants across rural Vietnam. Our results show that inequality adversely affects aggregate contributions, and this is on account of high endowment individuals contributing a significantly smaller share than those with low endowments. This negative effect of inequality on cooperation is exacerbated in high corruption environments. We find that corruption leads to more pessimistic beliefs about others' contributions in heterogeneous groups, and this is an important mechanism explaining our results. In doing so, we highlight the indirect costs of corruption that are understudied in the literature. These findings have implications for public policies aimed at resolving local collective action problems. |
| Keywords: | inequality, institutions, corruption, public goods, lab-in-field experiment |
| JEL: | H41 D73 D90 O12 |
| Date: | 2020–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuderg:2003&r=all |
| By: | Thomas Buser (University of Amsterdam); Auteur2 (University of Amsterdam) |
| Abstract: | Fear of public speaking is very common but we know little about its economic implications. We establish public speaking aversion as an economically relevant preference using three steps. First, we use a lab and a classroom experiment to show that preferences for speaking in public vary strongly across individuals with many participants willing to give up significant amounts of money to avoid giving a short presentation in front of an audience. Second, we introduce two self-reported items to elicit preferences for speaking in public through surveys. We show that these items are strongly related to choices in the incentivized lab experiment and that public speaking aversion is distinct from established traits and preferences including extraversion. Finally, we elicit these items in a student survey and show that public speaking aversion predicts students' career expectations, indicating that it is an influential factor in determining career choices. |
| Keywords: | public speaking, validated survey measures, human capital, career choice |
| JEL: | C91 D9 J24 |
| Date: | 2020–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20200074&r=all |
| By: | Flip Klijn; Mehdi Mdaghri Alaoui; Marc Vorsatz |
| Abstract: | We study academic integrity in a final exam of a compulsory course with almost 500 undergraduate students (mostly in Economics and Business Management and Administration) at a major Spanish university. Confinement and university closure due to Covid-19 took place by the end of the last lecture week. As a consequence, the usual classroom exam was turned into an unproctored on-line multiple-choice exam without backtracking. We exploit the different orders of exam problems and detailed data with timestamps to study students’ academic integrity. Taking the average over questions that were part of both earlier and later “rounds,” we find that the number of correct answers to questions in the later round was 7.7% higher than those to the same questions in the earlier round. Moreover, the average completion time of questions in the later round was 18.1% shorter than that of the same questions in the earlier round. We estimate that between 13.4% and 22.5% of the students cheated due to information flows from earlier to later rounds. Nonetheless, since exam grades are positively correlated with previous continuous assessment, they can be considered informative. Finally, a mere reminder of the university’s code of ethics, which was sent to a subgroup halfway through the exam, did not affect cheating levels. |
| Keywords: | education, Field Experiment, academic integrity, on-line exam, multiple-choice questions, code of ethics, continuous assessment, proctoring, COVID-19 |
| JEL: | A22 I21 I23 C93 D9 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1213&r=all |
| By: | Mantilla, Cesar; Murad, Zahra |
| Abstract: | We study how individuals' contribution to a team production task varies depending on whether the task is ego relevant or not. We design and conduct an experiment to test the effect of ego-relevance in two types of team tasks: when contributions are complementary and substitutable. Ego-relevance is manipulated by calling the Raven IQ Test an “IQ Task” or a “Pattern Task”. We find that the effects of ego-relevance are mediated by beliefs about the teammate's contributions. Subjects act as conditional cooperators. However, the pessimistic ones contribute even less in the Ego-relevant condition, whereas the optimistic ones contribute more in the Ego-relevant condition. We do not find the nature of team production process being complementary or substitutable moderating the effect of ego-relevance on contribution decisions. |
| Date: | 2020–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:zy248&r=all |
| By: | Daniela Del Boca (University of Turin and Collegio Carlo Alberto); Chiara Pronzato (University of Turin); Lucia Schiavon (University of Turin) |
| Abstract: | This paper investigates the impact of parenting courses on fragile families’ time use with their children. Courses aimed at raising parental awareness of the importance of educational activities are offered in four Italian cities (Naples, Reggio Emilia, Teramo and Palermo) within the framework of the social program “FA.C.E. Farsi Comunità Educanti” and with the cooperation of the program “Con i Bambini”. To conduct the impact evaluation, we designed a randomized controlled trial involving random assignment of the families (mostly mothers). At the end of the intervention, we administered an assessment questionnaire both to the treatment group, which took the course, and to the control group, which did not. Comparing the outcomes, we find attending the course increased families' awareness of the importance of educational activities for children, the frequency with which they read to the child, and their desire to spend more time with the child. |
| Keywords: | parenting, use of time, randomized controlled trial |
| JEL: | J13 D10 I26 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2020-081&r=all |
| By: | Florio, Erminia |
| Abstract: | We analyze whether (correct) information provision on immigration is more effective than contact in shaping attitudes towards immigration. We collect data from a randomized experiment in 18 middle- and high-school classes in the city of Rome. Half of the classes meet a refugee from Mauritania, whereas the rest of them attend a lecture on figures and numbers on immigration in Italy and the world. On average, students develop better attitudes towards immigration (especially in the case of policy preferences and the perceived number of immigrants in their country) after the information treatment more than they do after the contact treatment, whereas neither treatment affects feelings associated to immigrants. Also, students having received the information treatment strongly adjust their knowledge on immigration. However, students' individual characteristics and school type (i.e. middle vs. high school) affect treatments' effectiveness. |
| Keywords: | Attitudes towards immigration,Information Provision,Contact Theory,Randomized Experiment |
| JEL: | C93 J15 Z1 Z13 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:699&r=all |
| By: | Roman M. Sheremeta (Weatherhead School of Management, Case Western Reserve University and Economic Science Institute, Chapman University); Neslihan Uler (Agricultural and Resource Economics, University of Maryland) |
| Abstract: | We examine how taxes impact charitable giving and how this relationship is affected by the degree of wasteful government spending. In our model, individuals make donations to charities knowing that the government collects a flat-rate tax on income (net of charitable donations) and redistributes part of the tax revenue. The rest of the tax revenue is wasted. The model predicts that a higher tax rate increases charitable donations. Surprisingly, the model shows that a higher degree of waste decreases donations (when the elasticity of marginal utility with respect to consumption is high enough). We test the model’s predictions using a laboratory experiment with actual donations to charities and find that the tax rate has an insignificant effect on giving. The degree of waste, however, has a large, negative and highly significant effect on giving. |
| Keywords: | charitable giving, tax, waste, redistribution, experiment, public goods provision, neutrality, income inequality |
| JEL: | C93 D64 H21 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:20-32&r=all |
| By: | Miguel A. Fonseca (Department of Economics, University of Exeter and NIPE, Universidade do Minho); Ricardo Gonçalves (Universidade Católica Portuguesa, Católica Porto Business School and CEGE); Joana Pinho (Universidade Católica Portuguesa, Católica Porto Business School and CEGE); Giovanni Tabacco |
| Abstract: | We explore the consequences to contract design if firm shareholders are intent on their managers engaging in price exing activities under different legal regimes. We show that in fine-only legal regimes, optimal contracts must have a fixed wage. In contrast,in fine-plus-prosecution legal regimes optimal contracts must be high-powered,involving a variable component. We test these predictions in a laboratory experiment. We observe contract choices of firm owners, for a given legal regime, as well as the likelihood of managers forming explicit cartels and coordinating on prices in an indefinitely repeated Bertrand oligopoly, taking contract and legal regime as given. The data show that prosecuting managers leads to lower collusion, but high-powered contracts do not incentivize cartel formation or price coordination effectively, irrespective of legal regime. Nevertheless, high-powered contracts were most frequently chosen by firm owners, often with collusive intents. |
| Keywords: | Straight Bonds; cartel formation, antitrust, managerial compensation, experiment. |
| JEL: | L44 C90 L13 C70 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:cap:wpaper:022020&r=all |
| By: | Loukas Balafoutas (University of Innsbruck); Helena Fornwagner (University of Regensburg); Rudolf Kerschbamer (University of Innsbruck); Matthias Sutter (Max Planck Institute for Research on Collective Goods); Maryna Tverdostup (University of Innsbruck) |
| Abstract: | Credence goods markets – like for health care or repair services – with their informational asymmetries between sellers and customers are prone to fraudulent behavior of sellers and resulting market inefficiencies. We present the first model that considers both diagnostic uncertainty of sellers and the effects of insurance coverage of consumers in a unified framework. We test the model’s predictions in a laboratory experiment. Both in theory and in the experiment diagnostic uncertainty decreases the rate of efficient service provision and leads to less trade. In theory, insurance also decreases the rate of efficient service provision, but at the same time it also increases the volume of trade, leading to an ambiguous net effect on welfare. In the experiment, the net effect of insurance coverage on efficiency turns out to be positive. We also uncover an important interaction effect: if consumers are insured, experts invest less in diagnostic precision. We discuss policy implications of our results. |
| Keywords: | Credence goods, diagnostic uncertainty, insurance coverage, welfare, model, experiment |
| JEL: | C91 C72 D82 G22 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2020_26&r=all |
| By: | McGee, Andrew (University of Alberta); McGee, Peter (National University of Singapore) |
| Abstract: | What can employers learn from personality tests when job applicants have incentives to misrepresent themselves? Using a within-subject, laboratory experiment, we compare personality measures with and without incentives for misrepresentation. Incentivized personality measures are weakly to moderately correlated with non-incentivized measures in most treatments but are correlated with intelligence when test-takers have information about desired personalities or are warned that responses may be verified. We document that actual job ads provide information about desired personalities and that employers in the UK who administer personality tests are also likely to administer intelligence tests despite the potential for substitution between the tests. |
| Keywords: | personality, measurement, hiring, screening, experiments |
| JEL: | C91 D82 M50 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13809&r=all |
| By: | Heursen, Lea (Department of Economics, Humboldt University Berlin); Ranehill, Eva (Department of Economics, School of Business, Economics and Law, Göteborg University); Weber, Roberto A (Department of Economics, University of Zurich) |
| Abstract: | We study whether one reason behind female underrepresentation in leadership is that female leaders are less effective at coordinating action by followers. Two experiments using coordination games investigate whether female leaders are less successful than males in persuading followers to coordinate on efficient equilibria. Group performance hinges on higher-order beliefs about the leader’s capacity to convince followers to pursue desired actions, making beliefs that women are less effective leaders potentially self-confirming. We find no evidence that such bias impacts actual leadership performance, identifying a precisely-estimated null effect. We show that this absence of an effect is surprising given experts’ priors. |
| Keywords: | gender; coordination games; leadership; experiment |
| JEL: | C72 C92 D23 J10 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0796&r=all |
| By: | Jordi Brandts; David J. Cooper |
| Abstract: | We study the tradeoffs between managerial control and delegation using a new experimental game, the manager-subordinate game. Actions for two subordinates are either chosen independently by the subordinates (delegation) or imposed by a manager (managerial control). The manager-subordinate game combines four properties: (1) All parties benefit if the subordinates coordinate their actions. (2) The state of the world varies, changing which outcome is efficient. (3) Subordinates have differing preferences over which common course of action should be chosen. (4) Subordinates know the state of the world, but the manager does not. Efficient coordination requires coordinating subordinates’ action and utilizing their private information. We find that total efficiency is highest with a combination of managerial control and free-form chat between the three players. This combination works because subordinates rarely lie about their private information, making efficient coordination possible. The frequency of truth-telling contrasts with findings from the experimental literature on lying. |
| Keywords: | Coordination, experiments, Organizations, communication, truth-telling |
| JEL: | C92 D23 L20 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1211&r=all |
| By: | Béatrice Boulu-Reshef (LEO - Laboratoire d'Économie d'Orleans - UO - Université d'Orléans - Université de Tours - CNRS - Centre National de la Recherche Scientifique); Nina Rapoport (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) |
| Abstract: | Voluntary contributions are often solicited in sequential and public settings where information on the quality of the fundraising project unfolds with the sequence of decisions. This paper examines how the different sources of information available to potential donors in such settings influence their decision-making. Contrary to most of the leadership literature, neither leaders nor followers in these settings have certainty about the quality of the fundraising project. We explore whether leaders remain influential, the extent to which they use their influence strategically, and the consequences on followers when leaders are misinformed. We combine an information cascade method with a modified public goods game to create a "Voluntary Contributions in Cascades" paradigm. Participants sequentially receive private signals about the state of the world, which determines the potential returns from the public good, and take two public actions: an incentivized prediction about the state of the world and a contribution to the public good. We find that participants' predictions mostly align with Bayesian predictions, and find no evidence for strategic or misleading predictions. Leaders' contributions are positively correlated with followers', suggesting they remain influential despite their limited informational advantage. This influence takes a tragic turn when leaders happen to be misinformed, as most misinformed leaders end up unintentionally misleading followers. We find that having a misleading leader is associated with a reduction in gains from contributions roughly twice as large as the reduction that stems from dividing the marginal-per-capita-return by two. Our results stress the significance of having well-informed leaders. |
| Keywords: | voluntary contribution,information cascade,fundraising,sequential public good game,leadership |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-02977853&r=all |
| By: | Becker, Christoph K. (Heidelberg University); Melkonyan, Tigran (University of Alabama); Proto, Eugenio (University of Glasgow); Sofianos, Andis (Heidelberg University); Trautmann, Stefan T. (Heidelberg University) |
| Abstract: | Bayesian Updating is the dominant theory of learning in economics. The theory is silent about how individuals react to events that were previously unforeseeable or unforeseen. Recent theoretical literature has put forth axiomatic frameworks to analyze the unknown. In particular, we test if subjects update their beliefs in a way that is consistent "reverse Bayesian", which ensures that the old information is used correctly after an unforeseen event materializes. We find that participants do not systematically deviate from reverse Bayesianism, but they do not seem to expect an unknown event when this is reasonably unforeseeable, in two pre-registered experiments that entail unforeseen events. We argue that participants deviate less from the reverse Bayesian updating than from the usual Bayesian updating. We provide further evidence on the moderators of belief updating. |
| Keywords: | reverse Bayesianism, unforeseen, unawareness, Bayesian Updating |
| JEL: | C11 C91 D83 D84 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13821&r=all |
| By: | Alessandro Sontuoso (Smith Institute for Political Economy and Philosophy, Chapman University; Philosophy, Politics and Economics, University of Pennsylvania); Sudeep Bhatia (Department of Psychology, University of Pennsylvania) |
| Abstract: | We study games with natural-language labels (i.e., strategic problems where options are denoted by words), for which we propose and test a measurable characterization of prominence. We assume that – ceteris paribus – players find particularly prominent those strategies that are denoted by words more frequently used in their everyday language. To operationalize this assumption, we suggest that the prominence of a strategy-label is correlated with its frequency of occurrence in large text corpora, such as the Google Books corpus (“n-gram†frequency). In testing for the strategic use of word frequency, we consider experimental games with different incentive structures (such as incentives to and not to coordinate), as well as subjects from different cultural/linguistic backgrounds. Our data show that frequently-mentioned labels are more (less) likely to be selected when there are incentives to match (mismatch) others. Furthermore, varying one’s knowledge of the others’ country of residence significantly affects one’s reliance on word frequency. Overall, the data show that individuals play strategies that fulfill our characterization of prominence in a (boundedly) rational manner. |
| Keywords: | focal points; salience; coordination; hide-and-seek; culture; language; level-k |
| JEL: | C72 C91 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:20-38&r=all |
| By: | Christopher Cotton (Queen's University); Ardyn Nordstrom; Jordan Nanowski; Eric Richert |
| Abstract: | We evaluate a large, randomized UKaid Girls' Education Challenge project in rural Zimbabwe, where the staggered rollout of the project allows us to isolate the impact of intervention components specifically intended to improve individual and community-wide knowledge of and support for girls' education. Such advocacy and information campaigns are often included as components of major development projects, but previous work has been unable to isolate their importance and effectiveness separately from the broader projects. We show that advocacy and information campaigns increased mathematics performance and school enrolment. Expanding the program beyond information provision to provide resources and update curriculum corresponded to improvements in literacy, but did not correspond to any additional improvements in mathematics and enrolment beyond what was observed following the information campaign alone. |
| Keywords: | girls education, information provision, empowerment, economic development, field experiment, advocacy, learning outcomes, enrollment |
| JEL: | C93 I25 O15 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1448&r=all |
| By: | Timothy N. Cason (Purdue University); Lana Friesen (School of Economics, University of Queensland, Brisbane, Australia); Lata Gangadharan (Monash University) |
| Date: | 2020–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:637&r=all |
| By: | Nicolas Jacquemet (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Stephane Luchini (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); A. Malézieux (CEREN - Centre de Recherche sur l'ENtreprise [Dijon] - BSB - Burgundy School of Business (BSB) - Ecole Supérieure de Commerce de Dijon Bourgogne (ESC)); Jason F. Shogren (UW - University of Wyoming) |
| Abstract: | Using two earned income/tax declaration experimental designs we show that only partial liars are affected by a truth-telling oath, a non-price commitment device. Under oath, we see no change in the number of chronic liars and fewer partial liars. Rather than smoothly increasing their compliance, we also observe that partial liars who respond to the oath, respond by becoming fully honest under oath. Based on both response times data and the consistency of subjects when several compliance decisions are made in a row, we show that partial lying arises as the result of weak preferences towards profitable honesty. The oath only transforms people with weak preferences for lying into being committed to the truth. |
| Keywords: | part-time Lying,honesty,oath,commitment,Tax evasion |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-02576845&r=all |
| By: | Marie Boltz; Bart Cockx; Ana Maria Diaz; Luz Magdalena Salas (-) |
| Abstract: | We conducted an experiment in which we hired workers under different types of contracts to evaluate how flexible working time affects on-the-job productivity in a routine job. Our approach breaks down the global impact on productivity into sorting and behavioral effects. We find that all forms of working-time flexibility reduce the length of workers’ breaks. For part-time work, these positive effects are globally counterbalanced. Yet arrangements that allow workers to decide when to start and stop working increase global productivity by as much as 50 percent, 40 percent of which is induced by sorting. |
| Keywords: | Flexible work arrangements, part-time work, productivity, labor market flexibility, work–life balance |
| JEL: | J21 J22 J23 J24 J33 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:20/1007&r=all |
| By: | Crawfurd, Lee; Ramli, Ukasha |
| Abstract: | Are Labour party politicians anti-Semitic, and are Conservative party politicians Islamophobic? In this correspondence study we measure the responsiveness of elected local representatives in the United Kingdom to requests from putative constituents from minority religious groups. We send short email requests to 10,268 local government representatives from each of the main political parties, from stereotypically Islamic, Jewish, and Christian names. Response rates are six to seven percentage points lower to stereotypically Muslim or Jewish names. The two major political parties both show equal bias towards the two minority group names. Results suggest that the bias in response may be implicit. Bias is lower in more dense and diverse locations. |
| Date: | 2020–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:tc42s&r=all |
| By: | Stamatina, Stamatina; Banerjee, Simanti; Walters, Cory |
| Keywords: | Production Economics, Farm Management |
| Date: | 2020–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nbaece:307131&r=all |