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on Experimental Economics |
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Issue of 2021‒01‒25
33 papers chosen by |
| By: | El-Bialy, Nora; Fraile Aranda, Elisa; Nicklisch, Andreas; Saleh, Lamis; Voigt, Stefan |
| Abstract: | We report the results of an experiment on norm violation, specifically lying, in a repeatedly played mind game with Syrian refugees in Jordan and in Germany. We compare their behavior with Jordanians, Germans, and Syrians who still live in Syria. The average number of lies is amazingly similar - and low - across all five samples. However, the lying patterns of Syrian refugees are very different from non-refugee participants in Germany, Jordan, and Syria itself. After having lied once, refugee participants resort to a "never return"- pattern significantly more often than the nonrefugee participants. A closer look at the socio-demographic characteristics of our Syrian refugee participants reveals that lying is associated with higher age and gender, while a longer stay in the host country is positively correlated with a lower likelihood of reporting extreme numbers of matches. |
| Keywords: | Civil war,experimental economics,honesty,lying,psychological distress |
| JEL: | C93 D01 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ilewps:44&r=all |
| By: | Dániel Horn (Institute of Economics, Centre for Economic and Regional Studies. 1097 Budapest, Tóth Kálmán utca 4.andDepartment of Economics, Corvinus University of Budapest. 1093 Budapest Fõvám tér 8.); Hubert János Kiss (Institute of Economics, Centre for Economic and Regional Studies. 1097 Budapest, Tóth Kálmán utca 4.andDepartment of Economics, Corvinus University of Budapest. 1093 Budapest Fõvám tér 8.); Tünde Lénárd (SOFI, Stockholm University. SE-106 91 Stockholm, Sweden and Institute of Economics, Centre for Economic and Regional Studies. 1097 Budapest, Tóth Kálmán utca 4.) |
| Abstract: | In this study, we estimate unadjusted and adjusted gender gap in time preference, risk attitudes, altruism, trust, trustworthiness, cooperation and competitiveness using data on 1088 high-school students from 53 classes. These data, collected by running incentivized experiments in Hungarian classrooms, are linked to an administrative data source on the students’ standardized test scores, grades and family background. We find that after taking into account class fixed effects, females are significantly more altruistic (both with classmates and schoolmates), but are less present-biased, less risk tolerant, less trusting, less trustworthy and less competitive than males. At the same time we do not observe significant gender differences in patience, time inconsistency and cooperation at the 5% significance level. We also show that these initial gender differences do not change even if we control for age, family background, cognitive skills and school grades in a regression framework. Moreover, the gender gap also remains in all but one of these preferences even if we control for the other preference domains, suggesting that only risk preferences are confounded by the other preferences, at least as the gender gap in these preferences is concerned. |
| Keywords: | adolescents, altruism, competitiveness, cooperation, dictator game, patience, present bias, public goods game, risk preferences, social preferences, time inconsistency, time preferences, trust, trustworthiness |
| JEL: | C80 C90 D91 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2103&r=all |
| By: | Osberghaus, Daniel; Reif, Christiane |
| Abstract: | Although natural hazard insurance is advocated as an important means of risk management, private insurance demand often remains below critical levels. Prior loss experience and the design of governmental relief schemes are two factors potentially influencing insurance decisions. We address these two elements in monetary incentivized experiments which include representations of natural hazard insurance schemes in Europe. We draw on two very different samples: First, we run a laboratory experiment with a student subject pool in Germany. In addition, we replicate the experiment as an online experiment with citizens of flood-prone areas in the city of Dornbirn (Austria). The experiment reflects two possible designs of governmental relief schemes: partial but guaranteed relief and full but nonguaranteed relief. The risk of loss is kept constant over ten consecutive rounds to analyze the effect of loss experience. In both of our samples, the design of the governmental relief scheme has no effect on insurance decisions. Furthermore, prior loss experience adversely affects insurance decisions. Uninsured subjects tend to remain uninsured after experiencing a loss, and previously insured subjects often switch to non-insurance in the rounds after the loss. These results have important policy implications, e.g., for the optimal design of flood risk communication. |
| Keywords: | Natural hazard insurance,experiment,governmental relief,charity hazard |
| JEL: | C91 D14 H84 Q54 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20072&r=all |
| By: | Marco Castillo; John A. List; Ragan Petrie; Anya Samek |
| Abstract: | We use field experiments with nearly 900 children to investigate how skills developed at ages 3-5 drive later-life outcomes. We find that skills map onto three distinct factors - cognitive skills, executive functions, and economic preferences. Returning to the children up to 7 years later, we find that executive functions, but not cognitive skills, predict the likelihood of receiving disciplinary referrals. Economic preferences have an independent effect: children who displayed impatience at ages 3-5 were more likely to receive disciplinary referrals. Random assignment to a parenting program reduced disciplinary referrals. This effect was not mediated by skills or preferences. |
| JEL: | C91 C93 D12 D81 I21 I26 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28288&r=all |
| By: | Geraldes, Diogo; Riedl, Arno (RS: GSBE Theme Human Decisions and Policy Design, Microeconomics & Public Economics); Strobel, Martin (RS: GSBE Theme Human Decisions and Policy Design, Microeconomics & Public Economics) |
| Abstract: | The gender gap in income and leadership positions in many domains of our society is an undisputed pervasive phenomenon. One explanation for the disadvantaged position of women put forward in the economic and psychology literature is the weaker response of women to competitive incentives. Despite the large amount of literature trying to explain this fact, the precise mechanisms behind the gender difference in competitive responsiveness are still not fully uncovered. In this paper, we use laboratory experiments to study the potential role of stereotype threat on the response of men and women to competitive incentives in mixed-gender competition. We use a real effort math task to induce an implicit stereotype threat against women in one treatment. In additional treatments we, respectively, reinforce this stereotype threat and induce a stereotype threat against men. In contrast to much of the literature we do not observe that women are less competitive than men, neither when there is an implicit nor when there is an explicit stereotype threat against women. We attribute this to two factors which differentiates our experiment from previous ones. We control, first, for inter-individual performance differences using a within-subject design, and, second, for risk differences between non-competitive and competitive environments by making the former risky. We do find an adverse stereotype threat effect on the performance of men when there is an explicit stereotype threat against them. In that case any positive performance effect of competition is nullified by the stereotype threat. Overall, our results indicate that a stereotype threat has negative competitive performance effects only if there is information contradicting an existing stereotype. This suggests that the appropriate intervention to prevent the adverse effect of stereotype threat in performance is to avoid any information referring to the stereotype. |
| JEL: | C91 D01 J16 |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2021002&r=all |
| By: | Werthschulte, Madeline |
| Abstract: | When consuming goods provided by public utilities, such as telecommunication, water, gas or electricity, the predominant payment scheme is pay-later billing. This paper identifies one potential consequence of pay-later schemes, present-biased overconsumption of the respective good, and tests the effectiveness of pay-as-you-go schemes in reducing consumption. Specifically, I run a lab experiment which mimics an energy consumption choice and randomizes the timing of when consumption costs are paid: Either immediately ('pay-as-you-go') or one-week after consumption ('pay-later'). Results show that pay-as-you-go billing significantly decreases consumption, and in particular wasteful consumption. As the design controls for contaminating effects, these results can be solely attributed to present-biased discounting under the pay-later scheme. These results imply that pay-as-you-go schemes will be welfare improving both from agent's own perspective and from a social perspective if externalities are involved. In contrast, classic price-based polices will need correctives to account for present bias arising under pay-later schemes. |
| Keywords: | payment schemes,present bias,discounting,lab experiment,energy |
| JEL: | C91 D15 D91 Q49 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20089&r=all |
| By: | Misha Galashin; Martin Kanz; Ricardo Perez-Truglia |
| Abstract: | How do macroeconomic expectations affect consumer decisions? We examine this question using a natural field experiment with 2,872 credit card customers from a large commercial bank. We conduct a survey to measure consumer expectations about future inflation and the nominal exchange rate and combine this with an information-provision experiment that generates exogenous variation in these expectations. We merge the survey and experimental data with detailed administrative data on the subjects' credit card transactions and balances. The experiment is designed to test three standard predictions from models of intertemporal consumption choice: inflation expectations should affect spending on durables; exchange rate expectations should affect spending on tradables; and, holding constant the nominal interest rate, inflation expectations should affect borrowing. We find that the information provided to participants strongly affects subjective expectations. However, we do not find any significant effects on actual consumer behavior (as measured in administrative data) or self-reported consumption plans (as measured in survey data). Our preferred interpretation is that consumers are not sophisticated enough to factor inflation and exchange rate expectations into their consumption decisions. The absence of a link between consumer expectations and behavior has potentially important implications for macroeconomic policies such as forward guidance. |
| JEL: | C81 C93 D83 D84 E03 E31 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28281&r=all |
| By: | Islam, Asadul (Monash University); Pakrashi, Debayan (Indian Institute of Technology Kanpur); Vlassopoulos, Michael (University of Southampton); Wang, Liang Choon (Monash University) |
| Abstract: | A hidden cost of the COVID-19 pandemic is the stigma associated with the disease for those infected and groups that are considered as more likely to be infected. This paper examines whether the provision of accurate and focused information about COVID-19 from a reliable source can reduce stigmatization. We carry out a randomized field experiment in the state of Uttar Pradesh, India, in which we provide an information brief about COVID-19 by phone to a random subsample of participants to address stigma and misconceptions. We find that the information brief decreases stigmatization of COVID-19 patients and certain groups such as religious minorities, lower-caste groups, and frontline workers (healthcare, police), and reduces the belief that infection cases are more prevalent among certain marginalized social and economic groups (Muslims, low caste, rural-poor population). We provide suggestive evidence that improved knowledge about the prevention and transmission of COVID-19 and reduced stress about the disease are important channels for these effects. |
| Keywords: | stigma, COVID-19, misconceptions, information, experiment, infodemics |
| JEL: | D83 I18 J16 J18 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13995&r=all |
| By: | Maximilian Andres; Lisa Bruttel; Jana Friedrichsen |
| Abstract: | The experimental literature on antitrust enforcement provides robust evidence that communication plays an important role for the formation and stability of cartels. We extend these studies through a design that distinguishes between innocuous communication and communication about a cartel, sanctioning only the latter. To this aim, we introduce a participant in the role of the competition authority, who is properly incentivized to judge communication content and price setting behavior of the firms. Using this novel design, we revisit the question whether a leniency rule successfully destabilizes cartels. In contrast to existing experimental studies, we find that a leniency rule does not affect cartelization. We discuss potential explanations for this contrasting result. |
| Keywords: | cartel, judgment of communication, corporate leniency program, price competition, experiment |
| JEL: | C92 D43 L41 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1926&r=all |
| By: | Buchholz, Matthias; Danne, Michael; Mußhoff, Oliver |
| Abstract: | Farmland is an essential agricultural production factor that farmers can choose to either buy or rent. In this paper, we apply a discrete choice experiment to analyse German farmers' individual buying and rental decisions for farmland. Our results reveal that farmers have a higher willingness to buy than to rent farmland. Covariates such as farmers' risk attitude affect the decisions in the discrete choice experiment while no effect was observable for individual expectations about future farmland prices. Direct payments considerably raise farmers' willingness to buy and rent farmland. Farmers' decisions deviate substantially from normative predictions from the present value model. |
| Keywords: | Agricultural Land Market,Farmland,Rent-or-Buy Decision,Discrete Choice Experiment,Present Value Model |
| JEL: | C93 D90 Q10 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:forlwp:182020&r=all |
| By: | Jordi Brandts; Sabrine El Baroudi; Stefanie J. Huber; Cristina Rott |
| Abstract: | We conduct a field and an online classroom experiment to study gender differences in self-set performance goals and their effects on performance in a real-effort task. We distinguish between public and private goals, performance being public and identifiable in both cases. Participants set significantly more ambitious goals when these are public. Women choose lower goals than men in both treatments, but in particular when goals are private information. Men perform better than women under private and public goals as well as in the absence of goal setting, consistent with the identifiability of performance causing gender differences, as found in other studies. Compared to private goal setting, public goal setting does not affect men’s performance at all but it leads to women’s performance being significantly lower. Comparing self-set goals with actual performance we find that under private goal setting women’s performance is on average 67% of goals, whereas for men it is 57%. Under public goal setting the corresponding percentages are 43% and 39%, respectively. |
| Keywords: | Gender Gap, goal setting, public observability, experiment |
| JEL: | C91 J01 J16 J82 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1231&r=all |
| By: | Charness, Gary (University of California, Santa Barbara); Cobo-Reyes, Ramón (University of Essex); Eyster, Erik (University of California, Santa Barbara); Katz, Gabriel (University of Exeter); Sánchez, Ángela (NYU and Federal Reserve Bank of Minneapolis); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | We present a field experiment to study the effects of non-monetary incentives on healthy food choices of 282 children in elementary schools. Previous interventions have typically paid participants for healthy eating, but this often may not be feasible. We introduce a system where food items are graded based on their nutritional value, involving parents or classmates as change agents by providing them with information regarding the food choices of their children or friends. We find parents' involvement in the decision process to be particularly beneficial in boosting healthy food choices, with very strong results that persist months after the intervention. |
| Keywords: | healthy eating, children, parents, non-monetary incentives, field experiment |
| JEL: | C93 I12 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13999&r=all |
| By: | Gary Charness (University of California, Santa Barbara); Ramón Cobo-Reyes (Amercian University of Sharjah); Erik Eyster (University of California, Santa Barbara); Gabriel Katz (University of Exeter and Universidad Catolica del Uruguay); Ángela Sánchez (NYU Abu Dhabi); Matthias Sutter (Max Planck Institute Bonn, University of Cologne, University of Innsbruck, IZA Bonn) |
| Abstract: | We present a field experiment to study the effects of non-monetary incentives on healthy food choices of 282 children in elementary schools. Previous interventions have typically paid participants for healthy eating, but this often may not be feasible. We introduce a system where food items are graded based on their nutritional value, involving parents or classmates as change agents by providing them with information regarding the food choices of their children or friends. We find parents’ involvement in the decision process to be particularly beneficial in boosting healthy food choices, with very strong results that persist months after the intervention. |
| Keywords: | Healthy eating, children, parents, non-monetary incentives, field experiment |
| JEL: | C93 I12 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:047&r=all |
| By: | Imen Bouhlel (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Michela Chessa (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Agnès Festré (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Eric Guerci (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur) |
| Abstract: | Information search and opinion formation are central aspects of decision making in consumers choices. Indeed, before taking a decision, the alternatives among which the rational choice will be made should be clearly valued. In standard economic theory, the search dynamics is generally neglected because the process is assumed to be carried out without any cost or without spending time. However, whenever only a significant collection of experience can provide the bulk of relevant information to make the best choice, as it is the case for experience goods (Nelson, 1970), some engendered costs in collecting such information might be considered. Our paper lies on a conceptual framework for the analysis of an individual sequential search task among a finite set of alternatives. This framework is inspired by both the Secretary problem (Ferguson et al., 1989) and the multi-armed bandit problem (Robbins, 1952). We present a model where an individual is willing to locate the best choice among a set of alternatives. The total amount of time for searching is finite and the individual aims at maximizing the expected payoff given by an exploration-exploitation trade-off: a first phase for exploring the value of new alternatives, and a second phase for exploiting her past collected experience. The task involves an iterative exploitation – i.e., where the final payoff does not only depend on the value of the chosen alternative, but also on the remaining time that has not been dedicated to exploration –. Given the finite horizon of time, the optimal stopping strategy can be assimilated to a satisficing behavior (Simon, 1956). We manipulate the degree of certainty of information, and we find that the optimal stopping time is later under the uncertain information condition. We experimentally test the model's predictions and find a tendency to oversearch when exploration is costly, and a tendency to undersearch when exploration is relatively cheap. We also find under the certain information condition that participants learn to converge towards the optimal stopping time, but this learning effect is less present under the uncertain information condition. Regret and anticipation lead to more exploration under both information conditions. A gender effect is also exhibited with women tending to explore more than men. |
| Date: | 2020–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03036851&r=all |
| By: | Marta Ballatore (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Lise Arena (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Agnès Festré (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015 - 2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur) |
| Abstract: | This article aims at making an updated typology of recent experimental studies in the IS literature on the period 1999-2019. Based on a full-text search within the Association for Information Systems (AIS) "basket" of eight top IS journals (EJIS, ISR, JAIS, ISJ, JIT, JMIS, JSIS and MISQ), this research gathered 392 articles and highlights the use of 5 different types of experiments in IS, mainly: artificial simulations, laboratory experiments, field experiments, online experiments (scenario simulation game-based; brainstorming-based. . . ) and natural experiments. Each category is discussed through the perspective of its degree of control, and technological realism. Results show the significant predominance of laboratory experiments over field and natural experiments on the period. This, in turn, stresses the preferred tendency followed by IS scholars to perceive experimental methods as a way to control the source of variations of variables under study. In addition, this paper provides a better understanding of the context of use of a specific experimental method. Overall, it is shown that laboratory experiments (including scenario-based lab experiments) are mainly used, in a deterministic manner, to assess or test the impact of an IS on human decision-making or behaviour. By contrast, artificial simulations experiments are more appropriate to study emergent phenomena and to make predictions, often providing key insights about quality and effectiveness of IS. |
| Date: | 2020–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-03036837&r=all |
| By: | Chulyoung Kim (Yonsei Univ); Sang-Hyun Kim (Yonsei Univ); Jinhyuk Lee (Korea Univ); Joosung Lee (University of Edinburgh) |
| Abstract: | In a veto game, we investigate the effects of “buyout†which allows non-veto players strategically form an intermediate coalition. We report two main experimental findings in this paper. First, the frequency of intermediate coalition formation is much lower than predicted by theory, regardless of the relative negotiation power between veto and non-veto players. Second, allowing coalition formation among non-veto players does not affect the surplus distribution between veto and non-veto players, which diverges from core allocations. This finding contrasts to the literature, which views the ability to form an intermediate coalition as a valuable asset for non-veto players in increasing their bargaining power. Alternatively, we discuss inequity aversion as a possible explanation to support the prevalence of non-core allocations in our data. |
| Keywords: | coalition bargaining; veto game; buyout; strategic coalition formation; veto player; experiment. |
| JEL: | C72 C78 C92 D72 D74 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:yon:wpaper:2021rwp-183&r=all |
| By: | Andersson, Ola (Department of Economics, Uppsala University); Campos-Mercade, Pol (Department of Economics, University of Copenhagen); Meier, Armando N. (University of Lausanne); Wengström, Erik (Department of Economics, Lund University) |
| Abstract: | We show that the anticipation of COVID-19 vaccines reduces voluntary social distancing. In a large-scale preregistered survey experiment with a representative sample, we study whether providing information about the safety, effectiveness, and availability of COVID-19 vaccines affects compliance with public health guidelines. We find that vaccine information reduces peoples' voluntary social distancing, adherence to hygiene guidelines, and their willingness to stay at home. Vaccine information induces people to believe in a swifter return to normal life and puts their vigilance at ease. The results indicate an important behavioral drawback of the successful vaccine development: An increased focus on vaccines can lead to bad health behaviors and accelerate the spread of the virus. The results imply that, as vaccinations start and the end of the pandemic feels closer, existing policies aimed at increasing social distancing will be less effective and stricter policies might be required. |
| Keywords: | Economic epidemiology; social distancing; vaccination; information |
| JEL: | D83 D91 I12 I18 |
| Date: | 2020–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2020_029&r=all |
| By: | John A. List; Fatemeh Momeni; Yves Zenou |
| Abstract: | The behavioral revolution within economics has been largely driven by psychological insights, with the sister sciences playing a lesser role. This study leverages insights from sociology to explore the role of neighborhoods on human capital formation at an early age. We do so by estimating the spillover effects from a large-scale early childhood intervention on the educational attainment of over 2,000 disadvantaged children in the United States. We document large spillover effects on both treatment and control children who live near treated children. Interestingly, the spillover effects are localized, decreasing with the spatial distance to treated neighbors. Perhaps our most novel insight is the underlying mechanisms at work: the spillover effect on non-cognitive scores operate through the child's social network while parental investment is an important channel through which cognitive spillover effects operate. Overall, our results reveal the importance of public programs and neighborhoods on human capital formation at an early age, highlighting that human capital accumulation is fundamentally a social activity. |
| JEL: | C93 I21 I24 I26 I28 R1 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28283&r=all |
| By: | Daniela Glätzle-Rützler (Department of Public Finance, University of Innsbruck); Philipp Lergetporer (Center for the Economics of Education, ifo Institute Munich, and CESifo); Matthias Sutter (Max Planck Institute for Research on Collective Goods, University of Cologne, University of Innsbruck and IZA Bonn) |
| Abstract: | Many important intertemporal decisions are made by groups rather than individuals. What happens to collective decisions when there is internal conflict about the tradeoff between present and future has not been thoroughly investigated so far. We study experimentally the causal effect of group members’ heterogeneous payoffs from waiting on intertemporal choices. We find that three-person groups behave more patiently than individuals. This effect stems from the presence of at least one group member with a high payoff from waiting. We analyze additional treatments, group chat content, and survey data to uncover the mechanism through which heterogeneity in groups increases patience. |
| Keywords: | patience, time preferences, group decisions, payoff heterogeneity, experiment |
| JEL: | C91 C92 D03 D90 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:054&r=all |
| By: | Glätzle-Rützler, Daniela (University of Innsbruck); Lergetporer, Philipp (Ifo Institute for Economic Research); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | Many important intertemporal decisions are made by groups rather than individuals. What happens to collective decisions when there is internal conflict about the tradeoff between present and future has not been thoroughly investigated so far. We study experimentally the causal effect of group members' heterogeneous payoffs from waiting on intertemporal choices. We find that three-person groups behave more patiently than individuals. This effect stems from the presence of at least one group member with a high payoff from waiting. We analyze additional treatments, group chat content, and survey data to uncover the mechanism through which heterogeneity in groups increases patience. |
| Keywords: | patience, time preferences, group decisions, payoff heterogeneity, experiment |
| JEL: | C91 C92 D03 D90 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14025&r=all |
| By: | Costas Meghir (Cowles Foundation, Yale University, NBER, IZA, CEPR, and Institute for Fiscal Studies); Ahmed Mushfiq Mobarak (Cowles Foundation, Yale University); Ahmed Corina Mommaerts (University of Wisconsin – Madison); Ahmed Melanie Morten (Stanford University and NBER) |
| Abstract: | We document that an experimental intervention offering transport subsidies for poor rural households to migrate seasonally in Bangladesh improved risk sharing. A theoretical model of endogenous migration and risk sharing shows that the effect of subsidizing migration depends on the underlying economic environment. If migration is risky, a temporary subsidy can induce an improvement in risk sharing and enable profitable migration. We estimate the model and find that the migration experiment increased welfare by 12.9%. Counterfactual analysis suggests that a permanent, rather than temporary, decline in migration costs in the same environment would result in a reduction in risk sharing. |
| Keywords: | Informal Insurance, Migration, Bangladesh, RCT |
| JEL: | D12 D91 D52 O12 R23 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2185r2&r=all |
| By: | Svetlana Pevnitskaya (Department of Economics, Florida State University); Dmitry Ryvkin (Department of Economics, Florida State University) |
| Abstract: | We use a laboratory experiment to study decisions in a dynamic game where firms' private production leads to accumulation of a public bad, such as pollution. Firms have an option to invest in clean technology, which lowers their emissions, or contributions to the public bad. The main treatment variable is the type of access to clean technology, or benefits from such investment, which can be private or common. In the private access treatment, investment reduces the firm's own propensity to pollute. In the common access treatment, each firm's investment reduces all firms' propensity to pollute. For each treatment, we characterize two alternative solution concepts---the Markov perfect equilibrium and social optimum. The observed level of the public bad is lowest with common access to clean technology. This result remains in the presence of communication. The option to communicate induces coordination of investments in clean technology at a higher level, leading to lower average pollution levels in both treatments. |
| Keywords: | dynamic games, public bad, experiment, environmental economics |
| JEL: | C90 C72 Q50 Q01 C61 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:fsu:wpaper:wp2021_01_01&r=all |
| By: | Vollstaedt, Ulrike; Imcke, Patrick; Brendel, Franziska; Ehses-Friedrich, Christiane |
| Abstract: | Our study proposes a novel mechanism to reduce information asymmetry about product quality between buyers and sellers. Product testing organizations like Consumer Reports (US) and Stiftung Warentest (Germany) seek to reduce this asymmetry by providing credible information. However, limited capacity leads to testing of only a select number of product models, often bestsellers, which can yield suboptimal information. After outlining our mechanism, we develop a game to derive testable predictions. We show theoretically that a unique Nash equilibrium exists in which our mechanism yields optimal information, equivalent to a world of complete information, while selecting bestsellers does not. Subsequently, we confirm experimentally that our mechanism increases consumer surplus. |
| Keywords: | Consumer surplus,information asymmetry,product quality,product test,information disclosure,mechanism design,experiment |
| JEL: | C72 C91 D82 L15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:887&r=all |
| By: | Philipp Lergetporer; Marc Piopiunik; Lisa Simon |
| Abstract: | In recent years, Europe has experienced a large influx of refugees. While natives’ attitudes toward refugees are decisive for the political feasibility of asylum policies, little is known about how these attitudes are shaped by information about refugees’ characteristics. We conducted a survey experiment with a representative sample of more than 4,000 adults in Germany in which we randomly provide information about refugees’ education level. Information provision strongly increases respondents’ beliefs that refugees are well educated. The information also increases labor market competition concerns, decreases fiscal burden concerns, and positively affects general attitudes toward refugees. We perform several robustness analyses in additional experiments with more than 5,000 university students. In sum, we show that correcting misperceptions about refugees’ education level has profound effects on natives’ attitudes. |
| Keywords: | Refugees, information provision, education, survey experiment, labor market |
| JEL: | F22 J24 D83 C91 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_346&r=all |
| By: | Marianne Lefebvre (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - AGROCAMPUS OUEST - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - Institut National de l'Horticulture et du Paysage); Estelle Midler (Osnabrück University); Philippe Bontems (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: | Agriculture is one of the economic sectors most exposed to exogenous risks such as climate hazards and price volatility on agricultural markets. Agricultural policies targeting the adoption of environment-friendly but potentially risk-increasing practices cannot ignore this challenge. Farmers have indeed to decide if they take the foreground risk associated with the adoption of environment-friendly practices, while simultaneously facing exogenous background risk beyond their control. Using a theoretical model and a public good experiment, we analyse the adoption of agri-environmental practices and the effect of agri-environmental subsidies in a context where risks are both foreground and background. While most of the literature on background risk focuses on its impact on individual decisions, we analyse the influence of background risk in a context of strategic uncertainty (contribution to a public good). The results highlight the potential synergies between greening the CAP and supporting risk management. We find that background risk discourages the adoption of green practices, although it affects all farmland independently from the farmer's choice of practices (environment friendly or conventional). An incentive payment per hectare of land farmed with green practices increases the adoption of risk-increasing practices but is significantly less effective in the presence of background risk. |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03050486&r=all |
| By: | Kiessling, Lukas (Max Planck Institute for Research on Collective Goods); Chowdhury, Shyamal (University of Sydney); Schildberg-Hörisch, Hannah (Heinrich Heine University Düsseldorf); Sutter, Matthias (Max Planck Institute for Research on Collective Goods) |
| Abstract: | We study whether and how parents interfere paternalistically in their children's intertemporal decision-making. Based on experiments with over 2,000 members of 610 families, we find that parents anticipate their children's present bias and aim to mitigate it. Using a novel method to measure parental interference, we show that more than half of all parents are willing to pay money to override their children's choices. Parental interference predicts more intensive parenting styles and a lower intergenerational transmission of patience. The latter is driven by interfering parents not transmitting their own present bias, but molding their children's preferences towards more time-consistent choices. |
| Keywords: | parental paternalism, time preferences, convex time budgets, present bias, intergenerational transmission, parenting styles, experiment |
| JEL: | C90 D1 D91 D64 J13 J24 O12 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14030&r=all |
| By: | Curtis Atkisson; Monique Borgerhoff Mulder |
| Abstract: | Explaining why humans cooperate in anonymous contexts is a major goal of human behavioral ecology, cultural evolution, and related fields. What predicts cooperation in anonymous contexts is inconsistent across populations, levels of analysis, and games. For instance, market integration is a key predictor across ethnolinguistic groups but has inconsistent predictive power at the individual level. We adapt an idea from 19th-century sociology: people in societies with greater overlap in ties across domains among community members (Durkheim's "mechanical" solidarity) will cooperate more with their network partners and less in anonymous contexts than people in societies with less overlap ("organic" solidarity). This hypothesis, which can be tested at the individual and community level, assumes that these two types of societies differ in the importance of keeping existing relationships as opposed to recruiting new partners. Using multiplex networks, we test this idea by comparing cooperative tendencies in both anonymous experimental games and real-life communal labor tasks across 9 Makushi villages in Guyana that vary in the degree of within-village overlap. Average overlap in a village predicts both real-world cooperative and anonymous interactions in the predicted direction; individual overlap also has effects in the expected direction. These results reveal a consistent patterning of cooperative tendencies at both individual and local levels and contribute to the debate over the emergence of norms for cooperation among humans. Multiplex overlap can help us understand inconsistencies in previous studies of cooperation in anonymous contexts and is an unexplored dimension with explanatory power at multiple levels of analysis. |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2012.07669&r=all |
| By: | Marinho Bertanha |
| Abstract: | Numerous empirical studies employ regression discontinuity designs with multiple cutoffs and heterogeneous treatments. A common practice is to normalize all the cutoffs to zero and estimate one effect. This procedure identifies the average treatment effect (ATE) on the observed distribution of individuals local to existing cutoffs. However, researchers often want to make inferences on more meaningful ATEs, computed over general counterfactual distributions of individuals, rather than simply the observed distribution of individuals local to existing cutoffs. This paper proposes a consistent and asymptotically normal estimator for such ATEs when heterogeneity follows a non-parametric function of cutoff characteristics in the sharp case. The proposed estimator converges at the minimax optimal rate of root-n for a specific choice of tuning parameters. Identification in the fuzzy case, with multiple cutoffs, is impossible unless heterogeneity follows a finite-dimensional function of cutoff characteristics. Under parametric heterogeneity, this paper proposes an ATE estimator for the fuzzy case that optimally combines observations to maximize its precision. |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2101.01245&r=all |
| By: | van den Berg, Gerard J. (University of Bristol); Hofmann, Barbara (FEA Nuremberg); Stephan, Gesine (Institute for Employment Research (IAB), Nuremberg); Uhlendorff, Arne (CREST) |
| Abstract: | In the German unemployment insurance system, Integration Agreements (IA) are mandatory contracts between the employment agency and the unemployed, jointly signed by the latter and the caseworker. IAs stipulate rights and obligations but are generally perceived as instruments to control search behavior. We designed and implemented a Randomized Controlled Trial involving thousands of newly unemployed workers, where we randomize the timing of the IA as well as the extent to which this timing is announced prior to the meeting. Randomization is at the individual level. We use administrative registers to observe outcomes. A theoretical analysis of anticipation of prior announcements provides suggestions to empirically detect this. The results show that IAs early in the spell have on average a small positive effect on entering employment within a year. When classifying individuals using an employability indicator, we find that this result is driven by individuals with adverse prospects. Among them, being assigned to an early IA increases the probability of re-employment within a year from 45% to 53%. |
| Keywords: | unemployment, monitoring, job search, active labor market policy, nudge, anticipation, randomized controlled trial |
| JEL: | J68 J64 C93 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14026&r=all |
| By: | Solnick, Rachel Emily; Chao, Grace; Ross, Ryan; Kraft-Todd, Gordon; Kocher, Keith E (University of Michigan) |
| Abstract: | Background: Containment of the coronavirus disease 2019 (COVID-19) pandemic requires the public to change behavior under social distancing mandates. Social media are important information dissemination platforms that can augment traditional channels communicating public health recommendations. The objective of the study is to assess the effectiveness of COVID-19 public health messaging on Twitter when delivered by emergency physicians and containing personal narratives. Methods: On April 30, 2020, we randomly assigned 2007 U.S. adults to an online survey using a 2x2 factorial design. Participants rated 1 of 4 simulated Twitter posts varied by messenger type (emergency physician vs federal official) and content (personal narrative vs impersonal guidance). Main outcomes were: perceived message effectiveness (35-point scale); perceived attitude effectiveness (15-point scale); likelihood to share Tweets (7-point scale); and writing a letter to their governor to continue COVID-19 restrictions (write letter or none). Results: The physician/personal message had the strongest effect and significantly improved all main messaging outcomes except for letter-writing. Unadjusted mean differences between physician/personal and federal/impersonal were: perceived messaging effectiveness (3.2 [95%CI, 2.4-4.0]); perceived attitude effectiveness (1.3 [95%CI, 0.8-1.7]); likelihood to share (0.4 [95%CI, 0.15-0.7]). For letter-writing, physician/ personal made no significant impact compared to federal/ impersonal (odds ratio 1.14 [95%CI, 0.89-1.46]). Conclusions: Emergency physicians sharing personal narratives on Twitter are perceived to be more effective at communicating COVID-19 health recommendations compared to federal officials sharing impersonal guidance. |
| Date: | 2020–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:am49t&r=all |
| By: | Kartik Anand; Prasanna Gai; Edmund Lou; Sherry X Wu |
| Abstract: | How does a political leader’s messaging during a pandemic influence social distancing by citizens? We model the strategic choice of narrative in a beauty contest setting where the leader seeks to eliminate the disease. The leader’s resolve to eliminate the disease affects her narrative in a non-linear way. A resolute leader adopts a highly partisan narrative that identifies strongly with her followers, albeit at the expense of her payoff, while an ambivalent leader with low resolve for eliminating the disease is less partisan. Our result speaks to the debate on the voluntary acceptance of limits to individual liberty during a pandemic. |
| Keywords: | Beauty contests, pandemic, Covid-19, political narratives, leadership |
| JEL: | D7 D84 D91 H12 I12 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-106&r=all |
| By: | Stefania Bortolotti; Thomas Dohmen (University of Bonn, IZA, Maastricht University, ROA, DIW); Hartmut Lehmann (National Research University, Higher School of Economics, Russia; IZA, University of Bologna); Frauke Meyer (Forschungszentrum Jülich); Norberto Pignatti (International School of Economics at Tbilisi State University (ISET), IZA); Karine Torosyan (International School of Economics at Tbilisi State University (ISET)) |
| Abstract: | We shed new light on the relationship between cognition and patience, by providing documenting that the correlation between cognitive abilities and delay discounting is weaker for the same group of individuals if choices are incentivized. We conjecture that the exertion of higher cognitive effort, which induces higher involvement of the cognitive system, moderates the relationship between patience and cognition. To test this hypothesis, we analyze the relationship between various measures of cognitive ability, including the cognitive reffection test (CRT), a symbol-correspondence test, a numeracy test, as well as self-reported math ability and the interviewer's assessment of the respondent's sharpness and understanding, and different measures of patience, including incentivized choices between smaller sooner and larger later monetary payments and hypothetical inter-temporal trade-offs, for 107 subjects drawn from the adult population in Tbilisi (Georgia). |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:048&r=all |
| By: | Francesco Fallucchi; Marc Kaufmann |
| Abstract: | Many important economic outcomes result from cumulative effects of smaller choices, so the best outcomes require accounting for other choices at each decision point. We document narrow bracketing -- the neglect of such accounting -- in work choices in a pre-registered experiment on MTurk: bracketing changes average willingness to work by 13-28%. In our experiment, broad bracketing is so simple to implement that narrow bracketing cannot possibly be due to optimal conservation of cognitive resources, so it must be suboptimal. We jointly estimate disutility of work and bracketing, finding gender differences in convexity of disutility, but not in bracketing. |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2101.04529&r=all |