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on Experimental Economics |
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Issue of 2023‒02‒20
twenty-one papers chosen by |
| By: | John List |
| Abstract: | 2022 Summary of Artefactual Experiments |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:feb:artefa:00767&r=exp |
| By: | Keith Marzilli Ericson; Timothy J. Layton; Adrianna McIntyre; Adam Sacarny |
| Abstract: | Administrative barriers to social insurance program take-up are pervasive, including in subsidized health insurance. We conducted a randomized controlled trial with Massachusetts’ Affordable Care Act marketplace to reduce these barriers and other behavioral frictions. We find that a “check the box” streamlined enrollment intervention raises enrollment by 11%, more than personalized reminder letters (7.9% increase) or generic reminder letters (4.5% increase). Effects are concentrated among individuals eligible for zero-premium plans, who faced no further administrative burdens of setting up payments. Producing this enrollment effect through premium reduction would cost about $6 million in subsidies, highlighting the importance of these burdens. |
| JEL: | D73 I13 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30885&r=exp |
| By: | Vladimir Novak; Andrei Matveenko; Silvio Ravaioli |
| Abstract: | We show that rational but inattentive agents can become polarized ex-ante. We present how optimal information acquisition, and subsequent belief formation, depend crucially on the agent-specific status quo valuation. Beliefs can systematically - in expectations over all possible signal realizations conditional on the state of the world - update away from the realized truth and even agents with the same initial beliefs might become polarized. We design a laboratory experiment to test the model’s predictions. The results confirm our predictions about the mechanism (rational information acquisition), its effect on beliefs (systematic polarization) and provide general insights into demand for information. |
| Keywords: | Polarization, Beliefs Updating, Rational Inattention, Status Quo, Experiment |
| JEL: | C92 D72 D83 D84 D91 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2023_385&r=exp |
| By: | Geoffrey Castillo (VCEE - Vienna Center for Experimental Economics, University of Vienna); Lawrence Choo (China Center for Behavioral Economics and Finance, Southwestern University of Finance and Economics); Veronika Grimm (FAU - Friedrich-Alexander Universität Erlangen-Nürnberg) |
| Abstract: | If the Krupka-Weber (2013) norm-elicitation task captures pre-existing social norms, then the elicited norms should be independent of one's role in a game or one's social preferences. We test this idea in a complex game that features rich interactions. We find that different people, even when they have conflicting incentives, report the same social norms. Our results further validate the use of the Krupka-Weber task to measure social norms. |
| Keywords: | social norms, norm elicitation, laboratory experiment, methodology, ultimatum game |
| Date: | 2022–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03901206&r=exp |
| By: | Santos, Indhira; Petroska-Beska, Violeta; Carneiro, Pedro; Eskreis-Winkler, Lauren; Munoz Boudet, Ana Maria; Berneil, Ines; Krekel, Christian; Arias, Omar; Duckworth, Angela |
| Abstract: | We study whether a particular socio-emotional skill - grit (the ability to sustain effort and interest towards long-term goals) - can be cultivated through a large-scale program, and how this affects student learning. Using a randomized control trial, we evaluate the first nationwide implementation of a low-cost intervention designed to foster grit and self-regulation among sixth and seventh-grade students in primary schools in North Macedonia (about 33, 000 students across 350 schools). The results of this interventions are mixed. Exposed students report improvements in self-regulation, in particular the perseverance-of-effort facet of grit, relative to students in a control condition. Impacts on students are larger when both students and teachers are exposed to the curriculum than when only students are treated. For disadvantaged students, we also find positive impacts on grade point averages, with gains of up to 28 percent of a standard deviation one-year post-treatment. However, while this intervention made students more perseverant and industrious, it reduced the consistency-of-interest facet of grit. This means that exposed students are less able to maintain consistent interests for long periods. |
| Keywords: | socioemotional skills; grit; GPAs; middle-school students; field experiment; RCT |
| JEL: | C93 D91 I20 |
| Date: | 2022–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:118003&r=exp |
| By: | Piotr Evdokimov (HU Berlin); Umberto Garfagnini (University of Surrey) |
| Abstract: | Do agents believe to be agreeing more with others in the long-run? This paper designs an experiment to study how cognitive abilities affect actual and perceived disagreement in a standard sequential belief updating task with public signals. We document a persistent gap in the perception of disagreement as a function of cognitive ability. Higher cognitive ability is associated with less perceived disagreement, although the average subject underestimates the extent of actual disagreement regardless of cognitive ability. Learning about the state of the world has little effect on the evolution of perceived disagreement when controlling for cognitive ability. Providing subjects with information about their partner’s cognitive ability affects perceived disagreement only when the partner is less cognitively able. |
| Keywords: | cognitive ability; disagreement; learning; |
| JEL: | C90 D83 D89 |
| Date: | 2023–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:381&r=exp |
| By: | Gabriel Kreindler |
| Abstract: | Developing country megacities suffer from severe road traffic congestion, yet the level of congestion is not a direct measure of equilibrium inefficiency. I study the peak-hour traffic congestion equilibrium in Bangalore. To measure travel preferences, I use a model of departure time choice to design a field experiment with congestion pricing policies and implement it using precise GPS data. Commuter responses in the experiment reveal moderate schedule inflexibility and a high value of time. I then show that in Bangalore, traffic density has a moderate and linear impact on travel delay. My policy simulations with endogenous congestion indicate that optimal congestion charges would lead to a small reduction in travel times, and small commuter welfare gains. This result is driven primarily by the shape of the congestion externality. Overall, these results suggest limited commuter welfare benefits from peak-spreading traffic policies in cities like Bangalore. |
| JEL: | C93 D62 H23 O1 R40 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30903&r=exp |
| By: | Catia Batista; Jules Gazeaud; Julia Seither |
| Abstract: | International migration can contribute importantly to sustainable economic growth. The effects of migration for both origin and host countries, however, depend on immigrant integration. We experimentally evaluate the impact of information and migrants’ aspirations on immigrant integration using a field experiment among Cape Verdean immigrants in Portugal. The interventions promote integration outcomes such as migration status regularization and better quality employment of migrants. They furthermore affect those left behind. While the impact on material remittances is muted, targeting migrant integration barriers improves democratic processes and attitudes over gender equity in origin countries. In addition, providing immigrants with better information sources about integration processes affects migration intentions and expectations of prospective migrants. |
| Keywords: | Irregular migration, Integration, Remittances, Field experiment |
| JEL: | O12 O15 F22 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:unl:novafr:wp2205&r=exp |
| By: | Eugen Dimant; Michele Gelfand; Anna Hochleitner; Silvia Sonderegger |
| Abstract: | Descriptive norms – the behavior of other individuals in one’s reference group – play a key role in shaping individual decisions. When characterizing the behavior of others, a standard approach in the literature is to focus on average behavior. In this paper, we argue both theoretically and empirically that not only averages but also the shape of the whole distribution of behavior can play a crucial role in how people react to descriptive norms. Using a representative sample of the U.S. population, we experimentally investigate how individuals react to strategic environments that are characterized by different distributions of behavior, focusing on the distinction between tight (i.e., characterized by low behavioral variance), loose (i.e., characterized by high behavioral variance), and polarized (i.e., characterized by u-shaped behavior) environments. We find that individuals indeed strongly respond to differences in the variance and shape of the descriptive norm they are facing: loose norms generate greater behavioral variance and polarization generates polarized responses. In polarized environments, most individuals prefer extreme actions – which expose them to considerable strategic risk – to intermediate actions that minimize such risk. Importantly, we also find that relative to tight environments, in polarized and loose environments, personal traits and values play a larger role in determining actual behavior. This provides important insights into how individuals navigate environments that contain strategic uncertainty. |
| Keywords: | cooperation, descriptive norms, variance, peer effects |
| JEL: | C91 D01 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10233&r=exp |
| By: | Marcella Alsan; Luca Braghieri; Sarah Eichmeyer; Minjeong Joyce Kim; Stefanie Stantcheva; David Y. Yang |
| Abstract: | Concerns have been raised about the “demise of democracy”, possibly accelerated by pandemic-related restrictions. Using a survey experiment involving 8, 206 respondents from five Western democracies, we find that subjects randomly exposed to information regarding civil liberties infringements undertaken by China and South Korea to contain COVID-19 became less willing to sacrifice rights and more worried about their long-term-erosion. However, our treatment did not increase support for democratic procedures more generally, despite our prior evidence that pandemic-related health risks diminished such support. These results suggest that the start of the COVID-19 crisis was a particularly vulnerable time for democracies. |
| JEL: | I1 P0 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30846&r=exp |
| By: | Jizhou Liu |
| Abstract: | This paper studies inference in two-stage randomized experiments with covariate-adaptive randomization. Here, by a two-stage randomized experiment, we mean one in which clusters (e.g., households, schools, or graph partitions) are first randomly assigned to different levels of treated fraction and then units within each treated clusters are randomly assigned to treatment or control according to its selected treated fraction; by covariate-adaptive randomization, we mean randomization schemes that first stratify according to baseline covariates and then assign treatment status so as to achieve ``balance'' within each stratum. We study estimation and inference of this design under two different asymptotic regimes: ``small strata'' and ``large strata'', which enable us to study a wide range of commonly used designs from the empirical literature. We establish conditions under which our estimators are consistent and asymptotically normal and construct consistent estimators of their corresponding asymptotic variances. Combining these results establishes the asymptotic validity of tests based on these estimators. We argue that ignoring covariate information at the design stage can lead to efficiency loss, and commonly used inference methods that ignore or improperly use covariate information can lead to either conservative or invalid inference. Then, we apply our results to studying optimal use of covariate information in two-stage designs, and show that a certain generalized matched-pair design achieves minimum asymptotic variance for each proposed estimator. A simulation study and empirical application confirm the practical relevance of our theoretical results. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2301.09016&r=exp |
| By: | Lilith Burgstaller; Annabelle Doerr; Sarah Necker |
| Abstract: | We study the causal effects of household tax credits on the willingness to demand legally provided services using two survey experiments with 1.974 German homeowners. Participants choose between hypothetical offers of service providers and are randomly assigned to a policy scenario 1) without a tax credit, 2) a tax credit households can claim through the annual tax return, or 3) a tax credit granted by the seller at source. We also vary the refund rate of the tax credit (20/30%) and whether the price including the tax reduction is displayed. All tax credits increase the willingness to pay for offers with invoice as well as the probability to select an offer with invoice. The effectiveness of the tax credit is significantly higher when two attractive features (at source+30%) are combined or when the reduction is made salient. We estimate that about two thirds of respondents who would use the tax credit would have demanded an offer without invoice also without the tax credit. |
| Keywords: | tax credit, financial rewards for compliance, tax evasion, tax compliance, third-party reporting, survey experiment, discrete choice experiment |
| JEL: | H26 C93 E26 J22 O17 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10211&r=exp |
| By: | Shraman Banerjee (Department Of Economics, Shiv Nadar University); Swagata Bhattacharjee (Department Of Economics, Ashoka University) |
| Abstract: | In single object auctions with asymmetric bidders, the Myerson Optimal auction is difficult to implement because of its informational requirements, complexity, and a possible discouragement effect on the bidders. This paper experimentally studies the performance of a "Simple" auction (Hartline and Roughgarden, 2009) vis-a-vis Optimal auction. We find that Simple auction revenue- approximates Optimal auction better than what the theory predicts: under weak asymmetry the revenue difference is not statistically significant. We explore the bidding behavior and show that the high type bidders get discouraged in Optimal auction. We also explore the role of cognitive ability in the bidding behavior. |
| Keywords: | Optimal Auction, Simple Auction, Asymmetric Bidders, Experiment. |
| JEL: | D44 C90 |
| Date: | 2023–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:alr:wpaper:2023-01&r=exp |
| By: | Arya Gaduh; Rema Hanna; Benjamin A. Olken |
| Abstract: | Concerns about fraud in welfare programs common arguments worldwide against such programs. We conducted a survey experiment with over 28, 000 welfare program administrators and over 19, 000 beneficiaries in Indonesia to elicit the ‘marginal disutility from corruption, ’ i.e., the trade-between more generous social assistance and losses due to corruption and fraud. Merely mentioning corruption reduced perceived program success, equivalent to distributing more than 20 percent less aid. However, respondents were not sensitive to the amount of corruption—respondents were willing to trade off $2 of additional losses for an additional $1 distributed to beneficiaries. Program administrators and beneficiaries had similar assessments. |
| JEL: | D73 I38 O15 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30905&r=exp |
| By: | Kene Boun My (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Phu Nguyen-Van (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, Thang Long University); Thi Kim Cuong Pham (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Anne Stenger (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Tuyen Tiet (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Nguyen To-The (Thang Long University, VNU - Vietnam National University [Hanoï]) |
| Abstract: | This study examines factors determining farmers' investment in organic farming using a contextualized lab-in-the-field experiment with 220 small household farmers in Northern Vietnam. We focus on the role of network structure, information nudge, and social comparison between farmers using three types of networks: circle, star and complete. Our results suggest that, on average, around 64% of the land is invested in organic farming in the complete network in which each farmer is connected to all of the others, while only about 57% of the land is invested in the circle and star network. Moreover, social comparison (i.e., information about the average investment) performs better in a circle network than in a star network. Finally, information nudges about the socially optimal investment could encourage farmers' coordination in all three networks, particularly in the complete network with an increase in organic investment up to 76%. |
| Keywords: | Lab-in-the-field, Network, Nudge, Organic agriculture, Small household farmers, Social comparison. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03781161&r=exp |
| By: | Kegel, Mona Mareen; Stock-Homburg, Ruth |
| Date: | 2023–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:136009&r=exp |
| By: | Neyse, Levent; Fossen, Frank M.; Johannesson, Magnus; Dreber, Anna |
| Abstract: | Bosch-Domènech et al. (2014) reported a negative association between 2D:4D, a suggested marker of prenatal testosterone exposure, and the Cognitive Reflection Test (CRT) in a sample of 623 university students. In this pre-registered study, we test whether we can replicate their findings in a general population sample of over 2, 500 individuals from Germany. We find no statistically significant association between 2D:4D and the CRT in any of our primary hypothesis tests, or in any of our pre-registered exploratory analyses and robustness tests. The evidence is strong (based on the 99.5% confidence intervals in all three primary hypotheses tests) against effect sizes in the hypothesized direction larger than 0.075 CRT units (0.073 of the CRT standard deviation) for a one standard deviation change in 2D:4D. |
| Keywords: | Cognitive Reflection Test, 2D:4D, Replication, Prenatal Testosterone, Sex |
| JEL: | D87 D9 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbmbh:spii2023201&r=exp |
| By: | Sanjit Dhami; Narges Hajimoladarvish; Pavan Mamidi |
| Abstract: | We consider income-source-dependent tax evasion and show that this is a generalization of the well-known endowment effect. We show that loss aversion, moral costs, mental accounting, and risk preferences play a key role in explaining key features of source-dependent tax evasion. We provide evidence of the first direct link between subject-specific loss aversion and tax evasion, which is central to most successful modern theoretical accounts of tax evasion. We provide some evidence that risk aversion strengthens the cautionary effect of loss aversion and risk loving behavior attenuates, or reverses, it. However, the underlying effect is also influenced by the source of income. Evasion is increasing in the tax rate and decreasing in the audit penalty, as predicted. Our paper provides novel theoretical insights; proposes new methods in the estimation of the underlying behavioral parameters; and confirms the central predictions of the theory, while pointing out challenges for further developments that existing theory is unable to account for. |
| Keywords: | tax evasion, endowment effect, loss aversion, morality, mental accounting, prospect theory, risk aversion |
| JEL: | C91 C92 D82 D91 G21 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10224&r=exp |
| By: | Lorenzo Esposito (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Milano, Italy – Banca d'Italia, Milano, Italy); Letizia Malara (DISCE, Università Cattolica del Sacro Cuore, Milano, Italy) |
| Abstract: | Mainstream theory of finance is based on the assumptions that markets are efficient and economic agents are rational, in the sense that they use optimally the information they have in order to maximize their utility. At least since the “Allais paradox”, countless experiments have shown that this is not the case and investors’ decisions are often inconsistent. In particular, the researches by Kahneman and Tversky have highlighted that investor behaviors are not rational and sometimes are inconsistent with the logic of the traditional finance theory, due to numerous cognitive biases, which interfere with the choice process of investors. In this paper we investigate some of the most well-known cognitive biases: framing effect, loss aversion, endowment effect, decoy effect and disposition effect. In addition, the availability and representativeness heuristics and their associated biases (confirmation bias, accessibility bias, and conjunction fallacy) are examined. Our experimental methodology is based on a questionnaire consisting of 23 questions and organized into 6 sections, each referring to the various biases examined. The answers obtained differ somewhat from the huge literature on cognitive biases. We understand these differences as mainly connected to the unheard situation created by the Covid-19 pandemic, showing that personal experiences do have an effect on risk preferences. |
| Keywords: | cognitive biases, behavioral economics, prospect theory, pandemic |
| JEL: | G41 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie5:dipe0029&r=exp |
| By: | Becchetti, Leonardo; Conzo, Gianluigi; Salustri, Francesco |
| Abstract: | Climate challenge can be modelled as a multiplayer prisoner's dilemma where any ecological action - i.e., purchasing an electric car or adopting sustainable life styles - is a costly action in terms of economic resources, time, and effort for individuals. According to the well-known embedded social dilemma, even though the social benefit is maximised when everyone takes ecological actions, the Nash equilibrium of the game if all players have standard self-interested preferences is not acting. In this paper we analyse how this ecological prisoner's dilemma is affected by people's perception. Using the European Social Survey, we look at how urgent the climate threat is perceived by respondents and what they think about other countries' willingness to take ecological actions. Theoretical predictions suggest that the former increases, while the latter does not affect willingness to take ecological actions. Our empirical findings on a large sample of European citizens however show that both factors positively affect willingness to take actions. We interpret the positive effect of other country action on the individual responsibility to take actions in terms of conditional cooperation and show that the effect is weaker in countries and regions with higher social capital. |
| Keywords: | climate change, perception, ecological actions, social dilemma, conditional cooperation |
| JEL: | H41 Q54 Q58 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1231&r=exp |
| By: | Yves Arrighi (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); David Crainich (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Véronique Flambard (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique); Sophie Massin (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique) |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03700914&r=exp |