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on Experimental Economics |
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Issue of 2023‒06‒12
34 papers chosen by |
| By: | Goulão, Catarina; Lacomba, Juan Antonio; Lagos, Francisco; Rooth, Dan-Olof |
| Abstract: | Being overweight or obese is associated with lower employment and earnings, possibly arising from employer discrimination. A few studies have used field experiments to show that obese job applicants are, in fact, discriminated against in the hiring process. However, whether overweight job applicants also face employer discrimination is still an open question. To this end, we have designed a correspondence testing experiment in which fictitious applications are sent to real job openings across twelve different occupations in the Spanish labor market. We compare the callback rate for applications with a facial photo of a normal weight person to the one for applications with a photo of the same person manipulated into looking overweight. Applications with a photo of the weight-manipulated male receive significantly fewer callbacks for a job interview compared to normal weight, and this differential treatment is especially pronounced in female-dominated occupations. For women, we find the opposite result. Weight-manipulated female applications receive slightly more callbacks, especially in female-dominated occupations. Our experimental design allows us to disentangle whether employers act on attractiveness or weight when hiring. For men, the weight manipulation effect is explained by an attractiveness premium, while for women we find evidence of an attractiveness penalty, as well as a weight penalty, in explaining the effect. |
| Keywords: | Obesity; overweight; gender, attractiveness; hiring, correspondence testing |
| JEL: | J64 J71 |
| Date: | 2023–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:128088&r=exp |
| By: | Goeschl, Timo; Soldà, Alice |
| Abstract: | Pledges feature in international climate cooperation since the 2015 Paris Agreement. We explore how differences in pledgers' trustworthiness affect outcomes in a social dilemma that parallels climate change. In an online experiment, two participants interact with a randomly matched third player in a repeat maintenance game with a pledge stage. Treatments vary whether participants are matched with a player that is more or less trustworthy as revealed by behavior in a promise-keeping game; and whether they observe that trustworthiness. We find that participants knowingly matched with more trustworthy players cooperate more than participants matched with less trustworthy players (knowingly or unknowingly), but also more than participants unknowingly matched with more trustworthy players. In contrast, participants knowingly matched with less trustworthy players do not cooperate less than participants who are unknowingly so. Our findings suggest that the use of pledges, as per the Paris Agreement, can leverage the power of trustworthiness to enhance cooperation. |
| Keywords: | social dilemmas; pre-play communication; pledges; cooperation; credibility; group formation |
| Date: | 2023–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0728&r=exp |
| By: | Fabian Bopp (Paderborn University); Wendelin Schnedler (Paderborn University) |
| Abstract: | A lot of harm comes about because people ignore the consequences of their behavior on others. Experimental evidence suggests that people might even willfully ignore consequences so that they can act selfishly without a `bad conscience'. In essence, such people `kid themselves'. If I care about the consequences of my acts on others, I should not ignore them. Upon reflection, people may discover this inconsistency. De-biasing people may thus be an effective tool to prevent harm. We examine this idea experimentally. Ee find that inviting subjects to describe their aims and means makes them more likely to inform themselves and ultimately act more pro-socially. |
| Keywords: | willful ignorance, strategic ignorance, social preferences, de-biasing |
| JEL: | C91 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:109&r=exp |
| By: | Achim Ahrens; Alessandra Stampi-Bombelli; Selina Kurer; Dominik Hangartner |
| Abstract: | The challenge of assigning optimal treatment policies is ubiquitous in public economics. While a vast empirical literature is concerned with the estimation of causal effects under treatment effect heterogeneity, the potentials of individualized treatment assignments are under-explored, despite recent advances in the field of policy learning. We evaluate the benefits of multi-action policy learning using policy trees in the context of immigration naturalization. We use a tailored two-phase randomized field experiment to estimate and field a policy rule for an information campaign encouraging eligible immigrants in the City of Z\"urich to apply for Swiss citizenship. The policy rule takes the form of a decision tree assigning treatments based on individual-level characteristics drawn from linked administrative data. In the exploration phase, we randomly allocate 60% of our sample of 5, 145 citizenship-eligible immigrants to receive one of three different letters addressing specific naturalization hurdles pertaining to the lack of information and encouragement. The exploitation phase estimates and fields the policy rule on one-half of the remaining sample while sending random treatment letters to the other half. While we find only moderate levels of heterogeneity, the policy tree yields a larger, albeit not significant, increase in take-up compared to the best-performing one-size-fits-all treatment. |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2305.00545&r=exp |
| By: | Patricia Gil; Justin E. Holz; John A. List; Andrew Simon; Alejandro Zentner |
| Abstract: | In modern economies, when debt and trust issues arise, a partial forgiveness policy is often the solution to induce payment and increase disclosure. For their part, governments around the globe continue to use tax amnesties as a strategy to allow debtors to make amends for past misdeeds in exchange for partial debt forgiveness. While ubiquitous, much remains unknown about the basic facts of how well amnesties work, for whom, and why. We present a simple theoretical construct that provides both economic clarity into tax amnesties as well as insights into the necessary behavioral parameters that one must estimate to understand the consequences of tax amnesties. We partner with the Dominican Republic Tax Authorities to design a natural field experiment that is linked to the theory to estimate key causal mechanisms. Empirical results from our field experiment, which covers 125, 452 taxpayers who collectively owe $5.2 billion (5.5% of GDP) in known debt, highlight the import of deterrence laws, beliefs about future amnesties, and tax morale for debt payment and increased disclosure. Importantly, we find large short run effects: our most effective treatment (deterrence) increased payments of known debt by 25% and hidden debt by 48%. Further, we find no evidence of our intervention backfiring on subsequent tax payments. |
| JEL: | C93 H2 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31210&r=exp |
| By: | Fabian Bopp (Paderborn University); Sara le Roux (Oxford Brookes Business School) |
| Abstract: | The social media age has meant that many behaviours spread through contact with others. The extent to which people adopt/imitate behaviour they observe, can critically affect whether policymakers are successful when introducing new initiatives. In many situations people can either make decisions based on their own intuitive signals or follow a social signal. Depending on the quality of the signals one might be more informative than the other. This project aims to better understand how people use social information to learn and imitate others in ambiguous situations, when both the private and the social signal are not perfectly informative. We conduct an experimental study that observes whether people are prone to imitate others in risky and ambiguous environments, and in gain and loss domain settings. We find that individuals do significantly learn from social information, independent of the framing. Social learning behaviour is not significantly affected by ambiguity. (abstract of the paper) |
| Keywords: | risk; ambiguity; imitating; social learning |
| JEL: | C91 D81 D82 D83 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:110&r=exp |
| By: | Sébastien Duchêne (Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School); Adrien Nguyen-Huu (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Dimitri Dubois (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Marc Willinger (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier) |
| Abstract: | We assess the impact of environmental externalities on port folio decisions in a lab-in-the-field experiment on finance professionals and students. Participants are prone to accept lower returns for positive environmental impact but will not bear increased risk. They show a symmetric pro-environmental preferences depending on the sign of the externality. Finance professionals are more pro-environment than students, particularly regarding positive externalities, and less influenced by a ranking signal about environmental performance. Control tasks show that experimental measures of pro-social and environmental preferences have less influence on port folios than market practices for professionals but are significant predictors for students. |
| Date: | 2022–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:hal-03883121&r=exp |
| By: | Valeria Fanghella (EESC-GEM Grenoble Ecole de Management); Lisette Ibanez (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); John Thøgersen (Aarhus University [Aarhus]) |
| Abstract: | Prosocial behavior is important for a well-functioning society, but many people try to avoid situations where they could act prosocially. This paper studies the avoidance of a prosocial request, how it is affected by social pressure, and whether request avoidance and social pressure generate spillover effects on following prosocial behaviors. To this aim, we conduct an incentivized online experiment (N=1400), where participants play two consecutive dictator games with a charity. In the first game, we vary the type of game and information provided in a 2 x 2 between-subject design: (i) standard dictator game or dictator game with costly opt-out; (ii) with or without social information (mean donation in a previous session). The second game is a standard dictator game for all and aims to capture spillover effects from the first decision. We find that the opt-out option leads to significantly lower donations, especially when social information is present (but this effect is not statistically significant). The negative effect of the opt-out option spills over to the second donation decision. We also observe a negative spillover effect after a standard dictator game. Social information reduces donations in a standard dictator game, but also allows to mitigate the negative spillover effect from the first to the second behavior. |
| Keywords: | prosocial behavior, opt-out option, social information, spillover, charitable giving, selfimage |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:hal-04093001&r=exp |
| By: | Olga Tatarnikova (ESSCA Research Lab - ESSCA - Ecole Supérieure des Sciences Commerciales d'Angers , CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Sebastien Duchene (Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School); Patrick Sentis (MRM - Montpellier Research in Management - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier); Marc Willinger (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier) |
| Abstract: | Efficiency of SRI portfolios is commonly assessed based on an inconclusive risk-return ratio. Wepropose to approach the efficiency of portfolios with the notion of instability. Unstable portfolios arecharacterized by higher transaction costs and human resources costs that justify search for more stableportfolios. We examine the instability of SRI portfolios from the perspective of behavioral finance. Basedon data from incentivized experiments with 153 financial professionals and 233 students, we compare abaseline treatment to a ranking treatment in which participants received feedback regarding their aver-age investment in SRI assets. We found that SRI portfolios had significantly lower instability: portfolioswith a majority of SRI shares exhibited less instability in both treatments compared to conventionalportfolios. Moreover, in the ranking treatment subjects invested more in SRI assets than in the baseline.In addition, the experiment revealed the convergence of professionals' and students' behavioral patterns. |
| Keywords: | behavioral finance, experimental economics, financial asset markets, portfolio instability, socially responsible investment |
| Date: | 2022–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:hal-03909118&r=exp |
| By: | Giselli Castillo |
| Abstract: | Following the contemporary analysis on justice and preferences in distribution decisions, the present study analyzes the responses given by the participants in a laboratory experiment where they had to compete developing a real effort task and decide, in a distribution game, how the opportunities of winning and payments of both participants will be distributed. It is shown that preferences in distributions of opportunities of winning the game are extreme, that is, perfect equality or perfect inequality is preferred, while intermediate distributions are rare. Furthermore, those who prefer unequal opportunity distributions are also more likely to choose inequitable payments distributions. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp544&r=exp |
| By: | Mallory Avery (Department of Economics, Monash Business School, Monash University); Andreas Leibbrandt (Department of Economics, Monash Business School, Monash University); Joseph Vecci (Gothenburg University, Vasagatan, Gothenburg, Sweden) |
| Abstract: | The use of Artificial Intelligence (AI) in recruitment is rapidly increasing and drastically changing how people apply to jobs and how applications are reviewed. In this paper, we use two field experiments to study how AI in recruitment impacts gender diversity in the male-dominated technology sector, both overall and separately for labor supply and demand. We find that the use of AI in recruitment changes the gender distribution of potential hires, in some cases more than doubling the fraction of top applicants that are women. This change is generated by better outcomes for women in both supply and demand. On the supply side, we observe that the use of AI reduces the gender gap in application completion rates. Complementary survey evidence suggests that this is driven by female jobseekers believing that there is less bias in recruitment when assessed by AI instead of human evaluators. On the demand side, we find that providing evaluators with applicants’ AI scores closes the gender gap in assessments that otherwise disadvantage female applicants. Finally, we show that the AI tool would have to be substantially biased against women to result in a lower level of gender diversity than found without AI. |
| Keywords: | Artificial Intelligence, Gender, Diversity, Field Experiment |
| JEL: | C93 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2023-09&r=exp |
| By: | José J. Domínguez (Department of Economic Theory and Economic History, University of Granada.); Giulio Ecchia (Department of Economics, University of Bologna.); Natalia Montinari (Department of Economics, University of Bologna.); Raimondello Orsini (Department of Economics, University of Bologna.) |
| Abstract: | Democracy in the workplace often involves employee participation in decision-making and financial matters, both of which have been shown to increase employee effort. However, it is unclear whether these forms of participation also affect other important attitudes that are correlated with the spirit of democratic workplaces such as honesty and cooperation. To address this question, we conducted a laboratory experiment to examine the effects of employee participation on these attitudes. Our results show that both employees’ participation in decision-making and profit-sharing decrease honesty. This effect is stronger for employees involved in financial participation. Additionally, we found that the different treatments also affect productivity in the first and third tertiles of the productivity distribution. On the one side, employees in the first tertile are more productive and more cooperative when they are allowed to choose the type of organization compared to the one who are assigned to the no-participation treatment. On the other side, employees in the third tertile of the productivity distribution are more likely to free ride and reduce cooperation in settings with participation compared to the no-participation. Our study sheds light on the complex effects that participatory practices may have in modern workplaces. |
| Keywords: | Employee Participation, Attitudes, Honesty, Cooperation, Lab Experiment. |
| Date: | 2023–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:gra:wpaper:23/02&r=exp |
| By: | Serge Blondel (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Ngoc Thao NOET (GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement) |
| Keywords: | public good (PG) game, Incentives, Hypothetical or real payment |
| Date: | 2023–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04075049&r=exp |
| By: | Xiaogeng Xu; Satu Metsälampi; Michael Kirchler; Kaisa Kotakorpi; Peter Hans Matthews; Topi Miettinen |
| Abstract: | Received wisdom holds that income rank matters for life satisfaction. In much of the literature, however, income comparisons are limited to the national population and evidence is correlational. In this paper, we investigate differences in the causal effects of rank information across reference groups. In a representative sample of mid-career Finns, we randomize individuals to receive personal rank information about educational, municipal, occupational, or age reference groups, and compare the effects, for a set of alternative welfare measures, to the standard national reference group and to a control group that receives no information. We also characterize the accuracy of rank beliefs across groups. Our data, which integrates experimental and register data, finds that rank information causes differences in satisfaction with disposable income, perceived fairness of own income, and wage satisfaction, but not life satisfaction. We also find substantial variation in the effects across reference groups, with those for the national reference group both weak and insignificant. |
| Keywords: | Relative position, individual welfare, fairness, comparison group, information provision |
| JEL: | D63 D8 D91 I31 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2023-05&r=exp |
| By: | Becker, Christoph; Duersch, Peter; Eife, Thomas |
| Abstract: | In density forecasts, respondents are asked to assign probabilities to pre-specified ranges of inflation. We show in two large-scale experiments that responses vary when we modify the response scale. Asking an identical question with modified response scales induces different answers: Shifting, compressing or expanding the scale leads to shifted, compressed and expanded forecasts. Mean forecast, uncertainty, and disagreement can change by several percentage points. We discuss implications for survey design and how central banks can adjust the response scales during times of high inflation. |
| Keywords: | density forecast; survey; Inflation; Experiment |
| Date: | 2023–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0727&r=exp |
| By: | Karun Adusumilli |
| Abstract: | Recent years have seen tremendous advances in the theory and application of sequential experiments. While these experiments are not always designed with hypothesis testing in mind, researchers may still be interested in performing tests after the experiment is completed. The purpose of this paper is to aid in the development of optimal tests for sequential experiments by analyzing their asymptotic properties. Our key finding is that the asymptotic power function of any test can be matched by a test in a limit experiment where a Gaussian process is observed for each treatment, and inference is made for the drifts of these processes. This result has important implications, including a powerful sufficiency result: any candidate test only needs to rely on a fixed set of statistics, regardless of the type of sequential experiment. These statistics are the number of times each treatment has been sampled by the end of the experiment, along with final value of the score (for parametric models) or efficient influence function (for non-parametric models) process for each treatment. We then characterize asymptotically optimal tests under various restrictions such as unbiasedness, \alpha-spending constraints etc. Finally, we apply our our results to three key classes of sequential experiments: costly sampling, group sequential trials, and bandit experiments, and show how optimal inference can be conducted in these scenarios. |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2305.00403&r=exp |
| By: | Simon Mathex (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Lisette Hafkamp Ibanez (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Raphaële Préget (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier) |
| Abstract: | The rebound effect occurs when improvements in energy efficiency result in lower energy savings than expected due to changes in behavior. These behavioral changes can be caused by an economic compensation and a moral compensation. For moral compensation, we consider moral licensing effect, but also the case of moral cleansing effect. The objective of our paper is to distinguish the economic and moral compensation in the rebound effect. To do so, we propose a theoretical model and an online experiment with 1622 subjects. Our experimental results show that an improvement in energy efficiency leads to a rebound effect through economic compensation. Concerning moral compensation, we do not observe any moral licensing but rather consistent behavior among participants with strong environmental attitudes. Finally, we find evidence for moral cleansing, which reduces the magnitude of the rebound effect. |
| Keywords: | Rebound effect, economic compensation, moral compensation, moral licensing effect, moral cleansing effect, online experiment |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-04071161&r=exp |
| By: | Simon Mathex (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Lisette Hafkamp Ibanez (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Raphaële Préget (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier) |
| Abstract: | The rebound effect occurs when improvements in energy efficiency result in lower energy savings than expected due to changes in behavior. These behavioral changes can be caused by an economic compensation and a moral compensation. For moral compensation, we consider moral licensing effect, but also the case of moral cleansing effect. The objective of our paper is to distinguish the economic and moral compensation in the rebound effect. To do so, we propose a theoretical model and an online experiment with 1622 subjects. Our experimental results show that an improvement in energy efficiency leads to a rebound effect through economic compensation. Concerning moral compensation, we do not observe any moral licensing but rather consistent behavior among participants with strong environmental attitudes. Finally, we find evidence for moral cleansing, which reduces the magnitude of the rebound effect. |
| Keywords: | Rebound effect, economic compensation, moral compensation, moral licensing effect, moral cleansing effect, online experiment |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:hal-04071161&r=exp |
| By: | Diederich, Johannes; Goeschl, Timo; Waichman, Israel |
| Abstract: | Manipulating choice architectures to achieve social ends (‘social nudges’) raises problems of ethicality. Giving individuals control over their default choice (‘selfnudges’) is a possible remedy, but the trade-offs with efficiency are poorly understood. We examine under four different information structures how subjects set own defaults in social dilemmas and whether outcomes differ between the self-nudge and two exogenous defaults, a social (full cooperation) and a selfish (perfect free-riding) nudge. Subjects recruited from the general population (n = 1, 080) play a ten-round, ten-day voluntary contribution mechanism online, with defaults triggered by the absence of an active contribution on the day. We find that individuals’ own choice of defaults structurally differs from full cooperation, empirically affirming the ethicality problem of social nudges. Allowing for self-nudges instead of social nudges reduces efficiency at the group level, however. When individual control over nudges is non-negotiable, self-nudges need to be made public to minimize the ethicality-efficiency trade-off. |
| Keywords: | choice architecture; defaults; choice architecture; public goods; self-nudge; online experiment; nudging; behavioral economics |
| Date: | 2023–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0726&r=exp |
| By: | Fabian Bopp (Paderborn University); Wendelin Schnedler (Paderborn University); Radovan VadoviÄ (Carleton University) |
| Abstract: | Successful implementation of new rules and policies depends in part on the degree of popular support. The key ingredient in mounting a general consensus behind one alternative is the individual tendency to conform. What drives conformism? Is it lasting or is it temporary? Traditionally, the literature has focused on adaptive mechanisms which are based on social learning. Observing others' actions generates new information which may lead to a permanent change in own preference. However, this type of conformism requires that individual opinions are still evolving and there is room for new information to make a difference. What happens once opinions mature and people become more steadfast in their preferences? Is it then not possible to generate group-wise consensus? We explore an outstanding conjecture that even steadfast individuals may yield (temporarily) to the will of the majority if they are sufficiently caring and don't like to hinder others. We design a laboratory experiment that allows us to identify the two behavioral mechanisms (adaptive vs. steadfast). We find evidence that steadfast subjects conform because they care about others. We also show that they are more willing to conform if they have more power. |
| Keywords: | conformism, collective choice, ex-ante fairness |
| JEL: | D72 C92 D83 D71 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:108&r=exp |
| By: | Felix Chopra (University of Copenhagen, CEBI); Christopher Roth (University of Cologne, ECONtribute, MPI for Collective Goods Bonn, briq); Johannes Wohlfart (University of Copenhagen, CEBI) |
| Abstract: | How do households adjust their spending behavior in response to changes in home price expectations? We conduct a field experiment with a sample of Americans that links survey data on home price expectations to actual spending behavior as measured in a rich home-scanner dataset. In the experiment we exogenously vary households’ home price expectations by providing them with different expert forecasts. Homeowners do not adjust their spending in response to exogenously higher home price expectations, consistent with wealth effects and higher expected housing costs offsetting each other. However, renters reduce their spending in response to an increase in home price expectations. We provide evidence that the effects on renters operate through an increase in expected rental costs and higher expected costs of a future home that many renters intend to buy. Our evidence has implications for the role of asset price expectations in business cycle dynamics and consumption inequality. |
| Keywords: | Consumption, Expectations, Home prices, Homeowner, Information, Renter |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:233&r=exp |
| By: | Fabian Bopp (Paderborn University) |
| Abstract: | Many people claim to intend to act pro-socially but fail to implement their intention when informing themselves about the consequences of their own action is necessary for a pro-social action. This attitude-behavior-gap is well documented, even in situations where informing can be done without additional costs. One reason for this attitude-behavior gap might be that after being informed the perceived social dilemma is increasing. It might become more obvious that one can not get both an individual and a socially optimal outcome. In this study, I am exploring whether reducing the potential dilemma in the second stage is affecting ignorance behavior in the first stage. Using a novel identification strategy with the disadvantage of a counter-directed confounding factor by defusing the dilemma size, this study finds no evidence for dilemma aversion being an important factor in explaining information avoidance behavior. |
| Keywords: | willful ignorance, strategic ignorance, conflict aversion, dilemma aversion, trade-off aversion |
| JEL: | C91 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:111&r=exp |
| By: | Ernst Fehr; Gary Charness |
| Abstract: | We review the vast literature on social preferences by assessing what is known about their fundamental properties, their distribution in the broader population, and their consequences for important economic and political behaviors. We provide, in particular, an overview of the empirically identified characteristics of distributional preferences and how they are affected by merit, luck, and risk considerations as well as by concerns for equality of opportunity. In addition, we identify what is known about belief-dependent social preferences such as reciprocity and guilt aversion. The evidence indicates that the big majority of individuals have some sort of social preference while purely self-interested subjects are a minority. Our review also shows how the findings from laboratory experiments involving social preferences provide a deeper understanding of important field phenomena such as the consequences of wage inequality on work morale, employees’ resistance to wage cuts, individuals’ self-selection into occupations and sectors that are more or less prone to morally problematic behaviors, as well as issues of distributive politics. However, although a lot has been learned in recent decades about social preferences, there are still many important, unresolved, yet exciting, questions waiting to be tackled. |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:432&r=exp |
| By: | Marcel Preuss; Germán Reyes; Jason Somerville; Joy Wu |
| Abstract: | We examine how people redistribute income when there is uncertainty about the role luck plays in determining opportunities and outcomes. We elicit redistribution decisions from a U.S.-representative sample who observe worker outcomes and whether luck magnified workers’ effort (“lucky opportunities”) or determined workers’ income directly (“lucky outcomes”). We find that participants redistribute less and are less reactive to changes in the importance of luck in environments with lucky opportunities. Our findings have implications for models that seek to understand and predict redistribution attitudes, and help to explain the gap between lab evidence on support for redistribution and U.S. inequality trends. |
| Keywords: | inequality of opportunity, fairness, luck, perceptions |
| JEL: | C91 D63 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10383&r=exp |
| By: | Alexander K. Koch (Department of Economics and Business Economics, Aarhus University); Dan Mønster (Department of Economics and Business Economics, Aarhus University); Julia Nafziger (Department of Economics and Business Economics, Aarhus University) |
| Abstract: | To study the effects of reminder nudges in complex environments, we apply a novel experimental approach based on a computer game in which decision makers have to pay attention to and perform multiple actions within a short period of time. The set-up allows us, first, to test the effect of reminders both on reminded and non-reminded actions and thus to observe whether reminders have (positive or negative) spillovers. Second, we investigate spillovers between multiple nudges by testing the effect of scaling up the number of reminded actions. Third, we study intertemporal spillovers by investigating whether the effects of having been exposed to reminders persist after reminders are withdrawn. We observe that reminders have positive effects in the short run - multiple reminders more so than single reminders: while reminders lead to crowding-out of non-reminded actions, the positive effect on the reminded actions dominates. After withdrawal of the reminders, the negative spillover effect persists, while the positive effect partially fades out so that, overall, reminders have no effect. |
| Keywords: | Nudging, spillover effects, attention, reminders, persistence, game-based experiments |
| JEL: | C9 D91 |
| Date: | 2023–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2023-06&r=exp |
| By: | Dur, Robert; Non, Arjan; Prottung, Paul; Ricci, Benedetta |
| Abstract: | In many public policy areas, randomized policy experiments can greatly contribute to our knowledge of the effects of policies and can thus help to improve public policy. However, policy experiments are not very common. This paper studies whether a lack of appreciation of policy experiments among voters may be the reason for this. Using unique survey data representative of the Dutch electorate, we find clear evidence contradicting this view. Voters strongly support policy experimentation and, in line with theory, particularly so when they do not hold a strong opinion about the policy. In a subsequent survey experiment among Dutch politicians, we find that politicians conform their expressed opinion about policy experiments to what we tell them the actual opinion of voters is. We conclude that voters are not afraid of policy experiments and neither are politicians when we tell them that voters are not. |
| Date: | 2023–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:yshkt&r=exp |
| By: | Subhasish M. Chowdhury (Department of Economics, University of Sheffield, Sheffield S1 4DT, UK.); Anastasia Danilov (School of Management and Economics, Humboldt-University of Berlin, 10178 Berlin, Germany.); Martin G. Kocher (Department of Economics, University of Vienna, 1090 Vienna, Austria; Department of Economics, University of Gothenburg, Gothenburg, Sweden; and CESifo Munich.) |
| Abstract: | A main goal of affirmative action (AA) policies is to enable disadvantaged groups to compete with their privileged counterparts. Existing theoretical and empirical research documents that incorporating AA can result in both more egalitarian outcomes and higher exerted efforts. However, the direct behavioral effects of the introduction and removal of such policies are still under-researched. It is also unclear how specific AA policy instruments, for instance, head- start for a disadvantaged group or handicap for the privileged group, affect behavior. We examine these questions in a laboratory experiment in which individuals participate in a real- effort tournament and can sabotage each other. We find that AA does not necessarily result in higher effort. High performers that already experienced an existing AA-free tournament reduce their effort levels after the introduction of the AA policy. There is less sabotage under AA when the tournament started directly with the AA regime. The removal of AA policies, however, significantly intensifies sabotage. Finally, there are no overall systematic differences between handicap and head-start in terms of effort provision or sabotaging behavior. |
| Keywords: | Affirmative action; Sabotage; Experiment; Tournament; Handicap; Head-start |
| JEL: | C72 C91 D63 D72 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2023012&r=exp |
| By: | Wei Huang (CUHK Business School, Chinese University of Hong Kong); Yu Wang (China Center For Behavioral Economics and Finance, Southwestern University of Finance and Economics); Xiaojian Zhao (Department of Economics, Monash Business School, Monash University) |
| Abstract: | Humans are social animals but sometimes stay alone. The paper theoretically investigates the connection between an intraperson game and an interperson interaction. Motivated beliefs supplied from memory management due to present bias in the individual investment problem give rise to a positive spillover on others through social interactions, suggesting that a high frequency of social interactions reduces an individual’s tendency to cooperate with others, exacerbating the free-riding problem. We also establish a positive relationship between overconfidence and prosocial behaviors. Evidence from cross-country observational data and cross-sectional data collected from an online experiment is largely consistent with our theoretical implications. |
| Keywords: | motivated beliefs, self-confidence, present bias, cooperation, cultural difference |
| JEL: | C91 D01 D91 O57 Z10 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2023-08&r=exp |
| By: | Arthur E. Attema (Erasmus University Rotterdam); Olivier L’haridon (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Jose Luis Pinto Prades (UNAV - Universidad de Navarra [Pamplona]) |
| Keywords: | altruism, ambiguity (or knightian uncertainty), behavioral health economics, experimental economics, health insurance, time trade off method |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04074732&r=exp |
| By: | Adrien Coiffard (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Raphaële Préget (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Mabel Tidball (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier) |
| Abstract: | Reverse auctions are used in various fields by public or corporate buyers to purchase goods and services from multiple sellers at the best price. Unlike in selling auctions, in reverse auctions a budget constraint rather than a target quantity is often announced by the auctioneer. However, in auction theory no optimal bidding strategy has yet been found in the case when a budget constraint is announced. Here we compare the two auction formats in an online experiment with 329 participants. We use the strategy method to obtain participants' bidding strategies from which we run exhaustive simulations of auction outcomes. This innovative methodology allows to overcome the issue of randomness of the auction outcome related to bidders' values. When each bidder has a single unit to sell, from the buyer's perspective, we find that, on average, the budget-constrained auction format outperforms the target-constrained auction format. |
| Keywords: | Reverse auctions, Online experiments, Strategy Method, Budget constraint, Target constraint. |
| Date: | 2023–04–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:hal-04055743&r=exp |
| By: | Ekaterina Alekhanova (Department of Economics, Carleton University) |
| Abstract: | The paper reports the results of evaluating the hourly impact of a behavioral intervention tested in a randomized controlled trial. Under the program, a randomly selected group of households in Alberta was provided visual information on their home heat loss. I find that the households conserve the same amount of electricity during peak and off-peak electricity demand hours, i.e. the intervention has failed to target peak times, so accounting for the intraday distribution of the electricity savings is not important when measuring the social benefits of the program. The most plausible reason for the flat savings profile could be the absence of hourly variation in retail electricity rates. As a policy recommendation, the study suggests implementing retail electricity prices fluctuating within a day. |
| Keywords: | Peak Electricity Demand, Behavior Nudge, Energy Efficiency, Randomized Controlled Trial |
| Date: | 2023–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:23-01&r=exp |
| By: | Guadalupe Bedoya; Jishnu Das; Amy Dolinger |
| Abstract: | We report results from the first randomization of a regulatory reform in the health sector. The reform established minimum quality standards for patient safety, an issue that has become increasingly salient following the Ebola and COVID-19 epidemics. In our experiment, all 1348 health facilities in three Kenyan counties were classifi ed into 273 markets, and the markets were then randomly allocated to treatment and control groups. Government inspectors visited health facilities and, depending on the results of their inspection, recommended closure or a timeline for improvements. The intervention increased compliance with patient safety measures in both public and private facilities (more so in the latter) and reallocated patients from private to public facilities without increasing out-of-pocket payments or decreasing facility use. In treated markets, improvements were equally marked throughout the quality distribution, consistent with a simple model of vertical differentiation in oligopolies. Our paper thus establishes the use of experimental techniques to study regulatory reforms and, in doing so, shows that minimum standards can improve quality across the board without adversely affecting utilization. |
| JEL: | H75 I11 I18 O17 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31203&r=exp |
| By: | Anna Bayona; Oana Peia; Razvan Vlahu |
| Abstract: | We study how inflated credit ratings affect investment decisions in bond markets using experimental coordination games. Theoretical models that feature a feedback effect between capital markets and the real economy suggest that inflated ratings can have both positive and negative real effects. We compare markets with and without a credit rating agency and find that ratings significantly impact investor behaviour and capital allocation to firms. We show that the main mechanism through which these real effects materialize is a shift in investors’ beliefs about the behaviour of other investors rather than firms’ underlying fundamentals. Our experimental results sug- gest that the positive impact of inflated ratings is likely to dominate in the presence of feedback effects since ratings act as a strong coordination mechanism resulting in enhanced market outcomes. |
| Keywords: | Credit ratings; Imperfect information; Investor beliefs; Firm financing |
| JEL: | D81 D82 D83 G24 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:776&r=exp |
| By: | Bernd Frick (Paderborn University); Clarissa Laura Maria Spiess Bru (Paderborn University); Daniel Kaimann (Paderborn University) |
| Abstract: | This study investigates whether women are more lenient in evaluating the performance of others. We examine the gender-specific behavior of female and male critics in expert evaluations, considering their allocated level of experience by using data from high-prestige wine assessments. We demonstrate that women rate, on average, less generously than men, even in direct comparison. In addition, we show that women with advanced experience levels are less generous than the most experienced same-sex reviewer, whereas this effect is not observed for men. Finally, controlling for self-selection into a particular field (i.e., wine critics), this study confirms previous findings using data, e.g., from professional sports: unobserved heterogeneity drives results generated in lab experiments. |
| Keywords: | Gender Differences, Information Asymmetry, Competitiveness, Overconfidence, Gender Bias, Reviews and Ratings |
| JEL: | J16 C33 L66 J2 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:106&r=exp |