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on Experimental Economics |
| By: | Müge Süer (The Halle Institute for Economic Research (IWH)); Nicola Cerutti (Oasis Loss Modelling Framework Ltd.); Jana Friedrichsen (Kiel University); Gyula Seres (National University of Singapore, N.1 Institute for Health and Institute for Digital Medicine) |
| Abstract: | Women are often perceived as more compliant than men; however, the literature provides inconclusive evidence. Using a novel experimental design comprising two complementary experiments, we test this claim in online samples representative of the German adult population. The first experiment (N=1600) features a probabilistic social dilemma game (PDG) in which participants can increase their individual payoff at the expense of exposing themselves and their group to probabilistic losses. In two treatment conditions, they receive either a recommendation on socially optimal behavior or a recommendation and information on weakly non-compliant peer behavior. We find that the recommendation strongly affects behavior but more so for women than for men. However, information on the non-compliant behavior of others does not induce significantly different responses in men and women. In the second experiment (N=522), we elicit empirical and normative expectations about behavior in the PDG with a recommendation to study the role of norms in following it. While men and women are expected to hold similar normative beliefs, men are expected to follow the recommendation less often, suggesting that compliance is a female social norm. |
| Keywords: | gender; compliance; public good; social dilemma; risk-taking; social norms; |
| JEL: | J16 I12 D81 H41 |
| Date: | 2024–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:519 |
| By: | Daniela Glätzle-Rützler (University of Innsbruck); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn, University of Cologne, Germany, University of Innsbruck, Austria, IZA Bonn, Germany, and CESifo Munich); Claudia Zoller (Management Center Innsbruck) |
| Abstract: | Efficient coordination is a major source of efficiency gains. We study in an experimental coordination game with 718 children and teenagers, aged 9 to 18 years, the strategies played in pre-adulthood. We find no robust age effects in the aggregate, but see that smaller group sizes and larger incentives increase the likelihood of choosing the efficient strategy. Beliefs play an important role as well, as subjects are more likely to play the efficient strategy when they expect others to do so as well. Our results are robust to controlling for individual risk-, time-, and social preferences. |
| Keywords: | coordination game, age, group size, incentives, children, experiment |
| JEL: | C91 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:mpg:wpaper:2024_18 |
| By: | Sara Giunti; Andrea Guariso; Mariapia Mendola; Irene Solmone |
| Abstract: | Global demographic shifts have increased population diversity in advanced economies, often leading to anti-immigrant attitudes and discrimination fueled by prejudice and stereotypes. In this paper, we study a short educational program for high-school students aimed at promoting cultural diversity and improving attitudes toward immigration through active learning. To identify the impact of the program, we designed a randomized controlled trial involving 4, 500 students from 252 classes across 40 schools in northern Italy. The program led to more positive attitudes and behaviors toward immigrants, especially in more mixed classes. In terms of mechanisms, the intervention reduced students' misperception and changed their perceived norms toward immigration, while it had no impact on implicit bias, empathy, or social contacts. Our findings suggest that anti-immigrant attitudes are primarily driven by sociotropic concerns rather than individual inter-group experience, and that educational programs fostering critical thinking and group discussion in an issue-salient context can correct them. |
| Keywords: | Ethnic Stereotypes, Social Inclusion Policy, Impact Evaluation, Immigration attitudes |
| JEL: | F22 J15 F68 H53 |
| Date: | 2024–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:csl:devewp:499 |
| By: | Christoph Engel (Max Planck Institute for Research on Collective Goods) |
| Keywords: | comparative law, contract fulfilment, change in circumstances, experiment, large language model, GPT, manipulating language of stimulus material |
| JEL: | C45 C81 C88 C91 D91 K12 K40 P50 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:mpg:wpaper:2024_12 |
| By: | Jordi Brandts (Instituto de Análisis Económico (CSIC) & Barcelona School of Economics); Isabel Busom (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona (UAB)); Cristina Lopez-Mayan (Serra Húnter Fellow & AQR-IREA, Universitat de Barcelona.) |
| Abstract: | Citizens’ ability to make informed and thoughtful choices when voting for policy proposals rests on their exposure to accurate information about the costs and benefits that each proposal entails. We study whether certain social factors affect the disposition to drop a misconception, the belief that rent control increases the availability of affordable housing. We design an on–line experiment where all participants watch a video explaining the scientific evidence on the consequences of this policy. We test whether letting them give feedback (giving voice) and informing them about others’ change of beliefs (social information) helps in reducing the misconception. Giving voice does not have an additional effect relative to a benchmark group that only watches the video. Social information further reduces the misconception when it specifies how different groups of people have responded to the video, but not when these distinctions are not made. Additionally, changes in beliefs translate into intended voting against the policy, and into recommending the video. Finally, ideological position and a zero–sum mentality are correlated with the initial misconception, but these two factors do not hinder the disposition to dropping it following the intervention. |
| Keywords: | policy beliefs, ideology, zero–sum thinking, refutational communication, online experiments. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:uab:wprdea:wpdea2404 |
| By: | Chan, Kenneth (UC Santa Barbara); Charness, Gary (UC Santa Barbara); Dave, Chetan (University of Alberta, Department of Economics); Reddinger, J. Lucas (Purdue University) |
| Abstract: | We investigate the difference between confidence in a belief distribution versus confidence over multiple priors using a lab experiment. Theory predicts that the average Bayesian posterior is affected by the former but is unaffected by the latter. We manipulate confidence over multiple priors by varying the time subjects view a black-and-white grid, of which the relative composition represents the prior. We find that when subjects view the grid for a longer duration, they have more confidence, under-update more, placing more weight on priors and less weight on signals when updating. Confidence within a belief distribution is varied by changing the prior beliefs; subjects are insensitive to this notion of confidence. Overall we find that confidence over multiple priors matters when it should not and confidence in prior beliefs does not matter when it should. |
| Keywords: | Bayesian Updating; Belief Updating; Confidence; Lab Experiment |
| JEL: | C11 C91 D83 |
| Date: | 2024–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:ris:albaec:2024_010 |
| By: | Christian Belzil (CREST, CNRS, Paris Polytechnic Institute, IZA, CIRANO); Tomáš Jagelka (University of Bonn, Dartmouth College, CREST-Ensae, IZA) |
| Abstract: | We develop a micro-founded framework for accounting for individuals' effort and cognitive noise which confound estimates of preferences based on observed behavior. Using a large-scale experimental dataset we estimate that failure to properly account for decision errors due to (rational) inattention on a more complex, but commonly used, task design biases estimates of risk aversion by 50% for the median individual. Effort propensities recovered from preference elicitation tasks generalize to other settings and predict performance on an OECD-sponsored achievement test used to make international comparisons. Furthermore, accounting for endogenous effort allows us to empirically reconcile competing models of discrete choice. |
| Keywords: | Preferences, risk preference, stochastic choice models, endogenous effort, cognitive noise, task complexity, experimental design |
| JEL: | D91 C40 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:350 |
| By: | Christoph Feldhaus (Department of Economics, Ruhr-University Bochum); Lukas Reinhardt (Centre for the Study of Social Cohesion, University of Oxford and Identity and Conflict Lab, Yale University); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn, University of Cologne, Germany, University of Innsbruck, Austria, IZA Bonn, Germany, and CESifo Munich) |
| Abstract: | In a democracy, it is essential that citizens accept rules and laws, regardless of which party is in power. We study why citizens in polarized societies resist rules implemented by political opponents. This may be due to the rules’ specific content, but also because of a general preference against being restricted by political opponents. We develop a method to measure the latter channel. In our experiment with almost 1, 300 supporters and opponents of Donald Trump, we show that polarization undermines rule-following behavior significantly, independent of the rules’ content. Subjects perceive the intentions behind (identical) rules as much more malevolent if they were imposed by a political opponent rather than a political ally. |
| Keywords: | Political polarization, Social identity, Outgroup, Economic preferences, Experiment |
| JEL: | C91 D90 D91 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:mpg:wpaper:2024_15 |
| By: | E. Glenn Dutcher; Krista J. Saral |
| Abstract: | Remote work policies remain controversial because of the perceived opportunity for increased shirking outside of the traditional office; a problem that is potentially exacerbated if employees work in a revenue-sharing team environment. Using a controlled experiment, where individuals are randomized to different work locations (remote or an office-like setting), we examine how remote work impacts effort choices under individual pay schemes and in revenue sharing teams. Treatments vary the number of remote workers on a team. Our results suggest that work location alone does not lead to productivity differences. However, the location of partners does impact an individual’s effort levels in revenue-sharing teams. Non-remote workers reduce effort as the number of remote partners increases, and remote workers increase effort as the number of remote workers increases. These results are driven predominantly by those who are relatively less productive as individuals. Post-experiment incentivized survey evidence points to expectations of partner productivity as a contributing factor. |
| JEL: | C9 J21 J24 J28 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33321 |
| By: | Stefan Faridani; Paul Niehaus |
| Abstract: | We study the problem of estimating the average causal effect of treating every member of a population, as opposed to none, using an experiment that treats only some. We consider settings where spillovers have global support and decay slowly with (a generalized notion of) distance. We derive the minimax rate over both estimators and designs, and show that it increases with the spatial rate of spillover decay. Estimators based on OLS regressions like those used to analyze recent large-scale experiments are consistent (though only after de-weighting), achieve the minimax rate when the DGP is linear, and converge faster than IPW-based alternatives when treatment clusters are small, providing one justification for OLS's ubiquity. When the DGP is nonlinear they remain consistent but converge slowly. We further address inference and bandwidth selection. Applied to the cash transfer experiment studied by Egger et al (2022) these methods yield a 20\% larger estimated effect on consumption. |
| JEL: | C01 C9 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33319 |
| By: | Fuente, David (School of the Earth, Ocean and Environment, University of South Carolina, 701 Sumter Street, Columbia, SC 29208, USA); Gitu, Josiah (Nairobi City Water and Sewerage Company Ltd, Kampala Road, Nairobi, Kenya); Mwaura, Mbutu (Nairobi City Water and Sewerage Company Ltd, Kampala Road, Nairobi, Kenya); Mulwa, Richard (Environment for Development-Kenya, Department of Economics and Development Studies, University of Nairobi, Harry Thuku Road, Gandhi Wing Room 309, P.O Box 30197 Nairobi, Kenya); Cook, Joseph (School of Economic Sciences, Washington State University, 101 Hulbert Hall, PO Box 646210, Pullman WA 99164-6210, USA) |
| Abstract: | Utilities across the global require stable revenue streams to provide customers access to high quality energy, water, sanitation, and other essential services. This requires policy makers to set prices to cover costs, promote the efficient use of resources, and ensure services are affordable. It also requires that customers pay their bills. Historically, utilities have used disconnections, or the threat of disconnection, to compel customers to pay their bills on time. However, the increasing recognition of the human rights to water and sanitation by many governments and the COVID-19 pandemic have led some water utilities to discontinue or curtail disconnections. Reducing arrears and encouraging on-time bill payment is essential to get utilities in the Global South on the path to financial sustainability. This raises an important question for scholars and policy makers alike: if disconnection for essential services is viewed as socially or politically unacceptable, how can utilities encourage customers to pay their bills? In partnership with the water utility serving Nairobi, Kenya, we test the impact of a set of simple, low-cost reminders on customer bill payment using a pre-registered, randomized controlled trial of 50, 000 residential customers. We use four measures of payment behavior: making any payment, paying the full current month’s bill, total arrears accumulated over the six months when messages were sent, and the fraction of the cumulative 6-month bill paid. We find that SMS-based bill payment reminders were not effective at improving bill payment on average. Nudges alone seem unlikely to solve the problem of water debt. |
| Keywords: | water; sanitation; information provision; field experiment; bill payment; Africa |
| JEL: | C93 D91 O13 Q25 Q56 |
| Date: | 2024–11–22 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:gunefd:2024_013 |
| By: | Henning Hermes (ifo Institute Munich); Philipp Lergetporer (Technical University of Munich); Fabian Mierisch (Catholic University of Eichstaett-Ingolstadt); Guido Schwerdt (University of Konstanz); Simon Wiederhold (University of Halle) |
| Abstract: | We investigate public preferences for equity-enhancing policies in access to early child care, using a survey experiment with a representative sample of the German population (n ≈ 4, 800). We observe strong misperceptions about migrant-native inequalities in early child care that vary by respondents’ age and right-wing voting preferences. Randomly providing information about the actual extent of inequalities has a nuanced impact on the support for equity-enhancing policy reforms: it increases support for respondents who initially underestimated these inequalities, and tends to decrease support for those who initially overestimated them. This asymmetric effect leads to a more consensual policy view, substantially decreasing the polarization in policy support between under- and over-estimators. Our results suggest that correcting misperceptions can align public policy preferences, potentially leading to less polarized debates about how to address inequalities and discrimination. |
| Keywords: | policy support, discrimination, survey experiments |
| JEL: | I24 J18 J13 D83 C90 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:hka:wpaper:2024-021 |
| By: | Famulok, Jakob; Kormanyos, Emily; Worring, Daniel |
| Abstract: | We present novel evidence that retail investors attempt offsetting their carbon footprints by investing sustainably. Using highly granular transaction data from bank clients, we find that higher footprints are linked to greener portfolios. In an experiment with clients from the same bank, we show that an exogenous shock to the participants' salience of their emissions causally shifts sustainable asset allocations upward. Finally, we identify a substitution effect between offsetting through donations and sustainable assets. Our findings add to an understanding of the behavioral drivers of sustainable investing, which is crucial to design effective policies aligning financial markets with environmental goals. |
| Keywords: | sustainable investing, carbon footprints, green portfolios, retail investors, experimental finance |
| JEL: | G40 G41 G11 D14 C93 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:306359 |
| By: | Zvonimir Bašić (Adam Smith Business School, University of Glasgow, UK); Stefania Bortolotti (University of Bologna); Daniel Salicath (Norwegian Labour and Welfare Administration); Stefan Schmidt (Max Planck Institute for Research on Collective Goods, Bonn); Sebastian Schneider (Max Planck Institute for Research on Collective Goods, Bonn); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn, University of Cologne, Germany, University of Innsbruck, Austria, IZA Bonn, Germany, and CESifo Munich) |
| Abstract: | Incentives are supposed to increase effort, yet individuals react differently to incentives. We examine this heterogeneity by investigating how personal characteristics, preferences, and socio-economic background relate to incentives and performance in a real effort task. We analyze the performance of 1, 933 high-school students under a Fixed, Variable, or Tournament payment. Productivity and beliefs about relative performance, but hardly any personal characteristics, play a decisive role for performance when payment schemes are exogenously imposed. Only when given the choice to select the payment scheme, personality traits, economic preferences and socioeconomic background matter. Algorithmic assignment of payment schemes could improve performance, earnings, and utility, as we show. |
| Keywords: | Effort, productivity, incentives, personality traits, preferences, socio-economic background, ability, heterogeneity, sorting, algorithm, lab-in-the-field experiment |
| JEL: | C93 D91 J24 J41 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:mpg:wpaper:2024_13 |
| By: | Sheng, Yi (Tilburg University, School of Economics and Management) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:tiu:tiutis:05c9c6fe-bfde-49e4-9fc4-bc4ea76bb8a8 |
| By: | Henning Hermes (ifo Institute Munich); Philipp Lergetporer (Technical University of Munich); Frauke Peter (German Centre for Higher Education Research and Science Studies); Simon Wiederhold (University of Halle) |
| Abstract: | Why are children with lower socioeconomic status (SES) substantially less likely to be enrolled in child care? We study whether barriers in the application process work against lower-SES children — the group known to benefit strongest from child care enrollment. In an RCT in Germany with highly subsidized child care (N = 607), we offer treated families information and personal assistance for applications. We find substantial, equity-enhancing effects of the treatment, closing half of the large SES gap in child care enrollment. Increased enrollment for lower-SES families is likely driven by altered application knowledge and behavior. We discuss scalability of our intervention and derive policy implications for the design of universal child care programs. |
| Keywords: | early childhood, educational inequality, randomized controlled trial |
| JEL: | I21 J13 J18 J24 C93 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:hka:wpaper:2024-022 |
| By: | Alistair Cameron (CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Lata Gangadharan (Monash University [Clayton]); Pushkar Maitra (Monash University [Clayton]); Paulo Santos (Monash University [Clayton]); Joseph Vecci (GU - Göteborgs Universitet = University of Gothenburg) |
| Abstract: | Together with private transfers, centralized redistribution policies form the backbone of social welfare systems worldwide. Examining their interplay is therefore crucial for understanding and addressing inequality. We investigate the relationship between private transfers and public redistribution policies using an experiment with nearly 4000 participants from Germany, India, Indonesia and the USA. The experiment creates large inequalities, then introduces one of four centralized redistribution regimes to address the inequality. Our findings reveal that no redistribution policy changes private pro-social or anti-social transfers, compared to an environment without centralized redistribution. Structural estimates show that egotistic, rather than social motives drive private transfers, and that inequality aversion is unaffected by redistribution policies, thus explaining the lack of a private response. This suggests that governments possess an additional degree of freedom in pursuing social safety nets. |
| Keywords: | Redistribution, Inequality Aversion, Experiments |
| Date: | 2024–11–29 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cdiwps:hal-04811881 |
| By: | Jean-Sébastien Lenfant (PRISM, Université Paris 1 Panthéon-Sorbonne) |
| Abstract: | The purpose of this article is to provide a historical account of the contributions to judgment and decision making by four cognitive psychologists at the turn of the 1970s: Sarah Lichtenstein, Paul Slovic, Amos Tversky and Daniel Kahneman. Beyond the usual focus on Kahneman and Tversky's heuristics and biases approach, we uphold that historians of behavioral economics would gain from a broader and more balanced view of the contributions of these four psychologists to the theory of decision making. Together with the heuristics and biases approach, experiments on preference reversal and choice intransitivities represent a multifaceted criticism of standard theories of choice and decision against which the genesis of behavioral economics could be evaluated. |
| Keywords: | Lichtenstein (Sarah), Slovic (Paul), Tversky (Amos), Kahneman (Daniel), heuristics and biases, preference reversal, intransitivity, preferences, behavioral economics, conjoint measurement, judgment, expected utility theory, mathematical psychology, cognitivism, experiments |
| JEL: | B21 B29 D91 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2024-31 |
| By: | Jean-Pierre Aubry; Alicia H. Munnell; Gal Wettstein |
| Abstract: | Writing a will ensures a person’s wealth goes to intended recipients, preventing major assets like a house from being split up among many heirs. Yet many people do not have a will, particularly lower-income and non-White households. Using a survey experiment, the analysis explores whether customer interactions with banks could encourage will-writing. The results show that: combining will-writing with taking out a mortgage – a complex and stressful event – is a bad idea; offering people money helps, but mainly those who need it the least; and linking will-writing to a simpler task, like opening an account, is a much more effective option, especially for disadvantaged groups. |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:crr:issbrf:ib2024-09 |
| By: | William A. Barnett (Department of Economics, University of Kansas, Lawrence, KS 66045, USA and Center for Financial Stability, New York City, NY, USA); Kangzheng Ding (Department of Economics, University of Kansas, Lawrence, KS 66045, USA) |
| Abstract: | While expected utility maximization and its foundations in the Savage Axioms play a major role in normative economics and Bayesian statistics, the axiomatic foundations of expected utility maximization have been the subject of extensive criticism over the years in terms of their descriptive ability to explain actual behavior in laboratory experiments. As a result, behavioral economists do not accept expected utility maximization as descriptive of observed consumer behavior. But the Savage Axioms have been substantially weakened and rendered more widely descriptive of observed behavior by replacing the usual Riemann integral with the Choquet [14] integral. In addition, the observed behavior under the weakened assumptions is relevant to behavior under uncertainty in the Frank Knight [47] sense, rather than the more restrictive context of behavior under risk with known probabilities. |
| Keywords: | Choquet integral; Sure-thing principle; Knightian uncertainty; Non-additive probabilities. 2020 Mathematics Subject Classification: 28A12, 28A25, 28C05, 28E10, 91B05, 91B06, 91B86. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:kan:wpaper:202418 |