Papers - All

Jing Cai, Adam Szeidl

Cited by*: 3 Downloads*: 38

We organize regular business meetings for randomly selected managers of young Chinese firms to study the effect of business networks on firm performance. We randomize 2,800 managers into several groups that hold monthly meetings for one year, and a "no-meetings" control group. We find that: (1) The meetings increase firm revenue by 7.8 percentage points, and also significantly increase profit, a management score, employment, and the number of business partners; (2) These effects persist one year after the conclusion of the meetings; and (3) Firms randomized to have better peers exhibit higher growth. We exploit additional interventions to document concrete channels: (4) Peers share exogenous business-relevant information, particularly when they are not competitors, showing that the meetings facilitate learning; (5) Managers create more business partnerships in the regular than in other one-time meetings, showing that the meetings improve firm-to-firm matching.

Wojciech Hardy, Michal Krawczyk, Joanna Tyrowicz

Cited by*: None Downloads*: None

We report results of an experimental study analyzing the effects of Internet piracy on book sales. We conducted a year-long controlled large-scale field experiment with pre-treatment pair matching. Half of the book titles received experiment treatment, in which a specialized agency would immediately remove any unauthorized copy appearing on the Internet. For the other half we merely registered such occurrences, but no countermeasures were taken. For all the titles we obtained print and e-book sales statistics from the publishers. We find that removal of unauthorized copies was an effective method of curbing piracy, but this had no bearing on legal sales.

John A List

Cited by*: 0 Downloads*: 3

Given the importance of job placement for Ph.D.s, it is surprising that economists have not closely examined the factors that affect procuring job interviews for new Ph.D. economists.' In this study, I investigated those factors using a data set gathered at the 1997 American Economic Association (AEA) meetings in New Orleans. My purpose was to increase the information available to Ph.D. candidates who wish to maximize their postgraduation job prospects. In addition, this study may guide undergraduates and master's candidates who seek to pursue a Ph.D. in economics. The results of the findings, however, could benefit more than job seekers-they may provide academic departments and private industry with a comparative baseline for making decisions to interview job candidates. The job market for new Ph.D.s consists of two submarkets-academic and businesshndustry. The following are questions regarding job seekers in both submarkets. (1) Do employers in academia seek the same attributes as businesshndustry? (2) Is there discrimination in the interview decision? (3) Is an MBA important in the Ph.D. market? (4) How many more interviews are secured by candidates with a finished dissertation? (5) How important are teaching and research credentials? (6) Are graduates from top-ranked programs given special consideration in the job market? (7) Do personal letters of recommendation or calls from professors make a difference in the interview decision? (8) How influential are recommendation letters from prestigious economists? (9) What is the marginal effect of submitting another application? A simple theoretic construct provides a basis for understanding the two-step job-search process carried out by new Ph.D. economists.* In the first step, the job seeker decides whether to enter one or both submarkets and determines the optimal number of applications to submit. The second step reflects the actual decision process regarding acceptance or rejection of a job offer. Because a natural prerequisite to securing a job is an initial interview, my main focus in this study was to discover the optimal job search strategies for new Ph.D. economists by determining applicant characteristics that are conducive to obtaining interviews.

Roland Fryer , Steven D Levitt, John A List, Anya Samek

Cited by*: None Downloads*: None

We present the results of a novel early childhood intervention in which disadvantaged 3-4-year-old children were randomized to receive a new preschool and parents education program focused on cognitive and non-cognitive skills (CogX) or to a control group that did not receive preschool education. In addition to a typical academic year (9 month) program, we also evaluated a shortened summer version of the program (2 months) in which children were treated immediately prior to the start of Kindergarten. Both programs, including the shortened version, significantly improved cognitive test scores by about one quarter of a standard deviation relative to the control group at the end of the year. The shortened version of the program was equally as effective as the academic-year program because most of the gains in the academic-year program occurred within the first few months.

James Andreoni, John A List

Cited by*: 0 Downloads*: 8

No abstract available

John A List

Cited by*: 11 Downloads*: 77

This special issue highlights an empirical approach that has increasingly grown in prominence in the last decade--field experiments. While field experiments can be used quite generally in economics to test theories' predictions, to measure key parameters, and to provide insights into the generalizability of empirical results, this special issue focuses on using field experiments to explore questions within the economics of charity. The issue contains six distinct field experimental studies that investigate various aspects associated with the economics of charitable giving. The issue also includes a fitting tribute to one of the earliest experimenters to depart from traditional lab methods, Peter Bohm, who curiously has not received deep credit or broad acclaim. Hopefully this issue will begin to rectify this oversight.

John A List

Cited by*: 16 Downloads*: 40

This special issue highlights an empirical approach that has increasingly grown in prominence in the last decade--field experiments. While field experiments can be used quite generally in economics to test theories' predictions, to measure key parameters, and to provide insights into the generalizability of empirical results, this special issue focuses on using field experiments to explore questions within the economics of charity. The issue contains six distinct field experimental studies that investigate various aspects associated with the economics of charitable giving. The issue also includes a fitting tribute to one of the earliest experimenters to depart from traditional lab methods, Peter Bohm, who curiously has not received deep credit or broad acclaim. Hopefully this issue will begin to rectify this oversight.

Michael S Haigh, John A List

Cited by*: 6 Downloads*: 12

An important class of investment decisions is characterized by unrecoverable sunk costs, resolution of uncertainty through time, and the ability to invest in the future as an alternative to investing today. The options model provides guidance in such settings, including an investment decision rule called the "bad news principle": the downside investment state influences the investment decision whereas the upside investment state is ignored. This study takes a new approach to examining predictions of the options model by using the tools of experimental economics. Our evidence, which is drawn from student and professional trader subject pools, is broadly consonant with the options model.

Gustavo J Bobonis, Edward Miguel, Charu P Sharma

Cited by*: 6 Downloads*: 22

Iron-deficiency anemia is among the world's most widespread health problems, especially for children, but it is rarely studied by economists. This paper evaluates the impact of a health intervention delivering iron supplementation and deworming drugs to 2-6 year old children through an existing pre-school network in the slums of Delhi, India. At baseline 69 percent of sample children were anemic and 30 percent had intestinal worm infections. Sample pre-schools were randomly divided into groups and gradually phased into treatment. Weight increased significantly among assisted children, and pre-school participation rates rose sharply by 5.8 percentage points - a reduction of one-fifth in school absenteeism - in the first five months of the program. Gains are largest in low socio-economic status areas. Year two estimates are similar, but two methodological problems--sample attrition, and the non-random sorting of new child cohorts into treatment groups--complicate interpretation of the later results.

Craig E Landry, Andreas Lange, John A List, Michael K Price, Nicholas G Rupp

Cited by*: 18 Downloads*: 17

This study develops theory and conducts an experiment to provide an understanding of why people initially give to charities, why they remain committed to the cause, and what factors attenuate these influences. Using an experimental design that links donations across distinct treatments separated in time, we present several insights. For example, we find that previous donors are more likely to give, and contribute more, than donors asked to contribute for the first time. Yet, how these previous donors were acquired is critical: agents who are initially attracted by signals of charitable quality transmitted via an economic mechanism are much more likely to continue giving than agents who were initially attracted by non-mechanism factors.

Hisaki Kono

Cited by*: 1 Downloads*: 12

Microfinance institutions employ various kinds of incentive schemes but estimating the effect of each scheme is not easy due to endogeneity bias. We conducted field experiments in Vietnam to capture the role of joint liability, monitoring, cross-reporting, social sanctions, communication and group formation in borrowers' repayment behavior. We find that joint liability contracts cause serious free-riding problems, inducing strategic default and lowering repayment rates. When group members observe each others' investment returns, participants are more likely to choose strategic default. Even after introducing a cross-reporting system and/or penalties among borrowers, the default rates and the ratios of participants who chose strategic default under joint liability are still higher than those under individual lending. We also find that joint liability lending often failed to induce mutual insurance among borrowers. Those who had been helped or who had repaid a little in the previous round were more likely to default strategically and repay a little again in the current round and those who paid large amounts were always the same individuals.

Mariah D Ehmke, John A List, Jayson L Lusk

Cited by*: 10 Downloads*: 14

A concern with the contingent valuation method (CVM) is the finding that hypothetical and real statements of value often differ. We test whether hypothetical bias, broadly defined, is independent of location by comparing real and hypothetical votes on a dichotomous choice referendum in China, France, Indiana, Kansas, and Niger. We find significant differences in hypothetical bias across locations and reject the hypothesis that hypothetical bias is independent of location. As opposed to the typical finding reported in the literature, subjects in Niger significantly understated their willingness-to-pay in the hypothetical referendum.

Andris Saulitis

Cited by*: 0 Downloads*: 34

This paper examines the extent to which a noncompliant debtor can be induced to pay back the debt by sending a randomly assigned message via mobile phone and e-mail, ranging from a simple reminder to personalized messages and a social norm. In cooperation with a debt-collector enterprise in Latvia, the field experiment was carried out on 24,781 unique cases of consumer debts with unpaid liabilities, ranging from one to 40,060.26 euros. Overall, sending a message to a debtor increases compliance in comparison of not sending a message at all. However, messages, which include debtor's name, agent's name or social norm, do not increase compliance in comparison to a simple reminder message. I also looked at the interaction effect between the content of the message and the debt amount, which has been hardly examined in previous experiments on compliance. Messages with a debtor's name significantly increase compliance in comparison to a simple reminder among the debts smaller than 170 euros. However, such a message is counter-effective for debts larger than 1,340 euros, the same trend is true for a message with the social norm. Hence, a different policy needs to be applied to the debtors who are extensively overindebted in comparison to those with comparatively small debt amounts.

Syon Bhanot

Cited by*: None Downloads*: None

Social norms messaging campaigns are increasingly used to influence human behavior, with social science research generally finding that they have modest but meaningful effects. One aspect of these campaigns in practice has been the inclusion of injunctive norms messaging, designed to convey a social judgement about one's behaviors (often in the form of encouraging or discouraging language, or a visual smiley or frowny face). While some prominent research has provided support for the use of such messaging as a tool for positive behavior change, causal evidence on the effect of injunctive norms messaging as a motivator (as opposed to just one part of a multifaceted messaging campaign) is limited. This paper presents a field experiment on water conservation behavior conducted by an organization in California, involving over 40,000 households, which provides some of the most precise evidence to date regarding the effect of injunctive norms on decision making. I find that not only do injunctive norms encourage conservation behavior, there is also no evidence that they discourage individuals from further attending norms messaging-regardless of whether the social judgement conveyed is negative or positive. Taken together, this suggests that injunctive norms are a useful tool in "nudge"-style campaigns tackling behavior change.

Ori Heffetz , John A List

Cited by*: 1 Downloads*: 14

A hallmark result within behavioral economics is that individuals' choices are affected by current endowments. A recent theory due to Koszegi and Rabin (2006) explains such endowment effect with a model of expectations-based reference-dependent preferences. Departing from past work, we conduct complementary experiments to disentangle expectations - verified probabilistic beliefs held by subjects - from other features of endowment - such as "assignment" to a good - hence allowing us to compare the effect of expectations with that of other variations. While mere assignment can affect choices, we do not find a large role in the effect for Koszegi-Rabin expectations.

Anya Samek

Cited by*: 5 Downloads*: 4

We experimentally investigate the difference in competitiveness of 3-5 year-old boys and girls in the U.S. 123 children from a preschool are randomly matched into girl-girl, boy-boy, and boy-girl pairs of similar age and participate in a gender-neutral, competitive classroom activity using candy as an incentive. Children participate in a piece rate incentive scheme and a tournament incentive scheme in rounds 1 and 2, and select their preferred incentive scheme for round 3. We find that girls and boys choose to compete at equal rates - with 80% of children choosing to compete overall. We also find that girls' output in the task is significantly lower than that of boys under the tournament scheme, but not different in round 3 for the girls and boys who self-select into the tournament. All children display a remarkable rate of confidence - 84% of children believe they won under the tournament scheme. The gender of the match does not play a significant role.

Craig E Landry, Andreas Lange, John A List, Michael K Price, Nicholas G Rupp

Cited by*: 4 Downloads*: 0

Several recent laboratory experiments have shown that the use of explicit incentives--such as conditional rewards and punishment--entail considerable "hidden" costs. The costs are hidden in the sense that they escape our attention if our reasoning is based on the assumption that people are exclusively self-interested. This study represents a first attempt to explore whether, and to what extent, such considerations affect equilibrium outcomes in the field. Using data gathered from nearly 3000 households, we find little support for the negative consequences of control in naturally-occurring labor markets. In fact, even though we find evidence that workers are reciprocal, we find that worker effort is maximized when we use conditional--not unconditional--rewards to incent workers.

John A List, Julie Pernaudet, Dana L Suskind

Cited by*: None Downloads*: None

Socioeconomic inequalities in child development crystallize at early stages, with associated disparities in parental investment in children. A key to understanding the data patterns is to document the sources underlying the observed inequalities. We first show that there are dramatic differences in parental beliefs across socioeconomic backgrounds (SES), with parents of higher SES being more likely to believe that parental investments impact child development. We then use two field experiments targeted to low-SES families to explore the mutability of such beliefs and their link to parental investments. In both cases, we find that parental beliefs about child development are malleable. The less intensive version of the program based on educational videos changes parental beliefs, but fails to lastingly increase parental investments and child outcomes. By contrast, in the more intensive version of our program combining home visits and feedback, the augmented beliefs are associated with enriched parent-child interactions and improved vocabulary, math, and social-emotional skills for the children. Together, these results suggest that changing parental beliefs can be an important pathway to raising parental investments and reducing socioeconomic gaps in children's skills, but that simple informational policies may not be sufficient.

Egil Matsen, Bjarne Strom

Cited by*: 0 Downloads*: 7

This paper examines data from the Norwegian television game show Joker, where contestants make well-specified choices under risk. The game involves very large stakes, randomly drawn contestants, and ample opportunities for learning. Expected utility (EU) theory gives a simple prediction of choice under weak conditions, as one choice is always first-order stochastically dominating. We document frequent, systematic and costly violations of dominance. Most alternative theories fail to add explanatory power beyond the EU benchmark, but many contestants appear to have a systematic expectation bias that can be related to Tversky and Kahneman's (1973) "availability heuristic". In addition, there seems to be a stochastic element in choice that is well captured by the so-called Fechner model.

John A List, Matthias Rodemeier, Sutanuka Roy, Gregory Sun

Cited by*: None Downloads*: None

While behavioral non-price interventions ("nudges") have grown from academic curiosity to a bona fide policy tool, their relative economic efficiency remains under-researched. We develop a unified framework to estimate welfare effects of both nudges and taxes. We showcase our approach by creating a database of more than 300 carefully hand-coded point estimates of non-price and price interventions in the markets for cigarettes, influenza vaccinations, and household energy. While nudges are effective in changing behavior in all three markets, they are not necessarily the most efficient policy. We find that nudges are more efficient in the market for cigarettes, while taxes are more efficient in the energy market. For influenza vaccinations, optimal subsidies likely outperform nudges. Importantly, two key factors govern the difference in results across markets: i) an elasticity-weighted standard deviation of the behavioral bias, and ii) the magnitude of the average externality. Nudges dominate taxes whenever i) exceeds ii). Combining nudges and taxes does not always provide quantitatively significant improvements to implementing one policy tool alone.