Papers - All

Chris Arnot, Peter C Boxall, Sean B Cash

Cited by*: 43 Downloads*: 54

The existing literature on socially responsible purchasing relies heavily on stated preference measures elicited through surveys that utilize hypothetical market choices. This paper explores consumers' revealed purchasing behavior with regard to fair trade coffee and is apparently the first to do so in an actual market setting. In a series of experiments, we investigated differences in consumer responsiveness to relative price changes in fair trade and non-fair trade brewed coffees. In order to minimize the hypothetical bias that may be present in some experimental settings, we conducted our experiments in cooperation with a vendor who allowed us to vary prices in an actual coffee shop. Using a choice model, we found that purchasers of fair trade coffee were much less price responsive than those of other coffee products. The demonstration of low sensitivity to price suggests that the market premiums identified by stated preference studies do indeed exist and are not merely artifacts of hypothetical settings.

Paul Glewwe, Michael Kremer, Sylvie Moulin, Eric Zitzewitz

Cited by*: 42 Downloads*: 16

This paper compares retrospective and prospective analyses of the effect of flip charts on test scores in rural Kenyan schools. Retrospective estimates that focus on subjects for which flip charts are used suggest that flip charts raise test scores by up to 20 percent of a standard deviation. Controlling for other educational inputs does not reduce this estimate. In contrast, prospective estimators based on a study of 178 schools, half of which were randomly selected to receive charts, provide no evidence that flip charts increase test scores. One interpretation is that the retrospective results were subject to omitted variable bias despite the inclusion of control variables. If the direction of omitted variable bias were similar in other retrospective analyses of educational inputs in developing countries, the effects of inputs may be even more modest than retrospective studies suggest. Bias appears to be reduced by a differences-in-differences estimator that examines the impact of flip charts on the relative performance of students in flip chart and other subjects across schools with and without flip charts, but it is not clear that this approach is applicable more generally.

Antoni Bosch-Domenech, Jose Garcia-Montalvo, Rosemarie Nagel, Albert Satorra

Cited by*: 42 Downloads*: 14

"Beauty-contest is a game in which participants have to choose, typically, a number in [0,100], the winner being the person whose number is closest to a proportion of the average of all chosen numbers. We describe and analyze Beauty-contest experiments run in newspapers in UK, Spain, and Germany and find stable patterns of behavior across them, despite the uncontrollability of these experiments. These results are then compared with lab experiments involving undergraduates and game theorists as subjects, in what must be one of the largest empirical corroborations of interactive behavior ever tried. We claim that all observed behavior, across a wide variety of treatments and subject pools, can be interpreted as iterative reasoning. Level-1 reasoning, Level-2 reasoning and Level-3 reasoning are commonly observed in all the samples, while the equilibrium choice (Level-Maximum reasoning) is only prominently chosen by newspaper readers and theorists. The results show the empirical power of experiments run with large subject-pools, and open the door for more experimental work performed on the rich platform offered by newspapers and magazines."

David J Cooper, John H Kagel, Qing Liang Gu, Wei Lo

Cited by*: 41 Downloads*: 13

We examine strategic interactions between firms and planners in China, comparing behavior between: (i) students and managers with field experience with this situation, (ii) standard versus increased monetary incentives, and (iii) sessions conducted "in context", making explicit reference to interactions between planners and managers, and those without any such references. The dynamics of play are similar across treatments with play only gradually, and incompletely, converging on a pooling equilibrium. A fivefold increase in incentives significantly increases initial levels of strategic play. Games played in context generated greater levels of strategic play for managers, with minimal impact on students.

Juan-Camilo Cardenas, Elinor Ostrom

Cited by*: 40 Downloads*: 34

The study of collective action requires an understanding of the individual incentives and of the institutional constraints that guide people in making choices about cooperating or defecting on the group facing the dilemma. The use of local ecosystems by groups of individuals is just one example where individual extraction increases well-being, but aggregate extraction decreases it. The use of economic experiments has enhanced the already diverse knowledge from theoretical and field sources of when and how groups can solve the problem through selfgoverning mechanisms. These studies have identified several factors that promote and limit collective action, associated with the nature of the production system that allows groups to benefit from a joint-access local ecosystem, and associated with the institutional incentives and constraints from both self-governed and externally imposed rules. In general, there is widespread agreement that cooperation can happen and be chosen by individuals as a rational strategy, beyond the "tragedy of the commons" prediction. A first step in this paper is to propose a set of layers of information that the individuals might be using to decide over their level of cooperation. The layers range from the material incentives that the specific production function imposes, to the dynamics of the game, to the composition of the group and the individual characteristics of the player. We next expand the experimental literature by analyzing data from a set of experiments conducted in the field with actual ecosystem users in three rural villages of Colombia using this framework. We find that repetition brings reciprocity motives into the decision making. Further, prior experience of the participants, their perception of external regulation, or the composition of the group in terms of their wealth and social position in the village, influence decisions to cooperate or defect in the experiment. The results suggest that understanding the multiple levels of the game, in terms of the incentives, the group and individual characteristics or the context, can help understand and therefore explore the potentials for solving the collective-action dilemma.

John A List, David Lucking-Reiley

Cited by*: 40 Downloads*: 5

No abstract available

Alan S Gerber, Donald P Green, Ron Shachar

Cited by*: 39 Downloads*: 19

Habit is a frequently mentioned but understudied cause of political action. This article provides the first direct test of the hypothesis that casting a ballot in one election increases one's propensity to go to the polls in the future. A field experiment involving 25,200 registered voters was conducted prior to the November general election of 1998. Subjects were randomly assigned to treatment conditions in which they were urged to vote through direct mail or face-to-face canvassing. Compared to a control group that received no contact, the treatment groups were significantly more likely to vote in 1998. The treatment groups were also significantly more likely to vote in local elections held in November of 1999. After deriving a statistical estimator to isolate the effect of habit, we find that, ceteris paribus, voting in one election substantially increases the likelihood of voting in the future. Indeed, the influence of past voting exceeds the effects of age and education reported in previous studies.

John A List, Mark Strazicich

Cited by*: 39 Downloads*: 22

Time paths of carbon dioxide emissions in twenty-one industrial countries are examined from 1960-1997 to test for stochastic and conditional convergence. Both panel unit root tests and cross-section regressions are performed. Overall, we find significant evidence that CO2 emissions have converged.

Steven D Levitt, John A List

Cited by*: 38 Downloads*: 65

No abstract available

Steffen Andersen, Seda Ertac, Uri Gneezy, Moshe Hoffman, John A List

Cited by*: 37 Downloads*: 26

One of the most robust findings in experimental economics is that individuals in one-shot ultimatum games reject unfair offers. Puzzlingly, rejections have been found robust to substantial increases in stakes. By using a novel experimental design that elicits frequent low offers and uses much larger stakes than in the literature, we are able to examine stakes' effects over ranges of data that are heretofore unexplored. Our main result is that proportionally equivalent offers are less likely to be rejected with high stakes. In fact, our paper is the first to present evidence that as stakes increase, rejection rates approach zero.

Sarah Lichtenstein, Paul Slovic

Cited by*: 37 Downloads*: 43

The present report describes an expanded replication of the previous experiments in a nonlaboratory real-play setting unique to the experimental literature on decision processes - a casino in downtown Las Vegas.

Dean S Karlan, John A List

Cited by*: 37 Downloads*: 17

We conducted a natural field experiment to explore the effect of price changes on charitable contributions. To operationalize our tests, we examine whether an offer to match contributions to a non-profit organization changes the likelihood and amount that an individual donates. Direct mail solicitations were sent to over 50,000 prior donors. We find that the match offer increases both the revenue per solicitation and the probability that an individual donates. While comparisons of the match treatments and the control group consistently reveal this pattern, larger match ratios (i.e., $3:$1 and $2:$1) relative to smaller match ratios ($1:$1) had no additional impact. The results have clear implications for practitioners in the design of fundraising campaigns and provide avenues for future empirical and theoretical work on charitable giving. Further, the data provide an interesting test of important methods used in cost-benefit analysis.

Daniel Bergan, Alan S Gerber, Dean S Karlan

Cited by*: 36 Downloads*: 27

We conducted a field experiment to measure the effect of exposure to newspapers on political behavior and opinion. Before the 2005 Virginia gubernatorial election, we randomly assigned individuals to a Washington Post free subscription treatment, a Washington Times free subscription treatment, or a control treatment. We find no effect of either paper on political knowledge, stated opinions, or turnout in post-election survey and voter data. However, receiving either paper led to more support for the Democratic candidate, suggesting that media slant mattered less in this case than media exposure. Some evidence from voting records also suggests that receiving either paper led to increased 2006 voter turnout.

Andreas Lange, John A List, Michael K Price

Cited by*: 35 Downloads*: 33

This study explores the economics of charitable fund-raising. We begin by developing theory that examines the optimal lottery design while explicitly relaxing both risk-neutrality and preference homogeneity assumptions. We test our theory using a battery of experimental treatments and find that our theoretical predictions are largely confirmed. Specifically, we find that single and multiple prize lotteries dominate the voluntary contribution mechanism both in total dollars raised and the number of contributors attracted. Moreover, we find that the optimal fund-raising mechanism depends critically on the risk postures of potential contributors and preference heterogeneity.

Bradley J Ruffle, Richard Sosis

Cited by*: 35 Downloads*: 51

The in-group-out-group bias is among the most widely documented and analyzed phenomenon in the social sciences. We conduct field experiments to test whether the bias extends to the cooperative behavior of one of the most successful modern collectives, the Israeli kibbutz. Despite their promise as universal cooperators, kibbutz members are more cooperative toward anonymous kibbutz members than they are toward anonymous city residents. In fact, when paired with city residents, kibbutz members' observed levels of cooperation are identical to those of city residents. Moreover, self-selection rather than kibbutz socialization largely accounts for the extent to which kibbutz members are cooperative.

Craig E Landry, John A List

Cited by*: 35 Downloads*: 17

While contingent valuation remains the only option available for measurement of total economic value of nonmarketed goods, the method has been criticized due to its hypothetical nature. We analyze field experimental data to evaluate two ex ante approaches to attenuating hypothetical bias, directly comparing value statements across four distinct referenda: hypothetical, "cheap talk," "consequential," and real. Our empirical evidence suggests two major findings: hypothetical responses are significantly different from real responses; and responses in the consequential and cheap talk treatments are statistically indistinguishable from real responses. We review the potential for each method to produce reliable results in the field.

Steffen Andersen, Seda Ertac, Uri Gneezy, John A List, Sandra Maximiano

Cited by*: 35 Downloads*: 2

Recent literature presents evidence that men are more competitively inclined than women. Since top-level careers usually require competitiveness, competitiveness differences provide an explanation for gender gaps in wages and differences in occupational choice. A natural question is whether women are born less competitive or whether they become so through the process of socialization. To pinpoint when in the socialization process the difference arises, we compare the competitiveness of children in matrilineal and patriarchal societies. We find that while there is no difference at any age in the matrilineal society, girls become less competitive around puberty in the patriarchal society.

Per Fredriksson , John A List, Daniel L Millimet

Cited by*: 33 Downloads*: 18

Previous studies have proposed that equilibrium capital flows are affected by environmental regulations-the commonly coined 'pollution haven' hypothesis. We revisit this issue by treating environmental policies as endogenous and allowing governmental corruption to influence foreign direct investment patterns. Via these two simple extensions, we are able to provide a much richer model of international capital flows. The theoretical model presumes that the effect of corruption on FDI operates via two channels: corruption affects capital flows through its impact on environmental policy stringency and due to greater theft of public funds earmarked for public spending. We empirically examine the implications of the model using US state-level panel data from four industrial sectors over the period 1977-1987. Empirical results suggest environmental policy and corruption both play a significant role in determining the spatial allocation of inbound US FDI. In addition, the estimated effect of environmental policy is found to depend critically on exogeneity assumptions.

John A List, Paramita Sinha, Michael H Taylor

Cited by*: 33 Downloads*: 116

Critics of stated preference methods argue that hypothetical bias precludes survey techniques from providing reliable economic values for non-market goods and services, rendering estimation of the total economic benefits of public programs fruitless. This paper explores a relatively new methodology to obtain the total value of non-market goods and services-choice experiments-which conveniently provide information on the purchase decision as well as the characteristic value vector. The empirical work revolves around examining behavior in two very different field settings. In the first field study, we explore hypothetical bias in the purchase decision by eliciting contributions for a threshold public good in an actual capital campaign. To extend the analysis a level deeper, in a second field experiment we examine both the purchase decision and the marginal value vector via inspection of consumption decisions in an actual marketplace. In support of the new valuation design, both field experiments provide some evidence that hypothetical choice experiments combined with ""cheap talk"" can yield credible estimates of the purchase decision. Furthermore, we find no evidence of hypothetical bias when estimating marginal attribute values. Yet, we do find that the ""cheap talk"" component might induce internal inconsistency of subjects' preferences in the choice experiment.

John A List

Cited by*: 33 Downloads*: 10

Through good and bad economic times, charitable gifts have continued to roll in largely unabated over the past half century. In a typical year, total charitable gifts of money now exceed 2 percent of gross domestic product. Moreover, charitable giving has nearly doubled in real terms since 1990, and the number of nonprofit organizations registered with the IRS grew by nearly 60 percent from 1995 to 2005. This study provides a perspective on the economic interplay of three types of actors: donors, charitable organizations, and government. How much is given annually? Who gives? Who are the recipients of these gifts? Would changes in the tax treatment of charitable contributions lead to more or less giving? How can charitable institutions design mechanisms to generate the greatest level of gifts? What about the effectiveness of seed money and matching grants?