Papers - All

Bradley J Ruffle, Richard Sosis

Cited by*: 11 Downloads*: 8

Time-consuming and costly religious rituals pose a puzzle for economists committed to rational choice theories of human behavior. We propose that either through selection or a causal relationship, the performance of religious rituals is associated with higher levels of cooperation. To test this hypothesis we design field experiments to measure the in-group cooperative behavior of members of religious and secular Israeli kibbutzim, communal societies for which mutual cooperation is a matter of survival. Our results show that religious males (the primary practitioners of collective religious ritual in Orthodox Judaism) are more cooperative than religious females, secular males and secular females. Moreover, the frequency with which religious males engage in collective religious rituals predicts well their degree of cooperative behavior.

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, Warren McHone , Daniel L Millimet

Cited by*: 11 Downloads*: 19

Whether environmental regulations alter capital flows remains a hotly debated issue. This paper uses county-level data to examine the location decisions of domestic and foreign firms in a single empirical model and tests for asymmetries by firm origin in the degree to which capital flows are influenced by environmental standards. We find that while domestic firms are influenced by environmental regulations, foreign firms are not. Since the benefits of foreign investment are well-documented-foreign plants typically provide more jobs and increase local wages by more than domestic plants-this result suggests a double-dividend is available: foreign plants provide an economic stimulus and are not unduly influenced by environmental protections.

Grant D Devine, Bruce W Marion

Cited by*: 11 Downloads*: 29

Comparative price information for major Ottawa supermarkets was collected over a twenty-eight-week period and published in daily newspapers during a five-week test period. In response to the information, the dispersion of prices across store and chains narrowed, the average level of prices of the market dropped, and consumer satisfaction increased relative to the control market. Consumers transferred patronage to the lower priced stores. Consumers indicated a willingness to pay US$ .34 per week on average for the price comparison information. Estimated consumer benefits far exceeded the cost of the program.

John A List, Daniel L Millimet

Cited by*: 11 Downloads*: 4

One particularly vexing puzzle for economists and policymakers over the past several decades concerns the empirical significance of the theoretically predicted pollution haven hypothesis. While neoclassical theory and conventional wisdom both surmise that local economies will suffer deleterious effects from stricter environmental regulations, empirical studies have largely failed to validate such claims. This study utilizes the method of matching to show that the impact of stricter regulation is heterogeneous spatially, varying systematically based on location-specific attributes. Previous studies that assume a homogenous response may therefore inadvertently mask the overall impact of more stringent regulations by pooling unaffected and affected regions.

John A List, Warren McHone , Daniel L Millimet

Cited by*: 11 Downloads*: 8

Whether lax environmental regulations are an important attraction for mobile capital remains one of the most controversial issues in the area of regulatory federalism. While the extant literature does a nice job of estimating the effects of environmental regulation on the spatial allocation of new plant births, one neglected area of research is the effect that environmental regulation has on plant relocation decisions. This paper uses an annual (1980-90) county level panel data set to examine the relationship between air quality regulatory stringency and the destination choice of relocating plants. We estimate empirical models using both parametric and semi-nonparametric specifications. Empirical results from both models suggest that air quality regulations alter significantly the destination choices of relocating plants.

Jeff P Carpenter, Erika Seki

Cited by*: 11 Downloads*: 10

Models of job tournaments and competitive workplaces more generally predict that while individual effort may increase as competition intensifies between workers, the incentive for workers to cooperate with each other diminishes. We report on a field experiment conducted with workers from a fishing community in Toyama Bay, Japan. Our participants are employed in three different aspects of fishing. The first group are fishermen, the second group are fish wholesalers (or traders), and the third group are staff at the local fishing coop. Although our participants have much in common (e.g., their common relationship to the local fishery and the fact that they all live in the same community), we argue that they are exposed to different amounts of competition on-the-job and that these differences explain differences in cooperation in our experiment. Specifically, fishermen and traders, who interact in more competitive environments are significantly less cooperative than the coop staff who face little competition on the job. Further, after accounting for the possibility of personality-based selection, perceptions of competition faced on-the-job and the treatment effect of job incentives explain these differences in cooperation to a large extent.

Michael E Levine, Charles R Plott

Cited by*: 11 Downloads*: 32

No abstract available

Michel Marechal, Christian Thoni

Cited by*: 10 Downloads*: 16

A substantive amount of lab experimental evidence suggests that the norm of reciprocity has important economic consequences. However, it is unclear whether the norm of reciprocity survives in a natural and competitive environment with experienced agents. For this purpose we analyze data from a natural field experiment conducted with sales representatives who were instructed to randomly distribute product samples as gifts to their business partners. We find that distributing gifts to store managers boosts sales revenue substantially, which is consistent with the notion of reciprocity. However, the results underline that the nature of the relationship between market participants crucially affects the prevalence of reciprocal behavior.

Rachel Croson, Jen Shang

Cited by*: 10 Downloads*: 36

We study the effect of social information on the voluntary provision of public goods. Competing theories predict that others[1] contributions might be either substitutes or complements to one's own. We demonstrate a positive social information effect on individual contributions, supporting theories of complementarities. We find the most influential level of social information is drawn from the 90th to 95th percentile of previous contributions. We furthermore find the effect to be significant for new members but not for renewing members. In the most effective condition, social information increases contributions by 12% ($13). These increased contributions do not crowd out future contributions.

Richard Engelbrecht-Wiggans, John A List, David H Reiley

Cited by*: 10 Downloads*: 9

Auction theory has recently revealed that multi-unit uniform-price auctions, such as those used by the U.S. Treasury for debt sales, entail demand-reduction incentives that can cause inefficient allocations. Recent experimental results show that bidders do indeed strategically reduce their bids in uniform-price auctions. The present paper extends this work, both theoretically and experimentally, to consider the effects of varying numbers of bidders. We derive several theoretical predictions, including the result that demand reduction should decrease with increasing numbers of bidders, though some demand reduction remains even in the asymptotic limit. We then examine the bidding behavior of subjects in this environment by auctioning dozens of Cal Ripken, Jr. baseball cards using both uniform-price and Vickrey auction formats. The field data are broadly consistent with the theoretical predictions of our model: most notably, demand reduction on second-unit bids becomes much smaller and harder to detect as the number of bidders increases.

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.

John A List, Charles Bailey, Patricia Euzent , Thomas Martin

Cited by*: 10 Downloads*: 42

This article measures the degree to which academic economists have engaged in unethical behavior and the degree to which academic economists believe the profession as a whole engages in unethical behavior. Three main types of unethical behavior are examined: (1) falsification of research; (2) expropriation of graduate student research or including an undeserving co-author on a research paper; and(3) exchange of grades for gifts, money, or sex. Using a unique data set gathered at the 1998 American Economic Association (AEA) meetings, we find that there is a significant amount of misconduct, particularly in the second category.

Orly Sade, Charles Schnitzlein, Jaime Zender

Cited by*: 10 Downloads*: 8

An experimental approach is used to examine the performance of three different multi-unit auction designs: discriminatory, uniform-price with fixed supply, and uniform-price with endogenous supply. We find that the strategies of the individual bidders and the aggregate demand curves are inconsistent with theoretically identified equilibrium strategies. The discriminatory auction is found to be more susceptible to collusion than are the uniform-price auctions, and so contrary to theoretical predictions and previous experimental results the discriminatory auction provides the lowest average revenue. Consistent with theoretical predictions, bidder demands are more elastic with reducible supply or discriminatory pricing than in the uniform-price auction with fixed supply. Despite a lack of a priori differences across bidders, the discriminatory auction results in significantly more symmetric allocations.

Michael S Haigh, John A List

Cited by*: 10 Downloads*: 15

We compare behavior across students and professional traders from the Chicago Board of Trade in a classic Allais paradox experiment. Our experiment tests whether independence, a necessary condition in expected utility theory, is systematically violated. We find that both students and professionals exhibit some behavior consistent with the Allais paradox, but the data pattern does suggest that the trader population falls prey to the Allais paradox less frequently than the student population.

Claude Montmarquette, Jean-Louis Rulliere, Marie-Claire Villeval, Romain Zeiliger

Cited by*: 10 Downloads*: 5

After a merger, company officials face the challenge of making compensation schemes uniform and of redesigning teams with managers from companies with different incentives, work habits and recruiting methods. In this paper, we investigate the relationship between executive pay and performance after a merger by dissociating the respective influence of shifts, which occur in both compensation incentives and team composition. The results of a real effort experiment conducted with managers within a large pharmaceutical company not only show that changes in compensation incentives affect performance but also suggest that the sorting effect of incentives in the previous companies impact cooperation and efficiency after the merger. Replicating this experiment with students showed differences in strategy rather than in substance between the two groups of subjects with managers appearing performance driven while students are more cost driven.

Richard Engelbrecht-Wiggans, John A List, David H Reiley

Cited by*: 10 Downloads*: 3

Recent auction theory and experimental results document strategic demand reduction by bidders in uniform-price auctions. The present article extends this area of research to consider the effects of varying the number of bidders. Our theoretical model predicts that demand reduction should decrease with an increase in the number of bidders. Considerable demand reduction remains even in the asymptotic limit, although truthful bidding yields profits very close to those of equilibrium play. We experimentally confirm several of our predictions by examining bidding behavior of subjects in an actual marketplace, auctioning dozens of sportscards using both uniform-price and Vickrey auction formats.

Maria De Paola, Rosanna Nistico, Vincenzo Scoppa

Cited by*: 10 Downloads*: 4

We evaluate the effectiveness of monetary incentives in enhancing student performance using a randomized experiment involving undergraduate students enrolled at a southern Italian University. Students were assigned to three different groups: a high-reward group, a low-reward group, and a control group. Rewards were given to the 30 best-performing students in each group. Financial rewards increase student performance. High-ability students react strongly whereas the effect is null for low-ability students. Large and small rewards produce very similar effects. These effects also persist in subsequent years, when the financial incentives are no longer in place. No types of crowding-out effects of the monetary incentives are found.

Raymond C Battalio, John H Kagel, Don N MacDonald

Cited by*: 10 Downloads*: 37

In an earlier paper (Raymond C. Battalio, John H. Kagel, and Don N. Mac Donald, 1985), we reported Allais-type violations of the independence axiom of expected utility theory with rats choosing over positively valued payoffs (food rewards). This note extends this research, examining animals' choices over losses, testing for (1) standard Allais-type common ratio effect violations of expected utility theory and (2) fanning out of indifference curves for random prospects, tests of Mark J. Machina's (1982, 1987) hypothesis II (hereafter H2), over previously unexplored areas of the unit probability triangle. Results from a parallel series of experiments using human subjects choosing over real losses are also reported. For both rats and people, we find standard Allais-type violations of expected utility theory and a systematic failure of the fanning out hypothesis in the southeast corner of the unit probability triangle, in the case of losses. Thus, the fanning out hypothesis (Machina 1982, 1987) cannot provide a satisfactory explanation for behavioral deviations from expected utility theory.

Stefan Luckner, Christof Weinhardt

Cited by*: 9 Downloads*: 12

The results of recent studies on prediction markets are encouraging. Prior experience demonstrates that markets with different incentive schemes predicted uncertain future events remarkably accurately. In this paper, we study the impact of different monetary incentives on prediction accuracy in a field experiment. In order to do so, we compare three groups of traders, corresponding to three treatments with different payment schemes, in a prediction market for the FIFA World Cup 2006. Somewhat surprisingly, our results show that performance-related payment schemes do not necessarily increase the prediction accuracy. Due to the risk aversion of traders the competitive environment in a rank-order tournament leads to the best results in terms of prediction accuracy.