Papers - All

Timothy Cason, Anya Samek, Roman Sheremeta

Cited by*: 2 Downloads*: 4

Motivated by problems of coordination failure observed in weak-link games, we experimentally investigate behavioral spillovers for order-statistic coordination games. Subjects play the minimum- and median-effort coordination games simultaneously and sequentially. The results show the precedent for cooperative behavior spills over from the median game to the minimum game when the games are played sequentially, but not when they are played simultaneously. Moreover, spillover occurs even when group composition changes, although the effect is not as strong. We also find that the precedent for uncooperative behavior does not spill over from the minimum game to the median game. These findings suggest guidelines for increasing cooperative behavior within organizations.

James Cox, John A List, Michael K Price, Vjollca Sadiraj, Anya Samek

Cited by*: 2 Downloads*: 123

The literature exploring other regarding behavior sheds important light on interesting social phenomena, yet less attention has been given to how the received results speak to foundational assumptions within economics. Our study synthesizes the empirical evidence, showing that recent work challenges convex preference theory but is largely consistent with rational choice theory. Guided by this understanding, we design a new, more demanding test of a central tenet of economics - the contraction axiom - within a sharing framework. Making use of more than 325 dictators participating in a series of allocation games, we show that sharing choices violate the contraction axiom. We advance a new theory that augments standard models with moral reference points to explain our experimental data. Our theory also organizes the broader sharing patterns in the received literature.

John A List, Jan Stoop, Daan van Soest, Haiwen Zhou

Cited by*: 2 Downloads*: 3

Both private and public organizations constantly grapple with incentive schemes to induce maximum effort from agents. We begin with a theoretical exploration of optimal contest design, focusing on the number of competitors. Our theory reveals a critical link between the distribution of luck and the number of contestants. We find that if there is considerable (little) mass on good draws, equilibrium effort is an increasing (decreasing) function of the number of contestants. Our first test of the theory implements a laboratory experiment, where important features of the theory can be exogenously imposed. We complement our lab experiment with a field experiment, where we rely on biological models complemented by economic models to inform us of the relevant theoretical predictions. In both cases we find that the theory has a fair amount of explanatory power, allowing a deeper understanding of how to effectively design tournaments. From a methodological perspective, our study showcases the benefits of combining data from both lab and field experiments to deepen our understanding of the economic science.

Abhijit Banerjee, Esther Duflo, Leigh Linden

Cited by*: 2 Downloads*: 54

This note presents the results obtained after the first year of a two-year randomized evaluation of a computer assisted learning (CAL) program in Vadodara, India. The CAL program, implemented by a NGO, took advantage of the donation of four computers to each municipal primary school in Vadodara by the state government. The program provided each child in the fourth standard with two hours of shared computer time in which students played educational games that reinforced mathematics competencies ranging from the standard 1 to the standard 3 level. We find the program to be quite effective. On average, it increased math scores by 0.37 standard deviations. The program effect is slightly higher at the bottom of the distribution but persists throughout the distribution. The program had no apparent spillover on language competencies.

Paul Glewwe, Albert Park, Meng Zhao

Cited by*: 2 Downloads*: 19

About 10% of primary school students in developing countries have poor vision, yet in virtually all of these countries very few children wear glasses. There has been almost no research on the impact of poor vision on school performance in developing countries, and simple OLS estimates are likely to be biased because students who study more often are likely to develop poor vision faster. This paper presents results from a randomized trial in Western China that began in the summer of 2004. The trial involves over 19,000 students in 165 schools in two counties of Gansu province. The schools were randomly divided (at the township level) into 103 schools that received eyeglasses (for students in grades 4-6) and 62 schools that served as controls. The results indicate that, after one year, making eyeglasses available increased average test scores by 0.11 to 0.15 standard deviations (of the distribution of the test scores). For those students who accepted the glasses, average test scores increased by 0.15 to 0.22 standard deviations.

Omar Al-Ubaydli, John A List

Cited by*: 2 Downloads*: 1

Economists are increasingly turning to the experimental method as a means to estimate causal effects. By using randomization to identify key treatment effects, theories previously viewed as untestable are now scrutinized, efficacy of public policies are now more easily verified, and stakeholders can swiftly add empirical evidence to aid their decision-making. This study provides an overview of experimental methods in economics, with a special focus on developing an economic theory of generalizability. Given that field experiments are in their infancy, our secondary focus pertains to a discussion of the various parameters that they identify, and how they add to scientific knowledge. We conclude that until we conduct more field experiments that build a bridge between the lab and the naturally-occurring settings of interest we cannot begin to make strong conclusions empirically on the crucial question of generalizability from the lab to the field.

Christina M Fong, Erzo FP Luttmer

Cited by*: 2 Downloads*: 4

We investigate determinants of private and public generosity to Katrina victims using an artifactual field experiment. In this experiment, respondents from the general population viewed a short audiovisual presentation that manipulated respondents' perceptions of the income, race, and deservingness of Katrina victims in one of two small cities. Respondents then decided how to split $100 between themselves and a charity helping Katrina victims in this small city. We also collected survey data on subjective support for government spending to help the Katrina victims in the cities. We find, first, that our income manipulation had a significant effect on giving; respondents gave more when they perceived the victims to be poorer. Second, the race and deservingness manipulations had virtually no effect on average giving. Third, the averages mask substantial racial bias among sub-groups of our sample. For instance, the subgroup of whites who identify with their ethnic or racial group strongly biased their giving against blacks. Finally, subjective support for government spending to help Katrina victims was significantly influenced by both our race and deservingness manipulations, but not by the income manipulation. White respondents supported significantly less public spending for black victims and significantly more for victims who were described in more flattering terms, such as being helpful and law-abiding.

Maria P Espinosa, Javier Gardeazabal

Cited by*: 2 Downloads*: 43

A disadvantage of multiple-choice tests is that students have incentives to guess. To discourage guessing, it is common to use scoring rules that either penalize wrong answers or reward omissions. These scoring rules are considered equivalent in psychometrics, although experimental evidence has not always been consistent with this claim. We model students' decisions and show, first, that equivalence holds only under risk neutrality and, second, that the two rules can be modified so that they become equivalent even under risk aversion. This paper presents the results of a filed experiment in which we analyze the decisions of subjects taking multiple-choice exams. The evidence suggests that differences between scoring rules are due to risk aversion as theory predicts. We also find that the number of omitted items depends on the scoring rule, knowledge, gender, and other covariates.

Dean S Karlan, Jonathan Zinman

Cited by*: 2 Downloads*: 20

Information asymmetries are important in theory but difficult to identify in practice. We estimate the empirical importance of adverse selection and moral hazard in a consumer credit market using a new field experiment methodology. We randomized 58,000 direct mail offers issued by a major South African lender along three dimensions: 1) the initial "offer interest rate" appearing on direct mail solicitations; 2) a "contract interest rate" equal to or less than the offer interest rate and revealed to the over 4,000 borrowers who agreed to the initial offer rate; and 3) a dynamic repayment incentive that extends preferential pricing on future loans to borrowers who remain in good standing. These three randomizations, combined with complete knowledge of the Lender's information set, permit identification of specific types of private information problems. Specifically, our setup distinguishes adverse selection from moral hazard effects on repayment, and thereby generates unique evidence on the existence and magnitudes of specific credit market failures. We find evidence of both adverse selection (among women) and moral hazard (predominantly among men), and the findings suggest that about 20% of default is due to asymmetric information problems. This helps explain the prevalence of credit constraints even in a market that specializes in financing high-risk borrowers at very high rates.

Lewis Glinert, Aileen Heinberg, Angela Hung, Arie Kapteyn, Annamaria Lusardi, Anya Samek

Cited by*: 2 Downloads*: 15

In this paper, we developed and experimentally evaluated four novel educational programs delivered online: an informational brochure, a visual interactive tool, a written narrative, and a video narrative. The programs were designed to inform people about risk diversification, an essential concept for financial decision-making. The effectiveness of these programs was evaluated using the RAND American Life Panel. Participants were exposed to one of the programs, and then asked to answer questions measuring financial literacy and self-efficacy. All of the programs were found to be effective at increasing self-efficacy, and several improved financial literacy, providing new evidence for the value of programs designed to help individuals make financial decisions. The video was more effective at improving financial literacy scores than the written narrative, highlighting the power of online media in financial education.

Joshua D Angrist, Victor Lavy

Cited by*: 1 Downloads*: 40

In Israel, as in many other countries, a high school matriculation certificate is required by universities and some jobs. In spite of the certificate's value, Israeli society is marked by vast differences in matriculation rates by region and socioeconomic status. We attempted to increase the likelihood of matriculation among low-achieving students by offering substantial cash incentives in two demonstration programs. As a theoretical matter, cash incentives may be helpful if low-achieving students reduce investment in schooling because of high discount rates, part-time work, or face peer pressure not to study. A small pilot program selected individual students within schools for treatment, with treatment status determined by previous test scores and a partially randomized cutoff for low socioeconomic status. In a larger follow-up program, entire schools were randomly selected for treatment and the program operated with the cooperation of principals and teachers. The results suggest the Achievement Awards program that randomized treatment at the school level raised matriculation rates, while the student-based program did not.

Mary Kay Gugerty, Michael Kremer

Cited by*: 1 Downloads*: 7

Many argue that organizations of the disadvantaged create positive externalities, and in particular strengthen the position of these groups in society. A natural inference is that these organizations should be subsidized. We argue that the benefits of expanding the operations of these groups must be set against the potential costs of weakening the role of the disadvantaged in these organizations. A prospective, randomized evaluation of a development program targeted at strengthening rural women's groups in western Kenya suggests that the program did not improve group strength or functioning as measured by participation rates, assistance to members, and assistance to other community projects. The funding did, however, change the very characteristics of the groups that made them attractive to funders in the first place. Younger, more educated women and women employed in the formal sector joined the groups, and men and better-educated and wealthier women moved into key leadership positions.

Juan-Camilo Cardenas

Cited by*: 1 Downloads*: 54

This paper discusses why running experiments in the field, outside of the university lab, can help us enrich the analysis we do of experimental data. One of the main arguments of the paper is that people participating in experiments, including students, do not come naked to the lab. They bring a great deal of rules of thumb, heuristics, values, prejudices, expectations and knowledge about the others participating, and about similar games, and use such information to make their decisions. The paper offers a short mention of relevant field experiments, and a more detailed look at field experiments conducted by the author, including a data set of CPR experiments run in 10 villages, between 2000 and 2002, with more than 1300 villagers in about 220 sessions, and replications with about 250 university students in more than 40 sessions. It offers then main lessons from bringing the lab to the field. Also there is a discussion of additional information gathered through different field instruments as well as community workshops with the participants to discuss the experimental data, the external validity of the experiments and their results, through parallels with their daily life. One of the lessons is that the greater variance in certain demographics about the experimental subjects might help explain variations in lab behavior that cannot be fully explained by the experimental institutions we study. Also, certain significant differences in behavior between villagers and students will be discussed.

Peter Bohm

Cited by*: 1 Downloads*: 13

No abstract available

Nava Ashaf, Xavier Gine, Dean S Karlan

Cited by*: 1 Downloads*: 41

This paper evaluates a program in Kenya that encourages the production of export oriented crops by providing smallholder farmers with credit linked to agricultural extension and marketing services. We use an experimental design in which farmer selfhelp groups are randomly assigned to either a control group, a group receiving all DrumNet services, or a group receiving all services except credit. Among the services offered by DrumNet, credit is the most important. Since the production of export crops requires a significant investment in capital and inputs, without credit farmers are less likely to plant the mentioned crops. Overall, the results show that DrumNet is an effective model for encouraging the production of export oriented crops.

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.

Juan-Camilo Cardenas, Jeff P Carpenter

Cited by*: 1 Downloads*: 13

No abstract available

Maria De Paola, Francesca Gioia, Vincenzo Scoppa

Cited by*: 1 Downloads*: 10

We analyze how overconfidence is affected by superstitious beliefs and emotions induced by positive and negative stimuli in a field experiment involving about 700 Italian students who were randomly assigned to numbered seats in their written examination sessions. According to widespread superstitions, some numbers are considered lucky, while others are considered unlucky. At the end of the examination, we asked students the grade they expected to get. We find that students tend to be systematically overconfident and that their overconfidence is positively affected by being assigned to a lucky number. Interestingly, males and females react differently: on the one hand, females tend to expect lower grades when assigned to unlucky numbers, while they are not affected by being assigned to lucky numbers. On the other hand, males are not affected by being assigned to unlucky numbers but expect higher grades when assigned to lucky numbers.

Rachel Croson, Americus Reed, Jen Shang

Cited by*: 1 Downloads*: 54

Information is presented about a presentation at the Advances in Consumer Research North American Conference on social information and marketing environments in donation behavior. Topics in the presentation include activated identities in decision-making, contextual cues in donation behavior, and gender identity in informers and targets of social information. Field experiments on radio pledges are also described.

Gerald Pruckner, Rupert Sausgruber

Cited by*: 1 Downloads*: 48

A publisher uses an honor-system for selling a newspaper in the street. The customers make payments into a cash-box, but can also just take the paper without paying. Payments are not monitored and highly anonymous; hence customers exhibit trustworthiness if they pay for the paper. We run a natural field experiment to identify motives behind payments. The experiment reveals that trustworthiness is based on a social rather than a legal norm. Additional survey questions serve to identify individual-specific components of trustworthiness. We find effects of gender, age, family status, church attendance, measures of reciprocity, social connectedness, and social risk.