Papers - All

Avner Ben-Ner, John A List, Louis Putterman, Anya Samek

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An active area of research within the social sciences concerns the underlying motivation for sharing scarce resources and engaging in other pro-social actions. We develop a theoretical framework that sheds light on the developmental origins of social preferences by providing mechanisms through which parents transmit preferences for generosity to their children. Then, we conduct a field experiment with nearly 150 3-5 year old children and their parents, measuring (1) whether child and parent generosity is correlated, (2) whether children are influenced by their parents when making sharing decisions and (3) whether parents model generosity to children. We observe no correlation of independently measured parent and child sharing decisions at this young age. Yet, we find that apart from those choosing an equal allocation of resources between themselves and another child, children adjust their behaviors to narrow the gap with their parent's or other adult's choice. We find that fathers, and parents of initially generous children, increase their sharing when informed that their child will be shown their choice.

Julian Conrads, Tommaso Reggiani, Rainer M Rilke

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Ambiguity about the chances of winning represents a key aspect in lotteries. By means of a controlled field experiment, we exogenously vary the degree of ambiguity about the winning chances of lotteries organized to incentivize the contribution for a public good. In one treatment, people have been simply informed about the maximum number of potential participants (i.e. the number of lottery tickets released). In a second treatment, this information has been omitted as in all traditional lotteries. Our general finding shows that simply reducing the degree of ambiguity of the lottery leads to a sizable and significant increase (67%) in the participation rate. This result is robust to alternative prize configurations.

Amanda Chuan, Anya Samek

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We conducted a field experiment with a charitable group to investigate whether giving the donor an option to write a personal message to the recipient influences giving behavior. Over 1,500 households were approached in a door-to-door campaign and randomized to either a control or a treatment in which donors could include a card for the recipient. We predict that treatment should increase contributions through making the gift more meaningful, but may also decrease contribution rate by increasing the social or other cost of donating. We find evidence in favor of the cost effect, and no evidence of increased giving.

Anya Samek

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The gender difference in competitiveness has been cited as an important factor driving the gender gap in labor market outcomes. Using a natural field experiment with 35,000 university students, I explore the impact of compensation scheme on willingness to apply for a job. I find that competitive compensation schemes disproportionately deter women from applying, which cannot be explained by differences in risk preferences alone. I also vary whether the job is introduced as helping a non-profit, which increases application rates, suggesting a role for social preferences in application decisions. Finally, I observe a correlation between competitiveness preferences and career choice.

John A List, Anya Samek, Terri Zhu

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We use a field experiment to investigate the effect of incentives on food purchase decisions at a grocery store. We recruit over 200 participants and track their purchases for a period of 6 months, permitting us a glimpse of more than 3,500 individual shopping trips. We randomize participants to one of several treatments, in which we incentivize fresh fruit and vegetable purchases, provide tips for fruit and vegetable preparation, or both. We report several key insights. First, our informational content treatment has little effect. Second, we find an important price effect: modest pecuniary incentives more than double the proportion of dollars spent on produce in the grocery store. Third, we find an interesting pattern of consumption after the experiment ends: even when incentives are removed, the treatment group has higher fruit and vegetable purchases compared to the control group. These long-term results are in stark contrast to either a standard price model or a behavioral model of 'crowd out.' Rather, our results are consonant with a habit formation model. This opens up the distinct possibility that short term incentives can be used as a key instrument to combat obesity.

Sujoy Chakravarty, Carine Sebi, E Somanathan, Emmanuel Theophilus

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The public goods problem (Hardin, 1968) either viewed as a problem of extraction or that of contribution has had a long history in the Social Sciences.Our experimental design uses a standard Voluntary Contributions Mechanism (VCM) game with a moderately large group of ten and face-to-face communication. The subjects, who are villagers in the Gori-Ganga Basin of the Central Himalayas, are not re-matched every period.Our results are somewhat different from laboratory experiments using a similar design such as Isaac and Walker (1988a, 1988b). A noteworthy general observation is that even with a relatively low Marginal Per Capita Return (MPCR = 0.2) and a large group we find a steady contribution rate around 55 percent, which diminishes slightly at the end of the session to around 45 percent. We also delve into the demographic characteristics of our subject pool and find that individual contribution to the common pool is determined by gender, age, caste, literacy and history of cooperation in the experiment. However, face-to-face communication is not seen to increase average individual contribution to the common pool.

Dean S Karlan, John A List

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We conducted two matching grant experiments with an international development charity. The primary experiment finds that a matching grant from the Bill and Melinda Gates Foundation raises more funds than a matching grant from an anonymous donor. The effect persists, and is strongest for donors who previously gave to other poverty-oriented charities. Combining these insights with survey results, we conclude that our matching gift primarily works through a quality signal mechanism. Overall, the results help to clarify why people give to charity, what models help to describe those motivations, and how practitioners can leverage economics to increase their fundraising potential.

Nick Drydakis

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This research examines the possible discrimination faced by gay men compared to heterosexuals when applying for jobs in the Greek private sector. This issue was addressed through the observation of employer hiring decisions. Mailing pairs of curriculum vitae, distinguished only by the sexual orientation of the applicants, led to the observation that gay men faced a significantly lower chance of receiving an invitation for an interview. However, in cases where employers called applicants back, the wages offered did not differ significantly between gay and heterosexual applicants. Nevertheless, there is substantial evidence to suggest that discrimination based on sexual orientation does exist in the Greek labour market, and at alarmingly high levels.

Tova Levin, Steven D Levitt, John A List

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The wealthiest 10% of donors now give 90% of charitable dollars in the U.S., but little is known about what motivates them. This study uses a natural field experiment, tracking over five thousand high capacity donors, to lend preliminary insights into the world of high capacity givers. On some dimensions, high capacity donors mirror modal donors: there is persistence in giving patterns, signals of program quality influence giving, and the price of giving is not unduly important. Unlike typical small donors, the givers in our data respond only on the intensive margin, and often with a longer time lag. Our study highlights the value to practitioners of partnering with academics, as our intervention has generated $30 million in incremental donations to the University.

Julian Conrads, Bernd Irlenbusch, Tommaso Reggiani, Rainer M Rilke, Dirk Sliwka

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How to hire voluntary helpers? We shed new light on this question by reporting a field experiment in which we invited 2859 students to help at the 'ESA Europe 2012' conference. Invitation emails varied non-monetary and monetary incentives to convince subjects to offer help. Students could apply to help at the conference and, if so, also specify the working time they wanted to provide. Just asking subjects to volunteer or offering them a certificate turned out to be significantly more motivating than mentioning that the regular conference fee would be waived for helpers. By means of an online-survey experiment, we find that intrinsic motivation to help is likely to have been crowded out by mentioning the waived fee. Increasing monetary incentives by varying hourly wages of 1, 5, and 10 Euros shows positive effects on the number of applications and on the working time offered. However, when comparing these results with treatments without any monetary compensation, the number of applications could not be increased by offering money and may even be reduced.

John A List

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No abstract available

Lester Lusher

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Procrastination, an issue linked to poor performance and decreased well-being, is a pervasive problem in education. This paper examines the role of commitment and motivation by evaluating a program called CollegeBetter.com which acts as a commitment device and monetary incentive to help college students battle problems of present bias. The zero-sum mechanism is based off a parimutuel betting market, where students join a pool by placing a monetary wager on themselves to achieve the pool's "commitment challenge." Students who successfully commit to the challenge 1) recover their wagers and 2) split losing wagers proportionally. Through a series of lab and field experiments, I find that students interested in the mechanism were low-achieving, overconfident, self-identified procrastinators, while traditional measures of time-preferences were weak predictors of selection. Across all pools, students randomly selected to participate were more likely to achieve the commitment challenge than students who applied for a spot but were randomly excluded. Consistent with loss aversion, having the student risk their own money is a principal contributor to the effectiveness of the mechanism.

Jeffrey A Livingston

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Problems that arise in online markets due to asymmetric information are exacerbated by the fact that transactions in these markets are completely anonymous. The online auction mechanism provided by eBay is an example of such a market. To combat the anonymity problem, eBay allows sellers to become "ID Verified" by paying a small fee to have their identity confirmed by a credit information company. Doing so may reassure potential bidders that the seller is legitimate since their identity is known, and there is more assurance that the seller could be tracked down and punished should a problem arise. Identifying the effect of ID verification is difficult using naturally occurring data, however, because the service tends to be used only by sellers who have a well-established reputation. It is thus difficult to determine whether an improved outcome is due to the seller's reputation or due to ID verification. This study alleviates this concern by conducting a field experiment where items are sold with different IDs that have different characteristics, and finds little evidence that bidders place any value on ID verification.

Steven D Levitt, John A List, Sally Sadoff

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Although backward induction is a cornerstone of game theory, most laboratory experiments have found that agents are not able to successfully backward induct. We analyze the play of world-class chess players in the centipede game, which is ill-suited for testing backward induction, and in pure backward induction games--Race to 100 games. We find that chess players almost never play the backward induction equilibrium in the centipede game, but many properly backward induct in the Race to 100 games. We find no systematic within-subject relationship between choices in the centipede game and performance in pure backward induction games.

David Ong

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A large body of chiefly laboratory research has attempted to demonstrate that people can exhibit choice-averse behavior from cognitive overload when faced with many options. However, meta-analyses of these studies, which are generally of one or two product lines, reveal conflicting results. Findings of choice-averse behavior are balanced by findings of choice-loving behavior. Unexplored is the possibility that many consumers may purchase to reveal their tastes for unfamiliar products, rather than attempt to forecast their tastes before purchase. I model such ‘sampling-search’ behavior and predict that the purchases of unfamiliar consumers increase with the available number of varieties for popular/mainstream product lines and decrease for niche product lines. To test these predictions, I develop a measure of popularity based on a survey of 1,440 shoppers for their preferences over 24 product lines with 339 varieties at a large supermarket in China. 35,694 shoppers were video recorded after the varieties they faced on shelves were randomly reduced. As found in the meta-studies, choice-averse behavior was balanced by choice-loving behavior. However, as predicted, the probability of choice-loving behavior increases with the number of available varieties for popular product lines, whereas choice-averse behavior increases with available varieties for niche product lines. These findings suggest that increasing the number of varieties has predictable opposing effects on sales, depending upon the popularity of the product line, and opens the possibility of reconciling apparently conflicting prior results.

Anne M Farrell, Susan D Krische, Karen L Sedatole

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Complementing proprietary archival data with an experiment, we examine employees' subjective valuations of their employee stock options and explore a stock option education program as a mechanism for influencing those valuations. We argue that the conflicting evidence on employee subjective valuations in prior studies can be attributed in part to knowledge differences. Our archival and experimental results show most employees value their options lower than the corresponding Black-Scholes cost. We find that a stock option education program that provides descriptive information about the Black-Scholes option pricing model and quantitative information about option values using that model increases not only employees' subjective valuations but also their self-reported loyalty and motivation. We complement our primary results with analyses of the cross-sectional determinants of subjective valuations, the differential effects on valuations of different components of the education program, and the heuristics used to formulate subjective valuations.

Paul J Ferraro

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Economic analyses of asymmetric information typically start with the assumption that individuals know more about their own characteristics than outside observers. This assumption implies that individuals can accurately assess their own competence in a given domain. However, individuals can only judge their competence if they are sufficiently competent. The relationship between competence and self-awareness explains a great deal of the overconfidence observed among economic agents. More specifically, overconfidence is inversely proportional to competence. Through a series of experiments and analyses of field data, the link between incompetence and overconfidence is confirmed and its implications for economic theory are explored.

Andreas Leibbrandt, Redzo Mujcic

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Some of the greatest human achievements are difficult to imagine without pro-sociality. This paper employs a natural field experiment to investigate indirect reciprocity in natural social interactions. We find strong evidence of indirect reciprocity in one-shot interactions among drivers. Subjects for whom other drivers stopped were more than twice as likely to extend a similar act to a third party. This result is robust to a number of factors including age, gender, social status, presence of onlookers, and the opportunity cost of time. We provide novel evidence for the power of indirect reciprocity to promote prosocial behavior in the field.

Anya Samek, Roman Sheremeta

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Studies show that identifying contributors significantly increases contributions to public goods. In practice, however, viewing identifiable information is costly, which may discourage people from accessing such information. To address this question, we design a public goods experiment in which participants can pay a fee to view information about identities and corresponding contributions of their group members. We then compare this to a treatment in which there is no identifiable information, and a treatment in which all contributors are freely identified. Our main findings are that: (1) contributions in the treatment with costly information are as high as those in the treatment with free information, (2) participants choose to view the information about 10% of the time, and (3) being a high contributor is positively correlated with choosing to view identifiable information about others. Thus, it seems that having access to information is important even when such information is rarely viewed. Our findings have practical implications for non-profit organizations with a large pool of donors and for designers of recognition systems, especially in online communities with many participants.

Ronald G Cummings, Paul J Ferraro

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Economists have paid increasing attention to the role of cultural diversity in explaining the variability of economic outcomes across societies. We develop an experimental framework that complements existing research in this area. We implement the framework with two cultures that coexist in an industrialized society: the Hispanic and Navajo cultures in the southwestern United States. We vary the ethnic mix of our experimental sessions in order to infer the effect of intercultural interactions on economic behavior and outcomes. We control for demographic differences in our subject pools and elicit beliefs directly in order to differentiate between statistical discrimination and preference-based discrimination. We present clear evidence that Hispanic and Navajo subjects behave differently and that their behavior is affected by the ethnic composition of the experimental session. Our experimental framework has the potential to shed much needed light on economic behavior and outcomes in societies of mixed ethnicity, race and religion.