Papers - All

Anya Samek

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Reputation systems provide decision support for e-commerce. A shortcoming of existing systems is that all transactions are rated equally, and the impact of reputation systems for differently valued goods is not well understood. In an experiment, we study a heterogeneous good market. We find that the reputation system increases surplus by increasing transactions in the high value good. Allowing for heterogeneous goods reduces information, as buyers cannot determine whether the seller previously transacted in low/high value goods. We test a new system, which displays reputation separately for each good. We provide evidence that this additional information is utilized in decisions.

Pieter A Gautier, Bas van der Klaauw

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We use data from a promotion campaign of NH-Hoteles to study self-selection of participants in a gift-exchange experiment. The promotion campaign allowed guests to pay any non negative amount of money for a stay in one of 36 hotels in Belgium and the Netherlands. The data allow us to distinguish between `regular guests', who booked prior to the announcement of the promotion campaign and guests who booked after the campaign was announced. During the promotion campaign we varied the posted price of a room that was communicated to the guests. Only the regular guests respond to the exogenous variation in the posted price and they pay substantially more on average. This different behavior cannot be explained by differences in satisfaction or observed compositional differences between both groups. We argue that the promotion campaign mainly attracted individuals who find it relatively unimportant to be viewed of as prosocial.

Manuela Angelucci, Silvia Prina, Heather Royer, Anya Samek

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How do peers influence the impact of incentives? Despite much work on incentives, little is known about the spillover effects of incentives. We investigate two mechanisms by which these effects can occur: through peers' actions and peers' incentives. In a field experiment on snack choice (grapes versus cookies), we randomize who receives incentives, the fraction of peers incentivized, and whether or not it can be observed that peers' choices are incentivized among over 1,500 children in the school lunchroom. Incentives increase the likelihood of initially choosing grapes. However, peer spillover effects can be large enough to undo these positive effects.

Omar Azfar, Clifford Zinnes

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One conjecture in the theory of incentives is that incentives based on broader outcomes may be better at motivating agents than incentives based on narrow measures. We designed an experiment to test these hypotheses using a ""prospective randomized evaluation procedure"" (PREP). We then apply PREP to training programs as typically funded by donors of economic development assistance. We randomly assigned 274 participating entrepreneurs in the Philippines to one of 26, simultaneous, one-day, training classes in marketing. Trainers were given cash incentives based on the average score of their ""students"" on a standardized test containing an alternative number of questions, which were randomly assigned to each class. We then examined outcomes based on student satisfaction ratings of the trainer. Our results suggest that incentives based on broad outcomes are more effective than incentives based on narrow outcomes. We conclude with ways to improve our approach as well as with a discussion of the implications for using prospective randomized evaluation for improving the evaluation of donor projects.

David H Reiley

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This paper tests the empirical predictions of recent theories of the endogenous entry of bidders in auctions. Data come from a field experiment, involving sealed-bid auctions for collectible trading cards over the Internet. Manipulating the reserve prices in the auctions as an experimental treatment variable generates several results. First, observed participation behavior indicates that bidders consider their bid submission to be costly, and that bidder participation is indeed an endogenous decision. Second, the participation is more consistent with a mixed-strategy entry equilibrium than with a deterministic equilibrium. Third, the data reject the prediction that the profit- maximizing reserve price is greater than or equal to the auctioneer's salvage value for the good, showing instead that a zero reserve price provides higher expected profits in this case.

Jay R Corrigan, Matthew C Rousu

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Firms spend billions of dollars annually on new product and label designs in order to attract and retain customers. The issue of labeling is also important to government agencies and nonprofit labeling organizations. For example, the U.S. Food and Drug Administration has an organizational body in its Office of Nutritional Products that deals with issues of food and dietary supplement labeling. The U.S. Department of Agriculture's Food Safety and Inspection Service also deals with labeling through its Labeling and Consumer Protection Staff. These government agencies spend millions of dollars trying to ensure that food labels adequately inform consumers. One issue that has not been examined is the welfare difference to consumers from alternative labeling schemes/regulations. It seems likely that different labels would differ in effectiveness at informing consumers.

Tobias Heldt

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In a natural experiment, this paper studies the impact of an informal sanctioning mechanism on individuals' voluntary contribution to a public good. Cross-country skiers' actual cash contributions in two ski resorts, one with and one without an informal sanctioning system, are used. I find the contributing share to be higher in the informal sanctioning system (79 percent) than in the non-sanctioning system (36 percent). Previous studies in one-shot public good situations have found an increasing conditional contribution (CC) function, i.e. the relationship between expected average contributions of other group members and the individual's own contribution. In contrast, the present results suggest that the CC-function in the non-sanctioning system is non-increasing at high perceived levels of others' contribution. This relationship deserves further testing in lab.

Carina Cavalcanti, Andreas Leibbrandt

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This paper investigates the role of dry promotions for community participation in eight Brazilian fishing villages. We randomly promoted some fishermen to assistants before the start of an environmental program, increasing their responsibilities but not providing any monetary compensation. Thereafter, we study whether they engage more in conservation behavior during this program. The data shows that promoted fishermen provide substantially more effort, which suggests that such promotions my be a cost-effective tool to stimulate cooperation and community participation.

Ryan D Friedrichs

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No abstract available

Kenneth Leonard, Melkiory Masatu

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The most important issue facing experimental economists is the generalizability of lab results. This letter examines more than 1200 doctor/patient consultations, in which scrutiny and duration of treatment were varied. We show that scrutiny has an important but short-lived effect.

Erwin Bulte, Aart de Zeeuw, Shelby Gerking, John A List

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Measuring preferences via stated methods remains the only technique to obtain the total economic value of a non-marketed good or service. This study examines if alternative causes of an environmental problem affect individual statements of compensation demanded. Making use of a unique sample drawn from the Netherlands, we find that Hicksian equivalent surplus (ES) is not significantly affected by causes of environmental harm. While our finding that agents only care about outcomes, rather than causes, is consonant with standard applications of utility theory, it is at odds with some recent experimental findings measuring the effects of cause on Hicksian compensating surplus (CS).

Glenn W Harrison, John A List

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No abstract available

Richard Martin, John Randal

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We describe a natural field experiment investigating donation behaviour. The setting was an art gallery where donations could be deposited into a transparent box in the foyer. Two aspects of the donation environment were manipulated: signs on the donation box and the initial contents of the box. We used three sign treatments: a control with no sign, a sign that thanked donors, and a sign that indicated donations would be matched. We used two initial contents treatments: one with relatively little money ($50) and one with four times as much. The average donation per donor was significantly larger in the $200 treatments but this was offset by a decrease in the propensity to donate. In the matching treatments donations were significantly larger both at the per donor and per visitor level. A control donate variable turned out to have the largest influence on donation behaviour: the day of the week. The average donation per visitor was 51% higher on Sundays, when compared to every other day of the week.

Anne Alexander , Ralph d'Arge , John A List, Michael Margolis

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The goal of this paper is to provide an investigation of several approaches to valuing ecosystem services and to contribute additional techniques which may be used in evaluating 'green' GDP accounts. Our estimates focus on the ecosystem as a productive economic input, not a stock which is depreciated or depleted over time; as such, it differs with other concepts more frequently employed in green GDP accounting. Most of our results are derived from the analytical fiction that a single owner of the biosphere establishes a market for all ecological resources. This monopolist then appropriates all rents from the human population. The maximum amount the monopolist charges is first assumed to be world gross product less the global human subsistence level. In addition, we examine the excess rents available in factor markets using the assumption of weak complementarity between factor inputs and ecosystem services. We also provide more conservative estimates of the value of ecosystem services by investigating the sustainable price the monopolist could charge the global population and by exploring the effects of compensating wage differentials and a non-monopolist owner of the ecosystem.

Stephan Meier

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Subsidizing charitable giving-for example, for victims of natural disasters-is very popular, not only with governments but also with private organizations. Many companies match their employees' charitable contributions, hoping that this will foster the willingness to contribute. However, systematic analyses of the effect of such a matching mechanism are still lacking. This article tests the effect of matching charitable giving in a randomized field experiment in the short and the long run. The donations of a randomly selected group were matched by contributions from an anonymous donor. The results support the hypothesis that a matching mechanism increases contributions to a public good. However, in the periods after the experiment, when matching donations have been stopped, the contribution rate declines for the treatment group. The matching mechanism leads to a negative net effect on the participation rate. The field experiment therefore provides evidence suggesting that the willingness to contribute may be undermined by a matching mechanism in the long run.

Melissa R Michelson, Herbert Villa Jr.

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Less than a third of Latinos vote in Presidential elections, while less than one fourth participate in Congressional elections. Turnout among young Latinos (age 18-25) is even lower. This paper describes the results of a field experiment aimed at increasing turnout among young Latinos in Fresno, California conducted in the fall of 2002. Canvassers went door-to-door during the final two weekends before Election Day to urge registered young people to go to the polls. Young people of all races/ethnicities were targeted. In addition to testing the effectiveness of personal contact and how this varies among registered voters of various races/ ethnicities, the project also included two imbedded experiments. First, the race/ethnicity of the canvassers was randomly assigned, to test whether Latinos and non-Latinos are equally effective at getting Latinos and non- Latinos to the polls. Second, the message delivered to contacted registered voters was randomly assigned, to test whether young Latinos are more receptive to a message which stresses group solidarity or one that emphasizes civic duty. The experiment demonstrates that Latino canvassers are better than non-Latinos at contacting young Latino voters, and that young Latinos are more receptive than are non-Latinos to door-todoor mobilization efforts.

Eszter Czibor, Sander Onderstal, Randolph Sloof, Mirjam van Praag

Cited by*: 0 Downloads*: 76

We conduct a framed field experiment in a Dutch university to compare student effort provision and exam performance under the two most prevalent evaluation practices: absolute (criterion-referenced) and relative (norm-referenced) grading. Based on the empirical stylized fact of gender differences in competitiveness we hypothesize that the rank-order tournament created by relative grading will increase male, but not female, performance. Contrary to our expectations, we find no impact of competitive grading on preparation behavior or exam scores among either gender. Our result may be attributed to the low value students in our sample attach to academic excellence.

David S Brookshire, Donald L Coursey, Howard Kunreuther

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No abstract available

Simon Gachter, Henrik Orzen, Elke Renner, Chris Starmer

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An extensive literature demonstrates the existence of framing effects in the laboratory and in questionnaire studies. This paper reports new evidence from a natural field experiment using a subject pool one might expect to be particularly resistant to such effects: experimental economists. We find that while the behaviour of junior experimental economists is affected by the description of the decision task they face, this is not the case for the more senior members of our subject pool.

Nick Drydakis

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A field experiment was contacted in order to unbiased test whether female ethnic minorities; Albanians, face housing discrimination by owners when they seek to rent a unit in Greece three years after the national adoption of the European anti-discrimination legislation. Replicated the commonest process to rent a unit in Greece; telephone contact, we investigated a big sample represented by 122 areas. Rationally classified them in three status groups, according to their average rent levels, we found that discrimination increased monotonically with areas' status. The estimated probability of Albanians to receive an invitation to investigate a unit was lower by 0.231 in low status areas, followed by 0.324 in medium status areas, and by 0.419 in high status areas than that of Greeks. Adjusted for intra-class correlation the estimated differentials were found to be statistically significant. Similarly, we estimated an insignificant rent penalty against Albanians of 0.010 in low status areas, and significant penalties of 0.015 in medium status areas and of 0.023 in high status areas against Albanians. Consequently, a taste and/or statistical discrimination implied against Albanian seekers. Interestingly, the study enabled to estimate further that good rental housings are in significant degree unavailable to Albanians restricted their freedom in selecting a place to live. Specifically, Albanian seekers faced significantly less probabilities to investigate newer, busheled and units placed in floor than Greeks. Whilst, Albanians in order to have access to good units they had to pay more than Greeks. Finally, we estimated that female owners practiced significantly more availability constraints to Albanians than male owners. The current research contributes to two areas that have attracted scarce research attention in Greece: the experimental investigation of housing discrimination and discrimination by ethnicity. The results of this study have implications for understanding some of the enduring patterns of ethnic discrimination in the housing market.