Papers - All

Bruno Crepon, Julie Pernaudet

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Disadvantaged youth are particularly at risk of under-investing in their health. Costs of healthcare and bias in health needs perceptions are likely to be key factors of underinvestment. Relying on a randomized experiment, we find that providing them with personalized information both on public health insurance and on their health status based on a medical diagnosis raises their curative and preventive investments. More specifically, they are more likely to consult a psychologist and to use contraception, while depression and risky sexual behaviors are key issues in this population. In order to distinguish between the two barriers, financial constraints and underestimation of health needs, we also test a program providing information on public health insurance only. This limited program improves their medical coverage in the same way as the combined program, but it does not translate into higher health investments. These findings highlight the importance of taking into account the role of subjective perceptions of health needs when considering health decisions among disadvantaged youth.

Brit Grosskopf, Graeme Pearce

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We present a natural field experiment designed to measure other{regarding preferences in the market for taxis. We employed testers of varying ethnicity to take a number of predetermined taxi journeys. In each case we endowed them with only 80% of the expected fare. Testers revealed the amount they could afford to pay to the driver mid-journey and asked for a portion of the journey for free. In a 2x2 between{subjects design we vary the length of the journey and whether drivers havereputational concerns or not. We find that the majority of drivers give at least part of the journey for free and over 25% complete the journey. Giving is found to be proportional to the length of the journey, and the drivers' reputational concerns do not explain their behaviour. Evidence of strong out{group negativity against black testers by both white and South Asian drivers is also reported. In order to link our empirical analysis to behavioural theory we estimate the parameters of a number of utility functions. The data and the structural analysis lend support to the quantitative predictions of experiments that measure other{regarding preferences, and shed further light on how discrimination can manifest itself within our preferences.

Luke N Condra, Mohammad Isaqzadeh, Sera Linardi

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We unpack the psychological influence of a Muslim cleric's power over the poor in an experiment in Afghanistan. The same cleric requests contributions for a hospital from day-laborers when dressed as a civilian and as a cleric. In Civilian condition, 50% contribute and 17% make large contributions; in Cleric condition, 83% contribute but large contributions fall. Through counterfactual simulations, we find that the clerical garb compels unmotivated subjects to contribute (selection), but causes those who initially were generous to reduce their contribution (crowding out). The backlash is present only among those with formal education but is counteracted when the cleric adds a recitation of Qur'anic verses. Overall, this suggests that education mediates whether people automatically associate religious authorities with the omnipresent.

Uzma Afzal, Giovanna d'Adda, Marcel Fafchamps, Farah Said

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Theoretical and empirical work on intra-household decision making capture empowerment through bargaining weights given to individual preferences, and infer such weights from household consumption allocations. In this paper we test two key hypotheses underlying this work: first, that spousal influence is the same for all private consumption goods; and second, that women have pent up demand for pure agency. We use data from a survey and a novel laboratory experiment implemented with adult couples in Pakistan. We find that women's influence on household decisions is decreasing in the importance of the decision. We find no evidence that women have pent up demand for agency. Instead, women are less willing to pay for agency when facing an unknown man. We interpret this evidence as suggesting that women in our study population have internalized gender norms, and that these norms regulate interactions between genders most strongly outside of the household. We also find little evidence, within our experimental setting, that willingness to pay for agency is affected by the instrumental value of agency.

Glenn W Harrison, Morten I Lau, Elisabet E Rutstrom

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Randomization to treatment is fundamental to statistical control in the design of experiments. But randomization implies some uncertainty about treatment condition, and individuals differ in their preferences towards taking on risk. Since human subjects often volunteer for experiments, or are allowed to drop out of the experiment at any time if they want to, it is possible that the sample observed in an experiment might be biased because of the risk of randomization. On the other hand, the widespread use of a guaranteed show-up fee that is non-stochastic may generate sample selection biases of the opposite direction, encouraging more risk averse samples into experiments. We undertake a field experiment to directly test these hypotheses that risk attitudes play a role in sample selection. We follow standard procedures in the social sciences to recruit subjects to an experiment in which we measure their attitudes to risk. We exploit the fact that we know certain characteristics of the population sampled, adults in Denmark, allowing a statistical correction for sample selection bias using standard methods. We also utilize the fact that we have a complex sampling design to provide better estimates of the target population. Our results suggest that randomization bias is not a major empirical problem for field experiments of the kind we conducted if the objective is to identify marginal effects of sample characteristics. However, there is evidence that the use of show-up fees may have generated a sample that was more risk averse than would otherwise have been observed.

Shagata Mukherjee, Michael K Price

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This study takes a first step to advance our understanding of the strategic interaction between the constituent components of default in microfinance and how to mitigate them. We conduct controlled microfinance field experiments in rural India to provide a systematic analysis of the relationship between gender, group liability and moral hazard. By varying the contract structure across different microfinance games, our experiment decomposes the two moral hazard (ex-ante and ex-post) channels and find that their effect on default are counteractive rather than additive for women clients. The study facilitates heterogeneity analysis of gender on moral hazard across comparable matrilineal and patrilineal societies in two neighboring states of India. We find that matrilineal women are less risk averse and are more likely to invest in the risky project (ex-ante moral hazard) than women in patrilineal societies. Moreover, we find a reversal of gender effect on strategic default (ex-post moral hazard) across the two societies, suggesting the importance of social norms and gender roles on financial behavior. Our results indicate that policymaking in microfinance should be designed by considering the heterogeneity of diverse societies, gender roles, norms and the underlying socio-economic factors that motivate financial behavior among borrowers.

Steven Blader, Claudine Gartenberg, Andrea Prat

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This paper investigates how the success of a management practice depends on the nature of the long-term relationship between the firm and its employees. A large US transportation company is in the process of fitting its trucks with an electronic on-board recorder (EOBR), which provide drivers with information on their driving performance. In this setting, a natural question is whether the optimal managerial practice consists of: (1) Letting each driver know his or her individual performance only; or (2) Also providing drivers with information about their ranking with respect to other drivers. The company is also in the first phase of a multi-year initiative to remake its internal operations. This first phase corresponds to an overhaul of the relational contract with its employees, focusing exclusively on changing values toward a greater emphasis on teamwork and empowerment. The main result of our randomized experiment is that (2) leads to better performance than (1) in a particular site if and only if the site has not yet received the values intervention, and worse performance if it has. The result is consistent with the presence of a conflict between competition-based managerial practices and a cooperation-based relational contract. More broadly, it highlights the role of intangible relational factors in determining the optimal set of managerial practices.

Egil Matsen, Bjarne Strom

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This paper examines data from the Norwegian television game show Joker, where contestants make well-specified choices under risk. The game involves very large stakes, randomly drawn contestants, and ample opportunities for learning. Expected utility (EU) theory gives a simple prediction of choice under weak conditions, as one choice is always first-order stochastically dominating. We document frequent, systematic and costly violations of dominance. Most alternative theories fail to add explanatory power beyond the EU benchmark, but many contestants appear to have a systematic expectation bias that can be related to Tversky and Kahneman's (1973) "availability heuristic". In addition, there seems to be a stochastic element in choice that is well captured by the so-called Fechner model.

Charles Bellemare, Sabine Kroger

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This paper analyzes data for a random sample drawn from the Dutch population who reveal their capacity to provide and sustain social capital by their propensity to invest and reward investments by means of an economic experiment. We have three main results. First, we find that heterogeneity in behavior is characterized by several asymmetries men, the young and elderly, and low educated individuals invest relatively less, but reward significantly more investments. Second, higher expected levels of investments have a positive and significant effect on the level of investments themselves, corroborating the presence of social norms. Third, we compare our results with a laboratory experiment conducted with a student sample. We find that the student sample provides a lower bound of the population level of social capital.

John A List, Charles F Mason

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Are individuals expected utility maximizers? This question represents much more than academic curiosity. In a normative sense, at stake are the fundamental underpinnings of the bulk of the last half-century's models of choice under uncertainty. From a positive perspective, the ubiquitous use of benefit-cost analysis across government agencies renders the expected utility maximization paradigm literally the only game in town. In this study, we advance the literature by exploring CEO's preferences over small probability, high loss lotteries. Using undergraduate students as our experimental control group, we find that both our CEO and student subject pools exhibit frequent and large departures from expected utility theory. In addition, as the extreme payoffs become more likely CEOs exhibit greater aversion to risk. Our results suggest that use of the expected utility paradigm in decision making substantially underestimates society's willingness to pay to reduce risk in small probability, high loss events.

John A List, William S Neilson, Michael K Price

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Recent theoretical and empirical studies have explored the effect of group membership and identity on individual decision-making. This line of research highlights that economic models focusing on the individual as the sole entity in the decision-making environment potentially miss critical features. This study takes this literature in a new direction by overlaying a field experiment onto a setting where groups have arisen naturally. Our experimental laboratory is large open air markets, where we are able to examine the effects of group membership on seller's collusive behavior as measured by prices and surplus allocations. This permits us to explore strategic implications of group composition. Empirical results illustrate the importance of group composition on pricing decisions, and show that deviations from Nash equilibrium are crucially related to group membership.

James Andreoni, John A List

Cited by*: 0 Downloads*: 8

No abstract available

Sultan Orazbayev

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Academic journal editors reject a significant portion of first submissions without sending them out for peer review. This decision, desk rejection, is made to reduce the workload on associate editors and referees, to give the submitting author a head start on revision or pursuit of an alternative venue, as well as to achieve quicker turnaround time for the journal. Desk rejection is a judgement based on the manuscript's perceived quality, impact and fit with the journal's scope. Could extraneous factors which are unrelated to the content of the manuscript, affect the editorial decision? This paper examines whether the sequential order in which manuscripts are submitted to a large academic journal affects the editorial decision. Becoming the first submission on the editor's list of manuscripts to review increases the probability of a desk rejection by up to 7% without any effect on the likelihood of a rejection after peer review.

Richard C Bishop, Kevin J Boyle, Richard T Carson, David Chapman, Matthew DeBell, Colleen Donovan, W. Michael Hanemann, Barbara Kanninen, Matthew Konopka, Raymond J Kopp, Jon A Krosnick, John A List, Norman Meade, Robert Paterson, Stanley Presser, Nora Scherer, V. Kerry Smith, Roger Tourangeau, Michael Welsh, Jeffrey M Wooldridge

Cited by*: 0 Downloads*: 78

No abstract available

John A List, Anya Samek, Michael K Price

Cited by*: 0 Downloads*: 2

No abstract available

Pablo Celhay, Paul Gertler, Paula Giavagnoli, Christel Vermeersch

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We show that fixed costs of adjustment as opposed to low returns likely explain why better quality care practices diffuse slowly in the medical industry. Using a randomized field experiment conducted in Argentina, we find that temporary financial incentives paid to health clinics for the early initiation of prenatal care 'nudged' providers to test and develop new data driven strategies to locate and encourage likely pregnant women to seek care in the first trimester of pregnancy. These innovations raised the rate of early initiation of prenatal care by 34% while the incentives were being paid in the treatment period. We follow health clinics over time and find that this increase persisted for at least 24 months after the incentives ended. In the absence of incentives, even though it is in the clinics' interest to stimulate early initiation of care, the presence of hard to change habits and cost of experimentation made it too expensive to develop and implement new methods to increase early initiation of care. Despite the large increases in early initiation of prenatal care, we find no effects on health outcomes.

Fuhai Hong, Tanjim Hossain, John A List, Migiwa Tanaka

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Using a natural field experiment with factory workers where we introduce a quantity-based performance-pay scheme in addition to their base salary, we quantify the impact of one-dimensional monetary incentives on both incentivized (quantity) and non-incentivized (quality) dimensions of output. While the management typically observes only quantity, we also observe quality by hiring quality-inspectors unbeknownst to the workers. While some workers receive a flat-rate base salary, others receive a piece-rate base salary. We find sharp evidence that workers under a flat-rate base salary trade off quality for quantity. Interestingly, this quantity-quality trade-off is statistically insignificant for workers under a piece-rate base salary. This variation in the treatment effect is consistent with a simple theoretical model that predicts that when agents are already incented at the margin, the quantity-quality trade-off resulting from additional incentives will be less prominent.

Jeffrey A Flory, Uri Gneezy, Kenneth Leonard, John A List

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Research on competitiveness at the individual level has emphasized sex as a physiological determinant, focusing on the gap in preference for competitive environments between young men and women. This study presents evidence that women's preferences over competition change with age such that the gender gap, while large for young adults, disappears in older populations due to the fact that older women are much more competitive. Our finding that tastes for competition appear just as strong among older women as they are among men suggests a simple gender-based view of competitiveness is misleading; age seems just as important as sex. These findings are consistent with one of the most commonly cited views on the deeper origins of gender differences: that they stem at least in part from human evolution.

Jeffrey A Flory, Andreas Leibbrandt, John A List

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Workplace misbehaviors are often governed by explicit monitoring and strict punishment. Such enforcement activities can serve to lessen worker productivity and harm worker morale. We take a different approach to curbing worker misbehaviour - bonuses. Examining more than 6500 donor phone calls across more than 80 workers, we use a natural field experiment to investigate how different wage contracts influence workers' propensity to break workplace rules in harmful ways. Our findings show that even though standard relative performance pay contracts, relative to a fixed wage scheme, increase productivity, they have a dark side: they cause considerable cheating and sabotage of co-workers. Yet, even in such environments, by including an unexpected bonus, the employer can substantially curb worker misbehavior. In this manner, our findings reveal how employers can effectively leverage bonuses to eliminate undesired behaviors induced by performance pay contracts.

Michael J. Seiler, Eric Walden

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Great debate is being waged between whether strategic mortgage defaulters follow a herd for social reasons or mimic others' behavior for informational gain. Using functional magnetic resonance imaging (fMRI), the latest neurological technology allowing for observation of brain activity during strategic mortgage default decision-making, we find that when defaulters learn of peer default behavior, they acknowledge the social component of the decision, but feel freer to make their own decisions. Alternatively, when observing the behavior of a maven (real estate expert), borrowers still consider the social aspect of the decision (although to a lesser extent), but ultimately follow the maven who presumably possesses a greater information set. Alarmingly, borrowers only significantly follow the herd when mavens advocate strategic default, not when they recommend against it.