Papers - All

Richard Martin, John Randal

Cited by*: 0 Downloads*: 11

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.

Yan Chen, Xin Li, Jeffrey K MacKie-Mason

Cited by*: 13 Downloads*: 11

We implemented the first web-based online field experiments of fund-raising. We embedded our experiment in the Internet Public Library to test four mechanisms: Voluntary Contribution (VCM), Premium, Seed Money and Matching. Although the gift size is not significantly different across mechanisms, the Seed and Matching mechanisms each generate significantly higher user click-through response rate than the Premium mechanism. Because this is one of the earliest embedded, web-based field experiments, we report our methodology findings in some detail. Cookies work better as participant assignment techniques than pop-up windows and elicitation of geographic information. Participant clickstream data that nominally demonstrate a desire to donate is a poor predictor of actual giving.

Jay R Corrigan, Matthew C Rousu

Cited by*: 0 Downloads*: 11

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.

Timothy R Berry, William T Harbaugh, Kate Krause

Cited by*: 47 Downloads*: 11

In this paper we examine the extent to which consumption choices by 7 and 11-year-old children and college undergraduates satisfy the axioms of revealed preference. We find that choices by even the 7-year-olds are considerably more likely to obey revealed preference axioms than would be true if they were choosing randomly. 11-year-olds do better still, while college students do no better than 11-year-old children. We also find that mathematical ability is not correlated with choosing rationally. We argue that this evidence suggests that the ability to choose rationally is not innate, but that it does develop quickly.

Laura Gee, Michael Schreck

Cited by*: 0 Downloads*: 11

Charitable giving has been about 2% of US GDP since the turn of the century. A popular fundraising tool is donation matching where every dollar is matched by a third party. But field experiments find that matching does not always increase donations. This may occur because individuals believe that peer donors will exhaust the matching funds. We develop a theory of how beliefs about peers' donations affect one's own likelihood of donation. We test our theory using novel "threshold match" treatments in field and laboratory experiments. These treatments form small groups and offer a flat matching bonus if a threshold number of donations is received. One "threshold match" treatment more than doubles the donation rate in the field relative to no match. To better understand the mechanism behind this huge increase, we use a lab study to replicate the field results and further show that beliefs about peers' donations matter. Our theoretical, lab, and field results combined suggest people are more likely to donate when they believe they are more pivotal to securing matching money. Beliefs about others matter, and they should be taken into account when trying to increase donations.

Abigail Barr, Jose Garcia-Montalvo, Magnus Lindelow, Pieter Serneels

Cited by*: 4 Downloads*: 11

We explore the value of the strategy method to field experimentalists. Specifically, we demonstrate that, while the method may lead to reductions in subject understanding, it also generates valuable insights. We played the Third Party Punishment Game and the Generalized Trust Game with Ethiopian medical and nursing students applying the strategy method to the responding role in each case. Then, making use of two proxy measures for the students` cognitive abilities, we investigate the relationship between strategy-type choices and subject understanding. Thus, we find support for the assertion that apparently random and internally inconsistent strategies are symptomatic of problems of cognition. We also find support for the often, implicitly made assumption that, in BDM-type trust games, the ratio of what is returned to what is sent is an appropriate focus for comparative analyses of responder behaviour. Finally, we find evidence that an observed difference in third party punishing behaviour between Swiss and Ethiopian students is due, not to misunderstanding, but to variations in what is perceived as punishable. Our results lead us to conclude that the strategy method is of considerable value in Third Party Punishment Games, but need not be routinely applied in BDM-type trust games.

Peter Bohm, Hans Lind

Cited by*: 4 Downloads*: 11

Preference reversal, or choice/reservation-price inconsistency, has been documented experimentally for certain types of lotteries. We argue that the relevance of these findings for real-world markets is uncertain because the type of objects used cannot exist on a market and because the extent to which the subjects had any real interest in the objects is unknown. Using real-world lotteries, we have tested choice/price consistency on subjects who prefer lotteries to cash. Preference reversal was observed, but the frequency was much lower than in earlier experiments. There were no differences between subjects who qualify as ""lottery interested"" and those who did not.

David Lucking-Reiley

Cited by*: 1 Downloads*: 11

I present experimental evidence on the effects of minimum bids in first-price, sealed-bid auctions. The auction experiments manipulated the minimum bids in a preexisting market on the Internet for collectible trading cards from the game Magic: the Gathering. I examine a number of outcomes, including the number of participating bidders, the probability of sale, the levels of individual bids, and the auctioneer's revenues. The benchmark theoretical model is one with symmetric, risk-neutral bidders with independent private values. The results verify a number of the predictions concerning equilibrium bidding. Many bidders behave strategically, anticipating the effects of the reserve price on others' bids.

Niklas Bengtsson, Per Engstrom

Cited by*: 0 Downloads*: 11

Results in behavioral economics suggest that material incentives can crowd out effort, if agents are mission-oriented rather than self-interested. We test this prediction on a sample of nonprofit organizations in Sweden. Swedish nonprofit organizations receive tax funds annually to promote global development issues through information campaigns. Traditionally, the contract with the main principal (the Swedish foreign aid agency) has been based on trust and self-regulation. We designed an experimental policy intervention, effectively replacing the trust-based contract with an increased level of monitoring from the principal, along with a threat to cut future funds if irregularities were detected. Our findings are inconsistent with (strong) motivational crowd-out. Overall, using both self-reported and observed measures of outreach, we find that the intervention improved efficiency. Graphical analysis shows that non-monitored organizations exhibit a distinct tendency to maximize expenditure; in contrast, organizations in the treatment group are more likely to return unused grants to Sida. Additionally, we find no crowding out of private contributions and no evidence of a "discouraged NGO"-syndrome.

John A List, Daniel Rondeau

Cited by*: 31 Downloads*: 11

This study designs a natural field experiment linked to a controlled laboratory experiment to examine the effectiveness of matching gifts and challenge gifts, two popular strategies used to secure a portion of the $200 billion annually given to charities. We find evidence that challenge gifts positively influence contributions in the field, but matching gifts do not. Methodologically, we find important similarities and dissimilarities between behavior in the lab and the field. Overall, our results have clear implications for fundraisers and provide avenues for future empirical and theoretical work on charitable giving.

Charles Bellemare

Cited by*: 5 Downloads*: 11

We present results from a field experiment testing the gift-exchange hypothesis inside a tree-planting firm paying its workforce incentive contracts. Firm managers told a crew of tree planters they would receive a pay raise for one day as a result of a surplus not attribuable to past planting productivity. We compare planter productivity - the number of trees planted per day - on the day the gift was handed out with productivity on previous and subsequent days of planting on the same block, and thus under similar planting conditions. We find direct evidence that the gift had a significant and positive effect on daily planter productivity, controlling for planter-fixed effects, weather conditions and other random daily shocks. Moreover, reciprocity is the strongest when the relationship between planters and the firm is long term.

Steven D Levitt, John A List, David H Reiley

Cited by*: 12 Downloads*: 11

The minimax argument represents game theory in its most elegant form: simple but with stark predictions. Although some of these predictions have been met with reasonable success in the field, experimental data have generally not provided results close to the theoretical predictions. In a striking study, Palacios-Huerta and Volij (2007) present evidence that potentially resolves this puzzle: both amateur and professional soccer players play nearly exact minimax strategies in laboratory experiments. In this paper, we establish important bounds on these results by examining the behavior of four distinct subject pools: college students, bridge professionals, world-class poker players, who have vast experience with high-stakes randomization in card games, and American professional soccer players. In contrast to Palacios-Huerta and Volij's results, we find little evidence that real-world experience transfers to the lab in these games--indeed, similar to previous experimental results, all four subject pools provide choices that are generally not close to minimax predictions. We use two additional pieces of evidence to explore why professionals do not perform well in the lab: (1) complementary experimental treatments that pit professionals against preprogrammed computers, and (2) post-experiment questionnaires. The most likely explanation is that these professionals are unable to transfer their skills at randomization from the familiar context of the field to the unfamiliar context of the lab.

Marco Haan, Peter Kooreman

Cited by*: 16 Downloads*: 11

A wealth of experimental literature studies the effect of repetition and group size on the extent of free riding in the provision of public goods. In this paper, we use data from honor systems for candy bars in 166 firms to test whether such effects can be found outside the laboratory. We find that free riding increases with repetition, and weak evidence that free riding decreases with group size.

Lee Cronk

Cited by*: 4 Downloads*: 10

The effects of cultural framing on behavior in experimental games were explored with a trust game and the Maasai concept of osotua. Maasai use the term osotua to refer to gift-giving relationships based on obligation, need, respect, and restraint. In the trust game, the first player is given money and an opportunity to give any portion of it to the second player. The amount given is then multiplied by the experimenter, and the second player has an opportunity to give any amount back to the first player. Fifty trust games were played by Maasai men at a field site in north central Kenya. Half of the games were played without deliberate framing, and half were framed with the statement, "This is an osotua game." Compared to games with no deliberate framing, those played within the osotua rhetorical frame were associated with lower transfers by both players and with lower expected returns on the part of the first players. Osotua rhetorical framing is also associated with a negative correlation between amounts given by the first player and amounts returned by the second. These results have implications both for the experimental game method and for our understanding of the relationship between culture and behavior.

Alan S Gerber, Donald P Green, David W Nickerson

Cited by*: 0 Downloads*: 10

No abstract available

Vic Adamowicz, Jonathan E Alevy, John A List

Cited by*: 0 Downloads*: 10

Psychological insights have made inroads within most major areas of study in economics. One area where less advance has been made is environmental and resource economics. In this study, we examine the implications of preference reversals over evaluation modes, in which stated economic values critically depend on whether the good is valued jointly with others or in isolation. The question arises because two commonly used methods for eliciting stated preferences differ in that one presents objects together and another presents objects to be evaluated in isolation. Beyond showing an example of the import of behavioral economics, our empirical evidence sheds new light on the factors associated with insensitivity of valuations to the scope of the good

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.

Glenn W Harrison, Morten I Lau, Elisabet E Rutstrom

Cited by*: 0 Downloads*: 10

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.

Glenn W Harrison, John A List

Cited by*: 23 Downloads*: 10

There has been a dramatic increase in the use of experimental methods in the past two decades. An oft-cited reason for this rise in popularity is that experimental methods provide the necessary control to estimate treatment effects in isolation of other confounding factors. We examine the relevance of experimental findings from laboratory settings that abstract from the field context of the task that theory purports to explain. Using common value auction theory as our guide, we identify naturally occurring settings in which one can test the theory. In our treatments the subjects are not picked at random, as in lab experiments with student subjects, but are deliberately identified by their trading roles in the natural field setting. We find that experienced agents bidding in familiar roles do not fall prey to the winner's curse. Yet, when experienced agents are observed bidding in an unfamiliar role, we find that they frequently fall prey to the winner's curse. We conclude that the theory predicts field behavior well when one is able to identify naturally occurring field counterparts to the key theoretical conditions.

Jeffrey A Livingston

Cited by*: 0 Downloads*: 10

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.