Papers - All

Travis Lybbert

Cited by*: 4 Downloads*: 12

Potential poverty traps among the rural poor suggest a need to reduce poor farmers' vulnerability by stabilizing crop yields and limiting yield losses. Advances in biotechnology will help address this need directly with crops that tolerate climate fluctuation or resist biotic stresses. Evaluating ex ante how farmers will value these "poor" seeds is important for delivery design, but also challenging. This paper describes an experimental economic approach to understanding farmers' valuation of such seeds. Using data from a survey and experiment, I assess Indian farmers' valuation of changes in the mean, variance, and skewness of payoff distributions. These farmers value increases in expected value, but seem indifferent about higher moment changes in payoff distributions. Farmer traits such as wealth and risk exposure affect their valuation of these changes only mildly. While various limitations to the experimental approach must qualify practical implications of these findings, the experiment demonstrates the viability of conducting valuation experiments with open-ended questions in developing countries.

John A List

Cited by*: 9 Downloads*: 12

Walrasian tatonnement has been a fundamental assumption in economics ever since Walras' general equilibrium theory was introduced in 1874. Nearly a century after its introduction, Vernon Smith relaxed the Walrasian tatonnement assumption by showing that neoclassical competitive market theory explains the equilibrating forces in ""double- auction"" markets. I make a next step in this evolution by exploring the predictive power of neoclassical theory in decentralized naturally occurring markets. Using data gathered from two distinct markets--the sports card and collector pin markets--I find a tendency for exchange prices to approach the neoclassical competitive model prediction after a few market periods.

Juan-Camilo Cardenas, John K Stranlund, Cleve E Willis

Cited by*: 14 Downloads*: 12

A large, but inconclusive, literature addresses how economic heterogeneity affects the use of local resources and local environmental quality. One line of thought, which derives from Nash equilibrium provision of public goods, suggests that in contexts in which individual actions degrade local environmental quality, wealthier people in a community will tend to do more to protect environmental quality. In this paper we report on experiments performed in rural Colombia that were designed to explore the role that economic inequality plays in the 'provision' of local environmental quality. Subjects were asked to decide how much time to devote to collecting firewood from a local forest, which degrades local water quality, and how much to unrelated pursuits. Economic heterogeneity was introduced by varying the private returns to these alternative pursuits. Consistent with the Nash equilibrium prediction, we found that the players with more valuable alternative options put less pressure on local water quality. However, the subjects with less valuable alternative options showed significantly more restraint relative to their pure Nash strategies. Furthermore, they were willing to bear significantly greater opportunity costs to move their groups to outcomes that yielded higher average payoffs and better water quality than the Nash equilibrium outcome.

Juan-Camilo Cardenas, John K Stranlund, Cleve E Willis

Cited by*: 0 Downloads*: 12

No abstract available

Douglas V DeJong, Robert Forsythe, Wilfred C Uecker

Cited by*: 13 Downloads*: 12

Using the data from sealed offer laboratory markets, we compare the price and quality choices of student subjects with those of businessmen subjects. The businessmen subjects were public accounting firm partners and corporate financial officers. This is of interest since the financial officer-auditor relationship is one particular application of the elementary principal-agent model which the laboratory environment was designed to test. Using several different performance measures we are unable to reject the null hypothesis that the average performance of the two subject pools were the same. However, the market using businessmen subjects generally exhibited greater variance than the market using students.

Steven D Levitt, John A List, Chad Syverson

Cited by*: 7 Downloads*: 12

Productivity improvements within establishments (e.g., factories, mines, or retail stores) are an important source of aggregate productivity growth. Past research has documented that learning by doing-productivity improvements that occur in concert with production increases-is one source of such improvements. Yet little is known about the specific mechanisms through which such learning occurs. We address this question using extremely detailed data from an assembly plant of a major auto producer. Beyond showing that there is rapid learning by doing at the plant, we are able to pinpoint the processes by which these improvements have occurred.

Nick Drydakis

Cited by*: 0 Downloads*: 12

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.

Maria De Paola, Francesca Gioia, Vincenzo Scoppa

Cited by*: 7 Downloads*: 12

We conducted a field experiment involving 720 Italian undergraduate students to investigate the existence of gender differences in performance in competitive settings and whether performance is affected by one's opponent gender. The experimental design was aimed at disentangling gender differences in taste for competition from other differences in psychological attitudes, such as self-confidence and risk aversion. Students were invited to undertake a midterm exam under a tournament scheme having as a prize some bonus points to add to the final grade. Students competed in pairs of equal predicted ability but different gender composition. We find that females are as likely as males to take part in the competition and to obtain a good performance. The gender of one's competitor does not play any role in shaping students' behavior. Men and women perform similarly both in the competitive and in the non-competitive environment.

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.

Kenneth Leonard, Melkiory Masatu

Cited by*: 0 Downloads*: 12

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.

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.

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.

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.

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.

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.

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.

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.

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.