Papers - All

Andreas Lange, John A List, Michael K Price

Cited by*: 3 Downloads*: 7

The tontine, which is an interesting mixture of group annuity, group life insurance, and lottery, has a peculiar place in economic history. In the seventeenth and eighteenth centuries it played a major role in raising funds to finance public goods in Europe, but today it is rarely encountered outside of a dusty footnote in actuarial course notes or as a means to thicken the plot of a murder mystery. This study provides a formal model of individual contribution decisions under a modern variant of the historical tontine mechanism that is easily implemented by private charities. Our model incorporates desirable properties of the historical tontine to develop a mechanism to fund the private provision of a public good. The tontine-like mechanism we derive is predicted to outperform not only the voluntary contribution mechanism but also another widely used mechanism: charitable lotteries. Our experimental test of the instrument provides some evidence of the beneficial effects associated with implementing tontine-like schemes. We find that the mechanism has particular power in cases where agents are risk-averse or in situations where substantial asymmetries characterize individual preferences for the public good.

James Andreoni, Michael Callen, Karrar Hussain, Muhammad Yasir Khan, Charles Sprenger

Cited by*: 3 Downloads*: 7

We use structural estimates of time preferences to customize incentives for a sample of polio vaccinators during a series of door-to-door vaccination drives in Pakistan. Our investigation proceeds in three stages. First, we measure time preferences using intertemporal allocations of vaccinations. Second, we derive the mapping between these structural estimates and individually optimal incentives given a specific policy objective. Third, we experimentally evaluate the effect of matching contract terms to individual discounting patterns in a subsequent experiment with the same vaccinators. This exercise provides a test of the specific point predictions given by structural estimates of time preference. We document present bias among vaccinators and find that tailored contracts achieve the intended policy objective of smoothing intertemporal allocations of effort.

Heike Hennig-Schmidt, Bettina Rockenbach, Abdolkarim Sadrieh

Cited by*: 6 Downloads*: 7

We present a field experiment to assess the effect of own and peer wage variations on actual work effort of employees with hourly wages. Work effort neither reacts to an increase of the own wage, nor to a positive or negative peer comparison. This result seems at odds with numerous laboratory experiments that show a clear own wage sensitivity on effort. In an additional real-effort laboratory experiment we show that explicit cost and surplus information that enables to exactly calculate employer's surplus from the work contract is a crucial pre-requisite for a positive wage-effort relation. This demonstrates that employee's reciprocity requires a clear assessment of the surplus at stake.

Tanjim Hossain, John Morgan

Cited by*: 0 Downloads*: 7

We use field and natural experiments in online auctions to study the revenue effect of varying the level and disclosure of shipping charges. Our main findings are (1) disclosure affects revenues-for low shipping charges, a seller is better off disclosing; and (2) increasing shipping charges boosts revenues when these charges are hidden. These results are not explained by changes in the number of bidders.

John A List, Daniel Rondeau

Cited by*: 8 Downloads*: 7

Evidence suggests that contributions to capital campaigns increase with the value of leadership gifts. We examine the response of subjects to the announcement of leadership gifts and its implied change in the campaign's target. The two effects are partitioned.

Jeffrey C Ely, Tanjim Hossain

Cited by*: 1 Downloads*: 7

We conducted a field experiment to test the benefit from late bidding (sniping) in online auction markets. We compared sniping to early bidding (squatting) in auctions for newly-released DVDs on eBay. Sniping led to a statistically significant increase in our average surplus. However, this improvement was small. The two bidding strategies resulted in a variety of other qualitative differences in the outcomes of auctions. We show that a model of multiple concurrent auctions, in which our opponents are naive or incremental bidders as identified in the lab, explain the results well. Our findings illustrate how the overall impact of naivete, and the benefit from sniping observed in the lab, may be substantially attenuated in real-world market settings.

Sera Linardi, Tomomi Tanaka

Cited by*: 3 Downloads*: 7

This paper describes a randomized field experiment testing the impact of a savings competition on the behavior of working homeless individuals at a transitional shelter. When monetary prizes were offered for achieving the highest saving rates within a particular month, average savings increased by $80 (a 30% increase) while income and attendance at case management meetings remained unchanged. However, repeating the competition in the following month had no effect because responsive savers selected out of the shelter after the first month. In summary, while competition can increase savings in the short run, its effect may be limited to the intensive margin and may diminish with repetition. Combined with our findings that the strongest determinant of savings is income, it appear that for transitional populations on the economic margin, policies that provide opportunities to increase income may be a more effective first step than saving incentives.

Sujoy Chakravarty, Carine Sebi, E Somanathan, Emmanuel Theophilus

Cited by*: 0 Downloads*: 7

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.

Thomas S Dee

Cited by*: 5 Downloads*: 7

Wisconsin's influential Learnfare initiative is a conditional cash penalty program that sanctions a family's welfare grant when covered teens fail to meet school attendance targets. In the presence of reference-dependent preferences, Learnfare provides uniquely powerful financial incentives for student performance. However, a 10-county random-assignment evaluation suggested that Learnfare had no sustained effects on school enrollment and attendance. This study evaluates the data from this randomized field experiment. In Milwaukee County, the Learnfare procedures were poorly implemented and the random-assignment process failed to produce balanced baseline traits. However, in the nine remaining counties, Learnfare increased school enrollment by 3.7 percent (effect size = 0.08) and attendance by 4.5 percent (effect size = 0.10). The hypothesis of a common treatment effect sustained throughout the six-semester study period could not be rejected. These effects were larger among subgroups at risk for dropping out of school (e.g., baseline dropouts, those over age for grade). For example, these heterogeneous treatment effects imply that Learnfare closed the enrollment gap between baseline dropouts and school attendees by 41 percent. These results suggest that well-designed financial incentives can be an effective mechanism for improving the school persistence of at-risk students at scale.

Uri Gneezy, John A List, Michael K Price

Cited by*: 12 Downloads*: 7

Social scientists have presented evidence that suggests discrimination is ubiquitous: women, nonwhites, and the elderly have been found to be the target of discriminatory behavior across several labor and product markets. Scholars have been less successful at pinpointing the underlying motives for such discriminatory patterns. We employ a series of field experiments across several market and agent types to examine the nature and extent of discrimination. Our exploration includes examining discrimination based on gender, age, sexual orientation, race, and disability. Using data from more than 3000 individual transactions, we find evidence of discrimination in each market. Interestingly, we find that when the discriminator believes the object of discrimination is controllable, any observed discrimination is motivated by animus. When the object of discrimination is not due to choice, the evidence suggests that statistical discrimination is the underlying reason for the disparate behavior.

Herrmann Benedikt, Simon Gachter

Cited by*: 15 Downloads*: 7

We report evidence from public goods experiments with and without punishment which we conducted in Russia with 566 urban and rural participants of young and mature age cohorts. Russia is interesting for studying voluntary cooperation because of its long history of collectivism, and a huge urban-rural gap. In contrast to previous experiments we find no cooperation-enhancing effect of punishment. An important reason is that there is substantial spiteful punishment of high contributors in all four subject pools. Thus, spite undermines the scope for self-governance in the sense of high levels of voluntary cooperation that are sustained by sanctioning free riders only.

Christopher Mann

Cited by*: 1 Downloads*: 7

Survey researchers have long been concerned with the question of whether participation in preelection surveys increases voter turnout. This article presents findings from three large-scale field experiments conducted during the 2002 general election in Maryland, New York, and Pennsylvania. Unlike early studies, which found that participation in preelection surveys increased voter turnout, this study finds no significant effect. The author argues that the rigorous experimental methodology and large sample size in these three experiments should allay concern that survey participation affects turnout.

David Ong

Cited by*: 0 Downloads*: 7

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.

Nick Drydakis

Cited by*: 0 Downloads*: 7

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.

Mary Kay Gugerty, Michael Kremer

Cited by*: 1 Downloads*: 7

Many argue that organizations of the disadvantaged create positive externalities, and in particular strengthen the position of these groups in society. A natural inference is that these organizations should be subsidized. We argue that the benefits of expanding the operations of these groups must be set against the potential costs of weakening the role of the disadvantaged in these organizations. A prospective, randomized evaluation of a development program targeted at strengthening rural women's groups in western Kenya suggests that the program did not improve group strength or functioning as measured by participation rates, assistance to members, and assistance to other community projects. The funding did, however, change the very characteristics of the groups that made them attractive to funders in the first place. Younger, more educated women and women employed in the formal sector joined the groups, and men and better-educated and wealthier women moved into key leadership positions.

Omar Al-Ubaydli, John A List, Danielle LoRe, Dana L Suskind

Cited by*: 1 Downloads*: 7

No abstract available

Egil Matsen, Bjarne Strom

Cited by*: 0 Downloads*: 7

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.

John A List, Michael K Price

Cited by*: 8 Downloads*: 7

One fact that has emerged in modern societies is that people help others. Whether it is donating a few dollars to help feed the poor or volunteering time to help rebuild someone's life after a natural disaster, people around the globe commonly lend a hand. This study provides an overview of that support, summarizing gifts of both time and money around the globe. We also highlight research that indicates useful ways in which we can enhance the charitable pie. Our discussion revolves around both individual giving and corporate philanthropy, but we focus on empirical insights from recent charitable fundraising field experiments in the Western World. We present information that is useful for policymakers, fundraising practitioners, and academicians.

Esther Duflo, William Gale, Jeffrey Liebman, Peter Orszag, Emmanuel Saez

Cited by*: 7 Downloads*: 7

This paper analyzes the effects of a large randomized field experiment carried out with H&R Block, offering matching incentives for IRA contributions at the time of tax preparation. About 14,000 H&R Block clients, across 60 offices in predominantly low- and middle-income neighborhoods in St. Louis, were randomly offered a 20 percent match on IRA contributions, a 50 percent match, or no match (the control group). The evaluation generates two main findings. First, higher match rates significantly raise IRA participation and contributions. Take-up rates were 3 percent for the control group, 8 percent in the 20 percent match group, and 14 percent in the 50 percent match group. Average IRA contributions (including non-contributors, excluding the match) for the 20 percent and 50 percent match groups were 4 and 7 times higher than in the control group, respectively. Second, several additional findings are inconsistent with the full information, rational-saver model. In particular, we find much more modest effects on take-up and amounts contributed from the existing Saver's Credit, which provides an effective match for retirement saving contributions through the tax code; we suspect that the differences may reflect the complexity of the Saver's Credit as enacted, and the way in which its effective match is presented. Taken together, our results suggest that the combination of a clear and understandable match for saving, easily accessible savings vehicles, the opportunity to use part of an income tax refund to save, and professional assistance could generate a significant increase in contributions to retirement accounts, including among middle- and low-income households.

John A List, Daniel L Millimet

Cited by*: 3 Downloads*: 6

Devolution of tasks to local levels of government has recently become a popular agenda item within certain political factions in the US. While one expects the local policymaker to tailor policies to match the preferences of his constituents, critics of local policymaking claim that externalities are ignored and inefficiencies thus arise under local control of certain policies. A primary example concerns the control of pollution, which is known to have adverse effects on neighbouring jurisdictions. Whether localities actually 'race to the bottom' and enact lax environmental policies when given the chance remains an open issue. In this study, we make use of stochastic dominance tests to examine if President Reagan's policy of 'New Federalism' in the early 1980s induced states to lower environmental standards. Among the several environmental measures analysed, we do not find any evidence that the 'race to the bottom' materialized. Indeed, the evidence shows that even during these lean years of federal intervention several indicators of environmental quality at the state level continued to improve.