Papers - Artefactual

Rocco Caferra, Alessia Casamassima, Alessandro Cascavilla, Andrea Morone, Paola Tiranzoni

Cited by*: None Downloads*: None

This work aims to identify and quantify the biases behind the anomalous behavior of people when they deal with the Three Doors dilemma, which is a really simple but counterintuitive game. Carrying out an artefactual field experiment and proposing eight different treatments to isolate the anomalies, we provide new interesting experimental evidence on the reasons why subjects fail to take the optimal decision. According to the experimental results, we can quantify the size and the impact of three main biases that explain the anomalous behavior of participants: Bayesian updating, illusion of control, and status quo bias.

James Andreoni, Amalia Di Girolamo, John A List, Claire Mackevicius, Anya Samek

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We conduct experiments eliciting risk preferences with over 1,400 children and adolescents aged 3-15 years old. We complement our data with an assessment of cognitive and executive function skills. First, we find that adolescent girls display significantly greater risk aversion than adolescent boys. This pattern is not observed among young children, suggesting that the risk gap in risk preferences emerges in early adolescence. Second, we find that at all ages in our study, cognitive skills (specifically math ability) are positively associated with risk taking. Executive functions among children, and soft skills among adolescents, are negatively associated with risk taking. Third, we find that greater risk-tolerance is associated with higher likelihood of disciplinary referrals, which provides evidence that our task is equipped to measure a relevant behavioral outcome. For academics, our research provides a deeper understanding of the developmental origins of risk preferences and highlights the important role of cognitive and executive function skills to better understand the association between risk preferences and cognitive abilities over the studied age range.

Elvis Cheng Xu

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We conduct a field trust game under a natural experiment context to test the impacts of urbanisation on trust. We conjecture that urbanisation, defined in this context as the process of state-led rural-urban migration, contributes to a transformation of trust levels among co-villagers and towards outsiders. We test this conjecture in an experimental approach and more generally, examine whether the urbanisation will produce significant impacts on in-group trust and out-group trust. The research finds that urbanisation does not decrease significantly the trust towards co-villagers, meaning the in-group trust did not change statistically significantly. However, the trust towards outsiders does increase as a result of the state-led urbanisation. We also run a regression on the trust exhibited towards participants in the experiment and found the partial effect of whether they are co-villagers or outsiders weakens as a result of the urbanisation, and therefore conclude urbanisation decreases out-group discrimination in trust.

Yan Chen, Peter Cramton, John A List, Axel Ockenfels

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We review past research and discuss future directions on how the vibrant research areas of market design and behavioral economics have influenced and will continue to impact the science and practice of management in both the private and public sectors. Using examples from various auction markets, reputation and feedback systems in online markets, matching markets in education, and labor markets, we demonstrate that combining market design theory, behavioral insights, and experimental methods can lead to fruitful implementation of superior market designs in practice.

John A List

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While empirical economics has made important strides over the past half century, there is a recent attack that threatens the foundations of the empirical approach in economics: external validity. Certain dogmatic arguments are not new, yet in some circles the generalizability question is beyond dispute, rendering empirical work as a passive enterprise based on frivolity. Such arguments serve to caution even the staunchest empirical advocates from even starting an empirical inquiry in a novel setting. In its simplest form, questions of external validity revolve around whether the results of the received study can be generalized to different people, situations, stimuli, and time periods. This study clarifies and places the external validity crisis into perspective by taking a unique glimpse into the grandest of trials: The External Validity Trial. A key outcome of the proceedings is an Author Onus Probandi, which outlines four key areas that every study should report to address external validity. Such an evaluative approach properly rewards empirical advances and justly recognizes inherent empirical limitations.

John A List

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These are the slides from John A. List's keynote at the 2022 AFE conference.

John A List

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Last year I put together a summary of data from my field experiments website that pertained to artefactual field experiments. Several people have asked me if I have and update. In this document I update all figures and numbers to show the details for 2020. I also include the description from the 2019 paper.

Majid Ahmadi, Nathan Durst, Jeff Lachman, Mason List, Noah List, John A List, Atom Vayalinkal

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Recent models and empirical work on network formation emphasize the importance of propinquity in producing strong interpersonal connections. Yet, one might wonder how deep such insights run, as thus far empirical results rely on survey and lab-based evidence. In this study, we examine propinquity in a high-stakes setting of talent allocation: the Major League Baseball (MLB) Draft. We examine draft picks from 2000-2019 across every MLB club of the nearly 30,000 players drafted (from a player pool of more than a million potential draftees). Our findings can be summarized in three parts. First, propinquity is alive and well in our setting, and spans even the latter years of our sample, when higher-level statistical exercises have become the norm rather than the exception. Second, the measured effect size is important, as MLB clubs pay a real cost in terms of inferior talent acquired due to propinquity bias: for example, their draft picks appear in 25 fewer games relative to teams that do not exhibit propinquity bias. Finally, the effect is found to be the most pronounced in later rounds of the draft (after round 15), where the Scouting Director has the greatest latitude.

Glenn W Harrison, John A List

Cited by*: 644 Downloads*: 105

Experimental economists are leaving the reservation. They are recruiting subjects in the field rather than in the classroom, using field goods rather than induced valuations, and using field context rather than abstract terminology in instructions. We argue that there is something methodologically fundamental behind this trend. Field experiments differ from laboratory experiments in many ways. Although it is tempting to view field experiments as simply less controlled variants of laboratory experiments, we argue that to do so would be to seriously mischaracterize them. What passes for "control" in laboratory experiments might in fact be precisely the opposite if it is artificial to the subject or context of the task. We propose six factors that can be used to determine the field context of an experiment: the nature of the subject pool, the nature of the information that the subjects bring to the task, the nature of the commodity, the nature of the task or trading rules applied, the nature of the stakes, and the environment that subjects operate in.

Hans P Binswanger

Cited by*: 412 Downloads*: 122

Attitudes toward risk were measures in 240 households using two methods: an interview method eliciting certainty equivalents and an experimental gambling approach with real payoffs which, at their maximum, exceeded monthly incomes of unskilled laborers. The interview method is subject to interviewer bias and its results were totally inconsistent with the experimental measures of risk aversion. Experimental measures indicate that, at high payoff levels, virtually all individuals are moderately risk-averse with little variation according to personal characteristics. Wealth tends to reduce risk aversion slightly, but its effect is not statistically significant.

Glenn W Harrison, Morten I Lau, Elisabet E Rutstrom

Cited by*: 378 Downloads*: 31

We estimate individual risk attitudes using controlled experiments in the field in Denmark. The experiments were carried out across Denmark using a representative sample of 253 people between 19 and 75 years of age. Risk attitudes are estimated for various individuals differentiated by socio-demographic characteristics. Our results indicate that the average Dane is risk averse, and that risk neutrality is an inappropriate assumption to apply. We also find that risk attitudes vary significantly with respect to several important socio-demographic variables such as age and education. However, we do not find any effect of sex on risk attitudes. Copyright The editors of the "Scandinavian Journal of Economics" 2007 .

Steven D Levitt, John A List

Cited by*: 321 Downloads*: 96

A critical question facing experimental economists is whether behavior inside the laboratory is a good indicator of behavior outside the laboratory. To address that question, we build a model in which the choices that individuals make depend not just on financial implications, but also on the nature and extent of scrutiny by others, the particular context in which a decision is embedded, and the manner in which participants and tasks are selected. We present empirical evidence demonstrating the importance of these various factors. To the extent that lab and naturally occurring environments systematically differ on any of these dimensions, the results obtained inside and outside the lab need not correspond. Focusing on experiments designed to measure social preferences, we discuss the extent to which the existing laboratory results generalize to naturally-occurring markets. We summarize cases where the lab may understate the importance of social preferences as well as instances in which the lab might exaggerate their importance. We conclude by emphasizing the importance of interpreting laboratory and field data through the lens of theory.

Uri Gneezy, Kenneth Leonard, John A List

Cited by*: 243 Downloads*: 41

This study uses a controlled experiment to explore whether there are gender differences in selecting into competitive environments across two distinct societies: the Maasai in Tanzania and the Khasi in India. One unique aspect of these societies is that the Maasai represent a textbook example of a patriarchal society whereas the Khasi are matrilineal. Similar to the extant evidence drawn from experiments executed in Western cultures, Maasai men opt to compete at roughly twice the rate as Maasai women. Interestingly, this result is reversed amongst the Khasi, where women choose the competitive environment more often than Khasi men, and even choose to compete weakly more often than Maasai men. We view these results as potentially providing insights into the underpinnings of the factors hypothesized to be determinants of the observed gender differences in selecting into competitive environments.

Glenn W Harrison, Morten I Lau, Elisabet E Rutstrom, Melonie B Williams

Cited by*: 219 Downloads*: 30

We estimate individual discount rates with respect to time streams of money using controlled laboratory experiments. These discount rates are elicited by means of field experiments involving real monetary rewards. The experiments were carried out across Denmark using a representative sample of 268 people between 19 and 75 years of age. Individual discount rates are estimated for various households differentiated by socio-demographic characteristics such as income and age. Our conclusions are that discount rates are constant over the 12-month to 3-year horizons used in these experiments, and that discount rates vary substantially with respect to several socio-demographic variables. Hence we conclude that it would be reasonable to assume constant discount rates for specific household types, but not the same rates across all households.

Ernst Fehr, John A List

Cited by*: 154 Downloads*: 15

We examine experimentally how Chief Executive Officers (CEOs) respond to incentives and how they provide incentives in situations requiring trust and trustworthiness. As a control we compare the behavior of CEOs with the behavior of students. We find that CEOs are considerably more trusting and exhibit more trustworthiness than students--thus reaching substantially higher efficiency levels than students. Moreover, we find that, for CEOs as well as for students, incentives based on explicit threats to penalize shirking backfire by inducing less trustworthy behavior--giving rise to hidden costs of incentives. However, the availability of penalizing incentives also creates hidden returns: if a principal expresses trust by voluntarily refraining from implementing the punishment threat, the agent exhibits significantly more trustworthiness than if the punishment threat is not available. Thus trust seems to reinforce trustworthy behavior. Overall, trustworthiness is highest if the threat to punish is available but not used, while it is lowest if the threat to punish is used. Paradoxically, however, most CEOs and students use the punishment threat, although CEOs use it significantly less.

John A List, David H Reiley

Cited by*: 142 Downloads*: 82

Field experiments have grown significantly in prominence over the past decade. In this essay, we provide a summary of the major types of field experiments, explore their uses, and describe a few examples. We show how field experiments can be used for both positive and normative purposes within economics. We also discuss more generally why data collection is useful in science, and more narrowly discuss the question of generalizability. In this regard, we envision field experiments playing a classic role in helping investigators learn about the behavioral principles that are shared across different domains.

Michael S Haigh, John A List

Cited by*: 135 Downloads*: 40

Two behavioral concepts, loss aversion and mental accounting, have recently been combined to provide a theoretical explanation of the equity premium puzzle. Recent experimental evidence suggests that undergraduate students' behavior is consistent with this "myopic loss aversion" conjecture. Our suspicion is that, much like certain anomalies in the realm of riskless decisions, these behavioral tendencies will be severely attenuated when real market players are put to the task. Making use of a unique subject pool-professional futures and options pit traders recruited from the Chicago Board of Trade-we do find behavioral differences between professionals and students. Yet, rather than discovering that the anomaly disappears, the data suggest that professional traders exhibit myopic loss aversion to a greater extent than undergraduate students.

Martin G Kocher, Matthias Sutter

Cited by*: 127 Downloads*: 111

We examine the degree of trust and trustworthiness in an experimental trust game with 662 participants from six different age groups, ranging from 8-year-olds to retired persons. Although both trust and trustworthiness have been identified as fundamental pillars for efficient economic interactions, economic research has devoted little attention to measuring their strength in different age groups. In our experiment subjects interact with members of the same age group. We find that trust increases almost linearly from early childhood to early adulthood, but stays rather constant within different adult age groups. Trustworthiness prevails in all age groups.

Hans P Binswanger

Cited by*: 126 Downloads*: 47

No abstract available

Jayson L Lusk, Ted C Schroeder

Cited by*: 125 Downloads*: 80

This study compares hypothetical and nonhypothetical responses to choice experiment questions. We test for hypothetical bias in a choice experiment involving beef ribeye steaks with differing quality attributes. In general, hypothetical responses predicted higher probabilities of purchasing beef steaks than nonhypothetical resposnes. Thus, hypothetical choices overestimate total willingness-to-pay for beef steaks. However, marginal willingness-to-pay for a change in steak quality is, in general, not statistically different across hypothetical and actual payment settings.