Papers - Framed

Eli Beracha, Michael J. Seiler

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In this study, we examine whether homebuyers favor homes associated with just below pricing strategies or those with rounded prices (e.g., $199,900 vs. $200,000). The inclination for just below pricing allows sellers that use just below pricing to set a higher asking price without driving away potential buyers. Rounded priced homes, on the other hand, sell significantly faster and at a smaller discount from list price compared with just below priced homes. We find that the just below pricing strategy yields the highest transaction price relative to the true underlying home value. This suggests sellers exploit buyers' preference for just below priced homes with a higher initial listing price that outweighs the lower discount and shorter time on market associated with similar round priced homes, making just below pricing the more effective pricing strategy.

Mark A. Lane, Michael J. Seiler, Vicky L Seiler

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This study is the first to examine the widely debated merits of staging a home for sale. We find that both homeowners and real estate agents believe staging conditions (furnishings and wall color) will significantly impact homeowners' willingness to pay for a property. Our results show that homeowners rationally do not significantly differ in their valuations based on staging conditions. However, staging conditions do influence the process, as we find a neutral wall color and good furnishings do significantly influence a buyers' perceived liability and overall opinion of the home. While these are a necessary condition for purchase, staging is not enough to result in a higher selling price.

David Ong

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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.

E. Lance Howe, James J Murphy, Drew Gerkey, Colin Thor West

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Integrating information from existing research, qualitative ethnographic interviews, and participant observation, we designed a field experiment that introduces idiosyncratic environmental risk and a voluntary sharing decision into a standard public goods game. Conducted with subsistence resource users in rural villages on the Kamchatka Peninsula in Northeast Siberia, we find evidence consistent with a model of indirect reciprocity and local social norms of helping the needy. When participants are allowed to develop reputations in the experiments, as is the case in most small-scale societies, we find that sharing is increasingly directed toward individuals experiencing hardship, good reputations increase aid, and the pooling of resources through voluntary sharing becomes more effective. We also find high levels of voluntary sharing without a strong commitment device; however, this form of cooperation does not increase contributions to the public good. Our results are consistent with previous experiments and theoretical models, suggesting strategic risks tied to rewards, punishments, and reputations are important. However, unlike studies that focus solely on strategic risks, we find the effects of rewards, punishments, and reputations are altered by the presence of environmental factors. Unexpected changes in resource abundance increase interdependence and may alter the costs and benefits of cooperation, relative to defection. We suggest environmental factors that increase interdependence are critically important to consider when developing and testing theories of cooperation.

Omar Al-Ubaydli, John A List

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A commonly held view is that laboratory experiments provide researchers with more "control" than natural field experiments, and that this advantage is to be balanced against the disadvantage that laboratory experiments are less generalizable. This paper presents a simple model that explores circumstances under which natural field experiments provide researchers with more control than laboratory experiments afford. This stems from the covertness of natural field experiments: laboratory experiments provide researchers with a high degree of control in the environment which participants agree to be experimental subjects. When participants systematically opt out of laboratory experiments, the researcher's ability to manipulate certain variables is limited. In contrast, natural field experiments bypass the participation decision altogether and allow for a potentially more diverse participant pool within the market of interest. We show one particular case where such selection is invaluable: when treatment effects interact with participant characteristics.

Michael J. Seiler

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Defaulting on a mortgage is widely viewed as being immoral, but no prior study has examined the intervening roles of financial outcome and default intent. We find that the public is significantly more accepting of a defaulting borrower who earns a zero or negative return on his investment than one who earns a positive return. This moral viewpoint changes significantly when the default is strategic in nature. Defaulters are judged significantly less harshly by those who more so blame the lender for the current financial crisis, those who have previously strategically defaulted, and males. When asked to suggest a "morally appropriate" settlement offer to lenders to resolve the distressed debt, beyond the financial outcome and default intent remaining significant, we further find that those who more so blame the lender, those view their home as more of an investment rather than a consumption good, those who have previously strategically defaulted, those with lower income levels, and minorities suggest significantly lower settlement offers.

Gerhard Klimeck, Anya Samek

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We conducted an experiment with 30,000 users of a virtual nanotechnology facility, nanoHUB.org. We investigate the effect of virtual points and message framing on user participation in a survey. In one treatment, users receive points for completing the survey. In another treatment, users are exposed to a visual observation cue. We vary the social message, either emphasizing the private benefit to the user or the social benefit to the community of participation. Participation rates are increased through virtual points and for users receiving the private benefit messaging. The observation cue doesn't have an effect.

Julian Conrads, Bernd Irlenbusch, Tommaso Reggiani, Rainer M Rilke, Dirk Sliwka

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How to hire voluntary helpers? We shed new light on this question by reporting a field experiment in which we invited 2859 students to help at the 'ESA Europe 2012' conference. Invitation emails varied non-monetary and monetary incentives to convince subjects to offer help. Students could apply to help at the conference and, if so, also specify the working time they wanted to provide. Just asking subjects to volunteer or offering them a certificate turned out to be significantly more motivating than mentioning that the regular conference fee would be waived for helpers. By means of an online-survey experiment, we find that intrinsic motivation to help is likely to have been crowded out by mentioning the waived fee. Increasing monetary incentives by varying hourly wages of 1, 5, and 10 Euros shows positive effects on the number of applications and on the working time offered. However, when comparing these results with treatments without any monetary compensation, the number of applications could not be increased by offering money and may even be reduced.

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.

Glenn W Harrison, John A List

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No abstract available

Leonardo Becchetti, Vittorio Pelligra, Tommaso Reggiani

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In this paper, we study by means of a framed field experiment on a representative sample of the population the effect on people's charitable giving of three, substantial and procedural, elements: information provision, belief elicitation and threshold on distribution. We frame this investigation within the 5X1000 tax scheme, a mechanism through which Italian taxpayers may choose to give a small proportion (0.5%) of their income tax to a voluntary organization to fund its activities. We find two main results: (i) providing information or eliciting beliefs about previous donations increases the likelihood of a donation, while thresholds have no effect; (ii) information about previous funding increases donations to organizations that received fewer donations in the past, while belief elicitation also increases donations to organizations that received most donations in the past, since individuals are more likely to donate to the organizations they rank first.