Papers - Framed

John A List, Michael K Price

Cited by*: 15 Downloads*: 27

We explore collusion by using the tools of experimental economics in a naturally occurring marketplace. We report that competitive price theory adequately organizes data in multilateral decentralized bargaining markets without conspiratorial opportunities. When conspiratorial opportunities are allowed and contract prices are perfectly observed, prices (quantities) are considerably above (below) competitive levels. When sellers receive imperfect price signals, outcomes are intermediate to those of competitive markets and collusive markets with full information. Finally, experienced buyers serve as a catalyst to thwart attempts by sellers to engage in anticompetitive pricing: in periods where experienced agents transact in the market, average transaction prices are below those realized in periods where only inexperienced agents execute trades.

Frank W Marlowe

Cited by*: 1 Downloads*: 27

Most hypotheses proposed to explain human food sharing address motives, yet most tests of these hypotheses have measured only the patterns of food transfer. To choose between these hypotheses we need to measure people's propensity to share. To do that, I played two games (the Ultimatum and Dictator Games) with Hadza hunter-gatherers. Despite their ubiquitous food sharing, the Hadza are less willing to share in these games than people in complex societies are. They were also less willing to share in smaller camps than larger camps. I evaluate the various food-sharing hypotheses in light of these results.

Esther Duflo, Pascaline Dupas, Michael Kremer, Samuel Sinei

Cited by*: 15 Downloads*: 26

We report results from a randomized evaluation comparing three school-based HIV/AIDS interventions in Kenya: 1) training teachers in the Kenyan Government's HIV/AIDS-education curriculum; 2) encouraging students to debate the role of condoms and to write essays on how to protect themselves against HIV/AIDS; and 3) reducing the cost of education. Our primary measure of the effectiveness of these interventions is teenage childbearing, which is associated with unprotected sex. We also collected measures of knowledge, attitudes, and behavior regarding HIV/AIDS. After two years, girls in schools where teachers had been trained were more likely to be married in the event of a pregnancy. The program had little other impact on students' knowledge, attitudes, and behavior, or on the incidence of teen childbearing. The condom debates and essays increased practical knowledge and self-reported use of condoms without increasing self-reported sexual activity. Reducing the cost of education by paying for school uniforms reduced dropout rates, teen marriage, and childbearing.

Shagata Mukherjee, Michael K Price

Cited by*: 0 Downloads*: 26

This study takes a first step to advance our understanding of the strategic interaction between the constituent components of default in microfinance and how to mitigate them. We conduct controlled microfinance field experiments in rural India to provide a systematic analysis of the relationship between gender, group liability and moral hazard. By varying the contract structure across different microfinance games, our experiment decomposes the two moral hazard (ex-ante and ex-post) channels and find that their effect on default are counteractive rather than additive for women clients. The study facilitates heterogeneity analysis of gender on moral hazard across comparable matrilineal and patrilineal societies in two neighboring states of India. We find that matrilineal women are less risk averse and are more likely to invest in the risky project (ex-ante moral hazard) than women in patrilineal societies. Moreover, we find a reversal of gender effect on strategic default (ex-post moral hazard) across the two societies, suggesting the importance of social norms and gender roles on financial behavior. Our results indicate that policymaking in microfinance should be designed by considering the heterogeneity of diverse societies, gender roles, norms and the underlying socio-economic factors that motivate financial behavior among borrowers.

Steffen Andersen, Seda Ertac, Uri Gneezy, Moshe Hoffman, John A List

Cited by*: 37 Downloads*: 26

One of the most robust findings in experimental economics is that individuals in one-shot ultimatum games reject unfair offers. Puzzlingly, rejections have been found robust to substantial increases in stakes. By using a novel experimental design that elicits frequent low offers and uses much larger stakes than in the literature, we are able to examine stakes' effects over ranges of data that are heretofore unexplored. Our main result is that proportionally equivalent offers are less likely to be rejected with high stakes. In fact, our paper is the first to present evidence that as stakes increase, rejection rates approach zero.

Catherine C Eckel, Philip J Grossman

Cited by*: 30 Downloads*: 26

We report the results of a field experiment conducted in conjunction with a mailed fundraising campaign of a nonprofit organization. The experiment is designed to compare the response of donors to subsidies in the form of matching amounts or rebated amounts. Matching subsidies are used by many corporations as an employee benefit; the US federal tax system encourages giving using a rebate subsidy by making donations tax deductible. The design includes a control group and two levels of subsidy of each type. Our main result is that matching subsidies result in larger total donations to charities than rebate subsidies, a result that is qualitatively similar to the lab findings. The estimated price elasticities for the matching subsidy are very similar to (and insignificantly different from) the lab experiments, while rebate subsidies lead to lower contributions in the field than in the lab. Since rebates in the field involve substantial lags and additional complications as compared with the "instant rebates" of the lab, this latter difference is not unexpected. The matching results are an important step in validating lab estimates of responsiveness to subsidies of charitable giving.

Min Ding, Rajdeep Grewal, John Liechty

Cited by*: 49 Downloads*: 25

Because most conjoint studies are conducted in hypothetical situations with no consumption consequences for the participants, the extent to which the studies are able to uncover "true" consumer preference structures is questionable. Experimental economics literature, with its emphasis on incentive alignment and hypothetical bias, suggests that more realistic incentive aligned studies will result in stronger out-of-sample predictive performance of actual purchase behaviors and provide better estimates of consumer preference structures than hypothetical studies. To test this hypothesis, the authors design an experiment with conventional (hypothetical) conditions and their parallel incentive-aligned counterparts. Using Chinese dinner specials as the context, the authors conducted a field experiment in a Chinese restaurant during dinnertime. The results provide strong evidence in favor of incentive-aligned choice conjoint analysis, in that incentive-aligned choice conjoint outperforms hypothetical choice conjoint in out-of-sample predictions (59% versus 26% for incentive-aligned choice conjoint and hypothetical choice conjoint, respectively for the top two choices). As expected, subjects in the incentive-aligned choice condition exhibit preference structures that are systematically different from the preference structures of subjects in the hypothetical condition. Most notably, the subjects in the incentive-aligned choice condition are more price sensitive and exhibit different heterogeneity patterns. To determine the robustness of these results, the authors conducted a second study that used snacks as the context and only considered the choice treatments. This study confirmed the results by again providing strong evidence in favor of incentive-aligned choice analysis in out-of-sample predictions (36% versus 16% for incentive-aligned choice conjoint and hypothetical choice conjoint, respectively for the top two choices). The results provide a strong motivation for conjoint practitioners to consider conducting their studies in realistic settings using incentive structures that require participants to live with their decisions.

Peter Bohm

Cited by*: 17 Downloads*: 25

No abstract available

Leonardo Becchetti, Vittorio Pelligra, Tommaso Reggiani

Cited by*: 0 Downloads*: 24

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.

Jonathan E Alevy, Michael S Haigh, John A List

Cited by*: 21 Downloads*: 24

Previous empirical studies of information cascades use either naturally occurring data or laboratory experiments with student subjects. We combine attractive elements from each of these lines of research by observing market professionals from the Chicago Board of Trade (CBOT) in a controlled environment. As a baseline, we compare their behavior to student choices in similar treatments. We further examine whether, and to what extent, cascade formation is influenced by both private signal strength and the quality of previous public signals, as well as decision heuristics that differ from Bayesian rationality. Analysis of over 1,500 individual decisions suggests that CBOT professionals are better able to discern the quality of public signals than their student counterparts. This leads to much different cascade formation. Further, while the behavior of students is consistent with the notion that losses loom larger than gains, market professionals are unaffected by the domain of earnings. These results are important in both a positive and normative sense.

Peter Bohm

Cited by*: 7 Downloads*: 22

The main purpose of this article is to advance a set of conditions which demand-revealing mechanisms must pass in order to be politically acceptable for real-world applications and - to begin with - for real-world experiments. Without such non-laboratory experiments, real progress seems unlikely to take place in this field. So far, there are few indications that these conditions can be met with respect to the proposals made in the literature on public goods. One possible example of a mechanism that meets the ""acceptability"" conditions is given here. In addition, we present some comments as to why demand-revealing mechanisms constitute and important economic problem, a view which has recently been questioned.

John A List

Cited by*: 16 Downloads*: 22

A vibrant literature has emerged that suggests willingness to pay and willingness to accept measures of value are quite different for inexperienced consumers but that value differences erode with market experience. One potential shortcoming of this literature is that market experience is endogenous. This study presents a framed field experiment that exogenously induces market experience. Empirical findings support the premise that market experience, alone, can eliminate an important market anomaly.

Uri Gneezy, Moshe Hoffman, John A List

Cited by*: 8 Downloads*: 22

Women remain significantly underrepresented in the science, engineering, and technology workforce. Some have argued that spatial ability differences, which represent the most persistent gender differences in the cognitive literature, are partly responsible for this gap. The underlying forces at work shaping the observed spatial ability differences revolve naturally around the relative roles of nature and nurture. Although these forces remain among the most hotly debated in all of the sciences, the evidence for nurture is tenuous, because it is difficult to compare gender differences among biologically similar groups with distinct nurture. In this study, we use a large-scale incentivized experiment with nearly 1,300 participants to show that the gender gap in spatial abilities, measured by time to solve a puzzle, disappears when we move from a patrilineal society to an adjoining matrilineal society. We also show that about one-third of the effect can be explained by differences in education. Given that none of our participants have experience with puzzle solving and that villagers from both societies have the same means of subsistence and shared genetic background, we argue that these results show the role of nurture in the gender gap in cognitive abilities.

Omar Al-Ubaydli, Peter Boettke

Cited by*: 2 Downloads*: 21

The work of Friedrich Von Hayek contains several testable predictions about the nature of market processes. Vernon Smith termed the most important one the "Hayek hypothesis:" equilibrium prices and the gains from trade can be achieved in the presence of diffuse, decentralized information, and in the absence of price-taking behavior and centralized market direction. Vernon Smith tested this by surveying data on laboratory experimental markets and found strong support. We repeat this exercise using field experimental market data. Using field experiments allows us to test several other predictions. Generally speaking, we find support for Hayek's theories.

John A List, Jason F Shogren

Cited by*: 19 Downloads*: 20

This paper calibrates real and hypothetical willingness-to-accept estimates elicited for consumer goods in a multi-unit, random nth-price auction. Using a within-subject experimental design, we find that people understated their real willingness to accept in the hypothetical regimes, framed both as demand and non-demand revealing. After controlling for personspecific effects, however, hypothetical and real statements are equivalent on the margin.

Daniel Jones, Sera Linardi

Cited by*: 16 Downloads*: 19

An extensive literature on reputation signaling in prosocial settings has focused on an intrinsic desire for positive reputation. In our paper, we provide experimental evidence that some individuals are averse to both positive and negative reputation and will therefore respond to visibility by signaling that they are an "average altruism type" relative to their audience. We formalize our hypotheses about "wallflower" behavior in a theoretical model. Our experimental results show that instead of uniformly increasing contributions, visibility draws contributions towards the middle of others' contributions. As a result, visibility is associated with higher levels of giving only when in scenarios where others are giving a large amount. We also observe heterogeneity in reputation concerns wallflower behavior is particularly strong for women and can be observed in several different settings.

John A List

Cited by*: 0 Downloads*: 19

No abstract available

John A List

Cited by*: 16 Downloads*: 19

Public policy decision making often requires balancing the benefits of a policy with the costs. While regulators in the United States and abroad rely heavily on benefit-cost analysis, critics contend that hypothetical bias precludes one of the most popular benefit estimation techniques--contingent surveys--from providing reliable economic values for nonmarket goods and services. This paper explores a new methodology to obtain the total value of nonmarket goods and services--random nth price auctions. The empirical work revolves around examining behavior of 360 participants in a competitive marketplace, where subjects naturally buy, sell, and trade commodities. The field experiment provides some preliminary evidence that hypothetical random nth price auctions can, in certain situations, reveal demand truthfully.

Jay R Corrigan, Matthew C Rousu

Cited by*: 3 Downloads*: 18

Policymakers are considering including stricter standards in international trade agreements. Using auctions to assess preferences, we find that the median consumer places no premium on fair trade foods produced under more stringent labor and environmental standards. This indicates that current trade policies may be preferable to U.S. consumers.

Aaron Arndt, David M Harrison, Mark A. Lane, Michael J. Seiler, Vicky L Seiler

Cited by*: 0 Downloads*: 17

We investigate whether customers' overall impression of online property listings can be influenced by the real estate agent, and whether this influence depends on the customer's demographic characteristics. A sample of 1,594 potential homebuyers took an online audio/visual tour of a typically priced home in their area. Subjects were shown one of eight conditions in which we varied agent gender (male/female), agent attractiveness (attractive/less attractive), and pathos (used/not used). The results show that segments of customers are drawn to different real estate agents, but contrary to our expectations, customers were not necessarily drawn to similar agents or more attractive ones.