Papers - Natural

Stefano Carattini, Kenneth Gillingham, Xiangyu Meng, Erez Yoeli

Cited by*: None Downloads*: None

Observability has been demonstrated to influence the adoption of pro-social behavior in a variety of contexts. This study implements a natural field experiment to examine the influence of observability in the context of a novel pro-social behavior: peer-to-peer solar. Peer-to-peer solar offers an opportunity to households who cannot have solar on their homes to access solar energy from their neighbors. However, unlike solar installations, peer-to-peer solar is an invisible form of pro-environmental behavior. We implemented a set of randomized campaigns using Facebook ads in the Massachusetts cities of Cambridge and Somerville, in partnership with a peer-to-peer company, to study social media users' interest in peer-to-peer solar through clicks on the ads. In the campaigns, treated customers were informed that they could share "green reports" online, providing information to others about their greenness. We find that interest in peer-to-peer solar increases by up to 30% when "green reports," which would make otherwise invisible behavior visible, are mentioned in the ads.

Tanjim Hossain, John Morgan

Cited by*: 47 Downloads*: 65

Many firms divide the price a consumer pays for a good into two pieces---the price for the item itself and the price for shipping and handling. With fully rational customers, the exact division between the two prices is irrelevant---only the total price matters. We test this hypothesis by selling matched pairs of CDs and Xbox games in a series of field experiments on eBay. In theory, the ending auction price should vary inversely with the shipping charge to leave the total price paid constant. Contrary to the theory, we find that charging a high shipping cost and starting the auction at a low opening price leads to higher numbers of bidders and higher revenues when the shipping charge is not excessive. We show that these results can be accounted for by boundedly rational bidding behavior such as loss-aversion with separate mental accounts for different attributes of the price or disregard for shipping costs.

Stefano Carattini, Robert Dur, John A. List

Cited by*: None Downloads*: None

Many policies that are generally considered socially desirable by the scientific community, based on modeling and causal empirical analyses, are not very widespread. The main driver is often lack of public support at baseline ("ex ante"). Yet, there is evidence that when voters hold biased beliefs ex ante about a given policy, experiencing the policy firsthand may lead them to correct their beliefs and increase public support. If it was widely documented that opposition to sound policies in part dissipates when voters experience a given policy, then more policy-makers may be inclined to experiment with policies that scientists recommend but that are unpopular ex ante. Systematically combining policy evaluation with causal analysis of public support would allow scholars to create a body of knowledge on the conditions under which policies become more (or less) popular after implementation and what are the drivers of changes in beliefs and public support.

Fadi Hassan, Paolo Lucchino

Cited by*: 0 Downloads*: 30

More than 1.3 billion people worldwide have no access to electricity and this has first-order effects on several development dimensions. In this paper we focus on the link between access to light and education. We randomly distribute solar lamps to 7th grade pupils in rural Kenya and monitor their educational outcomes throughout the year at quarterly frequency. We find that access to lights through solar lamps is a relevant and effective input to education. Our identification strategy accounts for spillovers by exploiting the variation in treatment at the pupil level and in treatment intensity across classes. We find a positive and significant intention-to-treat effect as well as a positive and significant spillover effect on control students. In a class with the average treatment intensity of our sample (43%), treated students experience an increase in math grades of 0.88 standard deviations. Moreover, we find a positive marginal effect of treatment intensity on control students: raising the share of treated students in a class by 10% increases grades of control students by 0.22 standard deviations. We exploit household geolocation to disentangle within-class and geographical spillovers. We show that geographical spillovers do not have a significant impact and within-school interaction is the main source of spillovers. Finally, we provide suggestive evidence that the mechanism through which lamps affect students is by increasing co-studying at school especially after sunset.

John A List, Jason F Shogren

Cited by*: 24 Downloads*: 1

Examining panel data on bidding behavior in over forty second-price auction markets with repeated trials, we observe that (i) posted prices influence the behavior of the median naive bidder; (ii) posted prices do not affect the behavior of the median experienced bidder or the bidder for familiar goods; and (iii) anticipated strategic behavior wanes after two trials. The results suggest that while affiliation might exist in auctions for new goods, the repeated trial design with nonprice information removes the correlation of values and provides the experience that bidders need to understand the market mechanism.

David Laibson , John A List

Cited by*: 2 Downloads*: 114

There are many great ways to incorporate behavioral economics in a first-year undergraduate economics class-i.e., the course that is typically called "Principles of Economics." Our preferred approach integrates behavioral economics throughout the course (e.g., see Acemoglu, Laibson, and List 2015). With the integrated approach, behavioral content plays a role in many of the chapters of the principles of economics curriculum, including chapters on optimization, equilibrium, game theory, intertemporal choice, probability and risk, social preferences, household finance, the labor market, financial intermediation, monetary policy, economic fluctuations, and financial crises. We prefer the integrated approach because it enables the behavioral insights to show up where they are conceptually most relevant. By illustration, it is best to combine a discussion of downward nominal wage rigidity (i.e., the idea that workers strongly resist nominal wage declines) with the overall discussion of the labor market. Whether or not an instructor integrates behavioral economics throughout the principles of economics course, it makes sense to pull central materials together and dedicate a lecture (or more) to a focused discussion of behavioral economics. This note describes our approach to such a lecture, emphasizing six key principles of behavioral economics. Our choice of content for a behavioral lecture is motivated by three factors. First, we include ideas that are conceptually important. Second, we include material that is practically important and personally relevant to our students-we have found that such content resonates long after the course ends. Third, we include content that relates to what has been (or will be) taught in the rest of the course, and therefore serves as a complement. We want students to see that behavioral economics is an integrated part of economics, not a freak show that is isolated from "the standard ingredients" in the rest of the economics course. This paper summarizes our approach to such a focused behavioral lecture. In Section I, we define behavioral economics and place it in historical context. In Section II, we introduce six modular principles that can be used to teach behavioral economics. We provide PowerPoint notes on our home pages, which instructors should feel free to edit and use.

Rama Katkar, David Lucking-Reiley

Cited by*: 7 Downloads*: 13

Sellers in eBay auctions have the opportunity to choose both a public minimum bid amount and a secret reserve price. We ask, empirically, whether the seller is made better or worse off by setting a secret reserve above a low minimum bid, versus the option of making the reserve public by using it as the minimum bid level. In a field experiment, we auction 50 matched pairs of Pokemon cards on eBay, half with secret reserves and half with equivalently high public minimum bids. We find that secret reserve prices make us worse off as sellers, by reducing the probability of the auction resulting in a sale, deterring serious bidders from entering the auction, and lowering the expected transaction price of the auction. We also present evidence that some sellers choose to use secret reserve prices for reasons other than increasing their expected auction prices.

Richard C Bishop, Kevin J Boyle, Richard T Carson, David Chapman, Matthew DeBell, Colleen Donovan, W. Michael Hanemann, Barbara Kanninen, Matthew Konopka, Raymond J Kopp, Jon A Krosnick, John A List, Norman Meade, Robert Paterson, Stanley Presser, Nora Scherer, V. Kerry Smith, Roger Tourangeau, Michael Welsh, Jeffrey M Wooldridge

Cited by*: 0 Downloads*: 78

No abstract available

Uri Gneezy, John A List

Cited by*: 262 Downloads*: 31

Recent discoveries in behavioral economics have led scholars to question the underpinnings of neoclassical economics. We use insights gained from one of the most influential lines of behavioral research -- gift exchange -- in an attempt to maximize worker effort in two quite distinct tasks: data entry for a university library and door-to-door fundraising for a research center. In support of the received literature, our field evidence suggests that worker effort in the first few hours on the job is considerably higher in the "gift" treatment than in the "non-gift treatment." After the initial few hours, however, no difference in outcomes is observed, and overall the gift treatment yielded inferior aggregate outcomes for the employer: with the same budget we would have logged more data for our library and raised more money for our research center by using the market-clearing wage rather than by trying to induce greater effort with a gift of higher wages.

John A List

Cited by*: None Downloads*: None

"Putting Economic Research into Practice at Businesses (to Inform Science and Major Social Challenges)" Slides from ASSA NABE

Puppe Clemens, Sebastian Kube, Michel Marechal

Cited by*: 18 Downloads*: 25

We study the role of reciprocity in a labor market field experiment. In a recent paper, Gneezy and List (2006) investigate the impact of gift exchange in this context and find that it has only a transient effect on long run outcomes. Extending their work to examine both positive and negative reciprocity, we find consonant evidence in the positive reciprocity condition: the gift does not work well in the long run (if at all). Yet, in the negative reciprocity treatment we observe much stronger effects: a wage reduction has a significant and lasting negative impact on efforts. Together, these results highlight the asymmetry of positive and negative reciprocity that exists in the field, and provide an indication of the relative importance of each in the long run.

Syon Bhanot, Gordon Kraft-Todd, David Rand, Erez Yoeli

Cited by*: None Downloads*: None

We partnered with the School District of Philadelphia (SDP) to run a randomized experiment testing interventions to increase teacher participation in an annual feedback survey, an uncompensated task that requires a teacher's time but helps the educational system overall. Our experiment varied the nature of the incentive scheme used, and the associated messaging. In the experiment, all 8,062 active teachers in the SDP were randomly assigned to receive one of four emails using a 2x2 experimental design; specifically, teachers received a lottery-based financial incentive to complete the survey that was either "personal" (a chance to win one of fifteen $100 gift cards for themselves) or "social" (a chance to win one of fifteen $100 gift cards for supplies for their students), and also received email messaging that either did or did not make salient their identity as an educator. Despite abundant statistical power, we find no discernible differences across our conditions on survey completion rates. One implication of these null results is that from a public administration perspective, social rewards may be preferable since funds used for this purpose by school districts go directly to students (through increased expenditure on student supplies), and do not seem less efficacious than personal financial incentives for teachers.

Syon Bhanot

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Perception of peer rank, or how we can perform relative to out peers, can be a powerful motivator. While research exists on the effect of social information on decision making, there is less work on how ranked comparisons with our peers influence our behavior. This paper outlines a field experiment conducted with 3896 households in Castro Valley, California, which uses household mailers with various forms of social information and peer rank messaging to motivate water conservation. The experiment tests the effect of a visible peer rank on water use, and how the competitive framing of rank information influences behavioral response. The results show that households with relatively low or high water use in the pre-treatment period responded differently to how rank information was framed. I find that a neutrally-framed peer rank caused a small "boomerang effect" (i.e., an increase in average water use) for low water households, but this effect was eliminated by competitive framing. At the same time, a competitively-framed peer rank demotivated high water use households, increasing their average water use over the full period of the experiment. This result is supported by evidence that the competitive frame on rank information increased water use for households who ranked "last" in the peer group - a detrimental "last place effect" from competitively-framed rankings.

John A List, Warren McHone

Cited by*: 7 Downloads*: 2

This paper uses state-level pollution data from 1986-1997 to construct two indices that rank U.S. states according to environmental outputs. A major finding is that marginal performers in other indices, such as Wyoming, garner top spots in these ranking systems. The paper also presents findings from fixed and random effects models of panel data that imply state income levels are positively associated with environmental outputs after a threshold level of income is obtained.

Daniel J Benjamin, James O Berger, Magnus Johannesson, Brian A Nosek, E. J Wagenmakers, Richard Berk, Kenneth A Bollen, Bjorn Brembs, Lawrence Brown, Colin F Camerer, David Cesarini, Christopher D. Chambers, Merlise Clyde, Thomas D Cook, Paul De Boeck, Zoltan Dienes, Anna Dreber, Kenny Easwaran, Charles Efferson, Ernst Fehr, Fiona Fidler, Andy P. Field, Malcom Forster, Edward I. George, Tarun Ramadorai, Richard Gonzalez, Steven Goodman, Edwin Green, Donald P Green, Anthony Greenwald, Jarrod D. Hadfield, Larry V. Hedges, Leonhard Held, Teck Hau Ho, Herbert Hoijtink, James Holland Jones, Daniel J Hruschka, Kosuke Imai, Guido Imbens, John P.A. Ioannidis, Minjeong Jeon, Michael Kirchler, David Laibson , John A List, Roderick Little, Arthur Lupia, Edouard Machery, Scott E. Maxwell, Michael McCarthy, Don Moore, Stephen L. Morgan, Marcus Munafo, Shinichi Nakagawa, Brendan Nyhan, Timothy H Parker, Luis Pericchi, Marco Perugini, Jeff Rouder, Judith Rousseau, Victoria Savalei, Felix D. Schonbrodt, Thomas Sellke, Betsy Sinclair, Dustin Tingley, Trisha Van Zandt, Simine Vazire, Duncan J. Watts, Christopher Winship, Robert L. Wolpert, Yu Xie, Cristobal Young, Jonathan Zinman, Valen E. Johnson

Cited by*: 1 Downloads*: 965

We propose to change the default P-value threshold for statistical significance for claims of new discoveries from 0.05 to 0.005.

Erwin Bulte, John A List, Mark Strazicich

Cited by*: 17 Downloads*: 2

Recent empirical work suggests that (i) incomes are converging through time, and (ii) income and pollution levels are linked. This paper weds these two literatures by examining the spatial and temporal distribution of pollution. After establishing that theoretical predictions about whether pollution will converge are critically linked to certain structural parameters, we explore pollution convergence using state-level data on two important pollutants-nitrogen oxides and sulfur oxides-from 1929 to 1999. We find stronger evidence of converging emission rates during the federal pollution control years (1970-1999) than during the local control years (1929-1969). These results suggest that income convergence alone may not be sufficient to induce convergence of pollutant emissions.

Pascaline Dupas

Cited by*: 5 Downloads*: 10

An information campaign that provided Kenyan teenagers in randomly selected schools with the information that HIV prevalence was much higher among adult men and their partners than among teenage boys led to a 65% decrease in the incidence of pregnancies by adult partners among teenage girls in the treatment group relative to the comparison. This suggests a large reduction in the incidence of unprotected cross-generational sex. The information campaign did not increase pregnancies among teenage couples. These results suggest that the behavioral choices of teenagers are responsive to information on the relative risks of different varieties of a risky activity. Policies that focus only on the elimination of a risky activity and do not address risk reduction strategies may be ignoring a margin on which they can have substantial impact.

Uri Gneezy, Moshe Hoffman, John A List

Cited by*: 0 Downloads*: 0

We therefore agree with the sentiments of Bailey et al. (1) and Daly (2): Our study should not be viewed as the definitive study on this topic but as a proof of concept, which should propel researchers to exploit this unique sample to its fullest advantage. Further research using noncognitive measures, as well as alternative spatial measures would prove invaluable in addressing some of the shortcomings pointed out by Bailey et al. (1) and Daly (2). Moreover, such research would reveal the generality of our results and could focus activist efforts on traits that are most amenable to nurture. Also, if the measures are chosen to be more or less gender-dimorphic and more or less influenced by motivation, stereotype threat, and training, for example, this research, in addition to addressing some of the astute criticisms of Bailey et al. (1) and Daly (2), could also reveal mechanism, which would likewise be invaluable for focusing activists' efforts. We welcome collaboration with psychologists and anthropologists, such as the experts to whom this letter replies, to help us develop such measures of spatial and nonspatial cognitive abilities that are easy to explain and quick to implement, to take full advantage of this unique sample.

Eliot Abrams, Jonathan Libgober, John A List

Cited by*: None Downloads*: None

The past few decades have ushered in an experimental revolution in economics whereby scholars are now much more likely to generate their own data. While there are virtues associated with this movement, there are concomitant difficulties. Several scientific disciplines, including economics, have launched research registries in an effort to attenuate key inferential issues. This study assesses registries both empirically and theoretically, with a special focus on the AEA registry. We find that over 90% of randomized controlled trials (RCTs) in economics do not register, only 50% of the RCTs that register do so before the intervention begins, and the majority of these preregistrations are not detailed enough to significantly aid inference. Our empirical analysis further shows that using other scientific registries as aspirational examples is misguided, as their perceived success in tackling the main issues is largely a myth. In light of these facts, we advance a simple economic model to explore potential improvements. A key insight from the model is that removal of the (current) option to register completed RCTs could increase the fraction of trials that register. We also argue that linking IRB applications to registrations could further increase registry effectiveness.

Kuan-Ming Chen, Min Ding, John A List, Magne Mogstad

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Recent changes in labor arrangements have increased interest in estimating and understanding the value of job flexibility. We leverage a large natural field experiment at Uber to create exogenous variation in expected market wages across individuals and over time. Combining this experiment with high frequency panel data on wages and individual work decisions, we document how labor supply responds to exogenous changes in expected market wages in a setting with virtually no restrictions on drive labor allocation. We find that there is i) systematic heterogeneity in labor supply responses both across drivers and within a driver over time, ii) significant fixed costs of beginning a shift, and iii) high rider demand when it is costly for drivers to work. These three findings motivate a model of labor supply with heterogeneous preferences over work schedules, adjustment costs, and statistical dependence between market wages and the costs of driving. We recover the labor supply elasticities and reservation wages of this dynamic labor supply model via a combination of experimental estimates and other data moments. We then perform counterfactual analyses that allow us to examine how preference heterogeneity and adjustment costs influence the responses of workers' to wage incentives as well as infer drivers' willingness to pay for the ability to customize and adjust their work schedule. We also show that a static approach to the driver's dynamic problem delivers materially different estimates of workers' labor supply elasticities and their value of job flexibility.