Papers - Natural

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.

Todd Cherry, John A List

Cited by*: 7 Downloads*: 3

This paper uses county-level panel data to test the appropriateness of the 'one size fits all' reduced-form regression approach commonly used when estimating the economic model of crime. Empirical results provide initial evidence that previous studies, which restrict deterrent effects to have identical impacts across crime types, may be presenting statistically biased results.

Steven D Levitt, John A List, Chad Syverson

Cited by*: 7 Downloads*: 12

Productivity improvements within establishments (e.g., factories, mines, or retail stores) are an important source of aggregate productivity growth. Past research has documented that learning by doing-productivity improvements that occur in concert with production increases-is one source of such improvements. Yet little is known about the specific mechanisms through which such learning occurs. We address this question using extremely detailed data from an assembly plant of a major auto producer. Beyond showing that there is rapid learning by doing at the plant, we are able to pinpoint the processes by which these improvements have occurred.

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.

Benjamin A Olken

Cited by*: 6 Downloads*: 26

This paper examines the accuracy of beliefs about corruption, using data from Indonesian villages. Specifically, I compare villagers' stated beliefs about the likelihood of corruption in a road-building project in their village with a more objective measure of 'missing expenditures' in the project, which I construct by comparing the project's official expenditure reports with an independent estimate of the prices and quantities of inputs used in construction. I find that villagers' beliefs do contain information about corruption in the road project, and that villagers are sophisticated enough to distinguish between corruption in the road project and other types of corruption in the village. The magnitude of their information, however, is small, in part because officials hide corruption where it is hardest for villagers to detect. This may limit the effectiveness of grass-roots monitoring of local officials. I also find evidence of systematic biases in corruption beliefs, particularly when examining the relationship between corruption and variables correlated with trust. For example, ethnically heterogeneous villages have higher perceived corruption levels but lower actual levels of missing expenditures. The findings illustrate the limitations of relying solely on corruption perceptions, whether in designing anti-corruption policies or in conducting empirical research on corruption.

Macartan Humphreys, William Masters, Martin Sandbu

Cited by*: 6 Downloads*: 6

Despite a widespread trend towards the adoption of increasingly participatory approaches to political decision-making in developing countries there is little or no evidence that these practices in fact return the benefits attributed to them. We present an empirical investigation into one specific worry-that participatory decision processes may be vulnerable to manipulation by elites. We report on a field experiment on the effects of leaders, drawing on a unique nationwide experiment in democratic deliberation in Sao Tome and Principe. In these deliberations, meetings were moderated by discussion leaders who were randomly assigned to run meetings around the country. The randomization procedure provides a rare opportunity to identify the impact of leaders on the outcomes of group deliberations. We find that leadership effects were extremely large, in many cases accounting for over one third of all variation in the outcomes of the national discussions. These results have important implications for the design of such deliberative practices. While the total effect of leadership cannot be assessed, it is possible to observe leadership effects and to correct for variation in outcomes of meetings.

Ginger Z Jin, Andrew Kato

Cited by*: 6 Downloads*: 27

Economists accept consumer frauds as an equilibrium outcome of information costs. This paper empirically investigates what information is costly, what contribute to the information costs, and what institutions are more effective in reducing the information costs. We focus on one of the most complained about markets - Internet auctions. In a field experiment, we obtain actual baseball cards from both online and retail markets whose quality are then professionally graded and compared to the prices paid by online buyers for goods with similar claims. The experiment allows us to obtain a key variable - true quality - on top of price and seller ratings used in the existing literature. Our findings indicate that some naive buyers in the online ungraded market are misled by non-credible claims of quality. They pay higher prices but do not receive better quality and in fact are defrauded more often. In comparison, claim-driven frauds do not exist in retail or graded markets where buyers can observe card quality either through careful quality examination before purchase or a third-party grading service. Online seller reputation is found to be effective for identifying good-faith sellers. But conditional on completed auctions, reputable sellers do not provide better quality. More disturbingly, the price increase from making non-credible claims more than compensates for the lower likelihood of sale for sellers with low reputations. We attribute the naivete to misleading signals in the online ungraded market and two loopholes in the eBay rating system, namely universal rating and costless switching of anonymous identities. These loopholes reduce the precision and accessibility of seller information, and therefore add difficulties for naive buyers to become sophisticated. We also point out that naive buyers could impose several negative externalities on the other good-faith players in the market.

Jan Hansen, Carsten Schmidt, Martin Strobel

Cited by*: 6 Downloads*: 13

Political stock markets (PSM) are sometimes seen as substitutes for opinion polls. On the bases of a behavioural model, specific preconditions were drawn out under which manipulation in PSM can weaken this argument. Evidence for manipulation is reported from the data of two separate PSM during the Berlin 1999 state elections.

Sally Sadoff, Anya Samek, Charles Sprenger

Cited by*: 6 Downloads*: 40

We conduct a natural field experiment with over 200 customers at a grocery store to investigate dynamic inconsistency and the demand for commitment in food choice. Subjects are invited to allocate and re-allocate food items received as part of a grocery delivery program. We observe substantial dynamic inconsistency, as well as a demand for commitment among a non-negligible number of subjects. Interestingly, individuals who demand commitment are more likely to be dynamically consistent in their prior behavior. This work provides direct evidence of dynamic inconsistency in consumption choices in the field and points towards potential extensions to models of temptation.

Fuhai Hong, Tanjim Hossain, John A List, Migiwa Tanaka

Cited by*: 6 Downloads*: 98

A well-recognized problem in the multitasking literature is that workers might substantially reduce their effort on tasks that produce unobservable outputs as they seek the salient rewards to observable outputs. Since the theory related to multitasking is decades ahead of the empirical evidence, the economic costs of standard incentive schemes under multitasking contexts remain largely unknown. This study provides empirical insights quantifying such effects using a field experiment in Chinese factories. Using more than 2200 data points across 126 workers, we find sharp evidence that workers do trade off the incented output (quantity) at the expense of the non-incented one (quality) as a result of a piece rate bonus scheme. Consistent with our theoretical model, treatment effects are much stronger for workers whose base salary structure is a flat wage compared to those under a piece rate base salary. While the incentives result in a large increase in quantity and a sharp decrease in quality for workers under a flat base salary, they result only in a small increase in quantity without affecting quality for workers under a piece rate base salary.

Alan S Gerber, Donald P Green, Matthew N Green

Cited by*: 6 Downloads*: 3

Political campaigns currently make extensive use of direct mail, particularly in state and local races, yet its effects on voter behavior are not well understood. This essay presents the results of large-scale randomized field experiments conducted in Connecticut and New Jersey during state and municipal elections of 1999. Tens of thousands of registered voters were sent from zero to nine pieces of direct mail. The target populations included party registrants with a strong history of voter participation, independents, and a random subset of registered voters. Our results indicate partisan campaign mail does little to stimulate voter turnout and may even dampen it when the mail is negative in tone.

Gustavo J Bobonis, Edward Miguel, Charu P Sharma

Cited by*: 6 Downloads*: 22

Iron-deficiency anemia is among the world's most widespread health problems, especially for children, but it is rarely studied by economists. This paper evaluates the impact of a health intervention delivering iron supplementation and deworming drugs to 2-6 year old children through an existing pre-school network in the slums of Delhi, India. At baseline 69 percent of sample children were anemic and 30 percent had intestinal worm infections. Sample pre-schools were randomly divided into groups and gradually phased into treatment. Weight increased significantly among assisted children, and pre-school participation rates rose sharply by 5.8 percentage points - a reduction of one-fifth in school absenteeism - in the first five months of the program. Gains are largest in low socio-economic status areas. Year two estimates are similar, but two methodological problems--sample attrition, and the non-random sorting of new child cohorts into treatment groups--complicate interpretation of the later results.

Joshua D Clinton, John S Lapinski

Cited by*: 6 Downloads*: 6

Scholars disagree whether negative advertising demobilizes or stimulates the electorate. We use an experiment with over 10,200 eligible voters to evaluate the two leading hypotheses of negative political advertising. We extend the analysis to examine whether advertising differentially impacts the turnout of voter subpopulations depending on the advertisement's message. In the short term, we find no evidence that exposure to negative advertisements decreases turnout and little that suggests it increases turnout. Any effect appears to depend upon the message of the advertisement and the characteristics of the viewer. In the long term, we find little evidence that the information contained in the treatment groups' advertisements is sufficient to systematically alter turnout.

John A List

Cited by*: 5 Downloads*: 0

Walrasian tatonnement has been a fundamental assumption in economics ever since Walras' general equilibrium theory was introduced in 1874. Nearly a century after its introduction, Vernon Smith relaxed the Walrasian tatonnement assumption by showing that neoclassical competitive market theory explains the equilibrating forces in "double-auction" markets. I make a next step in this evolution by exploring the predictive power of neoclassical theory in decentralized naturally occurring markets. Using data gathered from two distinct markets- the sports card and collector pin markets-I find a tendency for exchange prices to approach the neoclassical competitive model prediction after a few market periods.

Alan S Gerber, Donald P Green

Cited by*: 5 Downloads*: 30

No abstract available

Omar Al-Ubaydli, John A List

Cited by*: 5 Downloads*: 89

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.

Tim Jeppesen, John A List, Daan van Soest

Cited by*: 5 Downloads*: 6

Empirical tests of the relationship between international competitiveness and the severity of environmental regulations are hampered by the lack of pollution abatement cost data for non-U.S. countries. The theory of the firm suggests that environmental stringency can be measured by the difference between a polluting input's shadow price and its market price. We make a first attempt at quantifying such a measure for two industries located in nine European OECD countries. Overall, we provide (i) a new approach to measure cross-country regulatory differences in that we use a theoretically attractive measure of industry-specific private compliance cost, and (ii) empirical estimates that are an attractive tool for researchers and policymakers who are interested in examining how economic activity is influenced by compliance costs.

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.

Charles Bellemare

Cited by*: 5 Downloads*: 11

We present results from a field experiment testing the gift-exchange hypothesis inside a tree-planting firm paying its workforce incentive contracts. Firm managers told a crew of tree planters they would receive a pay raise for one day as a result of a surplus not attribuable to past planting productivity. We compare planter productivity - the number of trees planted per day - on the day the gift was handed out with productivity on previous and subsequent days of planting on the same block, and thus under similar planting conditions. We find direct evidence that the gift had a significant and positive effect on daily planter productivity, controlling for planter-fixed effects, weather conditions and other random daily shocks. Moreover, reciprocity is the strongest when the relationship between planters and the firm is long term.

Dean S Karlan, Jonathan Zinman

Cited by*: 5 Downloads*: 17

Expanding access to commercial credit is a key ingredient of financial development strategies. There is less consensus on whether expanding access to consumer credit helps borrowers, particularly when loans are extended at high interest rates. Popular skepticism about "unproductive," "usurious" lending is fueled by research highlighting behavioral biases that may induce overborrowing. We estimate the impacts of expanding access to consumer credit at a 200% annual percentage rate (APR) using a field experiment and follow-up data collection. The randomly assigned marginal loans produced significant net benefits for borrowers across a wide range of outcomes. There is also some evidence that the loans were profitable.