Omar Al-Ubaydli, Steffen Andersen, Uri Gneezy, John A List
Cited by*: 0 Downloads*: 2

Constructing compensation schemes for effort in multi-dimensional tasks is complex, particularly when some dimensions are not easily observable. When incentive schemes contractually reward workers for easily observed measures, such as quantity produced, the standard model predicts that unrewarded dimensions, such as quality, will be neglected. Yet, there remains mixed empirical evidence in favor of this standard principal-agent model prediction. This paper reconciles the literature by using both theory and empirical evidence. The theory outlines conditions under which principals can use a piece rate scheme to induce higher quantity and quality levels than analogous fixed wage schemes. Making use of a series of complementary laboratory and field experiments we show that this effect occurs because the agent is uncertain about the principal's monitoring ability and the principal's choice of a piece rate signals to the agent that she is efficient at monitoring.
Steffen Andersen, Erwin Bulte, Uri Gneezy, John A List
Cited by*: 16 Downloads*: 27

No abstract available
Steffen Andersen, Seda Ertac, Uri Gneezy, John A List, Sandra Maximiano
Cited by*: 35 Downloads*: 2

Recent literature presents evidence that men are more competitively inclined than women. Since top-level careers usually require competitiveness, competitiveness differences provide an explanation for gender gaps in wages and differences in occupational choice. A natural question is whether women are born less competitive or whether they become so through the process of socialization. To pinpoint when in the socialization process the difference arises, we compare the competitiveness of children in matrilineal and patriarchal societies. We find that while there is no difference at any age in the matrilineal society, girls become less competitive around puberty in the patriarchal society.
Steffen Andersen, Glenn W Harrison, Morten I Lau, Elisabet E Rutstrom
Cited by*: 4 Downloads*: 16

Economists recognize that preferences can differ across individuals. We examine the strengths and weaknesses of lab and field experiments to detect differences in preferences that are associated with standard, observable characteristics of the individual. We consider preferences over risk and time, two fundamental concepts of economics. Our results provide striking evidence that there are good reasons to conduct field experiments. The lab fails to detect preference heterogeneity that is present in the field, obviously due to the demographic homogeneity of the lab. There are also differences in treatment effects measured in the lab and the field that can be traced to interactions between treatment and demographic effects. These can only be detected and controlled for properly in the field data. Thus one cannot simply claim, without additional empirical argument or assumption, that treatment effects estimated in the lab are reliable.
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.
Steffen Andersen, Alec Brandon, Uri Gneezy, John A List
Cited by*: 6 Downloads*: 51

Perhaps the most powerful form of framing arises through reference dependence, wherein choices are made recognizing the starting point or a goal. In labor economics, for example, a form of reference dependence, income targeting, has been argued to represent a serious challenge to traditional economic models. We design a field experiment linked tightly to three popular economic models of labor supply-two behavioral variants and one simple neoclassical model--to deepen our understanding of the positive implications of our major theories. Consistent with neoclassical theory and reference--dependent preferences with endogenous reference points, workers (vendors in open air markets) supply more hours when presented with an expected transitory increase in hourly wages. In contrast with the prediction of behavioral models, however, when vendors earn an unexpected windfall early in the day, their labor supply does not respond. A key feature of our market in terms of parsing the theories is that vendors do not post prices rather they haggle with customers. In this way, our data also speak to the possibility of reference-dependent preferences over other dimensions. Our investigation again yields results that are in line with neoclassical theory, as bargaining patterns are unaffected by the unexpected windfall.
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