Papers - All

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.

Yan Chen, Peter Cramton, John A List, Axel Ockenfels

Cited by*: None Downloads*: None

We review past research and discuss future directions on how the vibrant research areas of market design and behavioral economics have influenced and will continue to impact the science and practice of management in both the private and public sectors. Using examples from various auction markets, reputation and feedback systems in online markets, matching markets in education, and labor markets, we demonstrate that combining market design theory, behavioral insights, and experimental methods can lead to fruitful implementation of superior market designs in practice.

David P Tracer

Cited by*: 0 Downloads*: 56

In order to test the proposition that performance in bargaining experiments is significantly affected by degree of monetarization, market integration, and relative westernization, a one-shot Ultimatum Game was conducted during the months of June and July 1998 in two villages in a rural region of Papua New Guinea: Anguganak (where the people speak Au) and Bogasip (where they speak Gnau). Although the villages are located in close proximity to one another and are relatively homogeneous culturally, and both subsist using a mixture of foraging and horticulture and have an elaborate system of exchange relationships, they are distinguished by their average degree of exposure to and integration in a cash-based economy, as well as their degree of education (both are greater in Anguganak). The different sections of the chapter provide: an ethnographic account of the two villages; a description of the experimental methods employed; a presentation and analysis of the results in terms of various indicators of wealth and market integration; and a discussion of the implications of the results. The level of offers made in the Ultimatum Game data combined for Anguganak and Bogasip were between those in western industrialized populations and the Machiguenga of Peru. There was some indication that variability in the level of market integration between the two village populations may have influenced the results, although they appeared to be equally influenced by local beliefs on reciprocity, generosity, and indebtedness, and an unfamiliarity with impersonal transactions.

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.

Craig Gallet, John A List

Cited by*: 0 Downloads*: 1

This paper uses market share data to infer the nature of rivalry in the U.S. cigarette industry over the 1934-94 period. Unlike previous studies, which measure rivalry from various constructs of market share instability, we examine the time-series properties of market shares to determine whether or not rivalry is evident. Our empirical results imply that a majority of firm-level market shares are martingales, suggesting market shares have been unstable from 1934-94. This result leads us to conclude that rivalry in the cigarette industry has remained strong.

John A List, Daniel Rondeau

Cited by*: 31 Downloads*: 11

This study designs a natural field experiment linked to a controlled laboratory experiment to examine the effectiveness of matching gifts and challenge gifts, two popular strategies used to secure a portion of the $200 billion annually given to charities. We find evidence that challenge gifts positively influence contributions in the field, but matching gifts do not. Methodologically, we find important similarities and dissimilarities between behavior in the lab and the field. Overall, our results have clear implications for fundraisers and provide avenues for future empirical and theoretical work on charitable giving.

Richard Martin, John Randal

Cited by*: 0 Downloads*: 11

We describe a natural field experiment investigating donation behaviour. The setting was an art gallery where donations could be deposited into a transparent box in the foyer. Two aspects of the donation environment were manipulated: signs on the donation box and the initial contents of the box. We used three sign treatments: a control with no sign, a sign that thanked donors, and a sign that indicated donations would be matched. We used two initial contents treatments: one with relatively little money ($50) and one with four times as much. The average donation per donor was significantly larger in the $200 treatments but this was offset by a decrease in the propensity to donate. In the matching treatments donations were significantly larger both at the per donor and per visitor level. A control donate variable turned out to have the largest influence on donation behaviour: the day of the week. The average donation per visitor was 51% higher on Sundays, when compared to every other day of the week.

Rene Bekkers

Cited by*: 20 Downloads*: 112

A field study of altruistic behaviour is presented using a modification of the dictator game in a large random sample survey in the Netherlands (n=1,964). In line with laboratory experiments, only 5.7% donated money. In line with other survey research on giving, generosity increased with age, education, income, trust, and prosocial value orientation.

Uditi Karna, Min Sok Lee, John A. List, Andrew Simon, Haruka Uchida

Cited by*: Downloads*:

Educational disparities remain a key contributor to increasing social and wealth inequalities. To address this, researchers and policymakers have focused on average differences between racial groups or differences among students who are falling behind. This focus potentially leads to educational triage, diverting resources away from high-achieving students, including those from racial minorities. Here we focus on the "racial excellence gap" - the difference in the likelihood that students from racial minorities (Black and Hispanic) reach the highest levels of academic achievement compared with their non-minority (white and Asian) peers. There is a shortage of evidence that systematically measures the magnitude of the excellence gap and how it evolves. Using longitudinal, statewide, administrative data, we document eight facts regarding the excellence gap from third grade (typically ages 8-9) to high school (typically ages 14-18), link the stability of excellence gaps and student backgrounds, and assess the efficacy of public policies. We show that excellence gaps in maths and reading are evident by the third grade and grow slightly over time, especially for female students. About one third of the gap is explained by a student's socioeconomic status, and about one tenth is explained by the school environment. Top-achieving racial minority students are also less likely to persist in excellence as they progress through school. Moreover, state accountability policies that direct additional resources to reduce non-race-based inequality had minimal effects on the racial excellence gaps. Documenting these patterns is an important step towards eliminating excellence gaps and removing the "racial glass ceiling".

Uri Gneezy, John A List, Jeffrey A Livingston, Xiangdong Qin, Sally Sadoff, Yang Xu

Cited by*: 1 Downloads*: 124

Tests measuring and comparing educational achievement are an important policy tool. We experimentally show that offering students extrinsic incentives to put forth effort on such achievement tests has differential effects across cultures. Offering incentives to U.S. students, who generally perform poorly on assessments, improved performance substantially. In contrast, Shanghai students, who are top performers on assessments, were not affected by incentives. Our findings suggest that in the absence of extrinsic incentives, ranking countries based on low-stakes assessments is problematic because test scores reflect differences in intrinsic motivation to perform well on the test itself, and not just differences in ability.

John A List, Warren McHone

Cited by*: 0 Downloads*: 9

In this article, we use annual (1980-90) county-level manufacturing plant location data for New York State to examine the effects of the 1977 Clean Air Act Amendments on the location decisions of new pollution-intensive manufacturing plants in the "neo-regulatory" (1980-84) and "mature-regulatory" (1985-90) phases of the Act's implementation. Our results suggest that the temporal effects of regulation vary. Whereas the location decisions of pollution intensive manufacturing firms were unaffected by the Act's regulatory restrictions in the "neo-regulatory" period, the restrictions appear to have had a significant negative impact on the location decisions of these types of firms in the Act's "mature-regulatory" phase. The diversion of new pollution intensive plants to counties with less stringent environmental regulations suggests that current US environmental regulations may be leading to a "browning process" whereby counties historically free of pollution become havens for polluters.

Katherine L. Milkman, Sean F. Ellis, Dena M. Gromet, Youngwoo Jung, Alex S. Luscher, Rayyan S. Mobarak, Madeline K. Paxson, Ramon A. Silvera Zumaran, Robert Kuan, Ron Berman, Neil A. Lewis Jr, John A. List, Mitesh S. Patel, Christophe Van den Bulte, Kevin G. Volpp, Maryann V. Beauvais, Jonathon K. Bellows, Cheryl A. Marandola, Angela L. Duckworth

Cited by*: None Downloads*: None

Encouraging routine COVID-19 vaccinations will probably be a crucial policy challenge for decades to come. To avert hundreds of thousands of unnecessary hospitalizations and deaths, adoption will need to be higher than it was in the autumn of 2022 or 2023, when less than one-fifth of Americans received booster vaccines. One approach to encourage vaccination is to eliminate the friction of transportation hurdles. Previous research has shown that friction can hinder follow-through and that individuals who live farther from COVID-19 vaccination sites are less likely to get vaccinated. However, the value of providing free round-trip transportation to vaccination sites is unknown. Here we show that offering people free round-trip Lyft rides to pharmacies has no benefit over and above sending them behaviourally informed text messages reminding them to get vaccinated. We determined this by running a megastudy with millions of CVS Pharmacy customers in the United States testing two effects: free round-trip Lyft rides to CVS Pharmacies for vaccination appointments, and seven different sets of behaviourally informed vaccine reminder messages. Our results suggest that offering previously vaccinated individuals free rides to vaccination sites is not a good investment in the United States, which is contrary to the high expectations of both expert and lay forecasters. Instead, people in the United States should be sent behaviourally informed COVID-19 vaccination reminders, which increased the 30-day COVID-19 booster uptake by 21% (1.05 percentage points) and spilled over to increase 30-day influenza vaccinations by 8% (0.34 percentage points) in our megastudy. More rigorous testing of interventions to promote vaccination is needed to ensure that evidence-based solutions are deployed widely and that ineffective but intuitively appealing tools are discontinued.

Jie Bai

Cited by*: 0 Downloads*: 157

There is often a lack of reliable high quality provision in many markets in developing countries. I designed an experiment to understand this phenomenon in a setting that features typical market conditions in a developing country: the retail watermelon market in a major Chinese city. I begin by demonstrating empirically that there is substantial asymmetric information between sellers and buyers on sweetness, the key indicator of quality for watermelons, yet sellers do not sort and price watermelons by quality. I then randomly introduce one of two branding technologies into 40 out of 60 markets-one sticker label that is widely used and often counterfeited and one novel laser-cut label. I track sellers' quality, pricing and sales over an entire season and collect household panel purchasing data to examine the demand side's response. I find that laser branding induced sellers to provide higher quality and led to higher sales profits, establishing that reputational incentives are present and can be made to pay. However, after the intervention was withdrawn, all markets reverted back to baseline. To rationalize the experimental findings, I build an empirical model of consumer learning and seller reputation. The structural estimates suggest that consumers are hesitant to upgrade their perception about quality under the existing branding technology, which makes reputation building a low return investment. While the new technology enhances consumer learning, the resulting increase in profits is not sufficient to cover the fixed cost of the technology for small individual sellers. Counterfactual analysis shows that information frictions and fragmented markets lead to significant under-provision of quality. Third-party interventions that subsidize initial reputation building for sellers could improve welfare.

Juan-Camilo Cardenas

Cited by*: 0 Downloads*: 50

En esta ponencia queremos explorar, a partir de nuestros resultados de investigacion, posibles puentes de complementariedad y sinergia entre la economia experimental y los m_todos participativos de investigacion, para poder estudiar problemas rurales, en particular aquellos asociados al uso de recursos naturales por parte de las comunidades. Desde el 1er semestre del 2001 hasta la fecha hemos realizado una serie de talleres y experimentos economicos en varias comunidades del pas. En esta ponencia vamos a hacer referencia a los tres estudios de caso que se realizaron en el proyecto "Regulacion de Recursos Comunitarios: Ejercicios economicos en el campo" que se llevaron a cabo en el Neusa y la Vega en Cundinamarca, y el Parque Sanquianga en Nario. El proposito de estos estudios de caso era estudiar los problemas del uso comunitario de recursos como la pesca, la piangua y o el agua en una microcuenca. En cada comunidad se realizaron 26 sesiones de experimentos economicos con participacion de 130 campesinos en cada comunidad; igualmente se llevaron a cabo talleres y ejercicios desde el Diagnostico Rural Participativo (DRP) para discutir con los mismos participantes tanto los resultados de los experimentos como la problem_tica asociada al uso de estos recursos naturales. Dicha informacion fue sistematizada con el fin de contrastar los tres casos, y las posibles consistencias entre dos aproximaciones (economia experimental y herramientas participativas) que hasta el momento no han sido utilizadas de manera conjunta ni para las mismas situaciones. Como se presentar_, la economia experimental ofrece potencialidades interesantes para estudiar la validez de los modelos economicos de comportamiento de las personas frente a, por ejemplo, los dilemas del uso de recursos colectivos; igualmente puede ofrecer informacion muy detallada y verificable acerca de las decisiones micro de las personas; por su parte las metodolog?as participativas permiten explicar procesos y situaciones que un agente externo dif?cilmente puede comprender acerca de las causalidades e interacciones de factores que afectan la problem_tica de una comunidad. A traves de estos instrumentos podemos mostrar como estas dos metodologias pueden de una manera eficaz responder a preguntas centrales acerca del uso comunitario de recursos.

Xavier Gine, Pamela Jakiela, Dean S Karlan, Jonathan Morduch

Cited by*: 3 Downloads*: 15

Microfinance has been heralded as an effective way to address imperfections in credit markets. But from a theoretical perspective, the success of microfinance contracts has puzzling elements. In particular, the group-based mechanisms often employed are vulnerable to free-riding and collusion, although they can also reduce moral hazard and improve selection. The authors created an experimental economics laboratory in a large urban market in Lima, Peru and over seven months conducted 11 different games that allow them to unpack microfinance mechanisms in a systematic way. They find that risk-taking broadly conforms to predicted patterns, but that behavior is safer than optimal. The results help to explain why pioneering microfinance institutions have been moving away from group-based contracts.

John Gibson, David McKenzie, Steven Stillman

Cited by*: 3 Downloads*: 13

People migrate to improve their well-being, whether through an expansion of economic and social opportunities or a reduction in persecution. Yet a large literature suggests that migration can be a very stressful process, with potentially negative impacts on mental health reducing the net benefits of migration. However, to truly understand the effect of migration on mental health one must compare the mental health of migrants to what their mental health would have been had they stayed in their home country. The existing literature is not able to do this and typically settles for comparing the mental health of migrants to that of natives in the destination country, which takes no account of any pre-existing differences between these groups. This paper overcomes the selection problems affecting previous studies of the effect of migration on mental health by examining a migrant lottery program. New Zealand allows a quota of Tongans to immigrate each year with a lottery used to choose amongst the excess number of applicants. A unique survey conducted by the authors in these two countries allows experimental estimates of the mental health effects of migration to be obtained by comparing the mental health of migrants who were successful applicants in the lottery to the mental health of those who applied to migrate under the quota, but whose names were not drawn in the lottery. Migration is found to lead to improvements in mental health, particularly for women and those with poor mental health in their home country.

David M Harrison, Mark A. Lane, Michael J. Seiler

Cited by*: 4 Downloads*: 0

This study examines the herding behavior of individuals in the context of their willingness to strategically default on a mortgage based on the (falsely) observed behavior of those around them. We find that homeowners are easily persuaded to follow the herd and adopt a strategic default proclivity consistent with that of their peers. Herding behavior is stronger when a Maven, or thought leader, is involved and weaker when the person finds strategic default to be morally objectionable. Homeowners appear to herd more for informational gains rather than for social reasons, and do not herd differentially based on signal strength. In a robustness check using a sample of real estate professionals, the strong mimetic herding result continues to hold.

Guodong Gao, Tianshu Sun, Ginger Zhe Jin

Cited by*: 0 Downloads*: 64

While much research has examined the role of technology in moderating online user connections, how IT motivates offline interactions among users is much less understood. Using a randomized field experiment involving 80,000 participants, we study how mobile messaging can leverage recipients' social ties to encourage blood donation. There are three main findings: first, both behavior intervention (in the form of reminder message) and economic reward (in the form of individual or group reward) increase donations, but only the messages with group reward are effective in motivating more donors to donate with their friend(s); second, group reward tends to attract different types of donors, especially those who are traditionally less active in online social setting; and third, across all treatments, message recipients donate a greater amount of blood if their friends are present. Structural estimation further suggests that rewarding group donors is four times more cost-effective than rewarding individual donors. Based on the structural estimates, we perform policy simulations on the optimal design of mobile messaging. The method of combining structural model and randomized field experiment opens new frontiers for research on leveraging IT to mobilize a user's social network for social good.

Ryan D Friedrichs

Cited by*: 0 Downloads*: 14

No abstract available

Donald P Green

Cited by*: 0 Downloads*: 1

This essay summarizes the results of a large-scale randomized experiment conducted during the 2000 election campaign by the NAACP National Voter Fund, which sought to mobilize African-American voters. Focusing solely on the direct mail and phone banking components of the NAACP-NVF campaign, this study examines the voting behavior of 980,208 participants residing in single-voter households, 1.7 percent of whom were randomly assigned to a control group. The experiment permits us to estimate (1) the extent to which the National Voter Fund's phone calls and direct mail increased voter turnout and (2) the approximate cost per vote. Within this sample, the NVF's two pieces of GOTV mail, three live phone calls, and two recorded phone calls had modest effects, generating approximately 7,100 additional votes at $158 per vote. The upper bound of a 90 percent confidence interval puts these figures at 16,214 additional votes at $69 per vote.