John A List, Jeffrey A Livingston, Susanne Neckermann
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In the face of worryingly low performance on standardized test, offering students financial incentives linked to academic performance has been proposed as a potentially cost-effective way to support improvement. However, a large literature across disciplines finds that extrinsic incentives, once removed, may crowd out intrinsic motivation on subsequent, similar tasks. We conduct a field experiment where students, parents, and tutors are offered incentives designed to encourage student preparation for a high-stakes state test. The incentives reward performance on a separate low-stakes assessment designed to measure the same skills as the high-stakes test. Performance on the high-stakes test, however, is not incentivized. We find substantial treatment effects on the incented tests but no effect on the non-incented test; if anything, the incentives result in worse performance on the non-incented test. We also find evidence supporting the conclusion that the incentives crowd out intrinsic motivation to perform well on the non-incented test, but this effect is only temporary. One year later, students who had been in the incentives treatments perform better than those in the control on the same non-incented test.
Basil Halperin, Benjamin Ho, John A List, Ian Muir
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We use a theory of apologies to analyze a nationwide field experiment involving 1.5 million Uber ridesharing consumers who experienced late rides. Several insights emerge. First, apologies are not a panacea: the efficacy of an apology and whether it may backfire depend on how the apology is made. Second, across treatments, money speaks louder than words - the best form of apology is to include a coupon for a future trip. Third, in some cases sending an apology is worse than sending nothing at all, particularly for repeated apologies. For firms, caveat venditor should be the rule when considering apologies.
Hansika Kapoor, Savita Kulkarni, Anirudh Tagat
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This study aims to investigate intra-household bargaining outcomes elicited in an artefactual field experiment design where participants completed a purchase task of real commodities. Married couples separately expressed their initial preferences over commodities. The bargaining process in the experiment was exogenously introduced by sharing information about partners' preferences in the treatment group. We hypothesized that the spouse with weaker bargaining position at the household level would consider the information of their partner's preferences while making own consumption decisions more compared to their partner. Therefore, they may deviate from their own preferences when purchasing commodities. More than 230 married couples from two villages in the Tamil Nadu state of India participated in the experiment. It was observed that information about partners' spending preferences resulted in reduced final allocation for female participants. However, the deviation was not significantly different from the original intention to spend. Therefore, information about partners' preferences may not be an effective medium to elicit bargaining power in the context of jointly-consumed household commodities. Subgroup analyses were performed to identify any heterogeneous treatment effects.
Andreas Leibbrandt, John A List
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Labor force composition and the allocation of talent remain of vital import to modern economies. For their part, governments and companies around the globe have implemented equal employment opportunity (EEO) regulations to influence labor market flows. Even though such regulations are pervasive, surprisingly little is known about their impacts. We use a natural field experiment conducted across 10 U.S. cities to investigate if EEO statements in job advertisements affect the first step in the employment process, application rates. Making use of data from nearly 2,500 job seekers, we find considerable policy effects, but in an unexpected direction: the presence of an EEO statement dampens rather than encourages racial minorities willingness to apply for jobs. Importantly, the effects are particularly pronounced for educated job seekers and in cities with white majority populations. Complementary survey evidence suggests the underlying mechanism at work is "tokenism", revealing that EEO statements backfire because racial minorities avoid environments in which they are perceived as regulatory, or symbolic, hires rather than being hired on their own merits. Beyond their practical and theoretical importance, our results highlight how field experiments can significantly improve policy making. In this case, if one goal of EEO regulations is to enhance the pool of minority applicants, then it is not working.
Alec Brandon, John A List, Robert D Metcalfe, Michael K Price, Florian Rundhammer
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This study considers the response of household electricity consumption to social nudges during peak load events. Our investigation considers two social nudges. The first targets conservation during peak load events, while the second promotes aggregate conservation. Using data from a natural field experiment with 42,100 households, we find that both social nudges reduce peak load electricity consumption by 2 to 4% when implemented in isolation and by nearly 7% when implemented in combination. These findings suggest an important role for social nudges in the regulation of electricity markets and a limited role for crowd out effects.
Rudolf Kerschbamer, Daniel Neururer, Matthias Sutter
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Honesty is a fundamental pillar for cooperation in human societies and thus for their economic welfare. However, humans do not always act in an honest way. Here, we examine how insurance coverage affects the degree of honesty in credence good markets. Such markets are plagued by strong incentives for fraudulent behavior of sellers, resulting in estimated annual costs of billions of dollars to costumers and the society as a whole. Prime examples of credence goods are all kinds of repair services, the provision of medical treatments, the sale of software programs, and the provision of taxi rides in unfamiliar cities. We examine in a natural field experiment how computer repair shops take advantage of costumers' insurance for repair costs. In a control treatment, the average repair price is about EUR 70, whereas the repair bill increases by more than 80% when the service provider is informed that an insurance would reimburse the bill. Our design allows decomposing the sources of this economically impressive difference, showing that it is mainly due to the overprovision of parts and overcharging of working time. A survey among repair shops shows that the higher bills are mainly ascribed to insured costumers being less likely to be concerned about minimizing costs because a third party (the insurer) pays the bill. Overall, our results strongly suggest that insurance coverage greatly increases the extent of dishonesty in important sectors of the economy with potentially huge costs to costumers and whole economies.
John A List, Zacharias Maniadis, Fabio Tufano
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The sciences are in an era o fan alleged "credibility crisis'. In this study, we discuss the reproducibility of empirical results, focusing on economics research. By combining theory and empirical evidence, we discuss the import of replication studies, and whether they improve our confidence in novel findings. The theory sheds light on the importance of replications, even when replications are subject to bias. We then present a pilot meta-study of replication in experimental economics, a subfield serving as a positive benchmark for investigating the credibility of economics. Our meta-study highlights certain difficulties when applying meta-research (Ioannidis et al., 2015) and systematizing the economics literature.
Avner Ben-Ner, John A List, Louis Putterman, Anya Samek
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An active area of research within the social sciences concerns the underlying motivation for sharing resources and engaging in other pro-social actions. In this paper we ask: do parents model social preference behavior to children, and do children emulate this behavior? We develop a theoretical framework to examine this question, and conduct an experiment with 147 3 to 5 year old children and their parents, using dictator games to measure generosity. We find (1) evidence of parental teaching/modeling in the case of fathers and in that of parents of relatively generous children, and (2) an emulation effect such that children who initially share less than half of their endowment subsequently share more the more they see a parent or other adult share. We find little correlation between baseline sharing of children and the parents, with the possible exception of the oldest children.
Glenn W Harrison, John A List
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Experimental economists are leaving the reservation. They are recruiting subjects in the field rather than in the classroom, using field goods rather than induced valuations, and using field context rather than abstract terminology in instructions. We argue that there is something methodologically fundamental behind this trend. Field experiments differ from laboratory experiments in many ways. Although it is tempting to view field experiments as simply less controlled variants of laboratory experiments, we argue that to do so would be to seriously mischaracterize them. What passes for "control" in laboratory experiments might in fact be precisely the opposite if it is artificial to the subject or context of the task. We propose six factors that can be used to determine the field context of an experiment: the nature of the subject pool, the nature of the information that the subjects bring to the task, the nature of the commodity, the nature of the task or trading rules applied, the nature of the stakes, and the environment that subjects operate in.
Hans P Binswanger
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Attitudes toward risk were measures in 240 households using two methods: an interview method eliciting certainty equivalents and an experimental gambling approach with real payoffs which, at their maximum, exceeded monthly incomes of unskilled laborers. The interview method is subject to interviewer bias and its results were totally inconsistent with the experimental measures of risk aversion. Experimental measures indicate that, at high payoff levels, virtually all individuals are moderately risk-averse with little variation according to personal characteristics. Wealth tends to reduce risk aversion slightly, but its effect is not statistically significant.