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Inequality of opportunity, particularly when overlaid with socioeconomic, ethnic, or cultural differences, may limit the scope of cooperation between individuals. A central question, then, is how to overcome such obstacles to cooperation. We study this question in the context of Germany, by asking whether the propensity of immigrant youth to cooperate with native peers was affected by a major integration reform: the introduction of birthright citizenship. Our unique setup exploits data from a large-scale lab-in-the-field experiment in a quasi-experimental evaluation framework. We find that the policy caused male, but not female, immigrants to significantly increase their cooperativeness toward natives. We show that the increase in out-group cooperation among immigrant boys is an outcome of more trust rather than a reflection of stronger other- regarding preferences towards natives. In exploring factors that may explain these behavioral effects, we present evidence that the policy also led to a near-closure of the educational achievement gap between young immigrant men and their native peers. Our results highlight that, through integration interventions, governments can modify prosocial behavior in a way that generates higher levels of efficiency in the interaction between social groups.

We investigate how inviting students to set task-based goals affects usage of an online learning platform and course performance. We design and implement a randomized field experiment in a large mandatory economics course with blended learning elements. The low-cost treatment induces students to use the online learning system more often, more intensively, and to begin earlier with exam preparation. Treated students perform better in the course than the control group: they are 18.8% (0.20 SD) more likely to pass the exam and earn 6.7% (0.19 SD) more points on the exam. There is no evidence that treated students spend significantly more time, rather they tend to shift to more productive learning methods. The heterogeneity analysis suggests that higher treatment effects are associated with higher levels of behavioral bias but also with poor early course behavior.

The stability of many post-conflict societies rests on the successful reintegration of former soldiers. We use an experimental approach to study reintegration in Northern Uganda and examine behavior of former soldiers together with the behavior of receiving communities towards this group. We focus on trust-based interactions and find that individual trustworthiness increases with the length of time a person was with the Lord's Resistance Army, a rebel group which forcibly recruited a large fraction of young people in the area. The effect is strongest among former soldiers who were abducted during childhood and is mute among those who soldiered during adulthood. These results are consistent with predictions of recent theories that highlight the importance of cooperation during war. Furthermore, members of receiving communities with an abductee son, who thus have better knowledge of former soldiers are aware of the behavioral difference. They believe former soldiers are more trustworthy than their peers and trust them more. Last, we find no evidence of preference-based discrimination, suggesting that anger is attenuated when communities do not attribute responsibility for committed violence to returning soldiers.

We study how friendship shapes students' political opinions in a natural experiment. We use the indicator whether two students were exogenously assigned to a short-term "integration group", unrelated to scholar activities and dissolved before the school year, as instrumental variable for their friendship, to estimate the effect of friendship on pairwise political opinion outcomes in dyadic regressions. After six months, friendship causes a reduction of differences in opinions by one quarter of the mean difference. It likely works through a homophily-enforced mechanism, by which friendship causes politically-similar students to join political associations together, which reinforces their political similarity. The effect is strong among initially similar pairs, but absent in dissimilar pairs. Friendship affects opinion gaps by reducing divergence, therefore polarization and extremism, without forcing individuals' views to converge. Network characteristics also matter to the friendship effect.

We show that grit, a non-cognitive skill that has been shown to be highly predictive of achievement, is malleable in the childhood period and can be fostered in the classroom environment. Our evidence comes from an evaluation of a randomized educational intervention implemented in elementary schools in Istanbul. Outcomes are measured via a novel incentivized real effort task and actual school grades on core subjects. We find that treated students are 1) more likely to choose to undertake a more challenging and more rewarding task against an easier but less rewarding alternative, 2) less likely to give up after failure, 3) more likely to exert effort to accumulate task-specific ability, and consequently, 4) more likely to succeed and collect higher payoffs. The intervention also has a significant impact on school grades: We find that treated students are about 3 percentage points more likely to receive top grades in core academic subjects.

This paper reports the results from a controlled field experiment designed to investigate the causal effect of unannounced, public recognition on employee performance. We hired more than 300 employees to work on a three-hour data-entry task. In a random sample of work groups, workers unexpectedly received recognition after two hours of work. We find that recognition increases subsequent performance substantially, and particularly when recognition is exclusively provided to the best performers. Remarkably, workers who did not receive recognition are mainly responsible for this performance increase. Our results are consistent with workers having a preference for conformity and being reciprocal at the same time. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2015.2291 . This paper was accepted by John List, behavioral economics.

In the television show Affari Tuoi a contestant is endowed with a sealed box containing a monetary prize between one cent and half a million euros. In the course of the show the contestant learns more information about the distribution of possible monetary prizes inside her box. Consider two groups of contestants, who learned that the chances of their boxes containing a large prize are 20% and 80% correspondingly. Contestants in both groups receive qualitatively similar price offers for selling the content of their boxes. If contestants are less risk averse when facing unlikely gains, the price offer is likely to be more frequently rejected in the first group than in the second group. However, the fraction of rejections is virtually identical across two groups. Thus, contestants appear to have identical risk attitudes over (large) gains of low and high probability.

Regulation fostering Managed Care alternatives in health insurance is spreading. This work reports on an experiment designed to measure the amounts of compensation asked by the Swiss population (in terms of reduced premiums) for Managed-Care type restrictions in the provision of health care. It finds that restrictions on the freedom of physician choice would require an average compensation of more than one-third of the premium, while generic substitution even meets with a small willingness to pay. Marked preference heterogeneity is an argument against regulation imposing uniformity of contract in Swiss social health insurance.

In this study, we consider how gift-exchange and bonus systems function in a natural field setting by measuring the effort response of participants to non-monetary gifts over time. Our field experiment tests the difference in effort response to unconditional gifts delivered immediately, promised unconditional gifts delivered later, and conditional gifts linked to reaching a specific performance target. We find important benefits from promising to give an unconditional gift later: participants respond positively to a promised gift twice by increasing effort when the gift is promised and again when it is received. A promised gift outperforms both the unconditional gift delivered immediately, which leads to a single positive response, and the conditional gift based on performance, which does not trigger any significant behavioural change after the gift is delivered. The study lends insights into the relative effectiveness of gift-exchange and bonus systems and the temporal structure of reciprocal exchange.

Many people implicitly sell or give away their data when using online services and participating in loyalty programmes—despite growing concerns about company’s use of private data. Our paper studies potential reasons and co-variates that contribute to resolving this apparent paradox, which has not been studied previously. We ask customers of a bakery delivery service for their consent to disclose their personal data to a third party in exchange for a monetary rebate on their past orders. We study the role of implicitly and explicitly stated prices and add new determinants such as political orientation, income proxies and membership in loyalty programmes to the analysis of privacy decision. We document large heterogeneity in privacy valuations, and that the offered monetary benefits have less predictive power for data-disclosure decisions than expected. However, we find significant predictors of such decisions, such as political orientation towards liberal democrats (FDP) and membership in loyalty programmes. We also find suggestive evidence that loyalty programmes are successful in disguising their “money for data” exchange mechanism.

This article analyses the effectiveness of hiring credits. Using comprehensive administrative data, we show that the French hiring credit, implemented during the Great Recession, had significant positive employment effects and no effects on wages. Relying on the quasi-experimental variation in labour cost triggered by the hiring credit, we estimate a structural search and matching model. Simulations of counterfactual policies show that the effectiveness of the hiring credit relied to a large extent on three features: it was non-anticipated, temporary and targeted at jobs with rigid wages. We estimate that the cost per job created by permanent hiring credits, either countercyclical or time-invariant, in an environment with flexible wages would have been much higher.

This paper analyzes the effectiveness of hiring credits. Using comprehensive administrative data, we show that the French hiring credit, implemented during the Great Recession, had significant positive employment effects and no effects on wages. Relying on the quasi-experimental variation in labor cost triggered by the hiring credit, we estimate a structural search and matching model. Simulations of counterfactual policies show that the effectiveness of the hiring credit relied to a large extent on three features: it was nonanticipated, temporary and targeted at jobs with rigid wages. We estimate that the cost per job created by permanent hiring credits, either countercyclical or time-invariant, in an environment with flexible wages would have been much higher.

This discussion paper led to a publication in Environment and Behavior , 2015, 47(9), 970-1000. Field-experimental studies have shown that people litter more in more littered environments. Inspired by these findings, many cities around the world have adopted policies to quickly remove litter. While such policies may prevent people from following the bad example of litterers, they may also invite free-riding on public cleaning services. We are the first to show that both forces are at play. We conduct a natural field experiment where, in a randomly assigned part of a residential area, the frequency of cleaning was drastically reduced during a three-month period. We find evidence that some people start to clean up after themselves when public cleaning services are diminished. However, the tendency to litter more dominates. We also find that these responses continue to exist for some time after the treatment has ended.

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.

This paper presents results from two large-scale natural field experiments that tested the effect of social norm messages on tax compliance. Using administrative data from > 200,000 individuals in the United Kingdom, we show that including social norm messages in standard reminder letters increases payment rates for overdue tax. This result offers a rare example of social norm messages affecting tax compliance behavior in a real world setting. We find no evidence that loss framing is more effective than gain framing. Descriptive norms appear to be more effective than injunctive norms. Messages referring to public services or financial information also significantly increased payment rates. The field experiments accelerated the collection of tax revenue at little cost.

We report the results of a framed field experiment, in which we study the effectiveness of punishment and reward in sustaining cooperation in a social dilemma. Punishments tend to be directed at non-cooperators and rewards are assigned by those who are relatively cooperative. In contrast to the results typically found in laboratory experiments, however, we find that punishments and rewards fail to increase the average level of cooperation.

This discussion paper resulted in a publication in the 'Journal of Economic Behavior & Organization' , 2014, 98, 29-40. We analyze one of the explanations why people participate in lotteries. Our hypothesis stipulates that part of the value that a unit of money buys in lotteries is consumed before the actual resolution in the form of emotions such as hope. In other words, a person holding a lottery ticket may prefer a delayed resolution of risk due to positive anticipatory emotions. This conjecture is tested in an experiment with real lottery tickets. We show that our theoretical considerations may contribute to explaining empirical puzzles associated with lottery participation, timing of resolution and the spreading of drawings. More specifically, we find that a substantial number of participants prefer delayed resolution, that anticipated thrill is the main variable explaining this choice, that emotions actually experienced during the waiting period are indeed predominantly positive and correlated with predictions. Finally, we find that a great majority prefers to 'spread' chances, that is, to obtain one ticket for each of two drawings rather than two for the same drawing.

This discussion paper resulted in an article in Management Science . Volume 59 issue 7, pages 1514-1528. This paper reports on a field experiment conducted to estimate the impact of the share of women in business teams on their performance. Teams consisting of undergraduate students in business studies start up a venture as part of their curriculum. We manipulated the gender composition of teams and assigned students randomly to teams, conditional on their gender. We find that teams with an equal gender mix perform better than male-dominated teams in terms of sales and profits. We explore various mechanisms suggested in the literature to explain this positive effect of gender diversity on performance (including complementarities, learning, monitoring, and conflicts) but find no support for them.

The welfare impact of expanding access to bank accounts depends on whether accounts crowd out pre-existing financial relationships, or whether private gains from accounts are shared within social networks. In this experiment, we provided free bank accounts to a random subset of 885 households. Across households, we document positive spillovers: treatment households become less reliant on grown children and siblings living outside their village, and become more supportive of neighbors and friends within their village. Within households, we randomized which spouse was offered an account and find no evidence of negative spillovers. This article is protected by copyright. All rights reserved.

We explore the role of reciprocity in wage determination by combining experimental and survey data. The experiment is similar to Berg, Dickhaut and McCabe's (1995) and is conducted with Ghanaian manufacturing workers. The survey relates to the same sample workers and the firms within which they are employed. We find a strong positive association between individual reciprocity and individual wages. However, the direction of causality is unclear. Various aspects of the distribution of the tendency to reciprocate within an employee's workforce are also associated with that employee's wage and, in this case, there are strong arguments for a causal link is from former to latter. In particular, the mean, median, and minimum levels of reciprocity have a positive effect on wages, while the spread in the distribution (standard deviation) has a strong significant negative effect. This suggests that homogenous behaviour, or convergence to a norm, is rewarded. The results underline the importance of behavioural characteristics and firm culture for the operation of the labour market.

We use a game-theoretical model and results from laboratory experiments to study the process by which subordinated regions of a country can obtain a more favorable political status. In our theoretical model a dominant and a dominated region first interact through a political process. This process involves two referenda, one at the level of the country as a whole and one at the level of the subordinated region. If the political process succeeds, then the new autonomy level is implemented. If this process fails, then both regions engage in a costly political conflict in which both sides can spend resources to win the upper hand. We show that in the subgame-perfect equilibrium of our game the voting process leads to an intermediate arrangement acceptable for both parts so that the costly political struggle never occurs. In contrast, in our experiments we observe frequent fighting involving high material losses., The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The authors thank the Spanish Ministerio de Economı´a y Competitividad (Grant: ECO2011-29847-C02-01), the Generalitat de Catalunya (Grant: 2009 SGR 820), the Antoni Serra Ramoneda Research Chair (UAB-Catalunya Caixa), Consolider-Ingenio 2010 (CSD2006-00016) and the British Academy and the University of Nottingham for their financial support.

The literature on pro-social behavior shows that older children are more generous than younger children; however, the level of individual generosity is heterogeneous even between children of the same age. This paper investigates whether a child’s popularity affects his/her generosity. Our participants – 231 children, six to twelve years old – decide how many of their four colored wristbands they want to share with another anonymous child. We manipulate the visibility of this decision: in treatment Public, the decisions are revealed to the entire class at the end of the game, whereas in treatment Private children’s decisions remain secret. In addition, we elicited each child’s network of friends using an innovative “seating map” mechanism. Our results reveal that more popular children are more generous in Public than Private decision environments, while less popular children behave similarly in both cases. Moreover, older children in Public display greater generosity than (i) older children in Private and (ii) younger children in either Public or Private. Finally, in Public, older and more popular children share more than less popular older children, and more than younger children regardless of popularity; whereas, in Private there is no effect of popularity on children of any age. Our findings point to another reason to adopt transparent decision making in teams and organizations: it may promote the generosity of some (perhaps especially popular leaders) without detrimentally impacting the pro-sociality of others.

In this paper we examine the effects that variations in the quality of the environment at birth have on children’s other-regarding preferences, as measured through four binary-choice dictator games run with school-age children in rural Sierra Leone. We examine the effect of exogenous variations in rainfall level by location and year on children’s social preferences. We also study how age at which children had access to improved water sources, such as protected wells, correlates with preferences. Children born within a healthier environment are more generous, when generosity comes at no personal cost, more likely to choose socially efficient allocations and less averse to advantageous inequality. The correlation between rainfall shocks at birth and children’s height-for-age suggest that environmental quality affects preferences through its impact on health. We find that proxies for early childhood health affect experimental outcomes in a similar way as age, which helps to explain the process by which individuals develop social preferences. No significant relationship is found in our data between environmental quality and educational outcomes, such as school attendance and grades.

This study presents a new field experimental approach for measuring age discrimination in hiring. In addition to the classical approach in which candidates ages are randomly assigned within pairs of fictitious résumés that are sent to real vacancies, we randomly assign between these pairs the activities undertaken by the older candidates during their additional post-educational years. When applying this design to the case of Belgium, we find that age discrimination depends fundamentally on the older candidates career patterns. Older age only robustly affects call-back if the older candidate was employed in an out-of-field job during his or her extra post-educational years.

Intrinsic motivation for honesty is perceived as an important determinant of large and persistent variation in cheating behavior. However, little is known about its actual role due to challenges in obtaining precise measures of motivation for honesty, as well as field outcomes on cheating. We fill these gaps using a unique setting of informal milk markets in India. A novel behavioral experiment, which combines a standard die roll task with Bluetooth technology, is used to measure motivation for honesty of milkmen at both extensive and intensive margins. We then buy milk from the same milkmen and show that cheating in the field, measured by the amount of water added to milk, widens significantly with a milkman’s degree of dishonesty. Additional analyses show that conventional binary measure of motivation for honesty suffers from measurement errors, resulting in underestimation of this association.

This paper analyses the effects of work-related training on worker productivity. To identify the causal effects from training, we combine a field experiment that randomly assigns workers to treatment and control groups with panel data on individual worker performance before and after training. We find that participation in the training programme leads to a 10 percent increase in performance. Moreover, we provide experimental evidence for externalities from treated workers on their untreated teammates: An increase of 10 percentage points in the share of treated peers leads to a performance increase of 0.51 percent. We provide evidence that the estimated effects are causal and not the result of employee selection into and out of training. Furthermore, we find that the performance increase is not due to lower quality provided by the worker.

As a sequential dissemination on an ongoing work in progress upon SME’s competitiveness PN2 project, the paper is designated to evaluate the territorial environment role as enabler factor for SME’s development. Relying upon critical conclusions of SME’s readiness’ degree for accessing the instruments of knowledge economy, such as: the institutional framework and the economic incentives; human resources capability; the innovative system; information infrastructure; vulnerabilities assessment, we are forward designing institutional mechanisms for correcting SME’s noncompetitive position. We suggest interactive networks for consulting expertise poles as institutional mechanism enabling the knowledge transfer for the benefit of SME’s.

This paper describes and analyzes the results of a unique field experiment especially designed to test the eects of the level of commitment and information available to individuals when sharing risk. We find that limiting exogenously provided commitment is associated with less risk sharing, while limiting information on defections can be associated with more risk sharing. These results can be understood by distinguishing between intrinsic and extrinsic incentives, and by recognizing that social sanctions are costly to inflict or that individuals suer from time-inconsistent preferences. Comparing the groups formed within our experiment with the real life risk sharing networks in a few villages allows us to test the external validity of our experiment and suggests that the results are salient to our understanding of risk sharing arrangements observed in developing countries. JEL Classification Numbers: C93; D71; D81; O12.

We run a large field experiment with an online company specializing in selling used automobiles via ascending auctions. We manipulate experimentally the “price grid,” or the possible amounts that bidders can bid above the current standing price. Using two diverse auction sites, one in New York and one in Texas, we find that buyer and seller behavior differs strikingly across the two sites. Specifically, in Texas we find peculiar patterns of bidding among a small but prominent group of buyers suggesting that they are “cyber-shills” working on behalf of sellers. These patterns do not appear in the New York auctions. (JEL C93, D12, D44, L62, L81)

This paper shows how a public policy shapes convergence of beliefs through newly-formed social networks, with a focus on political opinion. We use a unique natural experiment that randomly assigns students into first-year groups at a French college that forms future top politicians. Pairs of students in the same group are much more likely to become friends. The randomized group membership serves as instrumental variable in a dyadic regression of differences in beliefs on friendship. We find that students’ political opinions converge particularly strongly between friends, reaching 11% of a standard deviation only after 6 months. Convergence is strongest among pairs least likely to become friends without the randomized exposure, or friends whose characteristics are the most different. While there is evidence of homophily in network formation, it does not seem to affect the estimates of convergence, except among very similar friends. The same strategy shows that a longer network distance implies slower convergence.

We derive a dynamic theoretical model of renewable resource extraction. In the social optimum, maximum extraction occurs in the last period only, while in the unique subgame perfect Nash equilibrium, the resource is depleted immediately. The predictions are tested in a field experiment conducted at a recreational fishing pond. The subjects, experienced recreational fishermen, face a dynamic social dilemma, in which they risk depletion of the resource by overfishing. We find strong support for the Nash equilibrium. Fishermen exert as much effort in the last period as in preceding periods, and effort is independent of the stock of fish.

Internet is a very attractive technology for experiments implementation, both in order to reach more diverse and larger samples and as a field of economic research in its own right. This paper reports on an experiment performed both online and in the laboratory, designed so as to strengthen the internal validity of decisions elicited over the Internet. We use the same subject pool, the same monetary stakes and the same decision interface, and randomly assign two group of subjects between the Internet and a traditional University laboratory to compare behavior in a set of social preferences games. This comparison concludes in favor of the reliability of behaviors elicited through the Internet. Our behavioral results contradict the predictions of social distance theory, as we find that subjects allocated to the Internet treatment behave as if they were more altruistic, more trusting, more trustworthy and less risk averse than laboratory subjects. Those findings have practical importance for the growing community of researchers interested in using the Internet as a vehicle for social experiments and bear interesting methodological lessons for social scientists interested in using experiments to research the Internet as a field., L'internet constitue un terrain très attractif d'un point de vue expérimentale, à la fois comme moyen d'obtenir des échantillons plus larges et plus diversifiés, et comme champ de recherche à part entière en raison de son rôle croissant dans la sphère économique. Cet article traite d'une expérience réalisée à la fois par internet et en laboratoire, conçue pour renforcer la validité interne des décisions observées en ligne. Les deux traitements présentent la même base d'échantillonnage, les mêmes schémas de rémunération, et la même interface de décision. Nous avons cherché à comparer les comportements dans un ensemble de jeux de préférence sociale, les participants étant répartis de manière aléatoire entre jeu en ligne et jeu en laboratoire. Cette comparaison tend à confirmer la fiabilité des décisions observées en ligne. Nos résultats sont également contraires aux prédictions de la théorie de la distance sociale : les participants alloués au traitement par internet ont tendance à être plus altruistes, plus confiants et plus dignes de confiance, et enfin moins risquophobes que les joueurs en laboratoire.

We test experimentally whether monitoring is less likely to reduce work motivation in distant than in close principal-agent relationships. Employing the same standard subject pool of students, we compare a laboratory and an internet implementation of an experimental principal-agent game where the principal can impose control at two different levels on the agent. Agency relationships are arguably more distant in the internet than in the laboratory setting. We find that differences in agents' effort due to an increase in the level of control are larger in the internet than in the laboratory experiment. The effect is driven by both higher intrinsic motivation and stronger control aversion in the laboratory. Agents' effort differences are fairly stable over time in both experiments which indicates that even experienced agents react more negatively to the implementation of control in the laboratory than on the internet. published

This paper contributes to the debate on front-of-pack nutritional labels. Because of their dissimilar formats, Guideline Daily Amount (GDA) and Traffic Light (TL) may trigger different responses among consumers. While GDA is comprehensive and cognitively demanding, information is coarser and more salient in TL. We implement an incentivized laboratory experiment to assess the relative performance of GDA and TL labelling schemes in assisting consumers to build a healthy daily diet. Participants must compose a daily diet, choosing from a finite set of products, and are paid a fixed cash amount only if the diet satisfies pre-determined nutritional goals. Goals correspond to the guideline daily amount values for different nutritional attributes, whose number varies from 1 (kcal) to 7 (kcal, fat, sugar, salt, fibre, vitamin C and calcium). Three different labels, GDA, TL and a combined GDATL are provided. Results show that GDA performs better than TL when subjects do not face time constraints. When time is limited however, TL and GDA have identical efficacy with 4 nutritional goals, and TL even outperforms GDA with 7 nutritional goals.

We study the causal impact of revealing pro-unionism during the recruitment stage on hiring chances. To this end, we conduct a randomised field experiment in the Belgian labour market. When matched with employer and sector data, the experimentally gathered data enable us to test the heterogeneity of discrimination against pro-union applicants by the union density in the sector and the size of the firm. We find that disclosure of pro-unionism affects hiring chances in a negative way and that-in line with our expectations based on the literature-this negative impact is stronger in highly unionised sectors.

Correspondence studies are nowadays viewed as the most compelling avenue to test for hiring discrimination. However, these studies suffer from one fundamental methodological problem, as formulated by Heckman and Siegelman (The Urban Institute audit studies: Their methods and findings. In M. Fix, and R. Struyk (Eds.), Clear and convincing evidence: Measurement of discrimination in America, 1993), namely the bias in their results in case of group differences in the variance of unobserved determinants of hiring outcomes. In this study, the authors empirically investigate this bias in the context of gender discrimination. The authors do not find significant evidence for the feared bias.

In a series of field experiments, we elicit risk preferences for financial, life-duration, and environmental domains using sequential multiple price-list auctions. We intentionally oversample subjects who frequently engage in activities that increase their mortality risk. We analyze the data using a bivariate Random Preference approach. Under the assumption that subjects are Rank Dependent Utility maximizers, we estimate the joint distribution of the CRRA and probability weighting coefficients. We find that the experienced risk takers are less likely than the student control group to overweight small probability, extreme events in their decision making. This is true in all three domains. We find that the tendency of women to be more risk averse in the financial domain than men arises from probability weighting rather than differences in the utility function. Finally, we show that a significant minority of subjects deviate from the type of s-inverse probability weighting typically observed in experiments.

published

Employers want motivated and productive employees. Are there ways to increase employee motivation without relying solely on monetary incentives, such as pay-for-performance schemes? One tool that has shown promise in recent decades for improving worker performance is setting goals, whether they are assigned by management or self-chosen. Goals are powerful motivators for workers, with the potential for boosting productivity in an organization. However, if not chosen carefully or if used in unsuitable situations, goals can have undesired and harmful consequences. Goals are a powerful tool that needs to be applied with caution.

We conduct an experimental study among European citizens regarding cross-cultural perceptions related to trust in two dimensions: volunteerism and honesty. We use representative samples from five major economies of the Euro area: France, Germany, Italy, the Netherlands, and Spain. We find that European citizens rely on nationality to infer behavior. Assessments of behavior show a north/south pattern in which participants from northern countries are perceived to be more honest and to provide more effort in a volunteering game than are participants from southern countries. Actual behavior is, however, not always in line with these assessments. Assessments of honesty show strong evidence of social projection: Participants expect other European citizens to be less honest if they are culturally closer to themselves. Assessments of volunteerism instead show a similar north/south-pattern in which both northern and southern Europeans expect higher performance of northerners than they do of southerners.

We investigate whether risk, time, environmental, and social preferences affect single family homeowners’ investments in energy efficient renovations and energy quality of their house using established experimental measures and questionnaires. We find that homeowners who report to be more risk taking are more likely to have renovated their house. Pro-environmental and futureoriented renovators, i.e. renovators with lower discount factors, live in homes with higher energy efficiency. Controlling for the energy efficiency of houses, we further find that energy consumption as measured by heating and energy costs are lower for future-oriented and proenvironmental individuals. Social preferences measured in a dictator and a generosity game play a mixed role for investments in energy efficiency and energy consumption. published

In view of policy action to integrate ex-offenders into society, it is important to identify the underlying mechanisms of the negative relationship between criminal record on the one hand and later employment and earnings on the other hand. In this study, we identify hiring discrimination against former juvenile delinquents in a direct way. To this end, we conduct a field experiment in the Belgian labour market. We find that labour market discrimination is indeed a major barrier in the transition to work for former juvenile delinquents. Labour market entrants disclosing a history of juvenile delinquency get about 22 percent less callback compared to their counterparts without a criminal record. This discrimination is heterogeneous by the occupation for which one applies.

This paper studies how imposing norms on contribution behavior affects individuals' intrinsic motivation. We consider an urban area in Germany where the Catholic Church collects a local church levy as a charitable donation, despite the fact that the levy is legally a tax. In cooperation with the church, we design a natural randomized field experiment with letter treatments informing individuals that the church levy is in fact a tax. Guided by a simple theoretical model, we use baseline contribution behavior to measure individuals' intrinsic motivation and demonstrate that treatment effects differ strongly across motivational types. Among weakly intrinsically motivated individuals, communicating the existence of a legal norm results in a significant crowd-out of intrinsic motivation. In contrast, strongly intrinsically motivated individuals do not show any treatment response. We cross-validate our findings using alternative motivational measures derived from an extensive post-treatment survey.

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.

This paper evaluates the impact of an unexpected temporary hiring credit targeted at workers paid below 1.6 times the minimum wage in firms with less than 10 employees in France from December 2008 to December 2009. Using rich administrative data covering all French firms, we find that the program has had a strong and rapid impact on employment. The net cost per job created for the government was around zero. The employment effect was stronger in areas where recruitment was easier. Although the hiring credit was not conditional on net job creation, it did not increase churning of workers. Nevertheless, we estimate that a credit conditional on net job creation above the employment growth threshold of -1%, would have maximized job creation, and created about 4 times more jobs, at constant budget, provided that take-up had remained the same.

When one’s treatment status affects the outcomes of others, experimental data are not sufficient to identify a treatment causal impact. In order to account for peer effects in program response, we use a social network model. We estimate and validate the model on experimental data collected for the evaluation of a scholarship program in Colombia. By design, randomization is at the student-level. Friendship data reveals that treated and untreated students interact together. Besides providing evidence of peer effects in schooling, we find that ignoring peer effects would have led us to overstate the program actual impact.

Micro-entrepreneurs often lack the financial literacy required to make important financial decisions. We conducted a randomized evaluation with a bank in the Dominican Republic to compare the impact of two distinct programs: standard accounting training versus a simplified, rule-of-thumb training that taught basic financial heuristics. The rule-of-thumb training significantly improved firms' financial practices, objective reporting quality, and revenues. For micro-entrepreneurs with lower skills or poor initial financial practices, the impact of the rule-of-thumb training was significantly larger than that of the standard accounting training, suggesting that simplifying training programs might improve their effectiveness for less sophisticated individuals., International Finance Corporation, Ideas42

Using a field experiment in China, we study whether migration status is correlated with attitudes toward risk, ambiguity, and competitiveness. Our subjects include migrants and non-migrants. We find that, migrants exhibit no differences from non-migrants in risk and ambiguity preferences elicited using pairs of lotteries; however, migrants are significantly more likely to enter competition in the presence of strategic uncertainty when they expect competitive entries from others. Our results suggest that migration may be driven more by a stronger belief in one’s ability to succeed in an uncertain and competitive environment than by risk attitudes under state uncertainty. Length: 46

Is tax compliance driven only by extrinsic motivations such as deterrence and tax policy or is there also a role for intrinsic motivations such as morals, norms and psychology? Agents may comply based on moral sentiments, social norms, guilt and shame (Andreoni et al. 1998), all of which are non-deterrence driven reasons for compliance. The importance of such intrinsically motivated compliance is hard to study empirically and therefore the least understood. This study uses a unique setting for making progress on this question: the local church tax in Germany. As we show in the paper, tax evaders, compliers, and donors can coexist in the local church tax system and be precisely distinguished from each other. Since there is zero deterrence in the baseline, baseline compliance provides a direct measure of intrinsically motivated tax compliance. Starting from the zero deterrence baseline we use a randomized field experiment to inject deterrence or recognition into the system. This allows us to study if policies aimed at either extrinsic motivation (deterrence) or intrinsic motivation (recognition) have qualitatively different effects on agents who have revealed each of those motivations in the baseline. Our main empirical findings are the following. First, a significant fraction of agents (23%) comply in the zero deterrence baseline where compliance would be zero absent intrinsic motivation, while the remaining 77% evade the tax. Intrinsic motivation is therefore substantial, although the majority behaves as rational, self-interested taxpayers. Second, announcing a zero audit probability (the status quo) has a small and insignificant effect on the compliance rate, showing that there is very little misperception on average. Third, tax salience and deterrence have strong effects on compliance for baseline evaders, but small and insignificant effects for baseline donors. This is consistent with the fact that the enforcement constraint is not binding for the intrinsically motivated and therefore they are naturally unresponsive to deterrence. Fourth and finally, recognition through social and monetary rewards for compliance has fundamentally different effects on baseline donors (who increase their payments) and baseline evaders (who reduce their payments). Hence, whether recognition helps or hurts depends crucially on what motivates taxpayers in the first place, with positive effects on the intrinsically motivated and negative effects on the extrinsically motivated. All of our findings can be explained by a model of tax compliance that unifies the standard Becker-Allingham-Sandmo approach (strengthening extrinsic motives for tax compliance) and the Andreoni (1989, 1990) warm-glow model of pro-social behaviour.

International audience; This paper is based on a randomised social experiment conducted in order to understand the low take-up rate of a Complementary health-insurance voucher program for the poorest in France (the Aide Complémentaire Santé: ACS). We explore two of the main hypotheses put forward to explain low enrolment: a lack of information about the program and a voucher amount considered to be too low. A sample of eligible individuals living in an urban area in Northern France were randomly split into three groups: a control group who benefited from the standard level of financial aid; a group benefiting from an increase in the value of the voucher; and a third group benefiting from the same increase along with an invitation to an information meeting regarding ACS. We show that the voucher increase has a small but statistically significant effect on ACS take-up. The invitation to the meeting appears to cancel out the positive effect of the voucher increase. Using an instrumental variable model to control for potential selection bias, we find ambiguous evidence of the meeting attendance on ACS take-up. This study confirms the difficulties that are faced in increasing the health insurancecoverage of poor populations via subsidy programs.