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This paper examines the concern for relative standing among rural households in China. We used a survey-experimental method to measure to what extent poor Chinese farmers care about their relative income and found that the respondents cared to a high degree. Compared to previous studies in developed countries, the concern for relative standing seems to be equally strong among rural households in China. This should be seen in the light of the rapid change China has undergone, with high growth, increased inequality, and the highest urban-rural income ratio in the world. Thus, the rural population, which is lagging behind, is suffering not only from low absolute income but also from low relative income.

The so-called unskilled-and-unaware problem was experimentally identified a decade ago: The unskilled are seemingly afflicted by a double curse because they also seem unaware of their (relative) lack of skills. Numerous authors have elaborated on this problem - experimentally as well as theoretically. In this paper, we report on the results of three experiments (one field, two laboratory) through which we test a theoretical model and some informal extensions. Specifically, we examine the impact of general information and specific information (feedback) on the quality of self-assessment (“calibration”) in various tasks and under various conditions. Overconfidence behavior initially prevails in almost all settings. We find a strong positive effect of general information on calibration, and show that calibration improves more when feedback is provided. In our experiments, it is the unskilled who improve their calibration the most.

Against the background of a rapid biodiversity loss in agricultural landscapes, increasing attention is being paid to farming practices that enhance ecosystem services. Therefore developing a cost-efficient and effective conservation-compatible land use policy to influence private land management is the main challenge facing present European agri-environmental policy. This paper deals with the design, implementation and results of a case-study payment scheme in the county Steinburg in the northernmost federal state of Germany (Schleswig- Holstein). The payment scheme combines a payment-by-results approach and the use of conservation procurement auctions in order to improve the cost-effectiveness of conservation schemes for grassland plant biodiversity.

This paper draws a link between self-control problems and the contractual mechanisms of microcredit. We use a series of “lab experiments in the field” which were designed to elicit measures of time discounting on a sample of 573 individuals in rural Karnataka, India. Evidence from the experiments were integrated with individual survey data on the economic and financial lives of villagers. One third of participants made choices consistent with hyperbolic preferences (more impatient now than in the future), and would be made better off if they could discipline their time inconsistent preferences. While hyperbolic preferences have been often associated with saving behavior, we describe links to borrowing as well. We find that “hyperbolic” women save a lower share of their savings at home and save less in total levels. Women with hyperbolic preferences are also more likely to borrow--and to do so through microcredit institutions specifically. The finding highlights the role of the fixed and frequent installment schedule ubiquitous in microcredit contracts. While microcredit contracts are celebrated for mitigating informational asymmetries, the evidence suggests that they also offer helpful structure for people with self-discipline problems who seek to accumulate capital but who lack suitable contractual saving devices.

This paper reports results of an experimental study of uniform and discriminatory auctions of multiple objects in an environment of publicly known common values. We find that the bidding behavior in the uniform case exhibits two clear regularities: agents consistently play weakly dominated strategies by overbidding on the first unit and have moderate diffyculty coordinating on high payoff (low auction revenue) equilibria. However, subjects with experience in the same environment are better at reducing demand to achieve higher payoff. Bidders in discriminatory auctions tend to submit bids close to value for all units and are not fully successful in attempts at collusion.

This article reports on a field study that has been conducted in the online computer game World of Warcraft. In a basic labor situation a principal gives an upfront wage to an agent (who is unaware that he is participating in an experiment) and asks him to conduct a real-effort task. The unique characteristic of the virtual world allows us to control for agents’ abilities to perform the task and to manipulate the principal’s social status. Confirming gift exchange theory, generous wages indeed increase agents’ efforts, even controlling for agents’ abilities, while the principals’ social status influences effort provision probability substantially. We interpret this result such that agents assess the kindness of the wages with respect to the expected principals’ wealth.

In a recent randomized experiment we found mean returns to capital of between 5 and 6 percent per month in Sri Lankan microenterprises, much higher than market interest rates. But returns were found to be much higher among men than among women, and indeed were not different from zero for women. In this paper, we explore different explanations for the lower returns among female owners. We find no evidence that the gender gap is explained by differences in ability, risk aversion, or entrepreneurial attitudes. Nor do we find that differential access to unpaid family labor or social constraints limiting sales to local areas are important. We do find evidence that women invested the grants differently from men. A smaller share of the smaller grants remained in the female-owned enterprises, and men were more likely to spend the grant on working capital and women on equipment. We also find that the gender gap is largest when we compare male-dominated sectors to female-dominated sectors, although female returns are lower than male returns even for females working in the same industries as men. We then examine the heterogeneity of returns to determine whether any group of businesses owned by women benefit from easing capital constraints. The results suggest there is a large group of high-return male owners and smaller group of poor, high-ability, female owners who might benefit from more access to capital.

It is often argued that cost-sharing -- charging a subsidized, positive price -- or a health product is necessary to avoid wasting resources on those who will not use or do not need the product. We explore this argument through a field experiment in Kenya, in which we randomized the price at which prenatal clinics could sell long lasting anti-malarial insecticide-treated nets (ITNs) to pregnant women. We find no evidence that cost-sharing reduces wastage on those that will not use the product: women who received free ITNs are not less likely to use them than those who paid subsidized positive prices. We also find no evidence that cost-sharing induces selection of women who need the net more: those who pay higher prices appear no sicker than the average prenatal client in the area in terms of measured anemia (an important indicator of malaria). Cost-sharing does, however, considerably dampen demand. We find that uptake drops by 75 percent when the price of ITNs increases from zero to $0.75 (i.e. from 100 to 87.5 percent subsidy), the price at which ITNs are currently sold to pregnant women in Kenya. We combine our estimates in a cost-effectiveness analysis of ITN prices on child mortality that incorporates both private and social returns to ITN usage. Overall, our results suggest that free distribution of ITNs could save many more lives than cost-sharing programs have achieved so far, and, given the large positive externality associated with widespread usage of ITNs, it would likely do so at a lesser cost per life saved.

We investigate the distribution of risk preferences and the frequency of expected utility violations along the gradient of market development. To do this, we collect experimental and survey data from a random sample of the population at four sites in Peru that differ in their level of competition and development. Similar to previous studies, we find that violations of expected utility theory are frequent. More importantly, however, violations are far less frequent the more competitive the market is. Also, our study suggests that experience in trade is not always associated with fewer behavioral anomalies. For instance, wholesale traders in an oligopolistic market with many years of experience are more likely to violate expected utility theory than entrepreneurs in an adjacent market with less experience. As hypothesized by Alchian (1950), it is in highly competitive markets where the evidence of rational behavior is found.

Caste-based quotas in hiring have existed in the public sector in India for decades. Recently there has been debate about introducing similar quotas in private sector jobs. This paper uses an audit study to determine the extent of caste-based discrimination in the Indian private sector. On average low-caste applicants need to send 20 percent more resumes than high-caste applicants to get the same callback. Differences in callback which favor high-caste applicants are particularly large when hiring is done by male recruiters or by Hindu recruiters. This finding suggests that the differences in callback between high and low-caste applicants are not entirely due to statistical discrimination. High-caste applicants are also differentially favored by firms with a smaller scale of operations, while low-caste applicants are favored by firms with a larger scale of operations. This finding is consistent with taste-based theories of discrimination and with commitments made by large firms to hire actively from among low-caste groups.

Although research has documented the importance of emotion in risk perception, little is known about its prevalence in everyday life. Using the Experience Sampling Method, 94 part-time students were prompted at random – via cellular telephones – to report on mood state and three emotions and to assess risk on thirty occasions during their working hours. The emotions – valence, arousal, and dominance – were measured using self-assessment manikins (Bradley & Lang, 1994). Hierarchical linear models (HLM) revealed that mood state and emotions explained significant variance in risk perception. In addition, valence and arousal accounted for variance over and above “reason” (measured by severity and possibility of risks). Six risks were reassessed in a post-experimental session and found to be lower than their real-time counterparts. The study demonstrates the feasibility and value of collecting representative samples of data with simple technology. Evidence for the statistical consistency of the HLM estimates is provided in an Appendix.

Economic analysis has said little about how an individual’s cognitive skills (CS's) are related to the individual’s preferences in different choice domains, such as risk-taking or saving, and how preferences in different domains are related to each other. Using a sample of 1,000 trainee truckers we report three findings. First, we show a strong and significant relationship between an individual’s cognitive skills and preferences, and between the preferences in different choice domains. The latter relationship may be counterintuitive: a patient individual, more inclined to save, is also more willing to take calculated risks. A second finding is that measures of cognitive skill predict social awareness and choices in a sequential Prisoner's Dilemma game. Subjects with higher CS's more accurately forecast others' behavior, and differentiate their behavior depending on the first mover’s choice, returning higher amount for a higher transfer, and lower for a lower one. After controlling for investment motives, subjects with higher CS’s also cooperate more as first movers. A third finding concerns on-the-job choices. Our subjects incur a significant financial debt for their training that is forgiven only after twelve months of service. Yet over half leave within the first year, and cognitive skills are also strong predictors of who exits too early, stronger than any other social, economic and personality measure in our data. These results suggest that cognitive skills affect the economic lives of individuals, by systematically changing preferences and choices in a way that favors the economic success of individuals with higher cognitive skills.

In this paper we describe a field experiment conducted among mollusk harvesters in a community on the Pacific Coast of Columbia. The experiment is based on a standard linear public good and consists of two stages. In the first stage we compare the ability of monetary and nonmonetary sanctions among community members to increase contributions to the public good. In the second stage we add a government regulation with either a high or low sanction for noncompliance to community enforcement efforts. The results for the first stage are consistent with other comparisons of monetary and nonmonetary sanctions within groups; both led to higher contributions. The results from the second stage reveal that government regulations always complemented community enforcement efforts. While the subjects tended to reduce their sanctioning efforts under the government regulations, contributions and earnings were significantly higher than without government interventions. In fact, the combination of community and government enforcement efforts generated near-perfect contributions to the public good. However, more research into the combined roles of government intervention and community enforcement efforts is needed because the complementarity we find may be situation-specific.

Least-Unmatched Price Auctions have become a popular format of TV and radio shows. Increasingly, they are also applied in internet trading. In these auctions the lowest single (unique) bid wins. We analyze the game-theoretic solution of least unmatched price auctions when prize, bidding cost and the number of participants are known. We use a large data-set of such auctions in order to contrast actual behavior of players with game-theoretic predictions. In the aggregate, bidding behaviour seems to conform with a Nash equilibrium in mixed strategies.

The paper explores whether a social learning model helps explain the observed conformity and compliance with social norms after the unification of Germany. We compare tax morale, (the willingness to pay taxes), between inhabitants of East and West Germany during the post-unification period, using three World Values Survey/European Values Survey waves between 1990 and 1999. German unification is of particular interest in analyzing tax morale since it is close to a quasi-natural experiment. Factors such as a common language, similar education systems and a shared cultural and political history prior to the separation after the Second World War can be controlled because they are similar. Our findings indicate that the social learning model employed in this study helps to predict the development of tax morale over time. It is clear that tax morale values converged within a mere nine years after unification, due largely to a strong change in the level of tax morale in the East. Thus, the paper contributes to the literature that attempts to explain how norms arise, how they are maintained and how they are changed.

This study measured the discount rates of a sample of 262 farm households in the Ethiopian highlands, using a time preference experiment with real payoffs. In general, the median discount rate was very high—more than double the interest rate on the outstanding debt—and varied systematically with wealth and risk aversion. Although we do not have a good theory for explaining the linkage between rates-of-time preferences (RTPs) and risk aversion, our findings warn that these two aspects of household behavior reinforce each other and are easily confused. Our results have important implications for understanding households’ behavior. Because the RTPs were so high, what might seem like profitable investments from the outside might not seem so from the farmers’ perspectives. Furthermore, when future returns were uncertain, risk-averse decision makers favored projects with shorter payback periods and were less willing to invest in projects with long-term benefits. Formal capital market development, including lending and mortgage markets—currently non-existent in most of rural Ethiopia—may help reduce RTPs and cause more investments to be acceptable. The results also suggested the need for more research on the linkages between risk aversion and RTPs in low-income countries.

The mandatory deposit for one-way drinks packaging, embodied in the German Packaging Ordinance of 1991, entered into force in January 2003, after the condition for its implementation was given by the fall of the market share of reusable drinks packaging under 72% in 1997. In this context the author doubts that the German mandatory deposit is an effective instrument to stabilise the market share of ecologically advantageous drinks packaging. Rather it is to be expected that the environmental policy objectives can be accomplished more effectively by a reorientation of the specific environmental policy. Hence it needs to be considered that – even eleven years after the first time decrease of the relevant market share of reusable drinks packaging – an urgent need for action exists in Germany. This practise based analysis therefore deals with packaging-taxes as an alternative environmental policy instrument and points out recommendations against the background of a further amending of the German Packaging Ordinance as well as experiences from the use of packaging taxes in Europe.

The aim of this book is to draw attention to the wealth and diversity of several recent state-of-the-art choice experiment studies that have been undertaken in Europe in the last few years. The main emphasis of the book is to highlight how this method can be employed to inform environmental, agricultural, natural resource management and food policies at the European Union (EU) level. Case studies presented in this volume are from eight countries across the EU, including France, Finland, Greece, Ireland, Italy, Poland, Spain and UK, and cover a wide array of issues ranging from landscapes, biodiversity, cultural heritage, noise pollution, forests and water resources to food labelling. The findings reported in this book reveal that the monetary cost and benefit values captured through the CEM for various stakeholders can be used to inform efficient, effective and equitable design and implementation of various EU level policies and directives, such as Common Agricultural Policy, Water Framework Directive, Forestry Strategy, Habitats Directive and food labelling systems to name a few. Finally, the book also presents some of the most recent developments in the choice experiment theory and analysis, as well as several interesting and cutting edge applications of these developments.

Este trabajo investiga el premio de la “belleza” en una muestra de ingenieros comerciales egresados desde 1978 a 1998. Usando un diseño experimental se construyó un índice de belleza por individuo en base a la percepción de un grupo de personas seleccionadas aleatoriamente, quienes calificaron fotos. Los resultados indican que el efecto de la “belleza” está presente sólo en los años iniciales en el mercado laboral, como un “premio” por estar sobre el promedio para las mujeres, llegando a ser del orden del 33%, y como un “castigo” por estar bajo el promedio para los hombres, cercano al 36%. Otro resultado es que el efecto para los hombres se disipa más rápidamente que para las mujeres, a medida que ganan experiencia en el mercado laboral. Por último, aunque la evidencia no es concluyente los resultados indican que el premio a la belleza es mayor en el sector privado y para trabajadores dependientes o empleados.

The European Union’s Council Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development has introduced promising changes in rewarding farmers by the implementation of conservation auctions and granting farmers’ transaction costs. The paper therefore deals with the evaluation of private transaction costs within a case study using repeated auctions to reward plant biodiversity. Based on a review of the current literature the paper develops a specific definition of transaction costs as well as a methodology to measure and calculate the farmers’ private transaction costs. The case study enfolds two field experiment auctions and two corresponding surveys. The transaction costs are measured by the use of written questionnaires and will be discussed both as a first reference value of farmers’ transaction costs as well as compared to the individual payments within the case study auctions in order to investigate the real-life performance of this specific application of repeated conservation auctions in biodiversity protection efforts.

We investigated the importance of the social context for people’s voluntary contributions to a national park in Costa Rica, using a natural field experiment. Some subjects make actual contributions while others state their hypothetical contribution. Both the degree of anonymity and information provided about the contributions of others influence subject contributions in the hypothesized direction. We found a substantial hypothetical bias with regard to the amount contributed. However, the influence of the social contexts is about the same when the subjects make actual monetary contributions as when they state their hypothetical contributions. Our results have important implications for validity testing of stated preference methods: a comparison between hypothetical and actual behavior should be done for a given social context.

This study tests the hyperbolic discounting hypothesis using real-payoff experiments in Ethiopia. We compared time preferences over cash and consumption goods and over different time horizons. We found that participants made consistent choices over time and that responses did not vary across payment type. However, participants offered an immediate payment option first selected the impatient reward more often than those offered a delayed payment initially. Participants with greater livestock wealth and smaller landholdings were more likely to select the patient reward.

The European Union’s Council Regulation on support for rural development by the European Agricultural Fund for Rural Development has introduced auctioning as a new instrument for granting agri-environmental payments and awarding conservation contracts for the recent multi-annual budgetary plan. This paper therefore deals with the conception and results of two case study auctions for conservation contracts. Results of two field experiments show much differentiated bid prices in the model-region and budgetary cost-effectiveness gains of up to 21% in the first auction and up to 36% in the repeated auction. Besides these promising results, some critical aspects as well as lessons to be learned will also be discussed in this paper to improve the design and performance of upcoming conservation auctions.

Background: Discrete-choice experiments (DCEs), while becoming increasingly popular, have rarely been tested for validity and reliability. Objective: To address the issues of validity and reliability of willingness-to-accept (WTA) values obtained from DCEs. In particular, to examine whether differences in the attribute set describing a hypothetical product have an influence on preferences and willingness-to-pay (WTP) values of respondents. Methods: Two DCEs were designed, featuring hypothetical insurance contracts for Swiss healthcare. The contract attributes were pre-selzected in expert sessions with representatives of the Swiss healthcare system, and their relevance was checked in a pre-test. Experiment A contained rather radical health system reform options, while experiment B concentrated on more familiar elements such as copayment and the benefit catalogue. Three attributes were present in both experiments: delayed access to innovation (‘innovation’), restricted drug benefit (‘generics’), and the change in the monthly premium (‘premium’). The issue to be addressed was whether WTA values for the overlapping attributes were similar, even though they were embedded in widely differing choice sets. Two representative telephone surveys with 1000 people aged >25 years were conducted independently in the German and French parts of Switzerland during September 2003. Socioeconomic variables collected included age, sex, education, total household income, place of residence, occupation, and household size. Three models were estimated (a simple linear model, a model allowing interaction of the price attribute with socioeconomic characteristics, and a model with a full set of interaction terms). Results: The socioeconomic characteristics of the two samples were very similar. Theoretical validity tends to receive empirical support in both experiments in all cases where economic theory makes predictions concerning differences between socioeconomic groups. However, a systematic inappropriate influence on measured WTA seems to be present in at least one experiment. This is likely to be experiment A, in which respondents were far less familiar with proposed alternatives than in experiment B. Conclusions: Measuring preferences for major, little-known innovations in a reliable way seems to present particular challenges for experimental research. In health economics, stated-preference methods such as discrete-choice experiments (DCEs) have been increasingly used to measure benefits. Applications of DCEs to the valuation of healthcare programs have recently become numerous.[1–3] In a DCE, individuals are given a choice between hypothetical commodities. From the choices that respondents make between the goods (differing in product attributes), the researcher can derive the implicit trade-offs between the product attributes. This allows the computation of respondents’ marginal utility for each attribute. With the inclusion of a cost or price attribute, a money value can be calculated for each characteristic as well as for the entire good or program. The advantage of this approach over other stated-preference methods (e.g. the contingent-valuation [CV] method), lies in the fact that the price attribute is one among several, of which all vary in the course of the experiment. Biases that occur when individuals are asked directly about their willingness to pay (WTP) are less likely to be observed in DCEs.[4] Applications of DCEs in health economics so far mainly comprise studies of WTP for different treatment methods[5–9] or different hospital or physician services.[10,11] DCEs that deal with the health system as a whole (e.g. the present study) are rare.[12] DCEs are usually limited to a small number of attributes.[1,13] In particular, when the product is defined as an entire healthcare system, this raises the question of whether neglected attributes influence the decisions of the respondents, causing bias in the WTP values obtained. Furthermore, it is often unclear what specific effects certain reform proposals will have in practice, which makes the hypothetical character of the experiment more problematic. However, reliable and valid WTP values are of utmost importance if policy recommendations are to be derived from DCE studies.[1] This paper adds to the literature in two ways. First, it seeks to measure and analyze willingness-to-accept (WTA) values for proposed changes to an entire healthcare system; something that has rarely been attempted thus far. Second, it benefits from the unique opportunity to conduct two parallel DCEs with two independent samples for addressing validity and reliability issues, made possible by the inclusion of three overlapping attributes in both DCEs. To the best knowledge of the authors, comparative DCEs have only been conducted by Slothuus-Skoldborg and Gyrd-Hansen,[12] who analyzed WTP for screening methods for different types of cancer, and by Merino-Castellò,[6] who studied the demand for two different drugs. In the field of environmental economics, DeShazo and Fermo[14] have undertaken two DCEs concerning national park attributes in two different countries. The aim of the present study is to examine whether differences in the attribute set describing a hypothetical product have an influence on preferences and WTP values of respondents. This can be tested thanks to three overlapping attributes.

We conduct a field experiment on direct and indirect transfer mechanisms. It shows that people are willing to donate significantly more if the donation is indirect, i.e., it is tied to the purchase of a good with a price premium, rather than made directly. This points to an efficiency–effectiveness trade–off: even though indirect donations are less efficient than direct donations, they are more effective in mobilizing resources. Our findings hold for ‘Fair Trade’ coffee as well as for ‘normal’ coffee. However, the strength of the efficiency–effectiveness trade–off is higher in the case of ‘Fair Trade’.

Ecological Economics, 64 (4), ISSN:0921-8009

Laboratory experiments in psychology find that media violence increases aggression in the short run. We analyze whether media violence affects violent crime in the field. We exploit variation in the violence of blockbuster movies from 1995 to 2004, and study the effect on same-day assaults. We find that violent crime decreases on days with larger theater audiences for violent movies. The effect is partly due to voluntary incapacitation: between 6PM and 12AM, a one million increase in the audience for violent movies reduces violent crime by 1.1 to 1.3 percent. After exposure to the movie, between 12AM and 6AM, violent crime is reduced by an even larger percent. This finding is explained by the self-selection of violent individuals into violent movie attendance, leading to a substitution away from more volatile activities. In particular, movie attendance appears to reduce alcohol consumption. Like the laboratory experiments, we find indirect evidence that movie violence increases violent crime; however, this effect is dominated by the reduction in crime induced by a substitution away from more dangerous activities. Overall, our estimates suggest that in the short-run violent movies deter almost 1,000 assaults on an average weekend. While our design does not allow us to estimate long-run effects, we find no evidence of medium-run effects up to three weeks after initial exposure.

We devise and execute three experiments to test key features of models of household decision-making. Using established couples (married and unmarried) we test income pooling, unanimity and Pareto efficiency. Subjects make choices individually and jointly and are asked to make predictions about their partner’s choices. Unanimity is rejected. Income pooling is not rejected in joint choice but has less explanatory power in individual choice. In direct tests both sexes do not pool income completely, but in econometric tests across all tasks, women place an equal weight on payoffs but men discount their partner’s payoffs by between 15 and 20%. We find that transparency has little impact on deviations from income pooling or indeed on behaviour generally. Many joint choices deviate from the Pareto principle in a systematic manner suggesting that choices made as a couple are more risk averse than individual decisions.

Broadly speaking, economic experiments and surveys have found trust to be much lower in Africa than in industrialized countries. We analyze new experimental and survey results from rural Cameroon, where the average level of trust appears to be much higher than is typical of Africa. A substantial part of this difference can be explained by the prevalence of Rotating Saving and Credit Associations (ROSCAs) in the area: membership of a common ROSCA is one of the most important factors determining experimental behavior. Correspondingly, responses to the survey questions indicate that villagers have a high degree of trust in people with whom they interact regularly, though not in people in general. There is a significant correlation between the degree of trust exhibited in the game and the degree of trust declared in response to survey questions. However, survey responses do not capture all of the systematic variation in experimental behavior, and understate the importance of ROSCA membership in predicting someoneÕs propensity to trust others.

This paper evaluates the effects of a professionally assisted consumer-directed program (Personal Budgets) compared to the standard home care programs of the German long-term care insurance. The evaluation makes use of a long-run social experiment at seven different sites with a random assignment into a treatment group receiving personal budgets and a control group in standard home care programs, i.e. an in-kind benefit (agency care) and cash payments. Compared to agency care personal budgets yield better care outcomes with regard to the overall support of formal and informal caregivers. In contrast, personal budgets do not improve care outcomes compared to the much less generous cash payments due to a strong crowding out of informal by formal care.

We report results from a Cournot triopoly experiment with different subject pools: German students, Malaysian students, and Malaysian managers. While German students play Nash, we reject the hypothesis that both Malaysian students and managers select the Nash quantity. Moreover, Malaysian managers perform significantly less competitively than Malaysian students. Finally, the affect of gender is opposite for German and Malaysian subjects.

In interpreting questions, respondents extract meaning from how the information in a questionnaire is shaped, spaced, and shaded. This makes it important to pay close attention to the arrangement of visual information on a questionnaire. Respondents follow simple heuristics in interpreting the visual features of questions. We carried out five experiments to investigate how the effect of visual heuristics affected the answers to survey questions. We varied verbal, numerical, and other visual cues such as color. In some instances the use of words helps overcome visual layout effects. In at least one instance, a fundamental difference in visual layout (violating the 'left and top means first' heuristic) influenced answers on top of word labels. This suggests that both visual and verbal languages are important. Yet sometimes one can override the other. To reduce the effect of visual cues, it is better to use fully labeled scales in survey questions.

We conduct a field experiment at a nonprofit organization's online store to study how demand changes when consumers' purchases can generate revenue for a charitable cause. When purchases can trigger a small donation by an outside anonymous group, consumers respond strongly and apparently without regard for the specific conditions that trigger the donation. Consumers respond similarly when the outside donation requires a personal donation which consumers generally decline. When the outside donations are relatively large, however, consumers appear to pay close attention to the trigger conditions, and increase their purchases only where needed to generate the outside donation. Overall, increasing the salience of financial incentives weakens consumers' positive responses to the outside group's donation pledges. We also present evidence that the donation pledges have positive long-term effects on demand and may reduce price sensitivity.

We measure the impact of a business training program for female microentrepreneur clients of a group banking program in Peru. Using the credit with education model, we assigned clients randomly to either treatment or control groups. Treatment groups received thirty to sixty minute entrepreneurship training sessions during their normal weekly group banking meeting. These lasted between one to two years. Control groups remained as they were before, meeting weekly with the group banking program solely for making loan and savings payments. We find that intention to treat (ITT) led to higher repayment and client retention rates for the microfinance institution, improved business knowledge, and practices. More importantly, average business sales revenues also increase while revenues fluctuations were reduced. In addition, we find significant heterogeneity in the exposure of clients within the treatment group. Treatment on the treated (TOT) estimates, obtained using ITT as instrumental variable, show substantially larger effects.

Changes in communication technology have allowed for the expansion of data collection modes in survey research. The proliferation of the computer has allowed the creation of web and computer assisted auto-interview data collection modes. Virtual worlds are a new application of computer technology that once again expands the data collection modes by VASI (Virtual Assisted Self Interviewing). The Virtual Data Collection Interface (VDCI) developed at Indiana University in collaboration with the German Socio-Economic Panel Study (SOEP) allows survey researchers access to the population of virtual worlds in fully immersive Heads-up Display (HUD)-based survey instruments. This expansion needs careful consideration for its applicability to the researcher's question but offers a high level of data integrity and expanded survey availability and automation. Current open questions of the VASI method are an optimal sampling frame and sampling procedures within e. g. a virtual world like Second Life (SL). Further multi-modal studies are proposed to aid in evaluating the VDCI and placing it in context of other data collection modes.

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.

Provides some theoretical developments on the topic of the performativity of economics., Propose quelques développements théoriques sur le thème de la performativité des sciences économiques.

The effects of the three-point rule in first league German soccer are tested empirically and compared to games from the German cup-competition. The inclusion of cup games ensures that changes in league games can be attributed to the three-point rule. As a result of their relative devaluation, the number of draws should decrease. Furthermore, an increase in the number of close wins is expected. The strategy of a leading team becomes more defensive, resulting in fewer goal shootings by that team, as well as fewer shooting opportunities for the opponent. Empirical evidence supporting these effects is found.

A vast body of empirical studies lends support to the incentive effects of rank-order tournaments. Evidence comes from experiments in laboratories and non-experimental studies exploiting sports or firm data. Selection of competitors across tournaments may bias these non-experimental studies, whereas short task duration or lack of distracters may limit the external validity of results obtained in lab experiments or from sports data. To address these concerns we conducted a field experiment where students selected themselves into tournaments with different prizes. Within each tournament the best performing student on the final exam of a standard introductory microeconomics course could win a substantial financial reward. A standard non-experimental analysis exploiting across tournament variation in reward size and competitiveness confirms earlier findings. We find however no evidence for effects of tournament participation on study effort and exam results when we exploit our experimental design, indicating that the non-experimental results are completely due to sorting. Treatment only affects attendance of the first workgroup meeting following the announcement of treatment status, suggesting a difference between short-run and long-run decision making.

Using a sample of established couples, we conduct an experiment on household decision-making. Individual partners first make a series of dichotomous choices between household goods and vouchers for experiences and then the couple jointly face the same choices. A random lottery device is used to incentivize the decisions. We find clear evidence of turn-taking as a method of resolving disagreements. In other words, when one partner wins one disputed question, it raises the probability that the other partner wins the next dispute. Given the arbitrary order of the questions this suggests that standard decision-theoretic models of household behaviour are inadequate and that instead, much behaviour might be concerned with relationship maintenance rather than the allocation of goods.

There is a longstanding concern that material rewards might undermine pro-social motivations, thereby leading to a decrease in blood donations. This paper provides an empirical test of how material rewards affect blood donations in a three-month large-scale field experiment and a fifteen-month follow-up period, involving more than 10,000 previous donors. We examine the efficacy of a lottery ticket as a reward vis-a-vis a standard invitation, an appeal, and a free cholesterol test. The offer of a lottery ticket, on average, increases the probability to donate blood during the experiment by 5.6 percentage points over a baseline donation rate of 46%. We find that this effect is driven by less motivated donors. Moreover, no reduction in donations is observed after the experiment.

Awards in the form of orders, decorations, prizes, and titles are ubiquitous in monarchies and republics, private organizations, not-for-profit, and profit-oriented firms. This paper argues that awards present a unique combination of different stimuli and that they are distinct and unlike other monetary and non-monetary rewards. Despite their relevance in all areas of life awards have not received much scientific attention. We propose to study awards and present results on a vignette experiment that quantifies and isolates the effects of different award characteristics such as the publicity associated with winning an award. Further, employing a unique data set, we demonstrate that there are substantial differences in the intensity of usage of awards across countries.

In a long-run social experiment, personal budgets have been tested as an alternative to the home care programs of the German long-term care insurance (LTCI). Due to extending the coverage beyond LTCI approved services and agencies, personal budgets may improve care outcomes compared to the provision of agency care at a constant benefit level, a highly desirable result in light of the ongoing demographic challenge. However, personal budgets also compete with the less generous cash option of the LTCI. Any transition from cash recipients to personal budgets increases LTCI spending, while care outcomes may remain unchanged if informal caregivers are crowded out by formal care. This paper compares care outcomes of the different home care programs and provides a rough cost analysis from the perspective of the LTCI. While personal budgets improve care outcomes compared to agency services, the nationwide introduction of personal budgets increases LTCI spending for former cash recipients without any traceable effect on their care outcomes.

A publisher uses an honor system for selling a newspaper in the street. The customers are supposed to pay, but they can also pay less than the price or not pay at all. We conduct an experiment to study honesty in this market. The results show that appealing to honesty increases payments, whereas reminding the customers of the legal norm has no effect. Furthermore, appealing to honesty does not affect the behavior of the dishonest. These findings suggest that some people have internalized an honesty norm, whereas others have not, and that the willingness to pay to obey the norm differs among individuals. In a follow-up survey study we find that honesty is associated with family characteristics, self-esteem, social connectedness, trust in the legal system, and compliance with tax regulations.

This study uses the findings of a correspondence testing in order to assess the potential discrimination at job access level against young people of ethnic origin from the underprivileged suburbs of the Paris area (Ile-de-France). We measure simultaneously the effects of place of residence (privileged or underprivileged city), of nationality (French or Moroccan), and of sound of surname and of forename on the chances of obtaining a job interview when answering a job ad. We base our assessment on a controlled experiment conducted on the profession of accountant. We constructed 16 jobseeker profiles and sent 1097 resumes in reply to 140 job vacancies advertised at the end of 2006. We find evidence of a significant discrimination against the candidates with a foreign origin., Cette étude utilise les résultats d'un test de correspondance afin d'évaluer la discrimination potentielle lors de l'accès aux entretiens d'embauche, pour les jeunes d'origine étrangère résidant dans des communes défavorisées d'Île de France. Nous mesurons simultanément les effets de la commune de résidence (ville favorisée ou défavorisée), de la nationalité (française ou marocaine) et de la consonance du nom et du prénom, sur les chances d'obtenir un entretien d'embauche en réponse à une offre d'emploi. Notre évaluation repose sur une expérience contrôlée réalisée sur la profession de comptable. Nous avons construit 16 profils de candidature et avons envoyé 1097 CV en réponse à 140 offres d'emploi postées à la fin de l'année 2006. Nous trouvons qu'il existe une discrimination significative à l'encontre des candidats d'origine étrangère.

In this paper we investigate whether there are differences in design effects between trained and fresh respondents. In three experiments, we varied the number of items on a screen, the choice of response categories, and the layout of a five point rating scale. We find that trained respondents are more sensitive to satisficing and select the first acceptable response option more often than fresh respondents. Fresh respondents show stronger effects with regard to verbal and nonverbal cues than trained respondents, suggesting that fresh respondents find it more difficult to answer questions and pay more attention to the details of the response scale in interpreting the question.

Observed choices in Social Dilemma Games usually take the form of bounded integers. We propose a doubly-truncated count data framework to process such data. We compare this framework to past approaches based on ordered outcomes and truncated continuous densities using Bayesian estimation and model selection techniques. We find that all three frameworks (i) support the presence of unobserved heterogeneity in individual decision-making, and (ii) agree on the ranking of regulatory treatment effects. The count data framework exhibits superior efficiency and produces more informative predictive distributions for outcomes of interest. The continuous framework fails to allocate adequate probability mass to boundary outcomes, which are often of pivotal importance in these games.

We study bargaining at the end of high-stakes poker tournaments, in which participants often negotiate a division of the prize money rather than bear the risk of playing the game until the end. This setting is ideal for studying bargaining: the stakes are substantial, there are no restrictions on the negotiations or the terms of a deal, outside options are clearly defined, there are no agency conflicts, and there is little private information. Even in this setting, we find that risk-reducing deals often are not completed or even proposed. As expected, we find that players are more likely to negotiate when the gains to trade are large and when the coordination costs are lower. Surprisingly, although the likelihood of a successful deal is increasing in the stakes, this relation is driven only by the tournaments with the very largest prizes. It is also puzzling that the success of a proposal depends on who makes it, but initiating a proposal does not affect the proposing player's payoff in a completed deal. Divisions of prizes are closely related to players' outside options, while at the same time one of two focal points are often chosen. We also find intriguing differences between two-player deals and deals with three or more players.

This paper uses data from the popular television game-show, "Deal or No Deal?", to analyse the way individuals make choices under risk. In a unique approach to the problem, I present a formal game-theoretical model of the show in which both the contestant and the banker are modelled as strategic players. I use standard techniques to form hypotheses of how rational expected utility-maximisers would behave as players in the game and I test these hypotheses with the relevant choice data. The main result is that an increasing o¤er function is the result of optimal behaviour when the banker is uncertain about the contestant.s risk attitudes. This result provides a theoretical foundation to the empirical model of the banker that pervades the literature. Estimates of the coefficient of relative risk aversion are consistent with estimates from other studies and estimates of the discernment parameter suggest contestants have difficulty making choices.