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We conduct a remittance field experiment among Salvadoran migrants in the metro DC area. Migrants need to decide whether or not to remit funds to a recipient in El Salvador and if so how much. We maintain a (2×2) design in which the remittance budget has a value of $400 or $200, and the remitted funds arrive as cash or grocery vouchers that are non-transferable and applicable to basic necessities that do not include alcohol and cigarettes. Each migrant is randomly allocated to one of the resulting four treatments. We test across these treatments whether control over remittance spending in the form of grocery vouchers affects remittance behavior. We find the following. Our quantitative findings suggest that migrants prefer a remittance to arrive as cash than as groceries when stakes are high. This result is robust to inclusion of a wide set of covariates and is consistent with a conceptual framework in which migrants have preferences over how recipients spend remittances. Our qualitative findings suggest that migrants integrate amounts sent in the experiment with the external environment for sending remittances. We explore the mechanisms underlying the main effect and find that migrants who more recently sent a remittance and, in certain specifications, male migrants exhibit a greater preference for cash. Some implications of our findings are discussed.

“Site selection bias” can occur when the probability that a program is adopted or evaluated is correlated with its impacts. I test for site selection bias in the context of the Opower energy conservation programs, using 111 randomized control trials involving 8.6 million households across the United States. Predictions based on rich microdata from the first 10 replications substantially overstate efficacy in the next 101 sites. Several mechanisms caused this positive selection. For example, utilities in more environmentalist areas are more likely to adopt the program, and their customers are more responsive to the treatment. Also, because utilities initially target treatment at higher-usage consumer subpopulations, efficacy drops as the program is later expanded. The results illustrate how program evaluations can still give systematically biased out-of-sample predictions, even after many replications.

This paper examines firms’ incentives to develop a new (green) product, which might compete against the pollutant (brown) good that they traditionally sell. We show that in equilibrium more than one firm might develop a green product, but such an equilibrium outcome is not necessarily efficient. In particular, we predict an excessive amount of green goods under certain conditions, namely, when the green product is extremely clean but both products are not sufficiently differentiated in their attributes, and when the green product is not significantly cleaner than the brown good. We finally provide policies that help regulatory authorities promote equilibrium outcomes yielding the highest social welfare.

We conduct experiments with adolescent participants on repeated fixed play in three different zero-sum games which have mixed strategy minimax solutions. Further, we collect subject information on cognitive abilities and participation rates in competitive activities. We find the adolescents' correspondences with and deviations from minimax play largely consistent with previously and widely studied adult populations. Further, we find strategic sophistication in terms of implementation of the mixed minimax strategy as well as earnings are not correlated with cognitive ability nor previous experience in competitive situations.

Market outcomes depend on the quality of information available to its participants. We measure the effect of information disclosure on market outcomes using a large-scale field experiment that randomly discloses quality information in wholesale automobile auctions. We argue that buyers in this market are horizontally differentiated across cars that are vertically ranked by quality. This implies that information disclosure helps match heterogeneous buyers to cars of varying quality, causing both good and bad news to increase competition and revenues. The data confirm these hypotheses. These findings have implications for the design of other markets, including e-commerce, procurement auctions, and labor markets. (JEL C93, D44, D82, L15)

We conduct a social dilemma experiment in which real-world leaders can punish group members as a third party. Despite facing an identical environment, leaders are found to take remarkably different punishment approaches. The different leader types revealed experimentally explain the relative success of groups in managing their forest commons. Leaders who emphasize equality and efficiency see positive forest outcomes. Antisocial leaders, who punish indiscriminately, see relatively negative forest outcomes. Our results highlight the importance of leaders in collective action, and more generally the idiosyncratic but powerful roles that leaders may play, leading to substantial variation in group cooperation outcomes. (JEL C93, D03, O13, Q23)

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.

We present evidence from a natural field experiment designed to shed light on the efficacy of alternative fundraising schemes. In conjunction with the Bavarian State Opera House, we mailed 25,000 regular opera attendees a letter describing a charitable fundraising project organized by the opera house. Recipients were randomly assigned to six treatments designed to explore behavioral responses to fundraising schemes varying in two dimensions: (i) the presence of a lead donor; (ii) whether and how individual donations would be matched using the lead donation. We provide reduced form evidence from the field experiment on the causal impact of each fundraising scheme on the extensive and intensive margins of giving. We then develop and estimate a structural model of giving behavior that simultaneously estimates individual responses on both margins. We utilize the structural model to predict giving behavior in counterfactual fundraising schemes. The evidence suggests the optimal fundraising scheme is one in which the charitable organization merely announces the existence of a significant and anonymous lead donor, and does not use the lead donation to match donations in any way, be it through linear matching, non-linear matching, threshold matching, or some combination of the three. We conclude by discussing evidence from a follow-up field experiment designed to probe further the question why lead donors are effective.

From the early literature on the role of firm managers (Alchian and Demsetz 1972) to the industrial organisation on contracts and mechanism design (Laont and Martimort 2009), economists have given a lot of attention to find solutions to the imperfect alignment between individuals' incentives and an organisation's collective goals (Prendergast 1999). In that literature a key role of managers is to monitor individuals to reward behaviour aligned with the collective goals and reduce sub- optimal behaviour, such as shirking. How- ever, another strand of literature, since Akerlof (1982), has put forward a vision of reciprocal behaviour between an organisation's leadership and its members: gifts (high wages, recognition) from the organisation are reciprocated by high effort from the members of the organisation. By rewarding individual members (rather than strictly monitoring them), organisations may benefit from greater effort and cohesion. Experimental research in organizational economics has provided mixed results suggesting that agents do react to personal incentives but also that reciprocal behaviour can play a substantial role (Camerer and Weber 2012).

We analyze data from a field experiment in which an auto repair firm provided checklists to mechanics and monitored their use. Revenue was 20 percent higher during the experiment, and the effect is equivalent to that of a 1.6 percentage point (10 percent) commission increase. Checklists appear to boost productivity by serving both as a memory aid and a monitoring technology. Despite the large benefits to the firm, mechanics did not use checklists without the firm directly monitoring their use. We show that a moral hazard can explain why mechanics do not otherwise adopt checklists. (JEL C93, D82, L25, L81)

A commonly held view is that laboratory experiments provide researchers with more “control” than natural field experiments. This paper explores how natural field experiments can provide researchers with more control than laboratory experiments. While laboratory experiments provide researchers with a high degree of control in the environment which participants agree to be experimental subjects, when participants systematically opt out of laboratory experiments, the researcher's ability to manipulate certain variables is limited. In contrast, natural field experiments bypass the participation decision altogether due to their covertness, and they allow for a potentially more diverse participant pool within the market of interest.

We use an RCT to analyze the impacts of microcredit. The study population consists of loan applicants who were marginally rejected by an MFI in Bosnia. A random subset of these were offered a loan. We provide evidence of higher self-employment, increases in inventory, a reduction in the incidence of wage work and an increase in the labor supply of 16–19-year-olds in the household's business. We also present some evidence of increases in profits and a reduction in consumption and savings. There is no evidence that the program increased overall household income. (JEL C93, G21, I38, J23, L25, P34, P36)

This paper examines whether individual and team incentives can improve student learning and performance using a theoretical analysis and a randomized eld experiment. If individual incentives are provided to students based on a specied target or performance standard for all, on the one hand it may not work for the low-ability students if they perceive the target to be too high, while on the other hand the high-ability students will win the prizes without extra eort if the target is too low. Only students with an ability level close to the target will attempt to win by working harder. If the students are grouped in teams and evaluated based on the team average, incentives can have an eect for all students across the spectrum of ability, because the average team abilities are pushed toward the target and there is also an incentive to help each other within teams. A team incentive augmented with a tournament component may be even more desirable because it eliminates the target, inducing all teams to work harder, because they do not know what the quality and eort of their competitors will be. However, team incentives may be prone to free riding and coordination problems. This paper presents the results of a randomized eld experiment for a representative sample of 100 Beninese secondary schools to compare these three methods of incentivizing students.

This article reports results from economic field experiments with cattle-dependent small-scale farmers in West Africa. We simultaneously estimate both risk and time preferences and examine how demographic and socio-economic characteristics are correlated with each preference. The empirical basis for our analysis is a panel data survey of 211 households conducted in Mali and Burkina Faso in 2007 and 2011, and economic experiments conducted with the heads of these households in 2011. The theoretical basis for our analysis is a discounted utility model. We apply prospect theory and quasi-hyperbolic discounting to estimate the present values of future utility streams. We apply a maximum likelihood approach to jointly estimate risk and time preferences, and to investigate the correlations among the preference parameters and observable characteristics. We find that, on average, the West African cattle farmer is generally more risk averse and more patient than similarly-situated respondents from Asia. Additionally, risk and time preferences are correlated with wealth, education, and religion. We find that constraints in wealth and education are associated with greater risk aversion and impatience. Furthermore, time spent in a Koranic school is positively related to the overweighting of small probabilities, greater risk-taking behavior, and patience.

Low-quality infrastructure services are persistent in developing countries, a situation mainly affecting the poorest households in contexts of high rates of informal access and heavily subsidized services. This paper exploits choice experiments, specifically designed for formal and informal users, to examine whether households in this situation are willing to pay for electricity service improvements. The analysis takes place in urban Dominican Republic, a country with one of the highest rates of electricity theft and lowest quality of services. The results strongly indicate that households value service improvements, showing average willingness to pay around US$9 for informal users, and 22 percent for formal users with service deficiencies. The estimated valuations are significantly heterogeneous across households, and such variance is mainly explained by household income, satisfaction with the electricity service, and household characteristics, such as family size and dwelling size. These results indicate substantial welfare losses derived from low-quality electricity services equivalent to over 35 percent of the direct fiscal subsidy to the utilities.

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.

This paper evaluates the effect of positive inducements on tax behavior by exploiting a natural experiment in which a municipality of Argentina randomly selected 400 individuals among more than 72,000 taxpayers who had complied with payment of their property tax. These individuals were publicly recognized and awarded the construction of a sidewalk. Results indicate that: i) being selected in the lottery and publicly recognized by the government has a positive but not persistent effect on future compliance; ii) receiving the sidewalk has a large positive and persistent effect; iii) high and persistent spillover effects exist: some neighbors of those who receive the reward comply more too, and these effects can be even larger than the direct effects; and iv) there is no financial motive effect; i.e., people do not pay their taxes just to participate in the lottery. Recognition serves only as a short-term incentive, but the provision of a durable and visible good has more persistent and broader effects. These findings provide evidence on features that make a positive inducement more successful, whether for tax compliance or other policy purposes.

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.

Social learning is a rapidly growing field for empirical and theoretical research in economics. We encounter social learning in many economically important phenomena, such as the adoption of new products and technologies or job search in labor markets. We review the existing empirical and theoretical literatures and argue that they have evolved largely independently of each other. This suggests several directions for future research that can help bridge the gap between both literatures. For example, the theory literature has come up with several models of social learning, ranging from naïve DeGroot models to sophisticated Bayesian models whose assumptions and predictions need to be empirically tested. Alternatively, empiricists have often observed that social learning is more localized than existing theory models assume, and that information can decay along a transmission path. Incorporating these findings into our models might require theorists to look beyond asymptotic convergence in social learning.

Hypothetical bias remains a major problem when valuing non-market goods with stated preference methods. Originally developed for Contingent Valuation studies, Cheap Talk has been found to effectively reduce hypothetical bias in some applications, though empirical results are ambiguous. We discuss reasons why Cheap Talk may fail to effectively remove hypothetical bias, especially in Choice Experiments. In this light, we suggest augmenting Cheap Talk in Choice Experiments with a so-called Opt-Out Reminder. Prior to each single choice set, the Opt-Out Reminder explicitly instructs respondents to choose the opt-out alternative if they find the experimentally designed alternatives too expensive. In an empirical Choice Experiment survey we find the Opt-Out Reminder to significantly reduce total WTP and to some extent also marginal WTP beyond the capability of the Cheap Talk applied without the Opt-Out Reminder. This suggests that rather than merely adopting the Cheap Talk practice directly from Contingent Valuation, it should be adapted to fit the potentially different decision processes and repeated choices structure of the Choice Experiment format. Our results further suggest that augmenting Cheap Talk with a dynamic Opt-Out Reminder can be an effective and promising improvement in the ongoing effort to remedy the particular types of hypothetical bias that potentially continue to invalidate Choice Experiment surveys.

We provide an empirical test of contrast effects—a bias where a decision maker perceives information in contrast to what preceded it—in the quasi-experimental context of speed dating decisions. We document that prior partner attractiveness reduces the subsequent likelihood of an affirmative dating decision. This relationship is confined to recent interactions, consistent with a perceptual error, but not learning or the presence of a quota in affirmative responses. The contrast effect is driven almost entirely by male evaluators. Additional evidence documents the effect's linearity with respect to prior partner attractiveness, its amplification for partners of moderate attractiveness, and its partial attenuation with accumulated experience. © 2014 The President and Fellows of Harvard College and the Massachusetts Institute of Technology

We randomly assigned male migrant workers in Qatar invitations to a motivational workshop aimed at improving financial habits and encouraging joint decision-making with spouses back home in India. 13–17 months later, we surveyed migrants and wives to estimate intent-to-treat impacts in their transnational households. Wives of treated migrants changed their financial practices and became more likely to seek out financial education themselves. Treated migrants and their wives became more likely to make joint decisions on money matters. Treatment effects on financial outcomes show potential heterogeneity, with those with lower prior savings saving differentially more than those with higher prior savings.

This paper estimates how experimentally-manipulated experiences with a novel financial product, rainfall index insurance, affect subsequent insurance demand. Using a seven-year panel, we develop three main findings. First, recent experience matters for demand, consistent with overinference from small samples. Second, spillovers also matter, in the sense that the recent payout experience of village co-residents affects insurance demand about as much as one's own recent payout experience. Third, the spillover effect decays as time passes while the effect of one's own experience does not. We discuss implications of this analysis for commercial sustainability of this complicated but promising risk management technology.

Ce texte a pour ambition de revenir sur une procedure d’experimentation destinee a tester l’impact du vote par approbation ainsi que du vote par note sur l’ampleur de ce qu’on a coutume d’appeler le vote utile. Les resultats de ces experiences, menees lors des elections presidentielles francaises de 2007 et de 2012, ont fait l’objet de deux articles publies dans la Revue economique. Notre objectif est ici d’attirer l’attention du lecteur sur la conception implicite qui sous-tend ces experiences : le vote comme outil de devoilement des preferences individuelles. Une telle orientation se fait au detriment d’une conception strategique du vote, c’est-a-dire envisage comme processus de coordination. La procedure experimentale mise en place tend a gommer cette dimension, en ne fournissant pas aux votants de reperes informationnels relatifs aux choix d’autrui. On parlera a cet effet d’isolation informationnelle.

Political campaigns spend millions of dollars each voting cycle on persuading voters, and it is well established that these campaigns do affect voting decisions. What is less understood is what element of campaigningÑthe content of the message or the delivery method itselfÑ sways voters, a question that relates back to how advertising works generally. We use a field experiment in a 2010 general election for local office to identify the persuasive mechanism behind a particular form of campaigning: candidate door-to-door canvassing. In the experiment, the candidate either canvassed a household or left literature without meeting the voters. In addition, the literature either contained information on the candidate or on how to vote. Our main result is that voters are most persuaded by personal contact (the delivery method), rather than the content of the message. Given our setting, we conclude that personal contact seems to work, not through social pressure, but by providing a costly or verifiable signal of quality. Length: 49

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.

The new public management account requires an opening balance sheet which needs to depict all assets and capital. This is also true for heritage assets in public museums. However, there exists neither in Germany nor generally an accepted international valuation approach, while at the same time there is a cut for public budget. As a result, the communes must decide on which area of responsibility to allocate financial resources and in what amount. With regard to museums, it means to define the tasks according to the strategic target planning, and to consequently derive the portfolio of the museum. The following article aims at designing a model for the challenge described. This is based on a trans-disciplinary approach and builds upon an extensive literature study, qualitative expert interviews and an evaluation in three existing museums. The focus is on the question of how art and cultural objects can be valued for accounting purposes. It is important to value the assets not only according to economic criteria but, due to the special task of museums, to also assess assets after their social benefits.

To analyse whether or not market success is affected by one’s forename, twelve fictional market participants were created. For each of them classified ads were placed in (real) magazines, pretending (1) to be looking for a relationship, (2) to offer private lessons, and (3) to be looking for an apartment. Afterwards the persons who had been trying to contact the fictional market participants were counted. Ceteris paribus market participants bearing attractive German forenames got more offers than those with less attractive German or Turkish forenames, at least on the relationship and residential market. Calculations of binary logistic regressions reveal that persons bearing less attractive German forenames or Turkish forenames are significantly less likely to receive answers to their relationship ads than persons with attractive German forenames. Persons bearing male Turkish forenames are also significantly less likely to receive answers to their relationship ads than male persons with less attractive German forenames. / Um zu untersuchen, ob Vornamen den Erfolg von Marktteilnehmern beeinflussen, wurden für 12 fiktive Testpersonen Kleinanzeigen auf dem Beziehungs-, Nachhilfe- und Wohnungsmarkt geschaltet, und es wurde die Anzahl der kontaktierenden Personen erfasst. Ceteris paribus attrahierten Anzeigen von Testpersonen mit positiv besetzten deutschen Vornamen insgesamt mehr Beziehungsinteressenten und Wohnungsanbieter als Anzeigen von Testpersonen mit einem negativ besetzten deutschen oder einem türkischen Vornamen. Berechnungen von binären logistischen Regressionen ergeben, dass bei Personen mit negativ besetzten deutschen Vornamen oder türkischen Vornamen die Wahrscheinlichkeit, Antwort auf ein Beziehungsinserat zu erhalten, signifikant geringer ist als bei Personen mit positiv besetzten deutschen Vornamen. Personen mit männlichen türkischen Vornamen haben zudem auch eine signifikant geringere Wahrscheinlichkeit, Antwort auf ein Beziehungsinserat zu erhalten, als männliche Personen mit negativ besetzten deutschen Vornamen.

We develop a model of households with multiple needs (smoothing shocks, financing investment) and constraints (limited credit, self-control issues) in order to examine the nature of household's financing constraints in a developing country, and the impact of relaxing them. We show that increased access to credit has very different implications for the aggregate model economy depending on its form: asset-financed or cash. We then illustrate how a short-term increase in access to loans leads to very distinct behavior in the short run. The relevance of the model can be evaluated using a field experiment, which we are currently implementing in Uganda.

We conducted a controlled field experiment on eBay and examined to what extent both social and competitive laboratory behavior is robust to institutionally complex real world markets with experienced traders, who selected themselves into these markets. EBay’s natural trading system provides bridges between lab and field environment that can be exploited to explore differences in behavior in the two environments. We find that many sellers do not make use of their commitment power as predicted by standard theories of both selfish and social behavior. However, a concern for equity strongly affects outcomes and reputation building in bilateral bargaining, while buyer competition effectively masks this concern and robustly yields equilibrium outcomes. The dichotomy of behaviors mirrors observations in laboratory research. Furthermore, we find that behavioral patterns in the field experiment mirror fully naturally occurring trading patterns in the market.

This paper discusses the determinants of and the barriers to formal saving both from the theoretical point of view and based on empirical evidence from various associated interventions and their possible effects at the micro and macroeconomic levels. It presents a comprehensive review of the literature based on a detailed classification of the barriers associated with supply-side factors related to access to financial products and demand-side barriers, related to the use, and frequency of use, of these products. Traditionally, the financial development literature has focused on the barriers associated with the supply of financial services that derive from high information and transaction costs. Recently published literature, however, shows how demand-side barriers, such as lack of trust, the influence of social networks, and certain cognitive biases, among other factors, might be equally important in explaining low or non-existent levels of saving. The paper concludes that such a classification and analysis of the barriers to financial inclusion leads to a deeper understanding of the question of financial inclusion and the actions that need to be taken to address it.

Many policy makers and economists argue that financial literacy is key to financial well-being. But why do many individuals remain financially illiterate despite the apparent importance of being financially informed? This paper presents results of a field study linking individual decisions to acquire personal financial information to a critical, and normally unobservable, characteristic: time preferences. We offered a short, free credit counseling and information program to more than 870 individuals. About 55 percent chose to participate. Independently, we elicited time preferences using incentivized choice experiments both for individuals who selected into the program and those who did not. Our results show that the two groups differ sharply in their measured discount factors. Individuals who choose to acquire personal financial information through the credit counseling program discount the future less than individuals who choose not to participate. Our results suggest that individual time preference may explain who will and who will not choose to become financially literate. This has implications for the validity of studies evaluating voluntary financial education programs and policy efforts focused on expanding financial education.

Using data from experimental games and household survey from 1, 200 married couples in three sites in Ethipoia, this paer uses different versions of a voluntary contribution mechanism to test for household efficiency. The experimental and econometric analyses provide many interesting results that have far-reaching implications for intra-houisehold models. Efficiency in contribution behaviour is decisively rejected in all treatments casting doubt on 'unitary' and 'collective' household models that assume Pareto optimality - significant amounts of potential surplus are not realised. Contribution rates by males and females are not significantly different from each other undermining models that argue females tend to contribute more to the family (for example, Sen 1990). Information on itital endowments of spouses improves contribution rates (efficiency) in some treatments while not having effect in others suggesting that the effect of information is context dependent. Actual and expected contribution rates of spouses are systematically different; husbands' expect their wives will contribute more than their actual contributions and wives expect their husbands will contribute lower than actual contribution. These systematic errors in expectations imply that the attainment if equilibrium in a game theoretic framework is unlikely. Statistical tests indicate that instead of efficiency considerations other norms are likely important. For example, in many of the treatments spouses contributed around half of their endowments implying either a norm like fairness or focal points influence decisions. Overall, most of the empirical resulst cast doubt on cooperative models and provide some support for behaviour guided either by farirness or other norms.

One key problem regarding the external validity of laboratory experiments is their duration: while economic interactions out in the field are often lengthy processes, typical lab experiments only last for an hour or two. To address this problem for the case of both symmetric and asymmetric Cournot duopoly, we conduct internet treatments lasting more than a month. Subjects make the same number of decisions as in the short-term counterparts, but they decide once a day. We compare these treatments to corresponding standard laboratory treatments and also to short-term internet treatments lasting one hour. We do not observe differences in behavior between the short- and long-term in the symmetric treatments, and only a small difference in the asymmetric treatments. We overall conclude that behavior is not considerably different between the short- and long-term.

While strong social ties help individuals cope with missing institutions, trade is essentially limited to those who are part of the social network. We examine what makes the decision to trust a stranger different from the decision to trust a member of a given social network (a friend), by comparing the determinants of these two decisions for the same individual. We implement a binary trust game with hidden action in a lab-in-the-field experiment with residents of an informal housing area in Cairo. Our results show that trust is higher among friends than among strangers and that higher trust among friends is related to the principal's belief of trustworthiness. However, on average a principal underestimates her friend's trustworthiness leading to inefficient outcomes. Our findings suggest that even within a social network, trade may often be limited to exchanges with few information asymmetries.

Using data from a field experiment in Kenya, we document that providing individuals with simple informal savings technologies can substantially increase investment in preventative health and reduce vulnerability to health shocks. Simply providing a safe place to keep money was sufficient to increase health savings, through a mental accounting effect. Adding an earmarking feature was only helpful when funds were put towards emergencies; earmarking for preventative health reduced savings on average, because the liquidity cost of tying up money was too great. Providing social pressure and credit through a ROSCA-based savings scheme had very large effects.

There is a long-standing debate as to whether nonexperimental estimators of causal effects of social programs can overcome selection bias. Most existing reviews either are inconclusive or point to significant selection biases in nonexperimental studies. However, many of the reviews, the so-called between-studies, do not make direct comparisons of the estimates. We survey four impact studies, all using data from development interventions that directly compare experimental and nonexperimental impact estimates. Our review illustrates that when the program participation process is well understood, and correctly modeled, then the nonexperimental estimators can overcome the selection bias to the same degree as randomized controlled trials. Hence, we suggest that evaluators of development programs aim to be careful and precise in the formulation of the statistical model for the assignment into the program and also to use the assignment information for model-based systematic sampling.

On débat depuis longtemps, en économique et en sociologie, de l’effet des réseaux sociaux sur l’emploi, mais établir des liens de causalité reste toutefois un défi. Dans cet article, grâce à des données portant sur un projet d’intervention auquel les participants ont été choisis au hasard, nous analysons l’impact, sur l’emploi, de variations dans diverses mesures de la taille et de la composition des réseaux sociaux, au niveau des individus et d’une communauté. Nos résultats indiquent que le fait d’avoir participé au projet accroît de beaucoup la taille des réseaux sociaux, en particulier en ce qui a trait aux liens faibles. Toutefois, ce changement ne se traduit pas par une meilleure situation de l’emploi 18 mois après la fin de l’étude. Nous n’observons aucune hétérogénéité dans l’effet de l’intervention sur les participants sur la base de la taille initiale du réseau social d’un individu ; ceux qui ont vu leurs liens forts augmenter à un taux plus élevé durant le projet étaient plutôt plus susceptibles de ne pas avoir d’emploi à la fin de l’intervention. En résumé, nos résultats suggèrent que, si certains programmes peuvent influencer avec succès la taille du réseau social des individus, ces changements ont un effet limité sur la situation de ces derniers sur le marché de l’emploi à long terme ; toutefois, quand on considère les individus qui ont un emploi, la composition du groupe, elle, subit un changement.

We outline a strategy for distinguishing rank-dependent probability weighting from systematic risk misperceptions in field data. Our strategy relies on singling out a field environment with two key properties: (i) the objects of choice are money lotteries with more than two outcomes; and (ii) the ranking of outcomes differs across lotteries. We first present an abstract model of risky choice that elucidates the identification problem and our strategy. The model has numerous applications, including insurance choices and gambling. We then consider the application of insurance deductible choices and illustrate our strategy using simulated data.

Other-regarding preferences are important for establishing and maintaining cooperative outcomes. In this paper, we study how formation of other-regarding preferences during childhood is affected by parental background. Our subjects, aged 4-12 years, are classified into other-regarding types based on simple binary choice dictator games. The main finding is that children of parents with low education are more spiteful, more selfish and less altruistic. This link is robust to controlling for a rich set of child characteristics and class fixed effects. The parental effects stand out against the overall development of preferences, as we find children to become less spiteful and more altruistic with increasing age. Our findings, complemented by an analysis of the World Values Survey data, suggest that low socio-economic status affects parental effort invested in instilling other-regarding preferences into children, making them less likely to acquire cooperative types of preferences.

Relying on a commonly used fixed-offer bargaining script we examine gender differences in bargaining outcomes in a highly competitive and frequently used market: the taxi market in Lima, Peru. Our bargaining script secures that only the seller can change prices and terminate negotiations, thus we are able to examine differences in the seller's entire path of negotiation and in the reservation price at which they are willing to trade. We find that male and female passengers who use the same bargaining script are not treated equally. Men face higher initial prices, final prices, and rejection rates. These differences are consistent with male drivers being more reluctant to give-in to demanding negotiations by male passengers, and with male passengers being perceived as having high valuations. To identify whether taste-based or statistical discrimination drives the inferior treatment of men we conduct an experiment where passengers send a signal on valuation before negotiating. The signal eliminates gender differences and the response is shown only to be consistent with statistical discrimination. Thus in the limiting case of a highly competitive market with experienced traders, we do not find evidence of taste-based discrimination, the differential observed is however consistent with statistical discrimination.

This study pursues the external validation of stated preference methods by comparing survey responses from verified voters with the outcome of a parallel public referendum on a conservation and preservation program to be funded by a local property tax surcharge. The majority of respondents were unaware of the upcoming referendum, and the experimental design allows us to control for referenda-related information effects as well as respondents’ perceptions regarding the consequentiality (i.e. the potential policy impact) of their survey votes. We find the survey under-predicts “yes” referendum votes at the precinct-level. These differences go away, however, if we focus only on respondents who perceived their survey vote to be consequential. Negative hypothetical bias among inconsequential survey respondents is also evident in the estimation of willingness to pay, and controlling for consequentiality increases construct validity.

Policymakers are increasingly using norm-based messages to influence individual decision making. We partner with a metropolitan water utility to implement a natural field experiment to examine the effect of such messages on residential water demand. The data, drawn from more than 100,000 households, indicate that social comparison messages had a greater influence on behavior than simple prosocial messages or technical information alone. Moreover, our data suggest that social comparison messages are most effective among households identified as the least price sensitive: high users. Yet the effectiveness of such messages wanes over time. Our results thus highlight important complementarities between pecuniary and nonpecuniary strategies. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

In a large natural field experiment, we explore the effect of providing donors with the opportunity to choose the target country for their donations. We find that only a small fraction of donors use the option, which might reflect a reluctance to consider tradeoffs when those concern important, 'protected', values. However, those donors who choose their object of benevolence give significantly more, even when controlling for their donation history. In view of the latest research on identifiable-victim effects, our findings underline that less inclusive targets can evoke more intense feelings than more inclusive ones - stressing that altruistic motivation seems to be mediated by aroused empathetic emotions.

In a canonical model of collective action, individual contribution to collective action is negatively correlated with group size. Yet, empirical evidence on the group size effect has been mixed, partly due to heterogeneities in group activities. In this paper, we first construct a simple model of collective action with the free rider problem, altruism, public goods, and positive externalities of social networks. We then empirically test the theoretical implications of the group size effect on individual contribution to four different types of collective action, i.e., monetary or nonmonetary contribution to directly or indirectly productive activities. To achieve this, we collect and employ artefactual field experimental data such as public goods and dictator games conducted in southern Sri Lanka under a natural experimental situation where the majority of farmers were relocated to randomly selected communities based on the government lottery. This unique situation enables us to identify the causal effects of community size on collective action. We find that the levels of collective action can be explained by the social preferences of farmers. We also show evidence of free riding by self-interested households with no landholdings. The pattern of collective action, however, differs significantly by mode of activity—collective action that is directly rather than indirectly related to production is less likely to suffer from the free rider problem. Also, monetary contribution is less likely to cause free riding than nonmonetary labor contribution. Unlike labor contributions, monetary contributions involve collection of fees which can be easily tracked and verified, possibly leading to better enforcement of collective action. © 2013 Asian Development Bank and Asian Development Bank Institute.

A disadvantage of multiple choice tests is that students have incentives to guess. To discourage guessing, it is common to use scoring rules that either penalize wrong answers or reward omissions. In psychometrics, penalty and reward scoring rules are considered equivalent. However, experimental evidence indicates that students behave differently under penalty or reward scoring rules. These differences have been attributed to the different framing (penalty versus reward). In this paper, we model students’ behavior in multiple choice tests as a choice among lotteries. We show that strategic equivalence among penalty and reward scoring rules holds only under risk neutrality. Therefore, risk aversion could be an alternative explanation to the previously found differences in students’ behavior when confronted with penalty and reward scoring rules. We suggest the use of a modified penalty scoring rule which is equivalent to the reward rule for whatever risk attitudes students might have. To disentangle the effect of framing and risk aversion on students’behavior we design a field experiment with three treatments, each one with a different scoring rule. Two of these scoring rules are equivalent but have different framing, while the third is not equivalent but has the same framing as one of the other two. The experimental results indicate that differences in students’ behavior are due to risk aversion and not due to different framing.

The paper investigates the effect of .99 price endings on consumer demand by means of a field experiment. Results tail behind other contributions showing how .99-endings can be ineffective, casting doubts on their widespread use among retailers. When the .99-ending price is removed an increase of sales emerges from descriptive statistics as well as in a multivariate framework in which sales of the treated item are the only dependent variable. However, such a counterintuitive effect does not survive in a differences-in-differences model in which the daily sales of all the relevant substitutes are jointly analyzed. There is no evidence of any common shock during the treatment. In contrast, a different price-elasticity of demand drives the relative increase of sales of the treated item when prices of the substitutes are on average higher. Once the different reactions to price changes are taken into account, the treated item does not display significantly higher sales as compared to its substitutes when the .99-ending price is removed.

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.

During the first round of the French Presidential election of April 22nd, 2012, voters of three French municipalities were invited to test approval voting and three types of evaluation voting. This paper presents the main results of that experiment. After correction of the participation and representation biases, two major insights clearly arise. On the one hand, approval voting gives a ranking of candidates which is different from uninominal voting and, on the other hand, whatever the scale of scores, evaluation voting reinforces this difference. Classification JEL : C93, D72