Search

The study describes the complementary benefits of model-building and data analysis using algorithm and statistical modeling methods in the context of unobtrusive marketing field experiments and in transforming findings into isomorphic management models. Relevant for marketing performance measurement, case-based configural analysis is a relatively new paradigm in crafting and testing theory. Statistical testing of hypotheses to learn net effects of individual terms in multiple regression analysis is the current dominant logic. Isomorphic modeling might best communicate what executives should decide using the findings from algorithm and statistical models. We test these propositions using data from an unobtrusive field experiment in a retailing context that includes two levels of expertise, four price-points, and presence versus absence of a friend ("pal" condition) during the customer-salesperson interactions (n=240 store customers). The analyses support the conclusion that all three approaches to modeling provide useful complementary information substantially above the use of one alone and that transforming findings from such models into isomorphic management models is possible.

When the provision of public goods requires contributions from individuals with different abilities, solicitation of efficient voluntary contributions from heterogeneous individuals becomes important. Blood banks are one such public resource. Blood banks perform a challenging task in ensuring a balanced supply of blood types to provide effective blood transfusion services. This study designs a field experiment in conjunction with a blood donation campaign to examine whether making potential donors aware of their potential contribution (the net marginal product of their donation) induces efficient individual donation behaviour. During the blood donation campaigns at the university, we conducted a field experiment with two treatments: one treatment with information regarding desired donor profiles for 400 ml whole blood donations and another treatment without such information. We find that the provision of information about desired donor profiles enhances the propensity of able donors to donate, whereas the information provision tends to depress the stated intention to donate.

This paper puts forward suggestions that could improve the efficiency of field experiments as they are currently carried out in experimental economics. Two recommendations are made: (1) Prior to the actual study, economic field experiments should include sample size calculations that confirm that meaningful effects can be detected. (2) Economic field experiments should take advantage of the power of multi-factor experimental plans.

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

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

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

Pre-College human capital investment occurs within a competitive environment and depends on market incentives created by Affirmative Action (AA) in college admissions. These policies affect mechanisms for rank-order allocation of college seats, and alter the relative competition between blacks and whites. We present a theory of AA in university admissions, showing how the effects of AA on human capital investment differ by student ability and demographic group. We then conduct a field experiment designed to mimic important aspects of competitive investment prior to the college market. We pay students based on relative performance on a mathematics exam in order to test the incentive effects of AA, and track study efforts on an online mathematics website. Consistent with theory, AA increases average human capital investment and exam performance for the majority of disadvantaged students targeted by the policy, by mitigating so-called "discouragement effects." The experimental evidence suggests that AA can promote greater equality of market outcomes and narrow achievement gaps at the same time.

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

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

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

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

PurposeThis study seeks to investigate the differences in three aspects of job satisfaction – total pay, promotion prospects, and respect received from one's supervisor – between male heterosexual and gay employees in Athens, Greece.Design/methodology/approachTo determine whether a job satisfaction gap exists, the job satisfaction of gay employees is compared to the job satisfaction of heterosexual employees after accounting for various asymmetries. The data were gathered as part of the Athens Area Study conducted by the University of Piraeus, University of Central Greece, and Panteion University of Social and Political Sciences.FindingsGay employees are found to be less satisfied according to all job satisfaction measures. Affect theory proposes that the extent to which one values a given facet of work moderates how dissatisfied one becomes when one's expectations are not met. Furthermore, the data enable us to estimate that gay employees’ job satisfaction is not associated more (as compared with heterosexuals’ job satisfaction) with adverse mental health symptoms. This finding is crucial given the rising interest between job satisfaction and life satisfaction. Finally, wage gaps against gay employees are found after accounting for basic asymmetries. Interestingly, however, the wage gaps grow for very dissatisfied employees and shrink for very satisfied employees.Practical implicationsAs long as, the general patterns in Greece suggest that homosexual employees face labor market discrimination, gay employees will report being less satisfied at work. Actually, in this study, job satisfaction is associated with wage inequality.Originality/valueThis research initiates efforts to compare job satisfaction based on sexual orientation.

Based on a randomized experiment, we estimate effects from notification to medical doctors of tighter monitoring of their Medical Certificates (MCs). Both the time prescribed by the doctor certificates for sick leave (prescribed sick leave) and the impact on the length of the actual sickness absence (actual sick leave) is studied. We find no effect on the total number of prescribed sick leave days. However, we do find an increase in both prescribed and actual sick leave with a 25% work inability. We also find that the notification letter causes an increase in actual sick leave (i.e. the number of reimbursed sick days). We discuss a number of potential explanations for this rather surprising result.

Dans un jeu de l’evolution resolu par l’action motrice, la strategie evolutionnairement stable (ses) est-elle robuste ? Cinquante-six etudiants sportifs participent a faucons vs colombes qu’ils jouent chacun cinq fois. Deux joueurs se separent a egale distance d’un ballon. Ils choisissent secretement un maillot, de couleur differente pour colombe et faucon. Au signal, chacun tente de ramener le ballon dans son camp. Ceci en usant des techniques du rugby pour faucon et du basket-ball pour colombe. La ses invite theoriquement a choisir faucon sept fois sur douze. Sur 140 tournois, la petite moitie de joueurs (25) jouant cet equilibre de Nash n’a pas maximise ses gains. Cela tient a la pertinence motrice du jeu. Les joueurs s’eloignant de la ses revelent une autre logique basee sur leurs possibilites dynamiques d’intervention, en liaison anticipee avec les caracteristiques des autres joueurs.

We examine the feasibility of using a massively multiplayer online role-playing game (MMORPG) to test economic theories. As a test vehicle we use the well-known endowment effect. Even though our goods are entirely virtual, our results confirm earlier results that individuals with more trading experience are less likely to exhibit status quo behaviour in trade. However, we also find evidence that highly experienced individuals are more likely to swap the item rather than keep it – i.e. there appears to be a propensity to ‘truck, barter and exchange’. A further experiment suggests that this feature is robust and is unlikely to be due to subject misperception or experimenter demand effects. However we are unable to eliminate selection effects as the source of our correlation between experience and propensity to trade. We conclude that virtual economies may be useful venues for field experiments., http://www.grips.ac.jp/list/jp/facultyinfo/munro_alistair/

Comprendre comment la cooperation emerge entre individus non apparentes offre une cle de comprehension de l’evolution des societes. L’analyse du role de l’heterogeneite des preferences sociales dans la decision de contribution aux biens publics revele que la cooperation conditionnelle explique le declin des contributions au cours du temps. Les regles morales peuvent cependant contrecarrer ce processus. Les comportements de sanction altruistes conduisent en effet a ce qu’un deuxieme probleme de passager clandestin s’avere finalement une source majeure de cooperation. Si, en l’absence d’institutions, une minorite d’egoistes pousse la majorite des individus dotes de preferences sociales a se comporter en passagers clandestins, l’introduction d’institutions appropriees conduit les egoistes a imiter les individus dotes de preferences sociales.

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

During the last decade several empirical studies have stressed the importance of norms and social interactions for explaining sickness absence behavior. In this context public discussions about the intentions of the insurance, and of the rights and duties of the receivers, may be important for reducing the sickness absence. In this paper we study whether information meetings about the Swedish sickness insurance affect the length of sickness absence spells. The study is based on experimental data on individuals with weak labor market attachments. The displacement of when the call to the meeting was sent out was randomized. Comparing the survival functions of those called immediately with those whose calls were delayed (by about 30 days) makes it possible to study whether the length of sickness absence is affected by receiving the call earlier. The result suggests that the length is reduced by, on average, 20 percent. In the long term (12 months later) there is no effect of the information meeting. This suggests that attendance to the information meeting does not change individuals’ long-term behavior.

Using a natural field experiment in a recreational site, a public good almost fully dependent on voluntary donations, we explored the crowding-out effect of gift rewards. First, we investigated whether receiving a map in appreciation of a donation crowded out prosocial behavior and found no significant effect of giving the map. Second, we explored the effect of adding the map to a treatment designed to increase donations. Interestingly, when the gift was combined with our attempt to trigger reputational and self image motives, the probability of donating decreased significantly, compared to the social reference treatment alone.

This article analyzes data from a randomized experiment on how matched-savings accounts affect the net worth of low-income people. We find that estimates are sensitive to probable data errors and to the handling of missing values. In contrast to the findings of Mills et al. 2008, some of the estimated impacts on net worth are large, both economically and statistically. We argue that the jury is still out on the impacts of Individual Development Accounts (IDA) on net worth, and we highlight that data quality and modeling assumptions are crucial even (or especially) for randomized experiments.

This paper uses data consisting of students' strategically reported preferences and their underlying true preferences to study the course allocation mechanism used at Harvard Business School. We show that the mechanism is manipulable in theory, manipulated in practice, and that these manipulations cause meaningful welfare losses. However, we also find that ex-ante welfare is higher than under the strategyproof and ex-post efficient alternative, the Random Serial Dictatorship. We trace the poor ex-ante performance of RSD to a phenomenon specific to multi-unit assignment, "callousness'. We draw lessons for the design of multi-unit assignment mechanisms and for market design more broadly., info:eu-repo/semantics/published

Using date from a field experiment conducted in seventy Colombian municipalities, we investigate who pools risk with whom when risk pooling arrangements are not formally enforced. We explore the roles played by risk attitudes and network connections both theoretically and empirically. We find that pairs of participants who share a bond of friendship or kinship are more likely to (1) join the same risk pooling group and to (2) group assortatively with respect to risk attitudes. Also, consistent with our theoretical finding that when there is a problem of trust the process of pooling assortativley with respect to risk preferences is perturbed, we find (3) only weak evidence of such assorting among unfamiliar individuals.

urvey-based methods for eliciting preferences have been a mainstay in vari-ous strands of research, including the valuation of public goods, the study of transportation mode choice, the measurement of the value of a statistical life, and the marketing of consumer products. More recently, surveys have been used to measure economic variables such as income expectations, life expectancy, and the level of happiness. Stated preference surveys are often the only practical approach for gauging preferences for non-market goods and for evaluating public policies prior to their implementation. In particular, these methods are widely recognized as the only approach for measuring passive-use values such as the existence value of endangered species protection. Estimates of non-market values are important com-ponents of many government-mandated benefit-cost analyses, and are admitted as evidence in legal proceedings over environmental damages (e.g., following an oil spill). Despite the widespread use of these methods, the role of economic incentives in shaping participant responses remains poorly understood.

Recent discoveries in behavioral economics have led to important new insights concerning what can happen in markets. Such gains in knowledge have come primarily via laboratory experiments—a missing piece of the puzzle in many cases is parallel evidence drawn from naturally occurring field counterparts. We provide a small movement in this direction by taking advantage of a unique opportunity to work with a Chinese high-tech manufacturing facility. Our study revolves around using insights gained from one of the most influential lines of behavioral research—framing manipulations—in an attempt to increase worker productivity in the facility. Using a natural field experiment, we report several insights. For example, conditional incentives framed as both “losses” and “gains” increase productivity for both individuals and teams. In addition, teams more acutely respond to bonuses posed as losses than as comparable bonuses posed as gains. The magnitude of this framing effect is roughly 1%: that is, total team productivity is enhanced by 1% purely due to the framing manipulation. Importantly, we find that neither the framing nor the incentive effect lose their significance over time; rather, the effects are observed over the entire sample period. Moreover, we learn that repeated interaction with workers and conditionality of the bonus contract are substitutes for sustenance of incentive effects in the long run. This paper was accepted by Gérard P. Cachon, decision analysis.

The presence of implicit observation cues, such as picture of eyes, has been shown to increase generosity in dictator games, and cooperative behavior in field settings. I combine these approaches, by testing if a picture of watching eyes affects unconditional giving in a natural environment, where the recipient is a charity organization. Taken together, this study reduces the influence of three potential confounding factors in previous experiments: (i) experimenter demand effects, (ii) that the facial cue reminds subjects of a human counterpart, and (iii) a social multiplier effect. Specifically, the paper reports results from an experiment, conducted in a Swedish supermarket chain, where customers face a naturally occurring decision problem. People who recycle cans and bottles have to choose whether to keep the recycled amount or donate it to a charity organization. By posting a picture of human eyes on recycling machines, I am able to test whether this causes an increase in donations to the charity. Based on a sample covering a 12-day period, 38 stores and 16775 individual choices, I find no general effect. However, when controlling for store and day fixed effects, and using a proxy for store attendance, the picture of eyes increased donated amount by 30 percent during days when relatively few other people visited the store. This result gives further support to the conclusion that subtle social cues can invoke reputation concerns in humans, although the relatively small effect suggests that previous estimates could be biased upward, or at least that the influence of observational cues is context dependent.

Mixed-strategy Nash equilibrium (MSNE) is a commonly-used solution concept in game-theoretic models in various fields in economics, management, and other disciplines, but the experimental results whether the MSNE predicts well actual play in games is mixed. Consequently, evidence for naturally-occurring games in which the MSNE predicts the outcome well is of great importance, as it can justify the vast use of MSNE in models. The game between the kicker and goalkeeper in soccer penalty kicks is a real-world game that can be used to examine the application of the MSNE concept or its accuracy because payoffs are a common knowledge, the players have huge incentives to play correctly, the game is simple enough to analyze, its Nash equilibrium is in mixed strategies, and players' actions can be observed. We collected and analyzed data on the direction of kicks and jumps in penalty kicks in various top leagues and tournaments. Our analysis suggests that the MSNE predictions are the closest to the actual sample data, even though some other prediction methods use information on the marginal distribution of kicks or jumps whereas the MSNE does not.

This article evaluates a body of recent work that uses field and natural experiments to answer the question of whether informed voters can enforce better governance. A common finding in the literature is that voter behavior is malleable and that information about the political process and politician performance improves electoral accountability. Limited availability of information thus provides one explanation for the persistence of low-quality politicians and the existence of identity politics and electoral malpractices in low-income democracies. Understanding how voters can gain access to credible sources of information and understanding how politicians react to improved information about their performance are promising avenues for future research.

We propose a new classification of experiments that captures the extent to which the experimental design and analysis are linked to economic theory. We then use this system to classify all published field experiments in the five top economics journals from 1975 to 2010. We find that the vast majority of field experiments (68%) are Descriptive studies that lack any explicit model; 18% are Single Model studies that test a single model-based hypothesis; 6% are Competing Models studies that test competing model-based hypotheses; and 8% are Parameter Estimation studies that estimate structural parameters in a completely specified model. Using the same system to classify laboratory experiments published over the same period, we find that economic theory has played a more central role in the laboratory than in the field. Finally, we discuss in detail three sets of field experiments, on gift exchange, on charitable giving, and on negative income tax, that illustrate both the benefits and the potential costs of a tighter link between experimental design and theoretical underpinnings.

We study the impact of status and social recognition on worker performance in a field experiment. In collaboration with an international non-governmental organization we hired students to work on a database project. Students in the award treatment were offered a congratulatory card from the organization honoring the best performance. The award was purely symbolic in order to ensure that any behavioral effect is driven by non-material benefits. Our results show that students in the award treatment outperform students in the control treatment by about 12 percent on average. Our results provide strong evidence for the motivating power of status and social recognition in labor relations with major implications for theory and applications.

Due to the mixed empirical evidence bearing on the economic determinants, beliefs have been at the centre of attention of research into preferences for income redistribution. We elicit preferences for income redistribution through a Discrete Choice Experiment performed in 2008 in Switzerland and relate them to several behavioural determinants, in particular to religious beliefs. Estimated marginal willingness to pay (WTP) is positive among those who do not belong to a religious denomination, and negative otherwise. However, the marginal WTP is shown to increase with a higher degree of religiosity. Moreover, those who state that luck or connections play a crucial role in determining economic success exhibit significantly higher WTP values than those who deem effort to be decisive. (JEL codes: C35, C93, D63, H29) Copyright The Author 2011. Published by Oxford University Press on behalf of Ifo Institute for Economic Research, Munich. All rights reserved. For permissions, please email: journals.permissions@oup.com, Oxford University Press.

A fundamental tenet in neoclassical theory is the basic independence assumption: an individual's preferences are assumed to be measured over levels, not changes. Although most theoretical and applied economic models invoke this assumption, a wealth of data from laboratory experiments refutes this premise, as systemic empirical disparities have been observed between willingness to pay (WTP) and willingness to accept (WTA) for the same good (e.g., Kahneman, Knetsch, and Thaler 1990), with WTA often observed to be many times larger than WTA. In an influential line of work, Hanemann (1991) argues that the large WTA/ WTP disparities that have been observed in the literature can be reconciled with static neoclassical theory via income and substitution effects; I but the empirical evidence to date has not conformed well to Hanemann's (1991) or any other neoclassical-based model. (2) If the observed value disparity is inconsistent with neoclassical explanations and is found to be a fundamental component of individual's preferences, as per reference-dependent theory (Kahneman and Tversky 1979; Tversky and Kahneman 1991), then a reevaluation of a good deal of economic analysis is necessary. In this article, we provide a different explanation for the WTA/WTP disparity--a dynamic theory based on the presence of commitment costs and possibly asymmetric beliefs about market opportunities. When the value of a good is uncertain, WTP and WTA will logically reflect compensation for the possibility of learning that the good has a different value than believed at the time of purchase or sale and the cost associated with reversing the purchase or sale decision. In its simplest form, our model predicts that with objective (symmetric) beliefs about market opportunities (and with perfect substitutability and no income effects), there should be no value disparity. Intuitively, the objective cost of delaying the purchase (or alternatively reversing the purchase) for prospective buyers is isomorphic to the objective cost of reversing (or delaying) the sale for prospective sellers. This symmetry necessarily leads to WTA = WTP, consistent with the neoclassical paradigm. Importantly, however, it is an agent's perception of the delay and reversal costs that motivates behavior. If agents behave in a manner consistent with the developing literature on cognitive dissonance and/or limited memory, it is quite plausible for individuals to display an asymmetric perception of the relative costs of selling later, depending upon whether they are placed in the role of a buyer or seller.3 This type of asymmetry alone can yield the systematic value divergences observed in the literature; indeed, we show that even with only slight asymmetries in beliefs of perceived costs, our theory can generate considerable value divergences because the actual divergence will depend upon the interaction of this asymmetry with the degree of value uncertainty, time preference, and lost value of consumption. We explore the predictive power of our theory by examining WTA and WTP statements of value from consumers in a competitive marketplace--the sportscard market. Although we do not consider the sportscard marketplace particularly worthy of study in its own right, it is useful for our purposes for several reasons. First, it is a natural setting for an examination of preference structures because it provides a rich pool of subjects making decisions in a familiar environment, with uncertainty and future learning about the values of traded goods. Second, we can identify factors that arise endogenously, such as market experience, and impose the remaining controls necessary to implement a clean experiment to explore whether such factors attenuate the value disparity through the channels predicted by our theory. Our data are striking in that agents display an asymmetric perception of the relative costs of selling later, depending upon whether they are placed in the role of a buyer or seller. …

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

Noise, air pollution and electromagnetic pollution (i.e. non-ionizing radiation, also called electrosmog) are typical negative local externalities in urban areas. They are side-effects of human and economic activity (e.g. road transport, telecommunication) and affect individuals’ well-being negatively without compensation. Measurements carried out in 2005 and 2006 show that in several Swiss cities the limit values of air pollution fixed in the Swiss law have often been exceeded. Moreover, in several areas of these cities also the day and night standards for the noise level were violated. Further, the increased number of mobile phone antennas in residential areas, and thus the increased intensity of radiated power, has, in recent years, aroused public concern, discussions and protests. The view of an antenna is annoying an increasing number of inhabitants. In order to solve these problems, policy-makers have to introduce new environmental instruments to improve the quality of the environment in the Swiss cities. This paper aims at giving policy-makers information on benefits generated by an improvement of local environmental quality. In two Swiss cities (Lugano and Zurich), stated choice experiment is used to estimate the benefits of a reduction of the level of the negative externalities mentioned above. Results from this choice experiment reveal that there is a positive and significant willingness to pay (WTP) for a reduction of the level of air pollution and noise to those limit values fixed by the government. In addition, this is the first study that uses a stated preference approach based on a choice experiment for the estimation of the benefit of a reduction of electrosmog.

Performance pay for teachers is frequently suggested as a way of improving education outcomes in schools, but the theoretical predictions regarding its effectiveness are ambiguous and the empirical evidence to date is limited and mixed. We present results from a randomized evaluation of a teacher incentive program implemented across a large representative sample of government-run rural primary schools in the Indian state of Andhra Pradesh. The program provided bonus payments to teachers based on the average improvement of their students' test scores in independently administered learning assessments (with a mean bonus of 3% of annual pay). At the end of two years of the program, students in incentive schools performed significantly better than those in control schools by 0.28 and 0.16 standard deviations in math and language tests respectively. They scored significantly higher on "conceptual" as well as "mechanical" components of the tests, suggesting that the gains in test scores represented an actual increase in learning outcomes. Incentive schools also performed better on subjects for which there were no incentives, suggesting positive spillovers. Group and individual incentive schools performed equally well in the first year of the program, but the individual incentive schools outperformed in the second year. Incentive schools performed significantly better than other randomly-chosen schools that received additional schooling inputs of a similar value.

During the night of April 14, 1912, the RMS Titanic collided with an iceberg on her maiden voyage. Two hours and 40 minutes later she sank, resulting in the loss of 1,501 lives—more than two-thirds of her 2,207 passengers and crew. This remains one of the deadliest peacetime maritime disasters in history and by far the most famous. For social scientists, evidence about how people behaved as the Titanic sunk offers a quasi-natural field experiment to explore behavior under extreme conditions of life and death. A common assumption is that in such situations, self-interested reactions will predominate and social cohesion is expected to disappear. However, empirical evidence on the extent to which people in the throes of a disaster react with self-regarding or with other-regarding behavior is scanty. The sinking of the Titanic posed a life-or-death situation for its passengers. The Titanic carried only 20 lifeboats, which could accommodate about half the people aboard, and deck officers exacerbated the shortage by launching lifeboats that were partially empty. Failure to secure a seat in a lifeboat virtually guaranteed death. We have collected individual-level data on the passengers and crew on the Titanic, which allow us to analyze some specific questions: Did physical strength (being male and in prime age) or social status (being a first- or second-class passenger) raise the survival chance? Was it favorable for survival to travel alone or in company? Does one's role or function (being a crew member or a passenger) affect the probability of survival? Do social norms, such as “Women and children first!” have any effect? Does nationality affect the chance of survival? We also explore whether the time from impact to sinking might matter by comparing the sinking of the Titanic over nearly three hours to the sinking of the Lusitania in 1915, which took only 18 minutes from when the torpedo hit the ship.

Les méthodes d’évaluation aléatoire ont commencé à être appliquées à de grands programmes sociaux en France depuis 2007, soit plus de quarante ans après les premiers travaux analogues menés aux Etats-Unis. Elles connaissent depuis un développement rapide. Ces méthodes expérimentales consistent à évaluer les effets d’une politique en comparant un groupe test à un groupe témoin, constitués par tirage au sort. Dans cet article dont l’objet est de proposer une introduction à l’application de ces méthodes aux expérimentations sociales, nous soulignons que leurs spécificités ne se réduisent pas (i) au principe de l’assignation aléatoire. Elles ont aussi pour autres singularités qui les distinguent des autres méthodes d’évaluation : ii) la dimension expérimentale du programme évalué, iii) le partenariat particulier qui est organisé entre le chercheur et l’institution expérimentatrice, iv) la conception a priori d’un protocole d’évaluation et d’un système d’observation et de traitement de l’information. Nous montrons que chacune de ces quatre singularités est la source d’un apport particulier de ces méthodes mais a aussi pour contrepartie une limite spécifique qui mérite d’être soulignée.

This study presents a new approach in which a wind tunnel apparatus is used to identify the efficiency of power output by a wind turbine with a 400W rating. Moreover, the study addresses a significant issue concerning the turbulence formed by a natural wind which can be eliminated or reduced with the use of the proposed wind tunnel. Wind power characteristics that indicate power output versus wind velocity are obtained by performing a number of case studies. The case studies include normal operation of the experimental wind turbine at variable wind velocity values with and without proposed wind tunnel. A certain level of turbulence is formed and the wind turbine power output is measured and recorded for a number of cases. The statistical t-Test and ANOVA analyses showed that the suggested approach could be useful for wind turbine manufacturers to evaluate the degree that contributes to the variability of renewable energy production. Besides, the results may be helpful to support educational institutions in providing renewable energy awareness in Iowa and in the US by providing adequate information for the selection and handling of the parameters that control the variability of the energy needs.

This study investigates loss aversion when the reference point is a state-dependent random variable. This case describes, for example, a money manager being evaluated relative to a risky benchmark index rather than a fixed target return level. Using a state-dependent structure, prospects are more (less) attractive if they depend positively (negatively) on the reference point. In addition, the structure avoids an inherent aversion to risky prospects and yields no losses when the prospect and the reference point are the same. Related to this, the optimal reference-dependent solution equals the optimal consumption solution (no loss aversion) when the reference point is selected completely endogenously. Given that loss aversion is widespread, we conclude that the reference point generally includes an important exogenously fixed component. For example, the typical investment benchmark index is externally fixed by the investment principal for the duration of the investment mandate. We develop a choice model where adjustment costs cause stickiness relative to an initial exogenous reference point.

Can one teach basic entrepreneurship skills, or are they fixed personal characteristics? Most academic and development policy discussions about microentrepreneurs focus on their access to credit, and assume their human capital to be fixed. The self-employed poor rarely have any formal training in business skills. However, a growing number of microfinance organizations are attempting to build the human capital of micro-entrepreneurs in order to improve the livelihood of their clients and help further their mission of poverty alleviation. Using a randomized control trial, we measure the marginal impact of adding business training to a Peruvian group lending program for female microentrepreneurs. Treatment groups received thirty to sixty minute entrepreneurship training sessions during their normal weekly or monthly banking meeting over a period of one to two years. Control groups remained as they were before, meeting at the same frequency but solely for making loan and savings payments. We find that the treatment led to improved business knowledge, practices and revenues. The program also improved repayment and client retention rates for the microfinance institution. Larger effects found for those that expressed less interest in training in a baseline survey. This has important implications for implementing similar market-based interventions with a goal of recovering costs.

Randomized controlled trials are increasingly used to evaluate policies. How can we make these experiments as useful as possible for policy purposes? We argue greater use should be made of experiments that identify the behavioral mechanisms that are central to clearly specified policy questions, what we call “mechanism experiments.” These types of experiments can be of great policy value even if the intervention that is tested (or its setting) does not correspond exactly to any realistic policy option.

The "Hawthorne effect," a concept familiar to all students of social science, has had a profound influence both on the direction and design of research over the past 75 years. The Hawthorne effect is named after a landmark set of studies conducted at the Hawthorne plant in the 1920s. The first and most influential of these studies is known as the "Illumination Experiment." Both academics and popular writers commonly summarize the results as showing that every change in light, even those that made the room dimmer, had the effect of increasing productivity. The data from the illumination experiments, however, were never formally analyzed and were thought to have been destroyed. Our research has uncovered these data. We find that existing descriptions of supposedly remarkable data patterns prove to be entirely fictional. There are, however, hints of more subtle manifestations of a Hawthorne effect in the original data.

A vibrant literature has emerged that suggests willingness to pay and willingness to accept measures of value are quite different for inexperienced consumers but that value differences erode with market experience. One potential shortcoming of this literature is that market experience is endogenous. This study presents a framed field experiment that exogenously induces market experience. Empirical findings support the premise that market experience, alone, can eliminate an important market anomaly.

Many social experiments are run in multiple waves, or are replications of earlier social experiments. In principle, the sampling design can be modified in later stages or replications to allow for more efficient estimation of causal effects. We consider the design of a two-stage experiment for estimating an average treatment effect, when covariate information is available for experimental subjects. We use data from the first stage to choose a conditional treatment assignment rule for units in the second stage of the experiment. This amounts to choosing the propensity score, the conditional probability of treatment given covariates. We propose to select the propensity score to minimize the asymptotic variance bound for estimating the average treatment effect. Our procedure can be implemented simply using standard statistical software and has attractive large-sample properties.

We investigate profit- maximizing versioning plans for an information goods monopolist. The analysis employs data obtained from a web-based field experiment in which potential buyers were offered information goods in varied price-quality configurations. Maximum simulated likelihood (MSL) methods are used to estimate parameters describing the distribution of utility function parameters across potential buyers of the good. The resulting estimates are used to examine the impact of versioning on seller profits and market efficiency.

In this paper we use experimental data collected in rural Cameroon to quantify the effect of social distance on trust and altruism. Our measure of social distance is one that is relevant to everyday economic interactions: subjects in a Trust Game play with fellow villagers or with someone from a different village. We find that Senders in a Trust Game pass significantly more money to Recipients from their own village than to Recipients from a different village. To test for the possibility that Senders are motivated by unconditional kindness, they also play a Triple Dictator Game. We find that Senders pass significantly more money on average in the Trust Game than in the Triple Dictator Game, confirming that transfers in the Trust Game are partly motivated by Trust. However, there is also a social distance effect in the Triple Dictator Game, and around one third of the social distance effect in the Trust Game is due to greater unconditional kindness to fellow villagers. Results from a Risk Game suggest that Trust Game transfers are uncorrelated with attitudes to risk.

The, often observed, positive correlation between incentive intensity and risk has been explained in two ways: the presence of transaction costs as determinants of contracts and the sorting of risk-tolerant individuals into firms using high-intensity incentive contracts. The empirical importance of sorting is perhaps best evaluated by directly measuring the risk tolerance of workers who have selected into incentive contracts under risky environments. We use experiments, conducted within a real firm, to measure the risk preferences of a sample of workers who are paid incentive contracts and face substantial daily income risk. Our experimental results indicate the presence of sorting; Workers in our sample are risk-tolerant. Moreover, their level of tolerance is considerably higher than levels observed for samples of individuals representing broader populations. Interestingly, the high level of risk tolerance suggests that both sorting and transaction costs are important determinants of contract choices when workers have heterogeneous preferences.

We explore the use of social comparison theory as a natural mechanism to increase contributions to an online movie recommendation community by investigating the effects of social information on user behavior in an online field experiment. We find that, after receiving behavioral information about the median user's total number of movie ratings, users below the median demonstrate a 530% increase in the number of monthly movie ratings, while those above the median decrease their monthly ratings by 62%. Movements from both ends converge towards the median, indicating conformity towards a newly-established social norm in a community where such a norm had been absent. Furthermore, the social information has a more dramatic effect on those below the median, suggesting an interaction between conformity and competitive preferences. When given outcome information about the average user's net benefit score from the system, consistent with social preference theory, users with net benefit scores above average contribute 94% of the new updates in the database. In both treatments, we find a highly significant Red Queen Effect.

Field experiments were conducted with farmers in the Limari Valley of Chile to test extant theory on right-to-choose auctions. Water volumes that differed by reservoir source and time of availability were offered for sale by the research team. The auctions were supplemented by protocols to elicit risk and time preferences of bidders. We find that the right-to-choose auctions raise significantly more revenue than the benchmark sequential auction. Risk attitudes explain a substantial amount of the difference in bidding between auction institutions, consonant with received theory. The auction bidding revealed distinct preferences for water types, which has implications for market re-design.

The controversy over how much to charge for health products in the developing world rests, in part, on whether higher prices can increase use, either by targeting distribution to high-use households (a screening effect), or by stimulating use psychologically through a sunk-cost effect. We develop a methodology for separating these two effects. We implement the methodology in a field experiment in Zambia using door-to-door marketing of a home water purification solution. We find evidence of economically important screening effects. By contrast, we find no consistent evidence of sunk-cost effects. (JEL C93, D12, I11, M31, O12)

A standard labour contract has two important components, agreed upon wage from principal and efforts that in return is provided by agent. On one hand both principal and agent have full knowledge of wage, while information on provided effort level is always incomplete due to its abstract nature. Principal can only observe output of agent, which is joint function of effort, skill level and work environment [Green (1992)]. Assuming economic agents strictly follow their material gain, the game theoretic model predicts that agent will utilise minimum possible effort level. Similarly, the principal will pay minimum wages, since additional wages cannot extract additional effort. In contrast, the gift exchange model (GEM) is based on the critical assumption that reciprocal behaviour creates a positive relationship between wages and workers‘ effort levels [Akerlof (1982, 1984)]. Workers are assumed to reciprocate higher wage levels from firms by increasing their effort (positive reciprocity) and /or by decreasing their effort in retaliation for low wage (negative reciprocity). In labour market as partial gift exchange, the loyalty of workers is exchanged for higher wage, and this loyalty then can be translated to higher productivity through effective management. Experimental evidence has supported the reciprocity hypothesis both in laboratory [Fehr and Falk (2008); Fehr, et al. (1993); Fehr and Tougareva (1995); Fehr and Falk (1999); Fehr, et al. (1998); Fehr, Gächter, and Kirchsteiger (1997)] and in the field [Falk (2007); Henning- Schmidt, et al. (2005); Bellemare and Shearer (2007)].