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12th
Nordic Conference on Behavioural and
Experimental Economics
University of Gothenburg 2017
Conference Overview
Thursday (5 October) 19.00-: Informal Gathering, Meet at Vasaplatsens Brygghus, Vasaplatsen 2 (at own
expense)
Friday (6 October) 08.30-09.20: Registration, Hyllan (please see directions below)
09.20-09.25: Welcome, Volvosalen
09.25-10.40: Keynote 1, Bertil Tungodden – "Fairness and Redistribution: Experimental
Evidence", Volvosalen
10.40-11.00: Coffee Break, Hyllan
11.00-12.20: Parallel Sessions 1
12.20-13.40: Lunch, Hyllan
13.40-15.00: Parallel Sessions 2
15.00-15.20: Coffee Break, Hyllan
15.20-16.40: Parallel Sessions 3
16.40-17.00: Coffee Break, Hyllan
17.00-18.20: Parallel Sessions 4
19.30-22.30: Conference dinner, Ottomania, Aschebergsgatan 23
Saturday (7 October) 09.00-10.20: Parallel Session 5
10.20-10.40: Coffee Break, Hyllan
10.40-12.00: Parallel Session 6
12.00-13.00: Lunch, Hyllan
13.00-14.15: Keynote 2, Anna Dreber – "Can We Trust Scientific Results?
Replications, Reproducibility, and Prediction Markets", Volvosalen
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Directions
The Department of Economics The Department of Economics is situated at Vasagatan 1.
From the airport Airport bus to "Centralstationen", get off at "Korsvägen". Tram no 2 towards
"Högsbotorp", get off at "Handelshögskolan".
From the train station Tram no 2 towards "Högsbotorp", get off at "Handelshögskolan"
Tram no 3,6 and 11, get off at "Hagakyrkan". Three minute walk from the School.
Bus 25, 761 and Rosa Express, get off at "Pilgatan", right next to the School.
Location of the Department of Economics
Registration and conference venues
The conference will take place on the 4th floor of House E (signs directing from
Vasagatan).
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Informal gathering on Thursday (5 October)
Directions from Hotel Vasa (link)
Directions from Hotel Flora (link)
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Conference dinner on Friday (6 October)
Directions from the Department of Economics (link)
Guidelines for presenters and session chairs
Each presentation has been allocated 20 minutes (15 minutes presentation and 5
minutes discussion). Please keep to the scheduled times to allow participants to attend
the talks they would like to listen to. Presenters should upload their presentation onto
the computers before their session using a USB memory device.
The last presenter in a session is the session chair. He/she is responsible to keep the
timetable and to indicate to presenter when it is 5, 2 and 1 minute left of the 15
minutes allocated to the presentation
.
Local organizers - Peter Martinsson ([email protected])
- Joe Vecci ([email protected])
Sponsor We would like to thank our sponsor Stiftelsen för ekonomisk forskning i Västsverige
(Foundation for Economic Research in West Sweden).
In case of emergency
Fire, ambulance and police: 112
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List of Participants Last name First name Email
Akay Alpaslan [email protected]
Balasubramanian Pooja [email protected]
Berggren Andrea [email protected]
Brekke Kjell Arne [email protected]
Buturak Gökhan [email protected]
Cammelli Federico [email protected]
Campos-Mercade Pol [email protected]
Carlsson Fredrik [email protected]
Cingl Lubomir [email protected]
Cool Alison [email protected]
Crosetto Paolo [email protected]
Demeke Eyoual [email protected]
Detlefsen Lena [email protected]
Di Guida Sibilla [email protected]
Dianat Ahrash [email protected]
Diekert Florian [email protected]
Doku Angela [email protected]
Dreber Anna [email protected]
Drouvelis Michalis [email protected]
Dupoux Marion [email protected]
Eggert Håkan [email protected]
Ek Claes [email protected]
Engelmann Dirk [email protected]
Filippin Antonio [email protected]
Finocchiaro Castro Massimo [email protected]
Friedl Andreas [email protected]
Friedrichsen Jana [email protected]
Fromell Hanna [email protected]
Granath Louise [email protected]
Granstrand Ove [email protected]
Gravert Christina [email protected]
Grimalda Gianluca [email protected]
Grimm Stefan [email protected]
Gärtner Manja [email protected]
Habla Wolfgang [email protected]
Haita-Falah Corina [email protected]
Helland Leif [email protected]
Hillenbrand Adrian [email protected]
Ho Hoang-Anh [email protected]
Hofmann Elisa [email protected]
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Holden Stein [email protected]
Hugh-Jones David [email protected]
Ibanez Marcela [email protected]
Johansson Stenman Olof [email protected]
Kiessling Lukas [email protected]
Kleine Marco [email protected]
Kurz Verena [email protected]
Lampi Elina [email protected]
Lima De Miranda Katharina [email protected]
Lindskog Annika [email protected]
Loureiro Maria [email protected]
Löfgren Åsa [email protected]
Markussen Thomas [email protected]
Marquardt Gerdis [email protected]
Martinsson Peter [email protected]
Masiliunas Aidas [email protected]
Matthews Peter [email protected]
Micheli Leticia [email protected]
Miettinen Topi [email protected]
Migheli Matteo [email protected]
Neelim Ananta [email protected]
Neyse Levent [email protected]
Nie Zihan [email protected]
Nieken Petra [email protected]
Norrgren Lisa [email protected]
Nosenzo Daniele [email protected]
Nyborg Karine [email protected]
Ortiz Gomez Jose Maria [email protected]
Pancotto Francesca [email protected]
Ploner Matteo [email protected]
Ranehill Eva [email protected]
Roeder Kerstin [email protected]
Sandberg Anna [email protected]
Schmidt Ulrich [email protected]
Schwieren Christiane [email protected]
Serdarevic Nina [email protected]
Sieberg Katri [email protected]
Spantig Lisa [email protected]
Stephens Thomas Alexander [email protected]
Swahnberg Hanna [email protected]
Tesemma Tewodros Assefa [email protected]
Trautmann Stefan [email protected]
Tungodden Bertil [email protected]
Wadehra Shivani [email protected]
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van Der Heijden Eline [email protected]
Vecci Joe [email protected]
Vollmann Martin [email protected]
Yang Xiaojun [email protected]
Zhang Huanren [email protected]
Zitzelsberger Sonja [email protected]
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Detailed Program
Parallel sessions 1
Room E43: Institutions and welfare
Jana Friedrichsen - Welfare Stigma in the Lab: Evidence of Social Signaling
Fredrik Carlsson - Trust in institutions: an experimental approach
Peter Matthews - Trust in Government and Redistributive Preferences: An Experimental
Approach
Stein Holden - Group Trust in Youth Business Groups: Influenced by Risk Tolerance and
Expected Trustworthiness
Room SEB: Development and Norms
Hanna Fromell - Sharing Norms and Saving Behaviour
Lisa Spantig - The Endowment Effect and Savings Decisions of the Poor
Daniele Nosenzo - Norm fragility in the presence of image-motivated agents: the role of norm
legitimacy
Stefan Grimm - Blaming the Refugees – Experimental Evidence on Responsibility
Atrribution
Room Volvo: Public Goods 1
Corina Haita-Falah - Sunk Contributions and Beliefs in a Dynamic Threshold Public Good
Game
Xiaojun Yang - Institutional choices and contributions in public goods game:Evidence from a
laboratory experiment in rural China
Marion Dupoux - Beyond perfect substitutability in public good games: heterogenous
structures of preferences
Matteo Ploner - When the State Doesn't Play Dice: An Experimental Analysis of Cunning
Fiscal Policies and Tax Compliance
Parallel sessions 2
Room E43: Reference group and positional concerns
Lukas Kiessling - Self-selected Peers and Their Effects on Individual Performance
Pooja Balasubramanian - Wage Inequality and the Reference Group Effect
Alpaslan Akay - I Cannot Sleep! Relative Concerns and Sleeping Behavior
Lena Detlefsen - Sibling Composition, Preferences and Adolescents' Behavior
Room SEB: Bargaining and Labour
Leif Helland - Obstinate Parties and Non-binding Outside Options in the Lab
Levent Neyse - Income Inequality and Risk Taking: The Impact of Social Information
Ahrash Dianat - Statistical Discrimination and Affirmative Action in the Lab
Marcela Ibanez - Formal insurance, risk sharing, and the dynamics of other-regarding
preferences
Room Volvo: Risk
Annika Lindskog - Risk-taking and peers
Ulrich Schmidt - It's all about gains: risk preference and problem gambling
Manja Gärtner - Intuitive decision style as a determinant of risk preferences
Kjell Arne Brekke - Does competence reduce ambiguity aversion?
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Parallel sessions 3
Room E43: Welfare
Leticia Micheli - Inequality of Opportunity and Redistributive Concerns
Dirk Engelmann - Preferences over taxation of high income individuals: Evidence from
online and laboratory experiments
Joe Vecci - Leader Identity and Coordination Failure: Evidence from a Lab Experiment in the
Field
Olof Johansson-Stenman - Inequality Aversion and Marginal Income Taxation
Room SEB: Gender and Psychology
Gökhan Buturak - Gender Stereotypes in Media and Women's Willingness to Compete
Lubomir Cingl - Individual Speculative Behavior under Acute Stress
Eva Ranehill - Hormonal contraceptives and economic preferences
Wolfgang Habla - How email reminders affect exercising behaviour
Room Volvo: Health
Verena Kurz - Nudging à la carte – A field experiment on food choice
Massimo Finocchiaro Castro - Medical Malpractice Liability and Physicians’
Behaviour:Experimental Evidence
Sibilla Di Guida - Taking Care of High-Need Patients in Capitation-Based Payment Schemes:
An experimental investigation into the importance of market conditions
Claes Ek - Spillovers from Food-Waste Collection in Swedish Municipalities
Parallel sessions 4
Room E43: Teams and group size
Karine Nyborg - The Good, the Bad, and the Conditional: Sorting and Dynamics in a Public
Good Game with Endogenous Group Formation
Eline van Der Heijden - Group contracts for agri-environmental management
Pol Campos-Mercade - Helping Behavior and Group Size
Topi Miettinen - Exploration in Teams and the Encouragement Effect:Theory and
Experimental Evidence
Room SEB: Voting and Bargaining
Katri Sieberg - Sequential Voting and Strategy – An Experimental Test
Adrian Hillenbrand - Strategic Rational Inattention - Strategic Rational Inattention: An
Experiment on Product Search with Hidden Costs
Sonja Zitzelsberger - Voting on the Threat of Exclusion in a Public Goods Experiment
Thomas Markussen - Governing Collective Action in the Face of Observational Error
Room Volvo: Fairness
Michalis Drouvelis - Motives for Point-of-Exchange Donations
David Hugh-Jones - Where do fairness preferences come from? An experiment on norm
transmission in an adolescent social network
Christiane Schwieren - Fairness, Justice, and Partner Preference in Borderline Personality
Disorder
Stefan Trautmann - Implementing Fair Procedures?
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Parallel sessions 5
Room E43: Framing and Voting
Marco Kleine - Creativity and framed incentives: experimental evidence
Martin Vollmann - Measuring the Willingness to Pay (not) to get Verbal Feedback in
Allocation Decisions
Christina Gravert - It’s Just Money: Do Experimental Subjects Arbitrage Intertemporal
Monetary Rewards?
Zihan Nie - Water scarcity and cooperation: evidence from rural China
Room SEB: Environment
Angela Doku - Coping with Weather Shocks: Rational and "Irrational" Decision-Making in
Protectionist Behaviour
Francesca Pancotto - The evolution of cooperation in the aftermath of natural disasters
Federico Cammelli - How good norms lead to bad coordination: a framed field experiment on
fire management in the Brazilian Amazon
Shivani Wadehra - Eliciting households’ cooperation for efficient waste management: Field
evidence from Delhi
Room Volvo: Markets
Nina Serdarevic - It Pays to be Nice: The Benefits of Cooperating in the Market
Gerdis Marquardt - Contract enforcement as a reference point for feelings of entitlement
Antonio Filippin - An experimental test of prediction markets
Thomas Alexander Stephens - Money Illusion and Individual Investment in Stocks
Parallel sessions 6
Room E43: Gender
Ananta Neelim - Self-promotion and gender inequality: aiding women break the shackles of
modesty
Maria Loureiro - Risk Aversion, Self-confidence and Altruism: explaining Gender
Differences in Ultimatum
Katharina Lima De Miranda - Can Gender Quotas Prevent Excessive Risk Taking? The
Effect of Gender Composition on Group Decisions under Risk
Paolo Crosetto - Safe options induce gender differences in risk attitudes
Room SEB: Labour and competition Andreas Friedl - “Gift Exchange” in a Natural Work Environment; Dissociating types and
actions
Aidas Masiliunas - Payoff risk and foregone payoff information in contests
Petra Nieken - Motivation and incentives in an online labor market
Jose Maria Ortiz Gomez - Probabilistic Reward Schemes: Experimental Evidence
Room Volvo: Public goods 3
Matteo Migheli - Competition, Information and Cooperation
Huanren Zhang - Egalitarianism and turn taking in repeated coordination games
Florian Diekert - Social preferences under strategic and natural uncertainty
Gianluca Grimalda - Sanctions and imitiation of virtuous behavior improve international
cooperation
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Abstracts
Parallel Sessions 1 Room E43: Institutions and welfare
Presenter: Jana Friedrichsen
Title: Welfare Stigma in the Lab: Evidence of Social Signaling
Abstract: Using a laboratory experiment, we present first evidence that stigmatization
through public exposure causally reduces the take-up of an individually beneficial transfer.
Our design exogenously varies the informativeness of the take-up decision by varying
whether transfer eligibility is based on ability or luck, and how the transfer is financed. We
find that subjects avoid the inference both of being low-skilled and of being willing to live off
others. Using a placebo treatment we can exclude other explanations for the observed stigma
effect. In the experiment, social stigmatization implies a reduction in the take-up rate of 30
percentage points.
Presenter: Fredrik Carlsson
Title: Trust in institutions: an experimental approach
Abstract: We design an institutional trust game, where senders have to decide what fraction
of an endowment they wish to send to a recipient working at a particular institution. The
intention of the experiment is to obtain a measure of institutional trust. The experiment is
implemented in Ethiopia, with senders being entrepreneurs and the receivers being employed
by four different institutions. We find that senders discriminate between the different
institutions and that the measures of trust in the experiment correlated with stated trust.
Presenter: Peter Matthews
Title: Trust in Government and Redistributive Preferences: An Experimental Approach
Abstract: This paper analyzes a two-phase randomized online experiment to identify the
determinants of redistributive preferences. Treatments that provide information on US income
inequality and trustworthiness of the government induce intended effects on respondents'
perception of inequality and government. The follow-up survey results reveal aggrandized
treatment effects from the multiple exposure to a trust treatment. However, these treatment
effects do not translate to any significant change in support for redistribution. I also find a
strong heterogeneous treatment effect on conservatives, largely decreasing their trust in
government and support for redistribution. Lastly, the heterogeneity check on social mobility
reveals a strong negative relationship between perception of social mobility and redistributive
preferences.
Presenter: Stein Holden
Title: Group Trust in Youth Business Groups: Influenced by Risk Tolerance and Expected
Trustworthiness
Abstract: We study trust and trustworthiness among youth in youth groups established as
primary cooperatives do develop a joint business in northern Ethiopia. The field experiments
were implemented using classrooms in local schools as field labs. The standard trust game
was played where all youth participants played the roles as senders as well as receivers. As
senders, they knew that the receiver would be an anonymous member of their own youth
group. The strategy method was used to elicit more detailed information about stated
trustworthiness given different amounts received. Expected returns were recorded with a
categorical variable. Risk tolerance was assessed with a separate incentivized risk game. The
youth were asked to rank the level of trust in their group relative to the general level of trust
in their community and in their family on scales from one to five. The experiments were
completed for 119 youth groups and 1125 youth group members allowing us to analyze group
level variation as well as individual variation in trust and trustworthiness. The analysis and
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write-up is still ongoing. A couple of preliminary tables are attached giving some indications
of some key results in the group level analysis.
Room SEB: Development and Norms
Presenter: Hanna Fromell
Title: Sharing Norms and Saving Behaviour
Abstract: We run a field experiment in Kenya and provide empirical evidence of the
existence of sharing norms in rural poor communities and their impact on individual savings.
Using the Krupka-Weber (2013) norm-elicitation method we show that these communities
live by social norms that prescribe extensive sharing of income at the expense of own savings.
For women, these norms are stronger if information about income is publicly known by the
community rather than private. Using information on subjects’ bank account usage we show
that these norms, and their interaction with public information, systematically affect actual
saving behaviour.
Presenter: Lisa Spantig
Title: The Endowment Effect and Savings Decisions of the Poor
Abstract: The relative reluctance of individuals to give up things they have been endowed
with (the ’endowment effect’) has been documented in a large body of experimental studies
and might have important consequences for the design of contracts and institutions. One area
in which the endowment effect may play an important role are savings decisions of the poor.
In many developing countries, poor households receive their income in cash. This cash
’endowment’ may increase the psychological costs of saving, contributing to the widely
observed low savings rates of the poor. I study the causal effect of cash endow-ment on
savings decisions of 300 Filipino microfinance clients in an experimental setting, controlling
for potential confounds such as transaction costs and time preferences. Dur-ing an individual
interview, study participants decide whether they want to save some of their compensation for
survey participation in their existing savings account. Treated individuals already hold on to
the cash for about 20 minutes when making the savings de-cision whereas the control group
knows that they will receive the money (less the amount saved) in cash just after deciding. I
find that cash in hand makes individuals feel richer. However, this feeling of endowment does
not translate into smaller savings amounts. The distribution of savings in treatment and
control is merely identical. Using administrative and survey data as well as economic
preference measures, I classify savers and investigate treatment effect heterogeneity while
controlling for multiple inference.
Presenter: Daniele Nosenzo
Title: Norm fragility in the presence of image-motivated agents: the role of norm legitimacy
Abstract: We study, theoretically and experimentally, the relation between norm fragility
(i.e. the extent to which a norm is vulnerable to exploitation of moral wiggle room) and norm
strength (i.e. the extent to which a norm is perceived as legitimate and is internalized by the
agents). Using a simple model where compliance with norms of fair sharing is driven both by
intrinsic and image motivation, we show that strengthening weak norms increases compliance
and can reduce norm fragility. We corroborate these theoretical results in a dictator game
experiment by showing that the extent to which subjects are willing to exploit moral wiggle
room depends on the legitimacy of the norm.
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Presenter: Stefan Grimm
Title: Blaming the Refugees – Experimental Evidence on Responsibility Attribution
Abstract: Do people blame refugees for negative events? We propose a novel experimental
paradigm to measure responsibility attribution and use this paradigm to investigate
discrimination behavior towards refugees as compared to towards locals. Participants in the
laboratory experience a positive or negative income shock which is with equal probability
caused by a random draw or another participant’s performance in a real effort task.
Responsibility attribution is measured by eliciting incentivized beliefs about whether the
shock is due to the other participant’s performance. We find evidence for reversed
discrimination: locals attribute responsibility more favorably to refugees compared to locals.
Particularly, refugees are less often held responsible for negative income shocks. This is
despite the majority of locals having negative implicit associations towards Arabic names.
Further, these implicit attitudes have predictive power for responsibility attribution behavior
of locals. Since beliefs about locals’ and refugees’ performance cannot explain our findings,
we can rule out explanations based on statistical discrimination.
Room Volvo: Public Goods 1
Presenter: Corina Haita-Falah
Title: Sunk Contributions and Beliefs in a Dynamic Threshold Public Good Game
Abstract: [Duffy, John; Ochs, Jack; Vesterlund, Lise, “Giving little by little: Dynamic
voluntary contribution games,” Journal of Public Economics, 91, 2007, 1708–1730] find that
contributing to a public good over multiple stages (dynamic setting) increases the overall
contributions compared to one-shot (static) setting. Moreover, dynamic contributions without
feedback about co-players’ contributions between stages yield the same contributions as with
feedback and higher than in the static setting. Because the dynamic setting without feedback
is strategically equivalent to the static one, this finding is puzzling. I test whether the sunk
character of the stage-by-stage contributions is what explains the higher contributions in the
dynamic setting without feedback relative to the static setting. Symmetric players contribute
in two stages to a threshold public good and receive feedback after each stage. The treatment
differences consist of the options available in the second stage: increase-only contributions
(NoTake option) or both increase and decrease contributions (Take option). Thus, in the
second stage, the first stage contributions are sunk in the NoTake option, but not in the Take
option. Moreover, the game with the Take option is theoretically equivalent with the static
contributions setting. In the baseline groups, subjects know their second stage option before
they make their first stage contributions. In the treatment groups, they know that in the second
stage either of the two options is available with 50% probability, but they learn its realization
only after the first stage. We find that differences in the second stage contributions between
the NoTake and the Take options are increasing in the first stage contributions, both for the
baseline and the treatment groups. However, these differences are larger in the treatment
condition than in the baseline condition. In fact, the second-stage contributions in the
NoTake-option of the treatment condition are increasing in the first stage contributions, while
they are decreasing in the other three conditions. This indicates that sunk contributions indeed
play a role in the superior performance of the dynamic setting over the static one.
Presenter: Xiaojun Yang
Title: Institutional choices and contributions in public goods game: Evidence from a
laboratory experiment in rural China
Abstract: We examine institutional choices and contribution in public goods games (PGGs)
by conducting a laboratory experiment in the field with farmers from rural areas of western
China. We conducted a standard PGG and PGGs with two exogenously imposed institutions:
a centralized automatic reward institution and a centralized automatic punishment institution.
We further elicited subjects’ institutional choices and social preferences via three dictator
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games. We find no significant effect of exogenously imposed institutions – whether the
reward institution or the punishment institution – on farmers’ contributions in the PGGs. In
addition, majority of subjects prefer the reward institution over the punishment institution,
and the choice for the punishment institution is related to certain type of social preferences,
e.g., those who have an aversion to disadvantageous payoffs. Furthermore, we find that
subjects who choose the punishment institution contribute significantly less than those who
choose the reward institution, and the choice for punishment institution seems to affect
contribution through other channels but not social preferences.
Presenter: Marion Dupoux
Title: Beyond perfect substitutability in public good games: heterogenous structures of
preferences
Abstract: The literature on public good games is very focused on the additive separability of
the values of the private and the public goods. Yet, the additive structure underlies a perfect
substitutability relationship between private and public goods, which is a strong assumption.
This paper studies the effect of preference structures on contributions to the public good
within a voluntary contributions experiment in both homogenous and heterogenous groups.
Within the structure of substitutability, I find that subjects free-ride more often when they
interact with subjects of the other type (complementarity) for whom it is optimal to
contribute. Introducing such a heterogeneity may provide a method for the identification of
free-riders. Nonetheless, an advantageous inequality aversion emerges as well. This means
that under perfect substitutability, subjects tend to dislike earning too much compared to their
group member whose preferences underlie complementarity, a more constraining structure.
Presenter: Matteo Ploner
Title: When the State Doesn't Play Dice: An Experimental Analysis of Cunning Fiscal
Policies and Tax Compliance
Abstract: We provide a test of the effect of aggressive fiscal policies on tax compliance in
the lab. Our experimental setup allows tax agents to break a deontological rule concerning the
implementation of audits on a group of tax payers. In one incentive condition, tax agents have
a direct monetary benefit from higher compliance; in another, they have none. Tax payers, on
the other hand, go through a phase of stringent controls under their tax agents and one where
audit probabilities are fixed and implemented by a random device. We find that tax agents
bend the rules to their advantage. Many either perform very frequent audits or place them in a
strategic way, thus enforcing a norm of high compliance. Those following the rules have no
success. Surprisingly, this is true for both incentive conditions. Tax payers exposed to these
audit strategies display nearly full compliance and continue to do so also when tax agents are
inactive. We conclude that cunning fiscal policies can effectively be used by tax authorities, if
it is transparent that they lead to higher overall compliance. This establishes a virtuous norm
that can have positive spillovers even in domains where the state has less coercive power.
Parallel sessions 2 Room E43: Reference group and positional concerns
Presenter: Lukas Kiessling
Title: Self-selected Peers and Their Effects on Individual Performance
Abstract: Peers impact behavior in various dimensions of life. However, for many people not
randomly assigned peers might matter, but rather they choose their peers carefully. In this
paper, we present how self-selected peers affect individual performance in contrast to
randomly assigned ones. For this purpose, we conduct a framed field experiment in secondary
schools. Students participate in suicide runs twice. First, students run alone, then with a peer.
Before the second run, we elicit preferences for peers both based on names and on
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performance. We experimentally vary the matching in the second run and form pairs either
randomly or based on elicited preferences. We find that self-selected peers improve
individual performance by .16-.21 SD relative to randomly assigned peers. Composition
differences cannot explain these effects. Rather, we provide several markers that the social
interaction has changed. Moreover, while selection based on names improves all students
across the ability distribution relatively to random assignment, selection on relative
performance tends favor faster students.
Presenter: Pooja Balasubramanian
Title: Wage Inequality and the Reference Group Effect
Abstract: Unfair treatment at the workplace encourages workers to adjust their behavior in
order to restore fairness and align monetary returns to costs. This adjustment of behavior
however, may differ depending on the reference group considered to evaluate equity. In this
aspect two main questions are to be considered: How do workers respond to unfair treatment
at the workplace? and how does this response change depending on the identity of the
reference group? To answer the above research questions, this paper utilizes data from a
randomized field experiment conducted in Kolkata, India where student assistants were hired
to help in a data entry task. Recruited workers were working in a team of two and were
offered a fixed wage per hour. Workers were randomly assigned to one of the following
treatment groups (1) A control group not subjected to wage cuts(2) A general wage cut(3) A
unilateral wage cut in reference to colleagues with similar social identity (4) A unilateral
wage cut in reference to colleagues with a different social identity, where social identity is
defined in terms of gender. Results show a significant decrease in the quantity and quality of
work following a general wage cut. A more severe drop in productivity was presented by men
in the case of unilateral wage cut, while women experiencing unilateral wage cuts didn’t
exhibit a similar behavior regardless of the gender of the team member. To the contrary,
women matched with a male colleague and experiencing unilateral wage cut show a slight
increase in productivity, a result that contributes to the discussion regarding the paradox of
the “content female worker”. These findings highlight the necessity of a better understanding
of the social comparison processes prevailing at the workplace, given the major role they play
in determining the level of productivity supplied.
Presenter: Alpaslan Akay
Title: I Cannot Sleep! Relative Concerns and Sleeping Behavior
Abstract: We investigate the effect of relative concerns with respect to income on the
quantity and quality of sleep using a long panel dataset on the sleep behavior of people in
Germany. We find that relative income has a substantial negative effect on the number of
hours of sleep on weekdays and overall satisfaction with sleep, i.e., sleep quality, whereas
absolute income has no particular effect on sleep behavior. The findings are robust to several
specification checks, including measures of relative concerns, reference group, income
inequality, and local price differences. The paper also investigates the importance of the
potential channels including working hours, time-use activities, and physical and mental
health to explain how relative concerns relate to sleep behavior. The results reveal that while
all of these channels partially contribute to the effect, it appears to be mainly driven by
physical and mental health and overall and financial well-being/stress. We also use a
subjective well-being valuation approach to calculate the monetary value of sleep lost due to
income comparisons. The total cost is as high as about 2.6 billion euro/year (1.8% of the
overall monetary value of sleep and 1.3% of total health expenditures) among the working-
age population in Germany.
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Presenter: Lena Detlefsen
Title: Sibling Composition, Preferences and Adolescents' Behavior
Abstract: The impact of sibling composition on individual outcomes has in recent years
become an intensively discussed topic in psychology, economics, sociology, public health and
related disciplines. Key finding in this literature show, among others, that later born children
have lower IQ (Bjerkedal et al., 2007), lower education (Black et al., 2005; Härkönen, 2014),
earn less (Behrman & Taubman, 1986; Björklund & Jäntti, 2012) and are more likely to
smoke (Black et al., 2016). One obvious reason for these birth order effects may be given by
differentiated parental investment among siblings favoring first bon children (e.g. Sulloway,
1996; Hertwig et al., 2002; Price, 2008). Another explanation is give by Sulloway (1995,
1996)who argues that their security in the expectation of parental favoritism makes first born
children to conform with parental values whereas later born ones are more likely to oppose
against them. This is confirmed by Dohmen et al. (2012) who find that first born children are
more similar to their parents in terms of risk preferences than later born ones. Consistent with
this view, later born children have been found to be less risk averse than first borns (Sulloway
and Zweigenhaft, 2010). Recent research documented that, besides risk preferences, in
particular time preferences serve as a good predictor for individual outcomes (Castillo et al.,
2011; Sutter et al., 2013; Golsteyn et al., 2014; Chabris et al., 2008). High discount rates have
been found to be negatively correlated with school performance (Castillo et al., 2011; Sutter
et al., 2013; Golsteyn et al., 2014), lifetime income (Golsteyn et al., 2014) and health related
outcomes, e.g. smoking, drinking and BMI (Chabris et al., 2008; Sutter et al., 2013). Given
that sibling composition, risk preferences, and higher discount rates all correlate with
individual outcomes, naturally the question arises whether differences in risk and time
preferences among siblings mediate sibling composition effects.
Our study thereby focus on adolescents (aged between 15 and 18) and we are not aware of
any study analyzing the relation of sibling composition, time and risk preferences and
economic outcomes for adolescents with incentivized experiments. In fact, there exists only
one study in the literature which investigates the link between sibling composition and time
and risk preferences (Lampi and Nordblom, 2011). They consider the relationship between
birth order, risk and time preferences as well as real life decisions based on a survey among
Swedish adults. As previous studies mentioned above, also Lampi and Nordblom (2011) find
that risk and time preferences are related to individual outcomes, in particular education and
earnings. Besides strong gender differences, they also find a link between birth order and
preferences: middle-born men were least patient and least risk averse in their data. We are
therefore the first to investigate the influence of birth order, number of siblings and sibling’s
sex composition on risk and time preferences of adolescents with incentivized experiments.
The field study was conducted between March and May 2015 in schools in Schleswig-
Holstein, Germany with a total of 525 students, all in the 10th grade. The schools include all
possible schools types in Germany, which offered us the possibility to get students with
different socio-economic and intellectual backgrounds. The experiments were conducted
during school hours which helped us to minimize dropouts and self-selection. We elicited
time preferences through choice lists. This procedure was used since it is well received in the
literature and has shown good results with children (e.g. Sutter et al., 2013). Risk preferences
were elicited through the choice task by Eckel & Grossman (2002) which is easy to
understand and has been shown to yield good results over all socioeconomic groups with
diverse mathematical skills (Dave et al., 2010)
Our results can be summarized as follows. First, a clear birth order pattern of preferences only
emerges for boys with second born boys being less risk averse and less patient than first born
boys. Second, looking into detail the explanation for the insignificant result for girls and the
clear significant picture for boys can be found in the sibling's sex composition. We find that
the sibling's sex composition seems to be more important for the risk and time preferences of
children than the pure birth order. For example, girls with an older brother tend to be more
risk averse than girls with an older sister. Third, when combining birth order, preferences and
17
field behavior, risk and time preferences can at least partially explain the birth order
differences found in literature.
Room SEB: Bargaining and Labour
Presenter: Leif Helland
Title: Obstinate Parties and Non-binding Outside Options in the Lab
Abstract: We experimentally investigate the role of reputation building in bar-gaining, using
the standard alternating offer protocol. The opportunity for building reputation is created by
the presence of obstinate types, i.e. behavioral types that insist on an out-of-equilibrium
demand. In the absence of outside options rational players have an incentive to mimic
obstinate types. This leads to significant delay in equilibrium. Introducing outside options in
this environment removes the mimicking incentive and forces agreement within at most two
periods in equilibrium. This even holds for outside options that are not binding in the absence
of obstinate types. In the experiment obstinate types are implemented as automatons. We and
strong support for the hypothesis that ("non-binding") outside options are effciency enhancing
in the presence of obstinate types. We argue that our findings cannot readily be explained by
preferences for efficiency or equality, or by reciprocity. In an extension we investigate a
model in which bargainers are permitted to purchase an outside option prior to the bargaining
game. We and that subjects buy such outside options when this is individually rational.
Presenter: Levent Neyse
Title: Income Inequality and Risk Taking: The Impact of Social Information
Abstract: In contrast with the assumptions of standard economic theory, recent experimental
evidence shows that the income of peers has a systematic impact on observed degrees of risk
aversion. This paper reports the findings of a field experiment examining the impact of
income inequality on risk preferences and whether the knowledge of inequality mediates the
decisions. The workers who were recruitted for a one time job were paid either a low or a
high wage. Half of the workers were aware of the income inequality while the other half were
not. After completing their task they were invited to invest a part of their salary into a risky
asset. The results show that high-wage workers take higher risks than low-wage workers if
they are aware of the inequality in wages.
Presenter: Ahrash Dianat
Title: Statistical Discrimination and Affirmative Action in the Lab
Abstract: We investigate experimentally the conditions that foster statistical discrimination
in labor markets, as well as the effectiveness of several policies designed to combat
discriminatory practices. In our experimental labor markets, firms and workers interact
repeatedly. Workers are associated with one of two colors and, in each period, have to decide
whether to invest in costly training. In each period, firms observe only a worker's associated
color and decide whether to hire the worker. We induce a pattern of statistical discrimination
in which workers associated with one color do not invest in costly training, correctly
foreseeing firms not hiring them. We then implement an array of affirmative action policies,
in which firms are given subsidies for hiring workers of one color. While all such policies
help equalize the playing field when they are in place, discrimination reappears once they are
lifted. However, we do find that a longer duration of affirmative action mitigates the reversal
to previous patterns of discrimination. Our results shed light on the efficacy of commonly
used methods to combat discrimination in labor markets.
Presenter: Marcela Ibanez
Title: Formal insurance, risk sharing, and the dynamics of other-regarding preferences
Abstract: In this paper we investigate if formal insurance crowds-out transfers and consider
the ex-post effect that this has on other regarding preferences. We test this question using a
framed field experiment with rural households in Mexico. In a solidarity game we randomly
18
allocated a fair insurance to two of the three members of the network and find that in case of a
shock, the value of transfers to non-insured members is significantly higher than in a control
treatment when insurance is not available. This result is observed both when shocks are
idiosyncratic and affect only one member of the network at the time or when shocks are
collective and two members of the network are affected. This unexpected crowding-in effect
leads to an increase in trust among non-insured participants, but a decrease in trust on insured
participants. This finding suggests that other regarding preferences evolve as a sense of
gratitude for the transfers received and not as a warm-glow for the transfers provided
Room Volvo: Risk
Presenter: Annika Lindskog
Title: Risk-taking and peers
Abstract: Evidence of how peers affect risk-taking behavior is inconclusive. This paper
investigates the impact of the outcome of peers, i.e. the social reference point, on risk taking
behavior using an experimental approach allowing for exogenous variation of peer groups. In
particular we focus on how risk taking behavior is affected when there is a probability of
getting ahead or falling behind in terms of income of others. Our results show that risk-taking
is affected by the desire to get ahead of others, both when the social reference point is within
reach (rank can be affected) and when it is out of reach (rank cannot be affected).
Presenter: Ulrich Schmidt
Title: It's all about gains: risk preference and problem gambling
Abstract: Reducing criminal acts in society is a crucial goal of governments all over the
world. Establishing punishment structures to attain this goal involve high costs. Typically,
both theorists and practitioners resort to the adjustment of severity and/or certainty of
punishment as effective measures to deter criminal behavior. One less costly mechanism to
affect a punishments impact is the swiftness of its execution (celerity). We carry out the first
controlled economic experiment to study the effectiveness of swiftness of punishment along
two dimensions: the timing of punishment and the timing of the resolution of uncertainty
regarding punishment. Our results indicate an interaction between both dimensions: when the
offenders are certain (uncertain) about the punishment, offenses significantly increase
(decrease) with delayed punishment. Our results yield strong policy implications in terms of
designing effective institutions in mitigating misconduct and reducing recidivism
Presenter: Manja Gärtner
Title: Intuitive decision style as a determinant of risk preferences
Abstract: We investigate the relation between individual differences in the tendency to use
intuitive or deliberate decision styles and individual differences in risk taking. An experiment
is conducted that elicits decision styles and risk preferences in a large, representative sample
of the Swedish population (N = 1832). We find a statistically significant and positive
correlation between individual risk taking and an individual’s tendency to rely on intuition
when making decisions. This relation is robust to controlling for a set of individual
characteristics that may affect both measures, such as age, gender, family background and
education. Moreover, we show that the relation is robust to an intervention that encourages
subjects to rely primarily on deliberation when making decisions.
Presenter: Kjell Arne Brekke
Title: Does competence reduce ambiguity aversion?
Abstract: Heath and Tversky (1991) suggested that participants will be more willing to
gamble on an ambiguous natural event over a lottery with well-defined risk, the more
competent they felt evaluating the possible outcome of the natural event.
19
In a series of experiments, we ask participants to first state the probability of each of five
comprehensive and mutually exclusive outcomes of a natural event. As previous studies
found, the stated probabilities added to more than 150% on average. We then randomly
picked one outcome – the given alternative – out of the five possible outcomes. Participants
where than asked to choose between (a) a gamble where they would win if the given
alternative occurred, or (b) a random lottery where they win with a given probability.
We find that participants have a strong preference for lotteries over gambles, in one
experiment even when the stated probability for the given alternative was three times as high
as the given probability of the lottery. We argue that this can be interpreted as an indication of
ambiguity aversion. We find however that the degree of ambiguity aversion varies across
different experiments.
In the first experiment, the natural event was a possible change of the key policy rate set by
the Central bank of Norway, and we recruited participants from medicine, mathematics and
language classes. In this case, we found a very strong preference for the lottery – indicating
strong ambiguity aversion. It seems reasonable that these participants had low confidence in
their assessment of Central bank policy. Experiment 2 used the Republican Iowa caucuses as
a natural event, with Donald Trump as one candidates and with participants from Mechanical
Turk. Here we observed much less ambiguity aversion. This event had such a huge media
coverage that it seems reasonable to think that participants felt much more competent.
The results thus seems consistent with Heath and Tversy’s competence hypothesis, applied to
ambiguity aversion. However, we cannot make a deduction from a comparison between
experiments. Moreover, other indicators of competence had no impact on the likelihood of
choosing the gamble.
To test further we ran a third experiment, this time using the Oscar awards as a natural event.
While Central bank policy was very unfamiliar to almost all participants in the first
experiment and few in the second experiment had avoided news about the Trump campaign,
we believe that the knowledge about movies is much more dispersed among Amazon
Mechanical Turk participants. In addition to the choice between gamble and lottery as above,
we also elicited knowledge about movies and the actors in the set. We predict that participants
with less knowledge about movies and the actors will exhibit more ambiguity aversion.
Parallel sessions 3 Room E43: Welfare
Presenter: Leticia Micheli
Title: Inequality of Opportunity and Redistributive Concerns
Abstract: Despite explaining about half of the variability in global income inequality,
inequality of opportunity - and its effects on individual behavior - has remained relatively
unexplored. To investigate how inequality of opportunity influences concerns for outcome
redistribution, we conducted 2 behavioral studies. In study 1, inequality of opportunity was
manipulated through chances to earn a lottery prize. Participants were assigned to either a low
or high probability of winning (PW) a lottery based on luck (random assignment). After
seeing their PW, participants were asked to play a Dictator Game considering they were the
winner of the lottery. Results showed that even though opportunities were distributed based
on luck, participants with high PW seemed to feel more entitled to the lottery prize, giving
significantly less to the other player than participants with low PW. To understand whether
distinct procedures to allocate unequal opportunities would be perceived differently, we
conducted an online survey. Results showed that procedures leading to inequality of
opportunity are evaluated differently in terms of fairness and individual control. Procedures in
which individuals perceive to have a higher control over the opportunities received (e.g.,
20
merit, effort) are evaluated as fairer than procedures in which individuals perceive to have
lower control (e.g., gender, skin color, height). However, an unequal allocation of
probabilities based on luck did not fit this pattern, as this procedure was perceived both as fair
and as having relatively little individual control. In study 2, we investigate whether different
procedures to allocate unequal opportunities moderate the influence of PW on redistributive
behavior. Participants are assigned to either low or high PW based on different procedures
(i.e., luck, merit and height). Overall, results seem to suggest that unequal distribution of
opportunities influence outcome redistribution, stressing the importance of including
opportunities into the redistributive debate.
Presenter: Dirk Engelmann
Title: Preferences over taxation of high income individuals: Evidence from online and
laboratory experiments
Abstract: Mobility of high income individuals across borders puts pressure on governments
to lower taxes. A central tenet of the underlying theoretical and empirical models is that
mobile individuals react to tax differentials through migration, and in turn immobile
households vote for lower taxes in the face of a migration threat. In light of research on
behavioural economics it is not clear, however, whether this premise holds. We use an
experimental survey design and elicit answers from more than 3,000 households in the
German Internet Panel (GIP), who are assigned roles as rich or poor and must choose a
redistributive tax. We use various treatments to understand the role of mobility and ideology
in tax choice. We observe substantial deviations from the predicted theoretical equilibrium. In
many cases comparative static results prevail however. Political ideology matters: left-leaning
households choose higher taxes than right-leaning persons, and center-right leaning
individuals tend to emigrate more when the tax at home is high. We compare the results with
those from a closely related lab experiment, in which subjects appear to behave more in line
with standard predictions.
Presenter: Joe Vecci
Title: Leader Identity and Coordination Failure: Evidence from a Lab Experiment in the Field
Abstract: This paper uses data from an artefactual field experiment and survey conducted in
44 towns in UP in India to examine whether Muslim or Hindu leaders are more likely to
overcome coordination failure. We find that Muslim leaders encourage greater coordination
than Hindu leaders. We then investigate possible solutions for group favouritism. We find
that differences across groups disappear when Muslim and Hindus work together in a pre-task
contact game; and that this policy is most effective in conflict prone areas. On the other hand,
an affirmative action policy that places Muslims in leadership positions decreases
coordination in Muslim led groups; and again only in high conflict areas. We find some
evidence that beliefs about the effort of team members under different leaders contribute to
explaining the results.
Presenter: Olof Johansson-Stenman
Title: Inequality Aversion and Marginal Income Taxation
Abstract: This paper deals with tax policy responses to inequality aversion by examining the
first-best Pareto-efficient marginal tax structure when people are inequality averse. In doing
so, we distinguish between four different and widely used models of inequality aversion. The
results show that empirically and experimentally quantified degrees of inequality aversion
have potentially very strong implications for Pareto-efficient marginal income taxation. It also
turns out that the exact type of inequality aversion (self-centered vs. non-self-centered), and
the measures of inequality used, matter a great deal. For example, based on simulation results
mimicking the disposable income distribution in the US in 2013, the preferences suggested by
Fehr and Schmidt (1999) imply monotonically increasing marginal income taxes, with large
negative marginal tax rates for low-income individuals and large positive marginal tax rates
21
for high-income individuals. In contrast, the in many respects comparable model by Bolton
and Ockenfels (2000) implies close to zero marginal income tax rates for all.
Room SEB: Gender and Psychology
Presenter: Gökhan Buturak
Title: Gender Stereotypes in Media and Women's Willingness to Compete
Abstract: We investigate experimentally if and how media shapes women’s economic
preferences. More specifically, we test whether or not gender stereotypes in visual media
have adverse effects on women’s economic preferences and, also, ask the question of whether
or not female counter-stereotypes would encourage women to compete. In our experiment, a
control group consisting of young women watched a relatively gender-neutral film (i.e.,
Shaun the Sheep Movie), a treatment group (henceforth, stereotype treatment) watched a film
that embodies gender stereotypes (i.e., Bridget Jones’s Diary), and a second treatment group
(henceforth, counter-stereotype treatment) watched a film in which the main character is a
counter-stereotypical young girl (i.e., Wadjda). Upon watching the films, all participants
responded to a series of questions that aimed to elicit their willingness to compete in a
tournament, to seek for challenges, to lead others, and to take risks. We find that women in
the control and counter-stereotype treatment groups were significantly more likely to select
into the tournament than those in the stereotype treatment group. The regressions that we ran
indicate that the discrepancy in the ratio of women who chose the tournament option between
the two treatment groups is driven by the negative effect of gender stereotypes in Bridget
Jones’s Diary, rather than the motivating effect of the female counter-stereotype in Wadjda.
Hence, our study hints at media’s role in the persistence of the gender gap in labor markets.
Moreover, unlike the findings in gender stereotype threat literature, we find no evidence of
performance impairment or boost due to our treatments in the selection-into-tournament task.
Though we found treatment effects in the selection-into-tournament task, we did not observe
any significant difference in the other preference elicitation tasks across treatments.
Presenter: Lubomir Cingl
Title: Individual Speculative Behavior under Acute Stress
Abstract: In this paper we study the effects of acute stress on speculative behavior using a
controlled laboratory experiment with 208 healthy subjects. We employ a recently introduced
measure that captures individual speculative behavior, the Speculation Elicitation Task, and
an efficient stress-inducing procedure, the Trier Social Stress Test for Groups. Our design
allows for the separation of the main channels behind the treatment effects. Generally we
observe strong gender differences: in the non-stressed, control group women want to
speculate significantly more than men, while we observe no gender difference in the risk
attitudes. The treatment (stress-inducing) procedure increases men's willingness to speculate
compared to control men, but it decreases the speculative behavior of women by about the
same amount. As we do not observe any change in the risk-preferences due to treatment, nor
in the expectations of the shift in others' equilibrium behavior, we conclude that the
behavioral change is driven by the change in preferences. The analysis of salivary cortisol
shows that the subjects were under a considerable level of stress.
Presenter: Eva Ranehill
Title: Hormonal contraceptives and economic preferences
Abstract: A growing body of correlational studies suggests that sex hormones such as those
contained in, or affected by, oral contraceptives (OCs) may impact economic behavior.
However, despite widespread use of OCs among women in Western countries, little is known
about their potential behavioral effects. The present study investigates whether OCs causally
influence economic preferences. We randomly allocate 340 women aged 18-35 to three
months of a widely used OC or placebo treatment. At the end of treatment, we conduct an
economic experiment measuring altruism, financial risk taking, and willingness to compete.
22
The statistical power is 80% to detect an effect size equal to a Cohen’s D of 0.30 at the 5%
level. We find no significant effects of OCs on any of the measured preferences, indicating
that this widely used OC treatment, commonly used throughout the world, does not
significantly affect the measured economic preferences. Further, we find no relation between
menstrual cycle phase and economic preferences in the placebo group.
Presenter: Wolfgang Habla
Title: How email reminders affect exercising behaviour
Abstract: Using a large-scale randomized experiment, we investigate whether regular email
reminders can assist gym members in attaining a higher level of attendance both in the short
and long run. To this end, we sent short weekly email reminders to 1,231 individuals over the
course of three months. We find that reminders increased weekly attendance by 13% in total
compared to the control group of 1,232 gym members, with the eff ect being larger for class
training (increase by 17%) than for free training (12%). Higher attendance in class training
sessions is driven by an increased number of bookings, while the number of cancellations is
insignificant, suggesting that the booking of a class worked well in committing people to
actually attend the gym. Furthermore, individuals who had attended less frequently than the
median in a pre-study baseline period increased attendance by nearly twice as much as those
who had attended more frequently than the median. In contrast to previous studies, we
dispose of a much higher sample size and a much richer picture of physical activities, which
include not only free training but also various class trainings. Moreover, we are able to look
into very detailed data on the booking of class trainings and the cancellation of bookings.
Room Volvo: Health
Presenter: Verena Kurz
Title: Nudging à la carte – A field experiment on food choice
Abstract: We test the effect of framing of a menu on the choice of ordering climate friendly
dishes in a randomized controlled experiment. We vary the convenience of either the
vegetarian or the meat option out of three dishes offered. Rearranging the menu in favor of
vegetarian food has a large and significant effect on the willingness to order a vegetarian dish
instead of meat. However, this effect decreases over the three-week treatment period. We
discuss potential channels through which our intervention might affect behavior and how our
results can be interpreted with respect to those channels. Our results demonstrate that small,
cheap interventions can be used towards decreasing carbon emissions from food
consumption.
Presenter: Massimo Finocchiaro Castro
Title: Medical Malpractice Liability and Physicians’ Behaviour:Experimental Evidence
Abstract: While there is large anecdotal evidence on the role of malpractice liability in
affecting physicians’ behaviour, the identification of its causal effect is rather difficult and, in
general, the empirical evidence is still limited. In this paper we study the effect of introducing
the risk of being sued for medical malpractice on the provision of physicians’ medical
services in a controlled laboratory setting. In our experimental sessions both medical and non-
medical students choose how many medical services to provide for heterogeneous patients
and, most importantly, under different scenarios. In particular, we implement different
exogenous variations in the expected probability of being sued for medical malpractice,
which depends on the quantity of medical services provided, as well as in the monetary cost
of being sued. Therefore, we exploit the within-subject variation in the provision of medical
services to infer the causal effect of malpractice liability. Furthermore, motivated by a simple
theoretical framework, we analyse the impact of malpractice liability under different pure
(fee-for-service and capitation) and mixed payment methods, which allows us to discuss the
interactions between medical malpractice liability and payment systems. Overall, the
experimental evidence in this context seems especially important to study the influence on
23
physicians’ behaviour, given the difficulty to infer the causal effect of malpractice liability
from empirical works. Therefore, our study has the potential to offer an important
contribution to the literature on physicians’ behaviour and, under the policy perspective, to
the recent public debate on the role of defensive medicine in increasing the health
expenditure.
Presenter: Sibilla Di Guida
Title: Taking Care of High-Need Patients in Capitation-Based Payment Schemes: An
experimental investigation into the importance of market conditions
Abstract: A capitation-based payment scheme is known to lead to underprovision of health
care especially to patients in high need of care. This paper contributes to the literature by
testing whether two alternative versions of the capitation-based payment scheme make
physicians prioritise high-need patients: 1) ring-fencing part of the capitation payment to a
fixed physician salary, and 2) making the per capita payment higher for patients expected to
be of high-need of care than for patients expected to be of low-need of care. We test the
schemes using a controlled, incentivised laboratory experiment where participants take the
role of physicians and decide on the supply of health care services. A total of 55 prospective
physicians (medical students) participated in three experimental sessions conducted in
Denmark in 2015. The results show that high-need patients gain the most from a fixed
physician salary when there is resource abundance, whereas there is no difference in gains
between high-need and low-need patients when physicians are resource constrained. We also
find that differentiation of payments make physicians take relatively better care of high-
payment patients than low-payment patients. This result holds even though physicians’ total
payment is fixed. We conclude that capitation-based payment schemes can be designed to
incentivize physicians to prioritise high-need patients. However, policymakers should be
aware that the presence of resource constraints significantly impact how the different schemes
affect allocation of care.
Presenter: Claes Ek
Title: Spillovers from Food-Waste Collection in Swedish Municipalities
Abstract: We estimate behavioral spillovers from environmental policy within the context of
a natural experiment on food waste in Sweden. Exploiting the staggered implementation of
food-waste collection across Swedish municipalities, we use a difference-in-difference design
to measure the causal effect of introducing such collection on another pro-environmental
behavior, namely the sorting of packaging waste. Results suggest a positive spillover effect
on packaging waste which corresponds to 5-10% of the population average and rises
gradually over time, possibly due to slow implementation of food-waste collection in many
municipalities. These estimates control for a number of shifts in the waste-related incentives
facing households, e.g. introduction of curbside collection of packaging waste from single-
family homes. Although we are unable to directly account for all such factors, we find no
compelling evidence of remaining upward bias.
Parallel sessions 4
Room E43: Teams and group size
Presenter: Karine Nyborg
Title: The Good, the Bad, and the Conditional: Sorting and Dynamics in a Public Good Game
with Endogenous Group Formation
Abstract: Previous research has shown that charitable commitments can serve as a screening
device in public good games (Brekke et al., 2011), enabling cooperative subjects to
endogenously self-select into groups which manage to sustain cooperation over time. We
present a public good game experiment in which subjects choose between two group types: in
blue groups, subjects receive a fixed extra payoff; in red groups, this extra payoff is donated,
24
instead, to the Red Cross. We use the strategy method to elicit the conditional contribution
preferences of the subjects, using this to classify subjects as unconditional altruists, free-
riders, conditional cooperators or others. In the current paper we investigate further why red
groups manage to sustain cooperation over time while blue groups do not. Is it simply
because red groups start off at higher contribution levels? Could it be that the behavior of
subjects who select into blue groups is more conditional on others’ behavior?
Our experiment starts with a one-shot standard public good game with no group choice and
no feedback. The preliminary results show that subjects who later choose red groups
contribute significantly higher amounts in this first one-shot game compared to subjects who
later choose blue groups. We find (as in Fischbacher et al. (2001)) that a small group of
subjects can be classified as unconditional altruists and a small group as free-riders, while the
largest group are conditional cooperators. While the altruists overwhelmingly select into red
groups, the free-riders select into blue groups. Although these groups are relatively small,
their very systematic selection into different groups is important for the dynamics of play.
Presenter: Eline van Der Heijden
Title: Group contracts for agri-environmental management
Abstract: To reduce the spatial scattering of agri-environmental interventions and decrease
administration costs, agri-environmental management in the Netherlands has recently been re-
organized to target farmer collectives. Individual farmers can no longer receive subsidies or
payments for environmental services: they now have to organize themselves in collectives to
become eligible. These collectives formulate a joint plan for agri-environmental management
on the basis of which a group contract is negotiated with the regional government. The
collective is responsible for meeting the targets of the group contract, and it pays individual
farmers for the services they provide. Collectives vary in terms of farmer types (e.g. dairy vs.
crop farmers) and scale of activities (e.g. small part-time vs. large commercial farmers), and
farmers’ opportunity costs may different as well. In defining the size and scope of the group
contract, farmer collectives thus face the difficulty of reaching consensus in heterogeneous
groups. In this paper we develop a four person, threshold public goods game which
incorporates important features of this situation: two types of players (high and low cost) and
two distributional rules (equal payoff rule and equal share of the bonus rule). In the game,
players can contribute (part of) their endowment to a public good, and if total group
contributions meet a certain (known) threshold, the group receives a bonus. The size of the
bonus depends on the threshold level. To examine if and how different distribution rules
affect group outcomes we have conducted a laboratory experiment with students. We
implemented different treatments, which varied in the way in which thresholds were
determined (endogenous versus exogenous) and in the order of the distribution rules. In total
204 subjects participated in the experiment, in 51 groups. In general, differences within and
across treatments are small. Not surprisingly, low cost subjects contribute more than high cost
subjects (although in terms of pay-offs the difference is minor). More importantly, our results
suggest that the equal payoff rule is better than the equal sharing of the bonus rule in terms of
contributions, frequency of threshold met, and payoffs. In addition, we find that contributions
with endogenous thresholds and exogenous thresholds are very similar but that payoffs are
significantly higher in the latter case.
Presenter: Pol Campos-Mercade
Title: Helping Behavior and Group Size
Abstract: Will a person in need of help be more likely to be helped when there are one or
two potential helpers? Dozens of experiments have led social psychologists to conclude that
the answer to this question depends entirely on the situation. This paper uses a simple game
theory model to predict in what situations a victim (person in need of help) will be more
likely to be helped in a group of one than in a group of two bystanders (potential helpers), and
in what situations the opposite is true. We show that, in situations where most bystanders are
25
willing to help, victims are better off when only one bystander can help them. The intuition
behind this result is that, despite most bystanders helping when they are the only potential
helpers, bystanders have to overcome a coordination problem on who will help when they are
two. However, in situations where few bystanders are willing to help, victims are better off
when two bystanders can help. This is because the probability that there is at least one
bystander that is willing to help is higher in larger groups.
We test these predictions by running a small experiment in which groups of one or two
bystanders have the possibility to pay a cost to help a victim. If at least one bystander pays the
cost, the victim receives a given amount of money. When the victim is placed in a group
where all bystanders have previously shown to be prosocial, she is better off when only one
bystander can help her than when two can. When the victim is placed in a group where few
bystanders have previously been prosocial, the victim is better off when two bystanders can
help her than when only one can. This paper suggests a simple and concrete rule to predict
whether people will be more likely to be helped when there are one or two potential helpers.
This rule does not only help explaining some of the previous experimental results in social
psychology, but also can be useful for managers, educators and policy-makers whose
objectives are to increase helping behaviors within an organization.
Presenter: Topi Miettinen
Title: Exploration in Teams and the Encouragement Effect: Theory and Experimental
Evidence
Abstract: This paper analyzes a two-person, two-stage model of sequential exploration,
where both information and payoff externalities exist, and tests the derived hypotheses in the
laboratory. We theoretically show that even when agents are self-interested and perfectly
rational, the information externality induces a standard encouragement effect: a positive effect
of first-mover exploration on the optimality of the second-mover exploring as well. When
agents have other-regarding preferences and imperfectly optimize, the encouragement effect
is strongest. The explorative nature of the game raises overall efficiency compared to a payoff
equivalent public goods game. We experimentally confirm our main theoretical predictions
using a novel experimental paradigm. Our findings are relevant not only for motivating and
managing progress in fields like criminal justice, education, scientific research and health, but
also for diverse applications such as prosocial behavior at work and collective action.
Room SEB: Voting and Bargaining
Presenter: Katri Sieberg
Title: Sequential Voting and Strategy – An Experimental Test
Abstract: This paper uses experimental analysis to test Dekel and Piccione’s (2000)
theoretical extension of the Feddersen and Pesendorfer’s (1998) jury voting model to a
sequential voting setup. Following Feddersen and Pesendorfer, Dekel and Piccione allow for
the possibility that jurors vote strategically, rather than sincerely reflecting their individual
information. They show that Feddersen and Pesendorfer’s unanimity rule results with
simultaneous voting also hold with sequential voting: a jury is more likely to convict the
innocent under unanimity rule than under majority rule, because voters will focus solely on
the potential to be pivotal. Dekel and Piccione also assert that information obtained from
sequential voting will be ignored, thus information cascades and other effects from sequential
voting should not occur. Recent experimental work (Anderson et al., 2015) failed to find
support for Feddersen and Pesendorfer’s results regarding either individual or group behavior
in simultaneous voting. We extend this literature by applying a similar experimental test for
sequential voting. We find that behavior varies significantly depending on whether juries vote
simultaneously or in sequence. In addition, although sequential voting behavior more closely
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follows theoretical predictions, the subjects tend to make decisions based on the information
gained from their signals, from information cascades and from previous votes.
Presenter: Adrian Hillenbrand
Title: Strategic Rational Inattention - Strategic Rational Inattention: An Experiment on
Product Search with Hidden Costs
Abstract: Online platforms are still a relatively new phenomenon and considerably
increase the market transparency. They allow consumers to search for their preferred products
out of a plethora of available offers. The consumer profits, optimally, through receiving better
offers. On the other side, consumer search behavior is more easily trace-able than ever before.
This potentially allows for behavior-based price discrimination. Thus, consumers face a trade-
off: Search more intensively and receive better products at potentially higher prices or restrict
their search behavior - staying rational inattentive - and receive a worse fit but maybe a better
deal. In this study, we provide a theoretical and experimental analysis capturing the strategic
interaction of sellers and buyers when sellers can observe the search behavior of the buyer.
Our model leads to two stylized and testable propositions: First, product prices should weakly
increase in the intensity of the consumer search behavior and, second, the consumers restrict
this search. Overall, this leads to a reduction in welfare. Our experimental results suggest that
the propositions derived from the model can be supported. From a policy perspective our
results suggest that the ability of behavioral price discrimination might lead to adverse
welfare effects.
Presenter: Sonja Zitzelsberger
Title: Voting on the Threat of Exclusion in a Public Goods Experiment
Abstract: The possibility to exclude members from a group has been shown to help
cooperation in public goods experiments. In this paper, we investigate experimentally if
groups decide to implement an exclusion institution when they have the choice. We consider
institutional choices in finitely repeated games as well as indefinitely repeated games which
maintain a “shadow of the future.” We furthermore distinguish between a costless exclusion
option and a costly exclusion option that, if chosen, reduces the endowment of all players.
Behavior in the experiment is surprisingly similar under the finite and the indefinite time
horizon, suggesting that subjects treat the finitely repeated game more like a indefinitely
repeated game, except the last round. Overall, groups favored the game with exclusion option
over the game without this option. The institutional cost of the exclusion option, however,
reduces the support, especially at the beginning of the experiment. Contribution levels are
significantly higher when the exclusion option has been implemented. Subjects who vote in
favor of the exclusion option contribute more than subjects who vote against it if the
exclusion option is implemented. Groups exclude on average one group member (out of five)
and exclusion is exclusively targeted at the lowest contributor. The higher contribution rates
among the cooperators often (but not always) compensate them for the costs of the exclusion
option in form of smaller groups and institutional costs. When there is no institutional costs,
cooperators benefit from the exclusion option.
Presenter: Thomas Markussen
Title: Governing Collective Action in the Face of Observational Error
Abstract: We present experimental results from a repeated public goods game where subjects
choose by voting between two different types of sanctions: either peer-to-peer (informal)
sanctions á la Fehr and Gächter (2000) or formal, centralized sanctions (Markussen,
Putterman and Tyran 2014). Our main innovation is to vary the quality of the available
information about contribution behavior. In one treatment, peer punishers have more accurate
information than the centralized authority, in another treatment the reverse is true, and in two
treatments the quality of information is the same for both types of punishers (high in one
treatment, low in another). Even though we only introduce a moderate amount of noise (a 10
percent probability that a contribution is reported incorrectly), we find strong treatment
effects on the relative popularity of each institution. The institution with most accurate
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information is always by far the most popular, but noisy information undermines the
popularity of peer-to-peer sanctions more strongly than the popularity of centralized
sanctions. The results may contribute to explaining the greater reliance on centralized
sanctioning institutions, such as the state, in complex environments.
Room Volvo: Fairness
Presenter: Michalis Drouvelis
Title: Motives for Point-of-Exchange Donations
Abstract: Solicitations of charitable donations frequently occur immediately following an
economic transaction. In such settings, donations are generally small but potentially frequent,
and they may be driven by different motives than gifts solicited in fundraising drives. To
study determinants of such gifts we pay subjects for performance in three tasks and then
allow them to donate to a charity in a combined within- and between-subject experimental
design. Financial bonuses increase giving, but randomly-induced differences in earned
income do not. The majority of subjects increase their donations when informed that
donations from concurrent or past subjects are larger. Holding constant the donations of
concurrent subjects, past subjects’ donation amount has little effect, and an anonymous
donation has none. Results are consistent across subject nationalities and suggest a model in
which subjects base their donation on the more salient of their unearned income or their
closest peers’ example.
Presenter: David Hugh-Jones
Title: Where do fairness preferences come from? An experiment on norm transmission in an
adolescent social network
Abstract: We ran an experiment on transmission of fairness norms in a UK school.
Participants chose an allocation of money between two others, which could be meritocratic
(based on task performance) or egalitarian; they then observed another person’s allocation
choice, before making a second allocation themselves. Participants’ behaviour, and their
stated attitudes about fairness, were influenced by the choice they observed. Our results show
that children and adolescents can learn social norms from each other.
Presenter: Christiane Schwieren
Title: Fairness, Justice, and Partner Preference in Borderline Personality Disorder
Abstract: Background. Social interaction in borderline personality disorder (BPD) has been
proposed to be altered by hypersensitivity to rejection and, more recently, injustice. It is
unclear, however, how fair individuals with BPD act themselves. Here, our aim was to test
whether BPD patients participate in social inclusion or exclusion by choosing interaction in
dyads or triads.
Method. We employed a coalition formation game in which a participant interacted with two
human interaction partners through inclusion/exclusion and distribution of monetary units.
Subsequently, we compared how participants predicted another person’s strategy (inclusive,
exclusive, or mixed) and rated its fairness and which partner participants would choose for.
Our analyses included 26 BPD patients and 29 healthy controls.
Results. The majority of the BPD group as well as the healthy group chose triads over dyads
and offered a near-to-equal split to their interaction partners. In accordance, the inclusive
strategy was perceived as fairest strategy in both groups. Most interestingly, despite a similar
sense of fairness, half of the BPD group would prefer an interaction partner with an exclusive
or mixed strategy while the majority of the HC group would choose an interaction partner
with an inclusive strategy.
Conclusions. Our study demonstrates no alterations in fairness perception but an alteration in
partner preference in BPD patients that might contribute to unfavorable partner choices and
impairments of interpersonal functioning in BPD.
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Presenter: Stefan Trautmann
Title: Implementing Fair Procedures?
Abstract: We experimentally study situations in which a decision maker allocates resources
to two agents. The allocation will be unequal, but the allocation procedure may be fair.
However, procedural fairness might be violated by favoritism. This feature is common in
many practical settings, including corporate governance and human resource settings. We
study the perception of procedural and outcome fairness in this setting, and the reaction to
different allocation procedures by the decision maker and the affected agents. We find that
unfair outcomes are acceptable for the agents if procedures are perceived as fair. However,
with opaque allocation decisions, it may be difficult to commit to fair allocation procedures.
Indeed, we find a very high degree of favoritism by the decision makers when they are forced
to allocate unequal outcomes, and have no fair (random) procedure available. Despite the
unfair allocation behavior, poor-outcome agents punish the decision maker only modestly; in
contrast, good-outcome agents reward substantially. We consider three interventions to get
more insights into the underlying decision processes. First, we provide full transparency about
the decision by the allocator. This does not reduce favoritism, but reduces rewards and
increases punishments, by the affected agents. Second, we provide the allocator with a
randomization device. Although agents are not informed about the randomization decision
(but know about the possibility), a large share of allocators chooses a fair procedure. Agents
do not punish bad outcomes, optimistically expecting allocators to allocate fairly. Third, we
allow the allocators to delegate their decision publicly to a fair random device. A large share
of allocators is willing to even costly delegate. Lack of delegation is interpreted as favoritism,
leading to punishment by poor-outcome agents and rewards by good-outcome agents.
Parallel sessions 5 Room E43: Framing and Voting
Presenter: Marco Kleine
Title: Creativity and framed incentives: experimental evidence
Abstract: Creativity is the key to innovation and a driving force of firms’ economic success.
Hence, it is crucial for firms to be able to establish work environments that foster the creative
performance of their employees. In general, paying employees based on their performance is
a common management practice to foster their output. More recently, behavioral economists
have proposed that the framing of performance-contingent incentives as losses is an effective
means to further increase workers’ output. However, the empirical support from experimental
laboratory settings (Hannan et al. 2005, Imas et al. 2015, Armantier and Boly 2015) and from
the field (Fryer et al. 2012, Hossain and List 2012, Hong et al. 2015) relates to work
environments with routine tasks; none of these studies directly addresses creative work. Are
loss-framed incentives effective for creative work? Creative work might be special: Apart
from being motivated to put effort in the work, creativity arguably requires workers’ free
minds. Yet, being put under pressure through incentives may be counterproductive and lead
to “choking under pressure” (e.g., Ariely et al. 2009). This effect is likely to hold particularly
for loss-framed incentives. In this project, we study the effect of gain- and loss-framed
incentives on creative performance and also compare it to performance without monetary
incentives. In a laboratory experiment with more than 400 subjects, we apply a prominent
paradigm on creative problem solving: the candle task (Duncker 1945, see also Maddux and
Galinsky 2009, Gino and Ariely 2012). We find some evidence monetary incentives reduce
performance in creative problem solving: Subjects have a higher propensity to solve the
problem without monetary incentives than with incentives. Framing the incentives as gains or
as losses does not affect performance in creative problem solving. Our results in support of
early work in Psychology indicate that monetary incentives might be counterproductive for
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creativity. They further call into question the generality of the positive link between loss-
framed incentives and work performance.
Presenter: Martin Vollmann
Title: Measuring the Willingness to Pay (not) to get Verbal Feedback in Allocation Decisions
Abstract: In economics communication has primarily been studied for its instrumental
purpose. However, in reality the amount of communication by far exceeds the required
amount predicted by standard theory. We conduct a laboratory experiment to test whether
individuals have a positive willingness to pay for receiving or for avoiding verbal feedback
after they have made an allocation decision. We find evidence that a substantial share of
dictators are willing to pay a positive amount to have control over receiving a verbal message
from the recipient after playing a mini dictator game. Among unfair dictators we identify
both, preferences for acquiring and for avoiding feedback, while fair dictators only pay for the
acquisition of feedback but not for the avoidance. Asking dictators and recipients about their
motivation for acquiring or avoiding feedback reveals that curiosity, the desire for social
approval, and information avoidance towards potentially negative feedback are the main
motives for their positive willingness to pay.
Presenter: Christina Gravert
Title: It’s Just Money: Do Experimental Subjects Arbitrage Intertemporal Monetary
Rewards?
Abstract: Intertemporal allocations of income receipts are commonly used to measure
individual discount rates. Alternative techniques, involving the intertemporal allocation of
consumption –most notably through the leisure consequences of effort provision – have
recently gained popularity because of the concern that sophisticated experimental subjects
will arbitrage monetary payments offered by the experimenter. If subjects do engage in
arbitrage, then money-based studies would reveal the market interest rate faced by subjects
rather than their temporal discount rates. We test these ideas in a laboratory study featuring
three novel elements designed to give arbitrage its best chance. First, all transactions were
conducted through direct bank transfers between subjects and the experimenter. Second, some
subjects were forced to use their own financial resources to participate in the study, thus
directly confronting their market rates for borrowing and saving. Third, choices faced by
subjects varied between receiving income from us, or repaying a loan from us. We then
applied five direct and indirect tests of the arbitrage hypothesis. We find that subjects only
passed one of the indirect tests: no present bias. No other behavior was consistent with
arbitrage.
Presenter: Zihan Nie
Title: Water scarcity and cooperation: evidence from rural China
Abstract: This study examines the impact of long-term exposure to water scarcity on
farmers’ cooperation. A unique historically formed irrigation water quota system in western
China provides an opportunity to measure exogenous variation of water scarcity within an
otherwise homogenous region. Specifically, we use the ratio of the arable land to the
irrigation water quota of each village as our measure of water scarcity. Moreover, we use
survey questions to measure collective actions in irrigation activities and use a public goods
game to measure norm of cooperation in rural communities. We find that irrigation water
scarcity not only induces better irrigation management practice and outcomes, but also fosters
a stronger norm of cooperation measured by higher contributions in the public goods game.
We argue that water scarcity improves the norm of cooperation within a community through
stronger incentives to work together on the irrigation management activities.
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Room SEB: Environment
Presenter: Angela Doku
Title: Coping with Weather Shocks: Rational and "Irrational" Decision-Making in
Protectionist Behaviour
Abstract: Climate change adaptation literature has typically focused on what will be referred
to as “rational” factors that led farmers to adapt their respective farming methods in the face
of weather shocks. Modelling decision-making in this way, therefore, ignores potential
underlying psychological aspects involved within this process. Here, rather than observing
outcomes, we identify whether behavioural factors play any role in the decision to protect
one's farm against weather shocks, particularly the type of protectionist method. We observe
Ethiopian farmers' decision to protect against weather shocks via credit (consumption
smoothing), or adaptation (income smoothing). In sequence, we first determine whether
borrowing is, in fact, used as a form of protection against weather shocks; whether borrowing
is used to help adapt farming practices, or vice-versa; and lastly, whether psychological
factors (in our case, self-esteem), is a relevant component involved in farmers' decision to
engage in protectionist behaviour, via consumption or income smoothing. We employ the
Rosenberg self-esteem scale as our measure of self-esteem. Preliminary results indicate that
borrowing takes place after stronger weather anomalies, and may be viewed as more risky
than certain adaptation methods. Along with access to weather information and land quality,
there is evidence that self-esteem plays a significant role in farmers' decision to undertake
either only income smoothing, or both income and consumption smoothing measures against
weather shocks in our sample. These findings have important policy implications in terms of
how to encourage farmers to adapt to weather shocks.
Presenter: Francesca Pancotto
Title: The evolution of cooperation in the aftermath of natural disasters
Abstract: Human cooperation is an unresolved issues although intensively studied. In
particular, cooperation among strangers is an unexplained human behavior in an evolutionary
perspective of human evolution where competition makes the difference in explain survival of
both individuals and groups. On the other hand, groups that are internally more cooperative,
have a higher chance to win over less cooperative groups, and this guarantees them higher
chances to survive, in a world characterized by violent intergroup conflicts. We surmise that
a mechanism similar to violent intergroup conflict takes place also as an effect of natural
disasters: in the wake of a tragic event, people are led by social norms to increase their level
of cooperation. Witt and Wilson (2017) for example find a strong level of cooperation in the
aftermath of Hurricane Katrina among individuals who were evacuated from New Orleans to
Houston, in a Public Goods Game. To test this hypothesis we run an experiment on 176
subjects recruited from the general population in the neighbouring Italian provinces of
Modena and Reggio Emilia, hit by a powerful earthquake in 2012, which led to 27 dead and
thousands of euros in disaster costs. We run treatment and control sessions, comparing
cooperation levels of areas inside and outside the earthquake crater. In order to perform this
test, subjects were asked to participate to two Public Goods Games, one with compulsory and
one with optional participation. Moreover, to control their individual pro-sociality, subjects
had to perform also a distribution game. Preliminary results show that people hit by the
earthquake participate significantly less and contribute significantly less than those who were
not hit. The results are robust when controlling for individual pro-sociality and for socio-
demographic characteristics. These results seem to contradict the hypothesis of a positive
effect of natural disasters on in-group cooperation. We interpret this evidence in the light of a
model of evolution of cooperation, where cooperation increases initially due to immediate
solidarity and shared tragic emotions, and then dissolves, allowing higher levels of egoism to
emerge with time and possibly with frustration with delays in reconstructions due to
inefficient public authorities. In fact, our experiments were run 5 years after the earthquake in
the middle of the period of reconstruction. Further research will focus in a new area hit by a
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new earthquake (Marche, 2016), where the time delay between event and effect is shorter,
providing a direct test for our theory.
Presenter: Federico Cammelli
Title: How good norms lead to bad coordination: a framed field experiment on fire
management in the Brazilian Amazon
Abstract: Accidental fires constitute one of the main threats to the Amazon forest
conservation. Fires originate from smallholders’ agricultural plots, and when accidentally
spreading out of the intended area, they are detrimental for the environment as well as for the
farmers’ health and flammable assets. Farmers share a social norm prescribing fire control
measures, yet, fires are still prevalent. The use and management of agricultural fires by
smallholder Amazon farmers is characterized by positive spillovers because the one’s use of
uncontrolled fire is a threat for the whole neighborhood. It configure as a coordination game
because if all fires were under control there would be no individual incentive to use
uncontrolled fires. We run a framed field experiment to test the impact of communication on
coordination ability under a norm. We build a level-k model of communication and find a
high level of pre-communication coordination and a limited pro-coordination impact of
communication: the norm substitutes for communication. However, when the norm is weak
enough and players believe their messages to be particularly influential, communication
improves coordination.
Presenter: Shivani Wadehra
Title: Eliciting households’ cooperation for efficient waste management: Field evidence from
Delhi
Abstract: As is the case in many Indian cities, Delhi’s landfills continue to be used as
dumpsites for all kinds of waste although the Municipal Solid Waste Management Rules
(MSWM), 2000 explicitly restrict landfills use to disposal of only inert, non-recyclable and
non-biodegradable waste. It is widely acknowledged that waste segregation at household level
is possibly the most efficient way to address this problem. In practice, however, inducing
such behavior at household level is a challenge for public authorities responsible for waste
management. This paper frames the problem of non-cooperation by households as a ‘social
dilemma’ and the empirical part of the research is designed accordingly. The data comes from
900 households across 15 localities in Delhi (11 in the treatment group and 4 in the control
group). Unit of randomization was localities while the unit of analysis is the households. All
treatment households were given information on waste segregation and its advantages to
society (e.g. health benefits to rag-pickers/scavengers). Since the literature on resolving social
dilemmas highlights the importance of information and norms, subsets of households received
additional interventions in terms of (a) a comparison of the amount of ‘own’-waste generated
with that of ‘others’ and (b) an economic incentive to cooperate (i.e. segregate waste) . In
addition we also analyze the change in household behavior as a function of expected costs
and environmental preferences. The Residents’ Welfare Associations (RWAs) in the various
localities covered by the research were co-opted as collaborating partners, in order to ensure
that the findings of the study can be implemented. The results show that of the households
who received the treatment, the percentage of households segregating increased from 4% to
54%, a week after giving the interventions. The study concludes that interventions such as
information interventions, and incentives (taxes) are effective in achieving compliance with
the rules. The study also found the garbage collector to be an important factor in ensuring that
segregated waste at the household also stays segregated at the collection level.
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Room Volvo: Markets
Presenter: Nina Serdarevic
Title: It Pays to be Nice: The Benefits of Cooperating in the Market
Abstract: This paper provides evidence for an apparent paradox – selfish individuals may
sometimes do worse in monetary terms than those less concerned about monetary gain. This
occurs when there is a market for exchange partners and cooperators may avoid free riders.
Using a two-step experimental design, we first measure subjects’ types and then assign them
to a repeated Prisoner’s Dilemma with either random matching or partner choice. In each
round, the individual who fails to attain a partner is excluded from the group. This design
allows us to study treatment effects on the earnings of different types. Overall results from
two experiments indicate that the partner choice treatment increases overall earnings and
excludes free riders from the game.
Presenter: Gerdis Marquardt
Title: Contract enforcement as a reference point for feelings of entitlement
Abstract: This paper provides an experimental examination of the effect of contract
enforcement on contractors’ reference points for feelings of entitlement. Previous
experiments by Fehr, Hart and Zehnder (AER, 2011) analyse and support the theory by Hart
and Moore (QJE, 2008) that contracts are reference points. Both theory and experiments
ignore the role of contract enforcement for contractors’ feelings of entitlement. I replicate and
confirm Fehr, Hart and Zehnder’s baseline experiment. I also run an additional treatment in
which buyers can offer sellers more or less favourable prices than specified in the contract,
whereas sellers can request enforcement of contracts as written. I find that contract
enforcement matters, without being invoked, for sellers’ punishment behaviour through
feelings of entitlement. Without explicit contract enforcement, flexible contracts (agreement
on a price range instead of a single price) leave sellers feel entitled to the best possible price
permitted by the contract. However, buyers rarely offer such a price which leads to
disappointment and punishment. With the option of contract enforcement, sellers feel entitled
to the price which the court would enforce, even if it is equally unfavourable
than in the no court treatment. The presence of the court provides an outside validation for
which prices are reasonable and thereby limits disappointment and punishment.
Presenter: Antonio Filippin
Title: An experimental test of prediction markets
Abstract: Prediction markets promise a mechanism for aggregating dispersed information
that provides proper incentives while being virtually costless. Nowadays, they are commonly
used to forecast the probability of a wide range of outcomes: elections, sport events,
innovations etc. Predictions markets have grown and diffused in the absence of a solid
empirical validation of the underlying theory. The question of whether we can build and use
markets to accurately predict uncertain events remains unanswered. We provide the first
experimental test of prediction markets where all the elements that are needed to assess the
accuracy of market prices as well as the sources of inaccuracies are either induced by the
design or controlled for. In particular, our design allows us to answer to the following
questions: (a) Are market prices accurate in predicting uncertain events? (b) If not, are
inaccuracies explained by risk aversion as predicted by the theory? Do incorrect beliefs add to
the inaccuracy of the observed prices? (c) Does the market activity make traders beliefs more
or less accurate? Does this feedback effect contribute to price inaccuracy? Our preliminary
results show that prediction markets provide relatively accurate predictions on aggregate.
Inaccuracies, which are substantial in many markets, cannot be explained by incorrect beliefs
and risk preferences. On the other hand market activity substantially distorts beliefs, which
we interpret as an instance of herding. As a consequence, the average individual holds more
inaccurate beliefs at the end than at the beginning of the market.
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Presenter: Thomas Alexander Stephens
Title: Money Illusion and Individual Investment in Stocks
Abstract: We study the impact of money illusion on stock holdings by individual investors.
Investors who evaluate assets using prospect theory valuations of past returns will be biased
towards safe assets and away from stocks. Based on historical returns, we argue that money
illusion will often increase this bias. To test our hypothesis, we elicit money illusion from a
quasi-representative sample and match it with anonymous portfolio data and controls. We
find that, among stockholders, a standard deviation increase in measured money illusion is
associated with a reduction by about a third of the share of financial wealth in stocks.
Parallel sessions 6 Room E43: Gender
Presenter: Ananta Neelim
Title: Self-promotion and gender inequality: aiding women break the shackles of modesty
Abstract: Our decisions in social interactions are often driven by image concerns. We want
others to view us as having qualities that are socially desirable. This often requires us to
engage in actions of self-promotion to make our good deeds and accomplishments visible.
However, engaging in such acts can be costly as we are usually subject to social norms that
generate expectations of modesty. The impact of these norms are stronger for women than for
men due to the differences in stereotypes and expectations of social roles across gender.
Women often respond to these norms by lessening or opting out of self-promotion all
together. This may have negative implications on their ability to develop their careers across
various settings that require making achievements and good deeds public. For example, in the
workplace, women’s reluctance to self-promote leads to an accentuation of the gender pay
gap and gender inequality in top managerial positions. Even in leadership in public service
positions, where feminine communal traits such as such as selflessness and caring for others
are highly valued, women underperform relative to their male counterparts. While there are
other factors that contribute to the success of males in the workplace and seeking public
office, the role of modesty norms in placing women at a disadvantage cannot be dismissed.
In this study we conduct a charitable dictator game experiment in which we manipulate the
intrinsic costs associated with self-promotion in an attempt to aid women break the modesty
norm. In our first set of treatments participants make charitable donation decisions and
whether to make them public using messages that are predetermined to be modest or not. We
also implement an alternative strategy where messages are not designed to be modest but
participants are allowed to donate only if they make their decisions public, i.e. we make them
choose between being modest and being communal, thus making self-promotion relatively
cheaper to engage in.
Our results show that men are up to 5 times more likely to self-promote relative to women
when using a message that is not modest. However, when the message is made more modest,
women respond by increasing their self-promotion by at least 3 times, while men’s decisions
remain largely unaffected. Similarly, making self-promotion actions relatively cheaper
through the second strategy also increases self-promotion in women by over 5 times.
Interestingly, there is no statistically significant increase in self-promotion in men. In all
cases, after the intrinsic costs to self-promote are manipulated, the initial gap in self-
promotion behavior between women and men no longer persists.
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Presenter: Maria Loureiro
Title: Risk Aversion, Self-confidence and Altruism: explaining Gender Differences in
Ultimatum
Abstract: We replicate Eckel and Groossman´s (2001) experiment where chivalry and
solidarity were the target under examination in the context of an ultimatum game. At the end
of the experiment, our protocol included a survey to participants. Such survey contained three
important scales: risk aversion (Weber et al. (2002)), altruism (Rushton et al. (1981)) and
self-esteem (Martín-Albo et al. (2007)), in addition to eliciting the most relevant socio-
economic variables. This information is used in order to help explaining potential gender
differences fond in the lab in ultimatum games.
With respect to Eckel and Groossman´s (2001), we found significant differences in terms of
rejection rates, which are higher in our sample. In particular, offers coming from men are
significantly more rejected than those from women. Future steps will assess the relationship
between gender and the elicited scales.
Presenter: Katharina Lima De Miranda
Title: Can Gender Quotas Prevent Excessive Risk Taking? The Effect of Gender
Composition on Group Decisions under Risk
Abstract: This study contributes to the public debate on gender quotas and the literature on
gender and risk taking by analyzing how the level of risk taking within a group is influenced
by its gender composition. In particular we look at the shift of risk taking between group and
individual decisions and analyze to which extent this shift depends on the gender
composition. We derive a gender-specific polarization hypothesis which states that, compared
to individual preferences, male dominated groups will shift towards higher risk taking than
female dominated ones. Our experimental tests reveal a systematic impact of gender
composition on group shifts which supports our hypothesis and points into the direction that a
higher share of females may prevent excessive risk taking.
Presenter: Paolo Crosetto
Title: Safe options induce gender differences in risk attitudes
Abstract: Gender differences in risk attitudes are frequently observed, although recent
literature has shown that they are context dependent rather than ubiquitous. In this paper we
try to rationalize the heterogeneity of results investigating experimentally whether the
presence of a safe option among the set of alternatives explains why females are more risk
averse than males. We manipulate three widely used risk elicitation methods finding that the
availability of a safe option causally affects risk attitudes. The presence of a riskless
alternative does not entirely explain the gender gap but it has a significant effect in triggering
or magnifying (when already present) such differences. Despite the pronounced instability
that usually characterizes the measurement of risk preferences, we show estimating a
structural model that the effect of a safe option is remarkably stable across tasks. This paper
constitutes the first successful attempt to shed light on the determinants of gender differences
in risk attitudes.
Room SEB: Labour and competition
Presenter: Andreas Friedl
Title: - “Gift Exchange” in a Natural Work Environment; Dissociating types and actions
Abstract: The objective of this project is to extend our knowledge of gift exchange (GE) by
studying the variation in workers’ performance upon variations in the nature of the gift and in
the information associated with the gift. The main questions we address are: (a) Is the
“intention” behind the employer giving a gift the only thing that matters for workers, as the
results in KMP seem to imply? (b) Does GE still hold when it is explicitly revealed that the
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main purpose of the employer handing out a gift is the productivity increase that the employer
expects in return? We have no knowledge about how reciprocity to types and reciprocity to
actions interact. In our experiments we compare conflicting and non-conflicting cases, and we
observe their impact on individual behaviour, using a natural labour market. We show that a
fine can have a heterogeneous effect of performance depending on the typ of the issuer. We
conclude that sanctions can switch from being “detrimental” to being beneficial, if
accompanied by information that the “type” of the agent is morally commendable.
Presenter: Aidas Masiliunas
Title: Payoff risk and foregone payoff information in contests
Abstract: We seek to uncover reasons behind overbidding in Tullock contests by testing a
hypothesis that deviations from Nash equilibrium are a result of a boundedly-rational learning
process that converges very slowly or not at all. In an experiment we manipulate two
elements that influence the convergence speed of payoff-based learning. The first element is
foregone payoff information, which should improve the convergence of reinforcement
learning. The second element is payoff risk, which reduces the correlation between realized
and expected payoffs and therefore slows down learning. We manipulate the sources of
payoff risk using a 2x2 design: payoffs from contest investments are either risky (as in
standard contests) or safe (as in proportional contests), and payoffs from the part of
endowment not invested in contest can also be either safe (as in standard contests) or risky.
Payoff-based learning predicts faster convergence when all payoff risk is eliminated and
when foregone payoff information is available. We also calculate the predictions of other
theories that could explain overbidding (non-monetary utility of winning, risk-seeking
preferences, aversion to realized payoff inequality, probability distortion) and find that each
predicts no overbidding in at least one treatment. In contrast, we find significant overbidding
in all treatments when foregone payoff information is not available, but in the treatment with
no payoff risk all groups converge to the Nash equilibrium once foregone payoff information
is introduced. In other three treatments, significant overbidding persists even with foregone
payoff information, although Nash equilibrium play rates increase. These findings are
consistent with the predictions of a reinforcement learning model.
Presenter: Petra Nieken
Title: Motivation and incentives in an online labor market
Abstract: An increasing number of workers do simple work in online labor markets. In
contrast to employees within firms, online workers usually work from home and do not have
any personal contract with employers or colleagues. This makes motivation more challenging.
While it is straightforward to pay online workers for performance, motivating workers to
work hard without paying them extra for doing so, is presumably more difficult. In this paper
we present the results from a large scale experiment on mTurk, testing the effect of
performance pay and non-monetary motivation on 3600 workers typing latin fragments. We
study two types of non-monetary motivation: Praise and goal-setting. In the praise treatments,
we told the workers on screen, before they started working, that we are happy that they will
work for us, and that we know they are diligent workers with an impressive approval rate. In
the goal treatments, we asked them to achieve a certain output level within the working
period. With respect to pay, we varied between fixed pay only, low piece rate and high piece
rate. The workers were explicitly paid for quantify, but we could also measure the quality of
their work. We find that praise had a significant negative effect on quantity – and no effect on
quality - irrespective of how the workers were paid. On average, workers who received
praise before they started to work, had a 5% lower output than those who were not praised.
Goal-setting had no significant effect, neither on quality of quality. Performance pay,
however had a strong positive affect on quantify, although we find no difference between
high and low piece rate. We find no evidence of a multitask problem. Rather we find a
positive relationship between quantity and quality in all treatments, including the performance
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pay treatments. In sum, the most efficient way to motivate the workers in our study was to
pay them a low piece rate, and not provide them with any non-monetary motivation.
Presenter: Jose Maria Ortiz Gomez
Title: Probabilistic Reward Schemes: Experimental Evidence
Abstract: Motivating low ability workers using target bonuses is a difficult task when the
production objective is hard to reach for them. As long as they know their limitations, they
may feel discouraged to work because they will never reach the goal and consequently they
will never receive the bonus. The main objective of this research project is to find the ways
how to motivate low ability workers to increase their performance and get a chance to get the
bonus. We suggest that introducing probabilistic reward scheme will enhance the
performance of low ability workers. We conduct an experiment including four treatments, i.e.
(i) baseline, in which the worker gets the bonus only if he/she reaches the goal; (ii) partial
bonus, in which the worker gets a part of the bonus each time (s)he produces one fourth of the
goal; (iii) partial lottery, in which the workers will play a lottery each time they reach one
fourth of the goal; (iv) final lottery, in which workers will play a lottery at the end of the task
and the probability of winning the lottery increases with performance. We find that high
ability workers perform better when a final lottery is involved in the bonus payment and they
equally perform along the rest of treatments. We also find that low ability workers perform
better when a lottery is involved in the bonus payment than when the payment is fixed. In this
case, the final lottery treatment outperforms the partial lottery treatment.
Room Volvo: Public goods 2
Presenter: Matteo Migheli
Title: Competition, Information and Cooperation
Abstract: We inquire experimentally whether rivalry induced by competition has any impact
on the individual voluntary contribution to a public good. Participants perform a task and are
remunerated according to two schemes, a noncompetitive and a competitive one, then they
play a standard public goods game. In the first scheme participants earn a flat remuneration,
in the latter they are ranked according to their performance and remunerated consequently.
Information about ranking and income before the game is played varies across three different
treatments. We find that competition per se does not affect the amount of contribution, and a
clear and strong negative income effect. The time spent to choose how much to contribute is
negatively correlated with the decision of cooperating fully. The main result is that full
information about the relative performance in the competitive environment enhances the
cooperation, while partial information reduces it.
Presenter: Huanren Zhang
Title: Egalitarianism and turn taking in repeated coordination games
Abstract: We design an experiment to investigate the effect of asymmetric payoffs in an
infinitely repeated prisoner’s dilemma by introducing inequality to the (C,C) or (D,D)
payoffs. The introduced inequality should not influence the behavior of subjects with standard
self-regarding preferences. The experimental results show that, consistent with the Fehr-
Schmidt model of inequality aversion, inequality in the (C, C) payoffs decreases cooperation
rate, while inequality in the (D,D) payoffs increases cooperation rate. This effect is most
significant when the continuation probability is sufficiently high so that cooperation can be
supported as an equilibrium. Strategy estimation demonstrates that players are more likely to
play Always-Defect when the inequality is imposed on the (C,C) payoffs, and more likely to
use conditional strategies such as Tit-For-Tat when the inequality is imposed on the (D,D)
payoffs. We do not find evidence that social preferences elicited in dictator games and
ultimatum games predict cooperation in repeated prisoner’s dilemma with asymmetric
payoffs.
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Presenter: Florian Diekert
Title: Social preferences under strategic and natural uncertainty
Abstract: Both strategic and natural uncertainty are defining features of common pool
resource systems. Using a lab-in-the-field experiment, we study whether social preferences
were sensitive to which sort of uncertainty is more salient. Specifically, a modified dictator
game was played with fishermen in Chile that either came from benthic fisheries (more
exposed to strategic uncertainty due to e.g. the risk of poaching) or pelagic fishermen (more
exposed to natural uncertainty due to e.g. large stock fluctuations). Respondents were
randomly assigned to one of three roles: “Donators” were tasked to send some non-negative
amount to \recipients", but the money could end up in the hands of a “bystander”, either
because of exogenous risk in the one treatment, or because the bystander had the option to
take the money in the other treatment. In my talk, I will present preliminary results from the
survey and experiments that took place in June/July 2017.
Presenter: Gianluca Grimalda
Title: Sanctions and imitiation of virtuous behavior improve international cooperation
Abstract: The effectiveness of punishment in sustaining cooperation has been questioned
because of the endemic presence of anti-social punishment in some cultural areas. This paper
examines the effectiveness of punishment in international cooperation. Our sample comprises
German and Russian subjects who participate in cooperation problems in eight different
conditions: (A) Within-country in both countries with and without punishment; (B) Between-
country with and without punishment hiding the group members’ nationality; (C) Between-
country with and without punishment revealing group members’ nationality. Our design
enables us to compare the effectiveness of punishment in international interactions vis-à-vis
national cooperation. Revealing and not revealing nationality helps us understand the impact
of national identity vis-à-vis the purely behavioural differences implicit in the two cultures.
We focus on these two countries because punishment typically works efficiently in Germany
to increase cooperation, while the opposite is true for Russia. These are the key results: (1)
German groups achieve higher probability of loss avoidance than Russian groups in within-
country interactions. (2) Introducing punishment significantly increases the probability of loss
avoidance in Germany, and only marginally in Russia. (3) In international interactions,
cooperative behavior by Russian subjects quickly converge to cooperative behavior by
German subjects. Therefore, international cooperation resembles within-Germany
cooperation, and exceeds within-Russia cooperation, especially so in the Punishment
treatments. (4) Punishment levels are generally not significantly different between treatments,
except for Germans publishing significantly more in the open international treatment in
comparison with within-Germany treatment. Overall, “virtuous cooperators” seem to be able
to discipline “failing cooperators” in international interactions, especially so when
punishment is available.
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The 13th
Nordic Conference on Behavioural and Experimental Economics
will be organized by the Department of Business and Economics at
University of Southern Denmark, Odense, Denmark (end of
September/beginning of October 2018)
