We study to what extent collusive behavior is affected by the awareness of negative externalities. Theories of outcome-based social preferences suggest that negative externalities make collusion harder to sustain than predicted by standard economic theory, while sociological theories of social ties and intergroup comparisons suggest that bilateral cooperation can be strengthened if there exist outsiders that gain from cooperative break down. We investigate this in a laboratory experiment. Subjects play the infinitely repeated prisoner's dilemma with and without a negative externality. The externality is implemented by letting subjects make a positive contribution to a public good if they choose to deviate from cooperation between the two, i.e. cooperation is collusive since the gains are at the expense of the public. We find that this negative externality tends to increase collusive behavior. Initially, the level of cooperation is lower, but as subjects gain experience and observe that their partners choose to cooperate despite the negative externality, they cooperate as least as much as in the baseline treatment.
We find that probabilistic deceit detection and cheap-talk threats enhance the fairness and honesty of a bargainer who possesses advantageous information and has the opportunity to be deceitful. In our ultimatum game, only proposers know the size of the pie. Proposers, therefore, have the option to understate the pie size and make their offer appear fairer than it really is. The separate and interactive effects of probabilistic deceit detection and cheap-talk threats have implications for how exchange can be facilitated by mechanisms that detect deceit and/or enable buyer communication in markets where sellers have informational advantages.
A network market is a market in which the benefit each consumer derives from a good is an increasing function of the number of consumers who own the same or similar goods. A major obstacle that plagues the introduction of a network good is the ability to reach critical mass, namely, the minimum number of buyers required to render purchase worthwhile. This can be likened to a coordination game with multiple Pareto-ranked equilibria. Through a series of experiments, we study consumers' ability to coordinate on purchasing the network good. Our results highlight the central importance of the size of the critical mass. Neither an improved reward-risk ratio through lower prices nor previous success at a lower critical mass facilitates the establishment of a network market when the critical mass is sufficiently high.
Many studies have sought to estimate the effects of participating in sports on ex-athletes’ adult lives. This paper contributes to the existing literature in two ways. First, it adopts an instrumental-variables method pioneered by Betsey Stevenson (2010) in which variation in rates of boys’ athletic participation across states before the passage of Title IX is used to instrument for changes in girls’ athletic participation following its passage, thereby avoiding selection bias and allowing for causal estimates. Second, it looks at the effect of participating in sports not on economic, but on social outcomes. In particular, we find that a ten percentage-point increase in state-level female sports participation generates a five to six percentage-point rise in the rate of female secularism, a five percentage-point increase in the proportion of women who are mothers, and a six percentage-point rise in the proportion of mothers who, at the time that they are interviewed, are single mothers. While our results appear to paint a picture of independence from potentially patriarchal institutions (church and marriage), further research is necessary to understand whether our results can be attributed to a single story such as this one or whether they are the products of multiple causal mechanisms.
The Journal of Behavioral and Experimental Economics (JOBEE) celebrates its 50th year in 2021. To commemorate its 50th anniversary, this study presents a retrospect on the journal's journey since it began publishing in 1972. We find that the journal has since grown in terms of both the number of annual articles and citations. The contribution base of the journal is primarily from the United States and Europe. Collaboration and the use of experimental research have become more prevalent in the journal over the years. Regression analysis shows that the drivers for citations include article age, research type, article length, belonging to a special issue, article order in the issue, number of authors, involvement of European authors as lead authors, number of references, and number of keywords. Variables that are analyzed but do not affect citations are whether the article is a lead article, whether the lead author is from the US, the novelty of the title, title length, and abstract length.
This paper provides the first evidence regarding the impact of life satisfaction on the individual intention to migrate. The impact of individual characteristics and country macroeconomic variables on the decision to migrate is analyzed in one framework. Differently from other studies, we allow for life satisfaction to serve as a mediator between macroeconomic variables and the intention to migrate. Using the Euro-barometer Survey for 27 Central Eastern (CEE) and Western European (non-CEE) countries, we test the predictions of our theoretical model and find that dissatisfied with life, people have a higher intention to migrate. The macroeconomic conditions have an effect on the intention to migrate indirectly through life satisfaction. At all levels of life satisfaction, unemployed, middle-aged individuals with a low or average income from urban areas at all levels of education are found to have higher intentions to migrate from CEE countries than from non-CEE countries.
Paper presents results of an evaluation of a tax-time savings program. $aveNYC offers incentivized savings accounts to taxpayers filing their taxes at Volunteer Income Tax Assistance (VITA) sites in New York City. Participants who direct-deposited at least $200 of their refund into the account and maintained the balance for a year received 50 cents per dollar saved. A comparison group was drawn from NYC VITA sites where the program was not offered. Propensity score weighting was used to balance the two groups. Study participants (N = 353) were surveyed via telephone halfway through the program, and again 8 months after the program ended. 70 percent of $aveNYC participants surveyed received the match. The majority of those who received the match continued to save some portion of the money. At the second survey, there was no significant difference between groups in savings amount: this finding may be due to measurement limitations. $aveNYC participants were less likely than comparison group members to have skipped paying bills or taken out a loan during the study period, and were more likely to have withdrawn money from savings. Findings suggest that tax-time savings programs can result in sustained emergency savings and prevent reliance on borrowing and unpaid bills. (C) 2013 Elsevier Inc. All rights reserved.
This paper contributes to the debate on the adequate elicitation of individual risk attitudes in general socio-economic surveys. A multi-item question on the willingness to take risk, a very short form of the DOSPERT scale (Weber et al., 2002) and a series of lottery tasks are compared with respect to the quality of the answers and the predictive validity of the derived risk measures. The quality of the collected data appears to be high. All the measures are informative about individual's attitudes while item nonresponse is mostly unproblematic. The measures however differ in their predictive power, with the lottery-based measures exhibiting only weak predictive validity. When the scope of the assessment is to predict behaviour, domain specific risk measures seem to be more appropriate. Embedding a short DOSPERT scale in general surveys appears to be very promising for empirical applications in social sciences that use survey-based risk measures. (C) 2013 Elsevier Inc. All rights reserved.
We investigate voluntary contribution to public goods in culturally heterogeneous groups with a laboratory experiment conducted among 432 Hindu and Muslim subjects in India. With our specification of 'Leading by example' we test for an interaction effect between leadership and religious heterogeneity in a high stake environment. While cultural diversity does not affect contributions in the standard linear Public Goods Game, it reduces cooperation in the presence of a leader. Furthermore, we show that preferences for conditional cooperation are only prevalent in pure groups. In mixed groups, poor leadership and uncertainty about followers' reciprocity hinders the functionality of leadership as an institutional device to resolve social dilemmas.
This article is interested in how efficiently individuals can use available information, and if this will translate into efficient outcomes at the market level. Our use of available information in markets is further specified by evolutionary psychology and behavioral ecology, which extend core theory and evidence in behavioral finance throughout the reviewed literature. The survey of the social, biological and physical literature is integrative, and demonstrates how evolved design at the individual level can interact with a market environment that evolves as a complex adaptive system. In general, the analysis also highlights the central importance of complex systems in the study of rational and efficient markets. (C) 2013 Elsevier Inc. All rights reserved.
This paper examines whether intergenerational transmission of happiness exists in China between preadolescents and their parents, and what factors are correlated with subjective well-being among them. We find that parents' and their children's levels of subjective well-being are indeed significantly correlated. yet the factors that affect their well-being differ. Higher income, being a female, higher education, good health, and not being divorced result in higher well-being among the parents. Preadolescents' well-being is instead determined by different kinds of interactions with peers and parents, where being bullied or not is one of the most important factors. (C) 2013 Elsevier Inc. All rights reserved.
In most Western economies, the flourishing of the Welfare State has coincided with a decline of the role of the family: divorce has been introduced, and the number of marriages has decreased. We suggest that a taboo against divorce was part of the informal safety net in a period when social protection was provided by the family. Once the State started offering suitable alternatives, the taboo was no longer expedient, and was dropped. For the same reasons, marriage has become less popular. We further notice that divorce is an extremely costly process, and once allowed it may act as an independent reason for the reduction of the number of marriages. This latter result is especially evident under the assumption that agents subjectively evaluate the probability of facing a divorce using an availability heuristic.
The issue of low-wage competition in services trade involving posted workers is controversial in the EU. Using Swedish survey data, people’s attitudes are found to be more negative to such trade than to goods trade. The differences depend on both a preference for favouring social groups to which individuals belong (here the domestic population) and altruistic justice concerns for foreign workers. In small-group experiments we find a tendency for people to adjust their evaluations of various aspects of trade to their general attitude. This tendency is stronger for those opposed to than those in favour of low-wage trade competition. This may indicate that the former group forms its attitudes in a less rational way than the latter group.
Recent research distinguishes an individual's decision utility, inferred from her observed choices, from her experienced utility, which more closely matches the notion of happiness. Using various estimation techniques, we test whether post-choice satisfaction (experienced utility), like decision utility in an experimental data set, is S-shaped with loss aversion around a given reference point. We also present a model which estimates the satisfaction function and reference point simultaneously. When pooling the data across individuals, we find an S-shaped satisfaction function in which the reference point depends on past payments, social comparisons, and subjective expectations. There is mixed evidence of loss aversion. At the individual level, there is substantial variation in satisfaction function shapes, although the S-shape is common. Though the two notions of utility are distinct, our findings imply that the two are related at a fundamental level. (C) 2012 Elsevier Inc. All rights reserved.
We test whether induced mood states have an effect on elicited risk and time preferences in a conventional laboratory experiment. We jointly estimate risk and time preferences and use a mixture specification that allows choices to be consistent with Expected Utility theory or with probability weighting. Time preferences between subjects in the control, positive mood, and negative mood treatments are not statistically significantly different. However, for choices consistent with Expected Utility Theory, we find that subjects induced into a negative mood exhibit higher risk aversion than those in either the control treatment or the positive mood treatment. For choices that are consistent with probability weighting, we find that positive mood increases risk aversion. Results also suggest that risk preferences are affected by whether a cognitively demanding task precedes a risk preference elicitation task or whether subjects were placed in a gender-specific session rather than a mixed-gender session.
This article contributes to the research on trust and reputation formation in anonymous online markets. I first give a formal account of the reputation mechanism in anonymous online markets and derive testable hypotheses. Based on the analysis of a large set of process data (N ≈ 176,000), I corroborate a statistically and economically significant seller reputation effect on the probability of sale and the selling price both in auctions and fixed price offers. Moreover, my analysis shows that sellers making fixed price offers invest in a good reputation to a similar extent as buyers pay for it in auctions. Finally, I obtain repeated observations on a considerable subset of the buyer population by including highest non-winning bids in the analysis and show that buyers trade off sellers’ reputations and prices within the set of offered items they choose to bid on. My findings provide further evidence that reputation systems solve trust problems and reduce transaction costs in anonymous online markets by providing incentives for traders’ cooperative behavior.
