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Articles 1 - 30 of 315
Full-Text Articles in Econometrics
From Personal To Personalized Goals: How Goal Nudges Improve Production, Joaquín Gómez-Miñambres, Brice Corgnet, Roberto Hernán González
From Personal To Personalized Goals: How Goal Nudges Improve Production, Joaquín Gómez-Miñambres, Brice Corgnet, Roberto Hernán González
ESI Working Papers
We study how workers’ non-binding self-set goals affect their production and whether goal nudges (ability-calibrated goal hints) make goal setting more effective. In a real-effort task, participants first complete an ability pretest and are then assigned to one of three treatments: a no-goal baseline, a personal goal treatment with no external hint, or a personalized goal nudge that participants may accept or modify. We document a positive link between goals and production. However, merely asking workers to set goals is ineffective: when left unguided, workers anchor on conservative goals well below those induced by goal nudges, leading to underperformance. In …
Generosity After Negative Random Shocks, Hernán Bejarano, Joris Gillet, Ismael Rodriguez-Lara
Generosity After Negative Random Shocks, Hernán Bejarano, Joris Gillet, Ismael Rodriguez-Lara
ESI Working Papers
We report the results of three preregistered experiments examining the effects of negative random endowment shocks on generosity. Using a dictator game, we show that generosity is greater towards those who experience a negative random shock, and this effect is larger than the effect inequality has on giving. Our data provide evidence that people do not expect this additional level of generosity after a shock and that injunctive norms cannot explain it either. Taken together, our findings suggest that the (high) level of generosity observed after negative random shocks is unexpected and exceeds what people consider to be socially appropriate. …
Identity-Dependent Externalities Can Mitigate Overbidding In Tullock Contests: Theory And Evidence, Dan Kovenock, Jian Song, Francesco Trevisan
Identity-Dependent Externalities Can Mitigate Overbidding In Tullock Contests: Theory And Evidence, Dan Kovenock, Jian Song, Francesco Trevisan
ESI Working Papers
We investigate how identity-dependent externalities infuence bidding behavior in Tullock lottery contests. While experimental studies of standard contests, in which losers are indiferent to the winner’s identity, consistently document overbidding, the role of identity-dependent preferences remains less explored. We address this gap by frst showing that the class of three-player Tullock lottery contests with identity-dependent externalities considered here can be mapped into a standard Tullock lottery contest with appropriately chosen prize valuations and endowments, yielding identical Nash equilibrium predictions. We then use this mapping to design a laboratory experiment that directly compares the two “equilibrium-equivalent” contest formats. In our three-player …
Conflict-Mediated Group Size Regulation: A Theory Of Supraoptimal And Suboptimal Group Size, Eric Schniter
Conflict-Mediated Group Size Regulation: A Theory Of Supraoptimal And Suboptimal Group Size, Eric Schniter
ESI Working Papers
Observed group sizes rarely match the size that would maximize what each member gets from belonging. We propose a two-part theory in which group size is regulated by two related conflicts: insider-outsider conflict over admission, and within-group conflict as crowding, competition, and social tensions intensify with size. Three strategies are available: admission, exclusion, and fission. The first part shows that even when exclusion is unavailable, fission dynamics alone drive group size away from the optimum in both directions, with the pattern set by how prospective joiners encounter groups and by the geometry of fission. When joiners compare groups across a …
The Dictatorial Public Goods Game, Gabriele Camera, Gary Charness, Nir Chemeya, Ro'i Zultan
The Dictatorial Public Goods Game, Gabriele Camera, Gary Charness, Nir Chemeya, Ro'i Zultan
ESI Working Papers
We propose a novel game, the Dictatorial Public Goods Game, to study the interplay between collective resource generation and centralized provision of public goods. After making choices in a standard Voluntary Contribution Mechanism (VCM), one player is selected from the group to administrate the contributions: either provide the public good or expropriate the collected resources for personal gain. We find that adding this centralized mechanism reduces efficiency compared to the standard VCM. Although higher contributions increase the material incentive to expropriate, they lead to more provision. Thus, pro-social choices in the contribution and in the provision stages act as …
Centralization Vs. Decentralization: First Evidence From The Laboratory, Gabriele Camera, Gary Charness, Nir Chemaya
Centralization Vs. Decentralization: First Evidence From The Laboratory, Gabriele Camera, Gary Charness, Nir Chemaya
ESI Working Papers
The future architecture of financial systems is a subject of contention, with centralized and decentralized governance proponents. Here we ask: would the architecture affect the quality of decision-making? We propose a game where financial network participants demarcate the ownership of claims to income. This governance task can be decentralized (shared authority), centralized (single authority), or hybrid (alternating authority). Without communication all architectures supported poor outcomes. With communication, decentralization ensured good governance and maximum profits, while centralization did not—lowering communication’s potency in promoting socially optimal decisions. This indicates there is scope for decentralization in innovating financial institutions.
On The Origins Of Modern East Asia: Knowledge And The Economic Transformation Of Japan And China In The Late 19th Century, Debin Ma, Jared Rubin, Weiwen Yin
On The Origins Of Modern East Asia: Knowledge And The Economic Transformation Of Japan And China In The Late 19th Century, Debin Ma, Jared Rubin, Weiwen Yin
ESI Working Papers
This paper revisits the old thesis of the contrasting paths of modernization between Japan and China. It develops a new analytical framework regarding the role of knowledge acquisition (propositional vs. prescriptive) and political centralization as the key drivers behind these contrasting paths. Our model and historical data highlight how the introduction of these elements contributed to Meiji Japan’s decisive turn towards the West and Qing China’s lethargic response to Western imperialism. Our analytical framework, developed from a comparative historical narrative and quantitative data, sheds new light on the importance of knowledge acquisition in enabling developing countries to reach the world’s …
Stated Preferences For Public Provision Of Services: Experimental Evidence From Latin America, Hernán Bejarano, Matias Busso, Juan Francisco Santos
Stated Preferences For Public Provision Of Services: Experimental Evidence From Latin America, Hernán Bejarano, Matias Busso, Juan Francisco Santos
ESI Working Papers
We study how individuals in six Latin American countries value public versus private provision of education and healthcare using a survey experiment. Respondents were randomly assigned to vignettes that vary income, service quality, and provider type. Reported service quality is the main driver of choices: the probability of selecting a private provider roughly doubles when reported quality of the public option falls from 80 to 20 percent, while income has a smaller effect. Higher institutional trust lowers the likelihood of switching to private providers but does not affect willingness to pay once individuals choose private provision.
Existence Of Equilibrium Mechanisms In Generalized Principal-Agent Problems With Interacting Teams, Brian Roberson
Existence Of Equilibrium Mechanisms In Generalized Principal-Agent Problems With Interacting Teams, Brian Roberson
ESI Working Papers
We study incentive design when multiple principals simultaneously design mechanisms for their respective teams in environments with strategic spillovers. In this environment, each principal’s set of incentive-compatible mechanisms—those that satisfy their own agents’ incentive compatibility constraints— depends on the mechanisms offered by the other teams. Following a classic example by Myerson (1982), such games may lack equilibrium due to discontinuities in the correspondence of incentive-compatible mechanisms. We establish general conditions for equilibrium existence by introducing a novel approach that involves tracking both the outcome distributions along the truthful-obedient path and the sets of outcome distributions achievable through unilateral deviations, thereby …
Authoritarianism And Conspiracism Around The World, Valerie Capraro, Folca Panizza, Joseph A. Vitriol, Mikey Biddlestone, Andrè Krouwel, Yordan Kutiyski, Alberto López Ortega, Ana Ebert, Max Wan, Praveen Kujal, Karen M. Douglas, Christopher M. Federico, Jolanda Jetten, Sander Van Der Linden, Flávio Azevedo
Authoritarianism And Conspiracism Around The World, Valerie Capraro, Folca Panizza, Joseph A. Vitriol, Mikey Biddlestone, Andrè Krouwel, Yordan Kutiyski, Alberto López Ortega, Ana Ebert, Max Wan, Praveen Kujal, Karen M. Douglas, Christopher M. Federico, Jolanda Jetten, Sander Van Der Linden, Flávio Azevedo
ESI Working Papers
Authoritarian leaders frequently deploy conspiracy narratives to justify power concentration and delegitimize opponents, yet the link between authoritarianism and conspiracism remains underresearched. Integrating data across six studies from multiple international surveys (N=63,403; 20 countries), expert-coded party systems (71 countries; 14 datasets), and longitudinal panel studies, we demonstrate that individuals with stronger authoritarian orientations are consistently more prone to conspiracism across diverse cultures, political contexts, and time. These results remain robust when controlling for populist attitudes and multiple political, psychological, and demographic variables. The link between authoritarianism and conspiracism appears to constitute a durable and generalizable psychological relationship. This may help …
Contests With Ambiguous Prizes, Cary Deck, Aidan Hathaway, Emma Kate Henry, Tigran Melkonyan, Samuel Redinger
Contests With Ambiguous Prizes, Cary Deck, Aidan Hathaway, Emma Kate Henry, Tigran Melkonyan, Samuel Redinger
ESI Working Papers
This paper examines behavior in contests where the prize value is ambiguous. We develop a theoretical model of bidding in a Tullock contest with an ambiguous prize where contestants account for the ambiguity attitude of their rival. Ambiguity affects optimal behavior via two countervailing channels - a direct effect arising from contestants’ ambiguity about the value of the prize and an indirect effect corresponding to the effect of ambiguity on the opponent’s behavior. Using a controlled laboratory experiment, we elicit individual risk and ambiguity attitudes and compare predicted and observed behavior in contests with an ambiguous prize, a risky prize …
Strategic Interactions And Gender Cues: Evidence From Social Preference Games, Hernán Bejarano, Matias Busso, Juan Francisco Santos
Strategic Interactions And Gender Cues: Evidence From Social Preference Games, Hernán Bejarano, Matias Busso, Juan Francisco Santos
ESI Working Papers
This paper studies trust, reciprocity, and bargaining using a large-scale online experiment conducted in six Latin American countries. Participants played trust and ultimatum games under randomly assigned conditions in which the gender of their counterpart was either disclosed or withheld. On average, disclosing counterpart gender does not yield statistically detectable effects in either game. However, statistically significant differences emerge by participants' own gender: on average men exhibit higher levels of trust, reciprocity, and generosity in bargaining than women. When disaggregating by participant-counterpart gender pairings, point estimates differ in sign across groups but are generally imprecisely estimated, and differences between interacting …
Dictators And Lying Dictators: An Experimental Investigation Of Preference Based-Group Biases In Chinese And American Interactions, Aaron S. Berman, Saika Cer Askin, Shapeng Jiang, David Porter, Jason Shachat
Dictators And Lying Dictators: An Experimental Investigation Of Preference Based-Group Biases In Chinese And American Interactions, Aaron S. Berman, Saika Cer Askin, Shapeng Jiang, David Porter, Jason Shachat
ESI Working Papers
This study examines preference-based behavioral biases in social interactions between two distinct communities: students from Chapman University in the United States and Wuhan University in China. Using controlled experiments, participants interacted within or across communities in Dictator games. Two versions of the Dictator game were used: one where decisions were observable by both the experimenter and the recipient, and another where allocators could misreport outcomes with plausible deniability. Results revealed unexpected patterns, including similar allocation distributions across communities in the transparent task, and differing behaviors in the misreporting task, with Chapman allocators being more generous to out-group members and Wuhan …
Poking Holes And Adding Points In Dictator Games, James C. Cox, Cary Deck, Laura Razzolini, Vjollca Sadiraj
Poking Holes And Adding Points In Dictator Games, James C. Cox, Cary Deck, Laura Razzolini, Vjollca Sadiraj
ESI Working Papers
Deviations from choices predicted by self-regarding preferences have regularly been observed in standard dictator games. Such behavior is not inconsistent with conventional preference theory or revealed preference theory, which accommodate other-regarding preferences. By contrast, experiments in which giving nothing is not the least generous feasible act produce data that is inconsistent with conventional preference theory including social preference models and suggest the possible relevance of reference point models. Two such models are the reference-dependent theory of riskless choice with loss aversion and choice monotonicity in moral reference points. Our experiment includes novel treatments designed to challenge both theoretical models of …
Final Offer Arbitration With Asymmetric Evidence, Yongjoon Kim, Afia Promi, Jiatong Xue, Cary Deck
Final Offer Arbitration With Asymmetric Evidence, Yongjoon Kim, Afia Promi, Jiatong Xue, Cary Deck
ESI Working Papers
As disputants increasingly rely upon arbitration it is critical to understand outcomes that are likely to arise from mechanisms like final offer arbitration. While a sizable experimental literature investigating strategic behavior in final offer arbitration exists, that work has overwhelmingly focused on situations where the arbitrator’s beliefs about the appropriate resolution are symmetric and uninfluenced by the disputants’ cases. This paper considers a setting where the arbitrator’s beliefs depend on the strength of each disputant’s case. We find disputant responses to changes in the relative strength of their case generally follow comparative statics predictions. Further, we find that final offers …
Coordination In Time, Lars Boerner, Erik O. Kimbrough, Mouli Modak
Coordination In Time, Lars Boerner, Erik O. Kimbrough, Mouli Modak
ESI Working Papers
We study how well people are able to solve pure coordination problems in continuous time. Subjects decide whether and when to pay a cost to go to market with their goods and earn money only if another person shows up at the same time. We show that coordination failure is common in a baseline, and we introduce treatments that feature public coordination devices (meant to mimic clocks) and assess the extent to which coordination improves when such devices are provided via different institutions. A publicly provided device outperforms a variety of privately provided alternatives. Our evidence suggests this is because …
Minimum Resale Price Maintenance In The Absence Of Point-Of-Sale Service, Agency Or Free-Rider Problems, Michael R. Baye, Dan Kovenock, Casper De Vries
Minimum Resale Price Maintenance In The Absence Of Point-Of-Sale Service, Agency Or Free-Rider Problems, Michael R. Baye, Dan Kovenock, Casper De Vries
ESI Working Papers
We show that MRPM can increase manufacturer profits and total output even in the ab- sence of traditional justifications based on point-of-sale services, retailer effort, or free-riding. The key insight is that MRPM mitigates channel conflict by altering how retailers balance extracting surplus from loyal customers and competing for price-sensitive shoppers. When a manufacturer optimally chooses a wholesale price and MRPM policy, this can intensify com- petition and create systematic distributional effects: prices fall for loyal consumers but rise for shoppers, and the profits of smaller, shopper-dependent retailers decline. We characterize the conditions under which MRPM raises output, benefits a …
Building Reputation: State-Sponsored Rebellions And Transnational Identities, Marion Mercier, Arthur Silve, Benjamin Tremblay-Auger
Building Reputation: State-Sponsored Rebellions And Transnational Identities, Marion Mercier, Arthur Silve, Benjamin Tremblay-Auger
ESI Working Papers
States sometimes back rebellions abroad to signal resolve. We study this reputation-building logic in international relations, focusing on co-ethnic links between countries as an objective source of variation in a state’s incentives to demonstrate resolve. We formally derive two interconnected predictions from the mechanism: (a) a state is more likely to endorse the uprising of a foreign group when facing a larger audience, resulting in (b) greater political inclusion for the group. We build a comprehensive panel dataset of co-ethnic rebellion sponsorship, and find evidence consistent with both predictions.
Tokenization And Interconnectedness: A Numerical Exploration, Alessandro Gioffré, Gabriele Camera
Tokenization And Interconnectedness: A Numerical Exploration, Alessandro Gioffré, Gabriele Camera
ESI Working Papers
Tokenization of assets has multiple implications for the operation of financial markets, among which are mitigating trade frictions and improving the interconnectedness of financial firms. This feature—if not properly managed—can propagate shocks more widely as compared to a traditional system. We study this double-edged aspect of tokenization using a matching model that makes explicit how firms are exposed to counterparty risk. We propose a way to manage this increased risk, through Financial Transactions Limiters, which exploit the technical advantages of tokenization in monitoring financial transactions of individual firms. We numerically analyze the possible social welfare consequences of tokenization, in …
Multidimensional Arbitration, Cary Deck, Paul Pecorino, Brian R. Powers
Multidimensional Arbitration, Cary Deck, Paul Pecorino, Brian R. Powers
ESI Working Papers
Most analyses of arbitration consider disputes over a single dimensional issue; however, in many situations more than one issue can be in dispute. In a labor context, the parties may disagree on the hourly wage, number of paid holidays, and fringe benefits as well as other conditions of employment. In addition to conventional arbitration (CA), two variants of multidimensional final-offer arbitration (FOA) are employed in practice. Under one version of FOA, the arbitrator must pick the entire package submitted by one of the disputants. Under the other version of FOA, the arbitrator can select elements from each disputant’s final offer …
My Performance Over Yours: Earned Entitlement, Performance, Luck, And Deservingness In Giving, Andrej Angelovski, Praveen Kujal, Jose M. Ortiz
My Performance Over Yours: Earned Entitlement, Performance, Luck, And Deservingness In Giving, Andrej Angelovski, Praveen Kujal, Jose M. Ortiz
ESI Working Papers
We study how three widely discussed cues—source of income (merit vs luck), own performance, and information about others’ work status and performance—shape redistribution. Prior to the dictator game, all 306 dictators and most of the 306 recipients complete the same real-effort matrix task in an online experiment that would yield either $4 or $1 for the dictators. In the Performance treatment the dictator’s payoff is based on their performance; in Luck, it is assigned by a 50-50 draw. We find that: (i) Earned entitlement is prevalent for high-performing dictators: they keep more for themselves; (ii) Earned entitlement is conditional …
Money And Social Exclusion In Networks, Maria Bigoni, Gabriele Camera, Edoardo Gallo
Money And Social Exclusion In Networks, Maria Bigoni, Gabriele Camera, Edoardo Gallo
ESI Working Papers
Globalization offers unparalleled opportunities to expand welfare through cooperation across large networks of unrelated individuals. Social exclusion – permanent or temporary – and monetary exchange are institutions that in theory can incentivize cooperation. In an experiment, we evaluate their relative performance and interaction in anonymous networks of different sizes. Permanent social exclusion (ostracism) reduces long-run economic potential by leading to sparse networks. Monetary exchange and temporary social exclusion perform similarly well in small networks. In large networks, however, monetary exchange is the only institution that promotes full cooperation by crowding out ostracism and keeping the network complete. An insight is …
General Equilibrium Markets As Distributed Computational Systems, Steven Gjerstad
General Equilibrium Markets As Distributed Computational Systems, Steven Gjerstad
ESI Working Papers
One principal capability of markets is the coordination of information distributed among market participants who typically have competing incentives. Despite distributed information and conflicting incentives, competition among market participants often leads to socially desirable resource allocation. In this sense a market is a distributed multi-agent mechanism that, in effect, finds an optimal solution to a computational problem that is not known to any individual market participant. The purpose of this paper is to demonstrate that capacity of markets by defining automated agents that interact with one another in a distributed system that implements a socially desirable resource allocation. In this …
Price Coordination Under List Pricing And Discounting: Experimental Evidence, Roberto Hernán González, Praveen Kujal, Miguel Angel Ropero-García, Román Fossati
Price Coordination Under List Pricing And Discounting: Experimental Evidence, Roberto Hernán González, Praveen Kujal, Miguel Angel Ropero-García, Román Fossati
ESI Working Papers
List-pricing and discounting is common in both retail and wholesale markets. Its interpretation amongst competition authorities varies from being procompetitive to collusion facilitating. We experimentally test how list pricing and discounting impact prices in a capacity constrained Bertrand-Edgeworth duopoly with symmetric and asymmetric firms facing constant marginal costs. We find that, relative to the symmetric baseline experiments, list pricing and discounting generate higher equilibrium prices for (symmetric) firms. Prices in the asymmetric-list price duopoly are also higher, however, the effect is much smaller than under symmetry. The introduction of asymmetry results in higher prices. The smaller firms gain more from …
Preferences Or Confounders? Persistent Gender Gap In Competition Across Four Continents, Natalia I. Valdez-Gonzalez, Adriana Gaviria, Antonio M. Espin
Preferences Or Confounders? Persistent Gender Gap In Competition Across Four Continents, Natalia I. Valdez-Gonzalez, Adriana Gaviria, Antonio M. Espin
ESI Working Papers
The gender gap in willingness to compete is thought to underlie enduring inequalities in education, career choice, and labor market outcomes. Yet it remains unclear whether the gap reflects true preference differences or results from confounding factors such as task stereotypes, overconfidence, or risk aversion. We test gender differences in competition entry across eight pre-registered studies in seven countries spanning four continents (Dominican Republic, Ivory Coast, El Salvador, Madagascar, Spain, The Philippines, and Uruguay; total n = 1,833), using an experimental design that systematically minimizes these confounds: (i) based on a non-male-stereotyped task (the Reading the Mind in the Eyes …
Religion And Economic Development: Past, Present, And Future, Sascha O. Becker, Amma Panin, Steven J. Pfaff, Jared Rubin
Religion And Economic Development: Past, Present, And Future, Sascha O. Becker, Amma Panin, Steven J. Pfaff, Jared Rubin
ESI Working Papers
This chapter examines the role of religion in economic development, both historically and today. Religion's influence varies globally, with high religiosity in countries like Pakistan and low rates in China. Despite declines in some Western countries, religion remains influential worldwide, with projected growth in Muslim populations due to higher fertility rates. Religion continues to shape societal norms and institutions, such as education and politics, even after its direct influence fades. The chapter explores how religious institutions and norms have impacted economic outcomes, focusing on both persistence and decline. It also examines cultural transmission, institutional entrenchment, networks, and religious competition as …
Religion, Culture, And Politics, Jared Rubin
Religion, Culture, And Politics, Jared Rubin
ESI Working Papers
This chapter presents a conceptual framework for understanding the interaction of religion, ideology, and politics. The framework’s key insights are: i) culture and ideology provide a shared mental framework for interpreting the world; ii) ideology is malleable, and it can be used to justify a wide set of empirical realities in a manner that is consistent with the prevailing mental framework; iii) religion is particularly adept at shaping this mental framework because it attempts to explain the unknown; iv) because co-religionists share a mental framework that depends on a (religious) interpretation of events, religions are particularly likely to be co-opted …
How To Discipline Financial Markets: Reputation Is Not Enough, Maria Bigoni, Gabriele Camera, Marco Casari
How To Discipline Financial Markets: Reputation Is Not Enough, Maria Bigoni, Gabriele Camera, Marco Casari
ESI Working Papers
Historically, shocks originating in the financial sector often spilled over into the real sector with dramatic consequences. We study in the lab how interventions targeting disclosure and capital requirements of financial intermediaries can reduce insolvencies or prevent their negative effects from propagating to the broader economy. In our two-sector economy, consumers and producers can fund financial intermediaries, who, in turn, provide them with liquidity to settle trades. However, intermediaries may undertake risky investments and become insolvent, which depresses real economic activity. In the experiment, insolvencies were frequent. As a consequence, consumers and producers often refused to fund intermediaries, which lowered …
Axiomatic Characterization Of Generalized Neo-Eu Preferences And The Falsifiability Of Ambiguity Theories, Manuel Nunez, Mark Schneider
Axiomatic Characterization Of Generalized Neo-Eu Preferences And The Falsifiability Of Ambiguity Theories, Manuel Nunez, Mark Schneider
ESI Working Papers
We introduce a new weakening of the independence axiom, co-extreme independence, which we show characterizes a class that encompasses popular ambiguity models including Hurwicz preferences, ϵ-contamination preferences, and NEOEU preferences. Importantly, our representation unifies these as forms of simple ambiguity models as we show that the Vapnik-Chervonenkis (VC) dimension of these models is either unity or increases linearly with the number of states. In contrast, standard ambiguity models characterized in the Anscombe-Aumann framework are complex ambiguity models that have a VC dimension that is either infinite or increases exponentially in the number of states. We show that simple ambiguity preferences …
A Critical Evaluation Of Loss Aversion As The Determinate Of Effort In Compensation Framing, Timothy W. Shields, James Wilhelm
A Critical Evaluation Of Loss Aversion As The Determinate Of Effort In Compensation Framing, Timothy W. Shields, James Wilhelm
ESI Working Papers
A robust finding in managerial accounting research is that participants prefer contracts framed as bonuses to economically equivalent contracts framed as penalties. Another finding is that participants put forth more effort when facing penalty contracts than equivalent bonus contracts. Both results are commonly described as due to loss aversion, an integral portion of prospect theory. We test whether loss aversion is correlated with higher effort in an experiment with two parts. In the first part, we elicit individual participants' loss aversion using two measures. In the second part of the experiment, participants choose costly effort to increase the likelihood of …