Search results for: Keyword=D64 [8]

2018
Evaluating intergenerational persistence of economic preferences: A large scale experiment with families in Bangladesh
2018/04
Max Planck Institute for Research on Collective Goods
Bonn
2018
Abstract
Economic preferences – like time, risk and social preferences – have been shown to be very influential for real-life outcomes, such as educational achievements, labor market outcomes, or health status. We contribute to the recent literature that has examined how and when economic preferences are formed, putting particular emphasis on the role of intergenerational transmission of economic preferences within families. Our paper is the first to run incentivized experiments with fathers and mothers and their children by drawing on a unique dataset of 1,999 members of Bangladeshi families, including 911 children, aged 6-17 years, and 544 pairs of mothers and fathers. We find a large degree of intergenerational persistence as the economic preferences of mothers and fathers are significantly positively related to their children’s economic preferences. Importantly, we find that socio-economic status of a family has no explanatory power as soon as we control for parents’ economic preferences. A series of robustness checks deals with the role of older siblings, the similarity of parental preferences, and the average preferences within a child’s village.
2017
Behaviorally Efficient Remedies – An Experiment
2017/17
Max Planck Institute for Research on Collective Goods
Bonn
2017
Abstract
Under common law, the standard remedy for breach of contract is expectation damages. Under continental law, the standard is specific performance. The common law solution is ex post efficient. But is it also ex ante efficient? We use experimental methods to test whether knowing that non-fulfilment will only lead to damages deters mutually beneficial trade. The design excludes aversion against others willfully breaking their promises. We find that there is indeed less trade if specific performance is not guaranteed, provided the preference for the traded commodity is sufficiently pronounced.
Committing the English and the Continental Way – An Experiment
2017/16
Max Planck Institute for Research on Collective Goods
Bonn
2017
Abstract
On the doctrinal surface, there is a deep divide between common and continental law when it comes to the origin of contractual obligations. Under continental law, in principle a unilateral promise suffices. Common law by contrast requires consideration. When it comes to deciding cases, the divide is much less pronounced. But for the most part the law does not govern people's lives through adjudication. It matches or molds their moral intuitions. We test these intuitions in the lab. If consideration is required, participants believe that all participants make more ambitious promises. But they themselves make a more cautious promise. These two effects cancel out, so that promises are not more likely to be kept with consideration.
Experimental Social Planners: Good Natured, but Overly Optimistic
2017/23
Max Planck Institute for Research on Collective Goods
Bonn
2017
Abstract
Public goods are dealt with in two literatures that neglect each other. Mechanism design advises a social planner that expects individuals to misrepresent their valuations. Experiments study the provision of the good when preferences might be non-standard. We introduce the problem of the mechanism design literature into a public good experiment. Valuations for the good are heterogeneous. To each group we add a participant with power to impose a contribution scheme. We study four settings: the authority has no personal interest and (1) valuations are common knowledge or (2) active participants may misrepresent their types; the authority has a personal interest (3) and must decide before learning her own valuation or (4) knows her own valuation. Disinterested social planners predominantly choose a payment rule that gives every group member the same final payoff, even if misrepresentation is possible. Authorities are overly optimistic about truth telling. Interested social planners abuse their power, except if the opportunity cost of a more balanced rule is small.
2016
Priming the charitable pump: an experimental investigation of two-stage raffles
Economic Inquiry
54
1
508-519
2016
Abstract
We experimentally study two-stage self-financing raffles in which participants can buy tickets in two stages. In all raffles, one half of the proceeds are donated to a local charity and the raffle winner wins the other half. The mechanisms differ by what happens to the tickets purchased in the first stage. In the complete draw down two-stage raffle, the first stage tickets are eliminated from the active pool of tickets, while in the no draw down raffle they remain in the active pool. We find that both two-stage raffles initially perform better than the standard one-stage 50–50 raffle. Over time, the aggregate contribution level in the complete draw down raffle declines and approaches that of the one-stage raffle, while in the no draw down raffle contributions are stable and remain higher than those in the other two mechanisms. In both two-stage raffles, we observe a positive correlation between the proceeds of the first stage and the number of tickets bought in the second stage. Our results are at odds with a standard warm glow model of giving, and also cannot be explained by the joy of winning or learning about bidders' types.
The Solidarity Motive
2016/14
Max Planck Institute for Research on Collective Goods
Bonn
2016
Abstract
For decades, experimental economics has been very interested in behavior that could be characterized as practicing solidarity (although the term is rarely used). Solidarity is a key concept in Catholic Social Teaching. This paper builds a bridge between these two endeavors that, thus far, had little contact with each other. Catholic Social Teaching is essentially normative. People are informed what they should do if they are good Christians. Experimental Economics is descriptive. Experimenters want to learn how much solidarity experimental participants exhibit when this is costly. But from a Catholic perspective it is interesting how strongly their norms are reflected in actual behavior. The many distinctions uncovered by behavioral economics may also help refine Catholic thinking. And behavioral economics is confronted with new questions, in particular regarding deontological motives.
2015
Insuring Your Donation – An Experiment
2015/16
Max Planck Institute for Research on Collective Goods
Bonn
2015
Abstract
An increasing fraction of donations is channeled through donation intermediaries. These enti-ties serve multiple purposes, one of which seems to be providing donors with greater certainty: that the donation reaches its intended goal, and that the donor may be sure to get a tax ben-efit. We interpret this function as insurance and test the option to insure donations in the lab. Our participants indeed have a positive willingness to pay for insurance against either risk. Yet the insurance option is only critical for their willingness to donate to a charity if the un-certainty affects the proper use of their donation.
2014
The values of ex-ante and ex-post communication in dictator games
2014/07
Max Planck Institute for Research on Collective Goods
Bonn
2014
Abstract
In the dictator game, the recipient’s opportunity to send a message to the dictator increases giving. This paper reports two experiments which study how the timing of messages affects dictators’ decisions (experiment 1) and which value recipients attach to communication opportunities (experiment 2). The first experiment shows that the effect of communication on dictator giving is equally strong when the recipient can send a message before or after the dictator has decided. However, recipients in a second experiment reveal a strong preference for pre-decision messages: Their willingness to pay for pre-decision messages is higher than for post-decision messages.