Economics - Research Publications
Permanent URI for this collection
Search Results
1 - 10 of 17
-
ItemBy chance or by choice? Biased attribution of others' outcomes when social preferences matter(SPRINGER, 2021-09-28)Decision makers in positions of power often make unobserved choices under risk and uncertainty. In many cases, they face a trade-off between maximizing their own payoff and those of other individuals. What inferences are made in such instances about their choices when only outcomes are observable? We conduct two experiments that investigate whether outcomes are attributed to luck or choices. Decision makers choose between two investment options, where the more costly option has a higher chance of delivering a good outcome (that is, a higher payoff) for the group. We show that attribution biases exist in the evaluation of good outcomes. On average, good outcomes of decision makers are attributed more to luck as compared to bad outcomes. This asymmetry implies that decision makers get too little credit for their successes. The biases are exhibited by those individuals who make or would make the less prosocial choice for the group as decision makers, suggesting that a consensus effect may be shaping both the belief formation and updating processes. SUPPLEMENTARY INFORMATION: The online version contains supplementary material available at 10.1007/s10683-021-09731-w.
-
Item
-
ItemWelfare Receipt and the Intergenerational Transmission of Work-Welfare Norms(Wiley, 2015)This article investigates the role of welfare receipt in shaping norms regarding work and welfare using unique Australian data from the Youth in Focus Project. We begin by incorporating welfare into a theoretical model of the transmission of work-welfare norms across generations. Consistent with the predictions of this model, we find evidence that youths' attitudes toward work and welfare may be influenced by socialization within their families. Young people are more likely to oppose generous social benefits and to believe that social inequality stems from individual characteristics if (i) their mothers support these views; (ii) their mothers were employed while they were growing up; and (iii) their families never received welfare. Finally, youths' work-welfare norms appear to be unrelated to their neighbors' welfare receipt suggesting that socialization occurs primarily within families rather than within neighborhoods.
-
ItemAggregative games and oligopoly theory: short‐run and long‐run analysis(Wiley, 2020-06-18)We compile an IO toolkit for aggregative games and use inclusive best reply functions to deliver oligopoly comparative statics and ranking of firms' actions and profits. Aggregative games apply to additively separable direct and indirect preferences, as well as generalized quadratic forms. The aggregative game structure delivers immediate consumer welfare results if demand functions have the IIA property. We close the model with a monopolistically competitive fringe to show strong neutrality properties for long-run equilibria. These properties underscore a unifying principle in the literature on merger analysis, privatization, Stackelberg leadership, and cost shocks.
-
ItemMonetary and Non-Monetary Incentives in Real-effort Tournaments(Elsevier, 2018-01-01)Results from laboratory experiments using real-effort tasks provide mixed evidence on the relationship between monetary incentives and effort provision. To examine this issue, we design three experiments where subjects participate in two-player real-effort tournaments with two prizes. Experiment 1 shows that subjects exert high effort even if there are no monetary incentives, suggesting that non-monetary incentives are contributing to their effort choices. Moreover, increasing monetary incentives does not result in higher effort provision. Experiment 2 shows that the impact of non-monetary incentives can be reduced by providing subjects with the option of leaving the laboratory early, using an incentivized timeout button, or working on an incentivized alternative activity. Experiment 3 revisits the relationship between monetary incentives and effort provision using the insights from Experiment 2. Using a design with an incentivized alternative activity, we show that participants increase effort in response to monetary incentives. Taken together, the findings from the three experiments suggest that results from real-effort tasks require a careful evaluation and interpretation of the motivations underlying the observed performance.
-
ItemCooperative R&D under uncertainty with free entry( 2007-08)In the last few decades, the effects of cooperative R&D arrangements on innovation andwelfare have played an important role in policy making. The goal of this paper is to analyzethe effects of cooperative R&D arrangements in a model with a stochastic R&D process andoutput spillovers. Our main innovation is to allow for free entry in both the R&D race andthe product market. To determine the desirability of cooperation in R&D environments,we compare three different ways of organizing R&D activities: R&D competition, R&Dcartels, and RJV cartels. In contrast with the literature, we assume that cooperative R&Darrangements do not have to include all of the firms in the industry. We show that sharingof research outcomes is a necessary condition for the profitability of cooperative R&Darrangements with free entry. The profitability of RJV cartels depends on their size. Theimpact of cooperative R&D arrangements on the aggregate level of innovation depends onwhether there are participants in the R&D race who are a part of the cooperative R&Darrangement. If some outsiders choose to participate in the R&D race, the aggregate rate ofinnovation remains unaffected by the formation of a cooperative R&D arrangement. Otherwise,it increases. R&D cartels may be welfare-improving in cases when they cause theaggregate rate of innovation to increase. In such cases, it may be desirable to subsidizethem. Since sharing of R&D outcomes affects the equilibrium number of firms in the productmarket after the R&D race, the consumer welfare effects of RJV cartels are sensitiveto the specification of consumer preferences. Subsidies may be desirable in cases of largerRJVs since they are the ones which are less likely to be profitable.
-
ItemHorizontal mergers with free entryin differentiated oligopolies( 2006-10)Antitrust authorities view the possibility of entry as a key determinant of whether a proposedmerger will be harmful to society. This paper examines the effects of horizontalmergers in models of non-localized, differentiated Bertrand oligopoly that allow for freeentry. The analysis of the long run effects of mergers in differentiated products marketsraises issues that are significantly different from those in the short run or in homogeneousproducts markets due to the introduction of new varieties. Our analysis reveals that determiningthe properties of consumer preferences is crucial to the antitrust analysis of mergersin differentiated products markets. Specifically, we show that if the demand system satisfiesthe Independence from Irrelevant Alternatives (IIA) property and if the number of firms istreated as a continuous variable, mergers in differentiated products markets have no longrun effect on consumer welfare. Moreover, in this case, marginal cost savings are to a largeextent irrelevant to the consumer welfare effects of mergers. If the number of firms is treatedas a discrete variable, fixed or marginal cost savings are a necessary condition for mergersto have zero or positive effect on consumer welfare. Using the example of linear demand,we show that if the demand system does not satisfy the IIA property, mergers in differentiatedproducts markets can harm consumer welfare in long run equilibrium. Moreover, theamount of harm increases with consumers’ taste for variety.
-
ItemSubject pool effects in a corruption experiment: a comparison of Indonesian public servants and Indonesian students.( 2006-10)We report results from a corruption experiment with Indonesian public servants andIndonesian students. Our results suggest that although both subject pools show a high levelof concern with the extent of corruption in Indonesia, the Indonesian public servantsubjects have a significantly lower tolerance of corruption than the Indonesian students.We find no evidence that this is due to a selection effect. The reasons given by the publicservants for either engaging in or not engaging in corruption suggest that the differences inbehavior across the subject pools are driven by their different real life experiences. Forexample, when abstaining from corruption public servants more often cite the need toreduce the social costs of corruption as a reason for their actions, and when engaging incorruption they cite low government salaries or a belief that corruption is a necessary evilin the current environment. In contrast, students give more simplistic moral reasons. Weconclude by arguing that experiments such as the one considered in this paper can be usedto measure forward-looking attitudinal change in society and that results obtained fromdifferent subject pools can complement each other in the determination of such attitudinalchanges.
-
ItemSubject pool effects in a corruption experiment: a comparison of Indonesian public servants and Indonesian students( 2006-10)We report results from a corruption experiment with Indonesian public servants andIndonesian students. Our results suggest that although both subject pools show a high levelof concern with the extent of corruption in Indonesia, the Indonesian public servantsubjects have a significantly lower tolerance of corruption than the Indonesian students.We find no evidence that this is due to a selection effect. The reasons given by the publicservants for either engaging in or not engaging in corruption suggest that the differences inbehavior across the subject pools are driven by their different real life experiences. Forexample, when abstaining from corruption public servants more often cite the need toreduce the social costs of corruption as a reason for their actions, and when engaging incorruption they cite low government salaries or a belief that corruption is a necessary evilin the current environment. In contrast, students give more simplistic moral reasons. Weconclude by arguing that experiments such as the one considered in this paper can be usedto measure forward-looking attitudinal change in society and that results obtained fromdifferent subject pools can complement each other in the determination of such attitudinalchanges.
-
ItemGender and corruption: insights from an experimental analysis( 2006-10)In recent years, a substantial body of work has emerged in the social sciences exploringdifferences in the behavior of men and women in various contexts. This paper contributes tothis literature by investigating gender differences in attitudes towards corruption. It departsfrom the previous literature on gender and corruption by using experimental methodology.Attitudes towards corruption play a critical role in the persistence of corruption. Based onexperimental data collected in Australia (Melbourne), India (Delhi), Indonesia (Jakarta) andSingapore, we show that while women in Australia are less tolerant of corruption than men inAustralia, there are no significant gender differences in attitudes towards corruption in India,Indonesia and Singapore. Hence, our findings suggest that the gender differences found in theprevious studies may not be nearly as universal as stated and may be more culture-specific.We also explore behavioral differences by gender across countries and find that there arelarger variations in women’s attitudes towards corruption than in men’s across the countriesin our sample.