Partial Coercion, Conditional Cooperation, and Self-Commitment in Voluntary Contributions to Public Goods

In this paper we experimentally investigate whether partial coercion can in combination with conditional cooperation increase contributions to a public good. We are especially interested in the behavior of the non-coerced populations. The main finding is that in our setting conditional cooperation is not a strong enough force to increase contribution levels. Although, non-coerced subjects rationally adjust their beliefs about contribution behavior of coerced subjects they do not increase their own contributions to the public good accordingly. This points to the limits of the actual strength of conditional cooperation and puts some doubt on the idea that it is crucial in overcoming social dilemma problems.coercion, public goods, commitment, laboratory experiment

Improving Workers’ Performance in Small Firms:A Randomized Experiment on Goal Setting in Ghana

Behavioral constraints like workers’ motivation and self-control problems can be a barrier to growth of small firms in LICs. In a field experiment, we test whether setting non-binding production goals improves workers’ performance in small cassava processing firms in Ghana. We first train workers to measure their daily production and then randomly assign a sub-sample to set daily production goals. Workers who set goals increase output by 16%, work 40 minutes longer per day and are 9% more productive per hour, increasing the average product of labor by 14%. The data suggests that goals act as a commitment device and ignite workers’ competitive spirit

Justice under Uncertainty

Uncertain outcomes are an inevitable feature of policy choices and their public support often depends on their perceived justice. We theoretically and experimentally explore just allocations when recipients are exposed to certainty and uncertainty. In the experiment, uninvolved participants unequivocally choose to allocate resources equally between recipients, when there is certainty. In stark contrast, with uncertainty just allocations are widely dispersed and recipients exposed to higher degrees of uncertainty are allocated less. The observed allocations can be well organized by four different theoretical views of justice, indicating that uninvolved participants differ fundamentally in their views on justice under uncertainty

Cortisol meets GARP:The Effect of Stress on Economic Rationality

Rationality is a fundamental pillar of Economics. It is however unclear if this assumption holds when decisions are made under stress. To answer this question, we design a laboratory experiment where we exogenously induce physiological stress in participants and test the consistency of their choices with economic rationality. We induce stress with the Cold Pressor test and measure it by assessing individuals’ cortisol levels in saliva. Economic rationality is measured by the consistency of participants’ choices with the Generalized Axiom of Revealed Preference (GARP). We find that participants exposed to the stress manipulation experience a significant increase in cortisol levels compared to those in the placebo group. However, differences in cortisol levels do not affect the consistency of choices with GARP. Our findings provide strong empirical support for the robustness of the economic rationality assumption

Exposure to Ethnic Minorities Changes Attitudes to Them

Does exposure to ethnic minorities change the majority’s attitudes towards them? We investigate this question using novel panel data on attitudes from a general-population sample in the Netherlands matched to geographical data on refugees. We find that people who live in neighborhoods of refugees for a sufficiently long time acquire a more positive attitude. Instead, people living in municipalities hosting refugees, but not in their close neighborhood, develop a more negative attitude. The positive neighborhood effect is particularly strong for groups that are likely to have personal contact with refugees suggesting that contact with minorities can effectively reduce prejudice

Giving in the Face of Risk

The decision how to share resources with others often needs to be taken under uncertainty on its allocational consequences. Although risk preferences are likely important, existing research is silent about how social and risk preferences interact in such situations. In this paper we provide experimental evidence on this question. In a first experiment givers are not exposed to risk while beneficiaries’ final earnings may be larger or smaller than the allocation itself, depending on the realized state of the world. In a second experiment, risk affects the earnings of givers but not of beneficiaries. We find that individuals’ risk preferences are predictive for giving in both experiments. Increased risk exposure of beneficiaries tends to decrease giving whereas increased risk exposure of givers has no effect. Giving under risk is strongly correlated with giving in the absence of risk. We find limited support for existing models of ex-post and ex-ante fairness. Our results point to the importance of incorporating risk preferences in models of social preferences