Self-selection bias in a field experiment: Recruiting subjects under different payment schemes

We examine a potential self-selection bias in different samples of experimental subjects depending on the payment scheme offered in the recruiting process. We ran four field experiments in which undergraduate students in a microeconomics course were invited to voluntarily set their own goal for the final exam. They were informed that they would be given a monetary reward (else nothing) if their actual grade were higher than or equal to their goal. Rewards were an increasing (quadratic) function of the goal. We aimed at studying whether subjects’ willingness to participate in the experiment depends on their expected performance under different advertised reward criteria, like a rank-order tournament and piece-rate pay. Given that judgments about future performance are closely tied to previous performance, the midterm exam scores from the current academic course are compared between participants and nonparticipants in order to analyze sample-sorting effects. We find that when a rank-order tournament is offered alone or in combination with another reward mechanism, high-performing students are more likely than low-performing ones to participate in the experiment

Framing and repetition effects on risky choices: A behavioural approach

Framing effects play an important role in individual decision-making under risk. This investigation revisits framing effects caused by two versions of the choice list procedure, lottery vs. lottery (LL) and lottery vs. certainty (LC). In the first, subjects face pairwise choices between lotteries within a choice list. In the second, subjects face pairwise choices between a safe amount and a lottery. In order to measure the sensitivity of subjects’ choices to the structure of the tasks, we implement an incentive-compatible experiment using repetition in order to have a robust measure of the subjects’ propensity to make a choice. Particularly, it is tested whether variations in the number of options offered in a choice list with and without variations in the range of options affect subjects’ choices. Our results suggest that changes in framework disturb subjects’ risk preferences only in the LC version when the range of options presented has been varied

When will the lockdown end? Confinement duration forecasts and self-reported life satisfaction in Spain: A longitudinal study

This paper reports results from a longitudinal study on the impact of the lockdown on daily self-reported life satisfaction levels during the first wave of the COVID-19 pandemic in Spain. A stable panel (N = 1,131) of adult subjects were surveyed during 84 consecutive days (March 29–June 20, 2020). They were asked to report daily life satisfaction and health state levels. Interestingly, daily life satisfaction increased during the lockdown. At the beginning of the experiment, subjects were asked to guess the end-week of the lockdown, against a possible monetary reward for accurate forecasts. Subjects predicting a longer lockdown period reported a higher average level of daily life satisfaction. Females reported on average lower levels of daily life satisfaction, but exhibited a stronger tendency to report higher levels of life satisfaction, the longer their lockdown forecast. Individual heterogeneity in life satisfaction levels can be partly attributed to personality traits, with neuroticism having a negative effect, while extraversion and agreeableness having a positive effect on daily life satisfaction

Risk-taking and fairness among cocaine-dependent patients in dual diagnoses: Schizophrenia and Anti-Social Personality Disorder

This study reports experimental results from a clinical sample of patients with a cocaine-related disorder and dual diagnosis: Schizophrenia and Anti-Social Personality Disorder. Both types of patients as well as a non-clinical group of students performed two incentivized decision-making tasks. In the first part of the experiment, they performed a lottery-choice task in order to elicit their degree of risk aversion. In the second part, they decided in two modified dictator games aimed at eliciting their aversion to advantageous and disadvantageous inequality. It is found that the Anti-Social Personality Disorder group exhibits no significant differences from the non-clinical sample in either task. However, compared with the students’ sample, subjects from the group with schizophrenia show more risk aversion and exhibit more aversion towards disadvantageous inequality

Three essays based on Experimental Economics: incentives and risk

This thesis sheds light on two of the basic pillars of experimental economics: incentives and framing effects in decision making under risk. Experimental economists are strongly convinced of the importance of monetary incentives as a vital tool in order to motivate effort and improve performance. Based on this, the effectiveness of different monetary incentive structures is analysed in order to increase students' academic performance and to study their overconfidence (both about their abilities and their performance). On the other hand, risk attitude is known to be a key determinant of various economic and financial choices, but it is usually measured with tasks that the literature suggests that may suffer from framing effects. Therefore, this investigation revisits framing effects, but taking into account other confounding factors that may have partly contaminated previous results obtained in the literature.Esta tesis arroja luz sobre dos pilares básicos de la economía experimental: los incentivos y el efecto “marco” en decisiones bajo riesgo. Los economistas experimentales estamos convencidos de la importancia de los incentivos monetarios como herramienta fundamental para motivar a los sujetos en su esfuerzo y mejorar sus resultados. En base a ello, se analiza la efectividad de diferentes estructuras de incentivos monetarios para incrementar el rendimiento académico de los estudiantes y estudiar su exceso de confianza (tanto sobre sus capacidades como el desempeño de las mismas). Por otro lado, la actitud frente al riesgo es un determinante clave en numerosas decisiones económicas y financieras, pero ésta se mide con tareas que la literatura sugiere que pueden sufrir efectos “marco”. Por ello, esta investigación reconsidera los efectos “marco” teniendo en cuenta factores que podrían confundir y haber contaminado parcialmente los resultados anteriores obtenidos en la literatura

Financial incentives and academic performance: an experimental study

Treball Final de Grau en Economia. Codi: EC1049. Curs acadèmic 2013-2014In this paper, the effect of financial incentives on academic performance is studied. We implement a field experiment designed to motivate students with rewards depending on their academic performance. Subjects, recruited among students from Introduction to Microeconomics, participate voluntarily in this experiment. Participants were informed that they would receive a reward depending on their bet (the grade they thought they would achieve), the real grade obtained and, in the case of old students, grades obtained in previous semesters in Introduction to Microeconomics. We establish two rankings (one for new students and another one for old students) classifying the students depending on the obtained reward and prizes (netbooks, hard drives and iPods) which were delivered to participants according to their position in the ranking. We find that implemented incentives were effective to increase the average of grades obtained for both cases, new and old students

Three essays based on Experimental Economics: incentives and risk

This thesis sheds light on two of the basic pillars of experimental economics: incentives and framing effects in decision making under risk. Experimental economists are strongly convinced of the importance of monetary incentives as a vital tool in order to motivate effort and improve performance. Based on this, the effectiveness of different monetary incentive structures is analysed in order to increase students' academic performance and to study their overconfidence (both about their abilities and their performance). On the other hand, risk attitude is known to be a key determinant of various economic and financial choices, but it is usually measured with tasks that the literature suggests that may suffer from framing effects. Therefore, this investigation revisits framing effects, but taking into account other confounding factors that may have partly contaminated previous results obtained in the literature.Esta tesis arroja luz sobre dos pilares básicos de la economía experimental: los incentivos y el efecto “marco” en decisiones bajo riesgo. Los economistas experimentales estamos convencidos de la importancia de los incentivos monetarios como herramienta fundamental para motivar a los sujetos en su esfuerzo y mejorar sus resultados. En base a ello, se analiza la efectividad de diferentes estructuras de incentivos monetarios para incrementar el rendimiento académico de los estudiantes y estudiar su exceso de confianza (tanto sobre sus capacidades como el desempeño de las mismas). Por otro lado, la actitud frente al riesgo es un determinante clave en numerosas decisiones económicas y financieras, pero ésta se mide con tareas que la literatura sugiere que pueden sufrir efectos “marco”. Por ello, esta investigación reconsidera los efectos “marco” teniendo en cuenta factores que podrían confundir y haber contaminado parcialmente los resultados anteriores obtenidos en la literatura.Programa de Doctorat en Economia i Empres

Monetary incentives and self-chosen goals in academic performance: An experimental study

This paper analyzes the effect of incentive-compatible self-chosen goals on academic performance by means of a randomized field experiment. We use two alternative payment mechanisms, a piece-rate and a rank-order tournament, to motivate students depending on their absolute or relative academic performance respectively. Students enrolled in Introductory Microeconomics were classified in two types depending on whether they had a failed background in this course (returning students) or they had not (new students). Controlling for potential confounding factors such as gender, degree, professor and university entrance grade, we find that both payment mechanisms are effective increasing grades of new and returning students

Monetary versus grade incentives depending on personality traits: A field experiment on undergraduate students’ performance

This study aims to examine the role of personality on the effectiveness in improving students' performance of two extrinsic incentives: monetary and grade incentives. To achieve this goal, we conducted a randomized field experiment in which students in a Microeconomics course were offered the opportunity to participate in a practice test program, with no effects on the grade of the course itself. In the call to participate, students were informed that participants would be randomly assigned to one of two groups. Whereas in the control group students would not be monetarily incentivized, participants assigned to the treatment group would be paid according to their performance in the practice tests. In addition, we elicited the big five personality and risk aversion traits of the participants (168 undergraduates). All subjects received grade incentives in the later official course exam, in which no monetary incentives were offered. We used non-parametric tests to carry out both between-subjects and within-subjects performance comparisons. Controlling for potential confounding factors like students' gender and academic record, our OLS regressions indicate that although monetary incentives are effective in improving students’ performance in practice tests, their effect does not carry over to the course exam. Furthermore, we find that the effectiveness of grade incentives (used in the course exam) on improvement as a substitute for monetary incentives (adopted in practice tests), is higher the more conscientious the students are