In a real effort lab and online team production experiment, we analyze exerted effort under different conditions of individual accountability. In a repeated setting, we vary the degree to which production can be directly traced back to a collaborator’s individual or randomly drawn effort level, respectively. We find that individuals produce much less and the decline of effort over time is significantly steeper under high as compared to low and endogenously chosen personal accountability. While endogenous accountability provides an option for monitoring others, it does not force subjects to learn about their under-performing peers, thus limiting the typical decline of contributions over time. We conclude that accountability one step removed may be an interesting institutional setting for repeated collaborations in contexts where low accountability for political, social or legal reasons is not a viable option.
We present an experiment on information defaults and information seeking in a repeated public goods provision setting. In our experiment the default is one either with or without information about others’ contributions, and having information comes either at a financial cost or at a financial benefit. Subjects mostly follow the money in deciding whether to have the information or not, but around a third seek or stick to information even when this is costly. However, a default of not having information about the others’ contributions leads to a slower unraveling of cooperation, whether or not the information is financially costly or beneficial. This slower unraveling is explained by the dynamic of beliefs about others’ contributions in these treatments. A secondary informational default effect appears to take place. When the default is no information, subjects do not seek information more but, conditional on taking into account financial incentives, they tend to believe that more other subjects seek information.
We experimentally examine the effects of time pressure on the likelihood that two players coordinate on a label salient focal point in a coordination game. We consider both payoff-symmetric and payoff-asymmetric coordination games. In symmetric games almost everyone coordinate on the focal point, regardless of how much time they have to decide. In asymmetric games, in contrast, the less time people have the more able they are at coordinating on a focal action, and the higher earnings consequently are. Furthermore, the subjects who prefer coordination on the focal outcome are slower in making their decision than those subjects who prefer coordination on the non-focal action.
An evidence-based policy debate about future fuel demand requires reliable estimates for fuel price elasticities. Such predictions are often based on revealed preference (RP) data. However, this procedure will only yield reliable results in the absence of severe structural discontinuities. In order to overcome this potential limitation we used a situational stated preference (SP) survey to estimate the response to hypothetical fuel price changes beyond the scope of previous observations. We elicit fuel price elasticities for price increases up to four Euros per liter and find that the situational approach predicts the actual responses to previously observed fuel price changes very well. We conclude that applying a situational approach is particularly useful, if behavioral predictions for unprecedented (non-monetary) policy interventions or supply side shocks are of interest that go beyond the reach of standard RP approaches.
We analyse corporate tax avoidance in a stylized experimental Bertrand setting with homogenous products and symmetric firms and consumers. More specifically, we investigate how market concentration and information disclosure of firms’ tax avoidance behaviour could reduce corporate tax avoidance. We find that making corporate tax behaviour more transparent by introducing a tax rating, makes consumers actively and costly boycott firms that do not pay their taxes. Firms anticipate consumer boycotts and increase their tax payments accordingly.
We develop a new design to measure the disincentive effects in labor supply in a laboratory real-effort task. We study disincentives from taxing work and redistributing tax revenues per capita when redistribution is imposed vs. democratically chosen in a vote. We find that disincentives are significantly smaller when redistribution is chosen in vote than when it is imposed. That is, we find a “dividend of democracy” in the sense that the efficiency cost of redistribution is smaller (and tax revenues are higher) when taxation and redistribution is “legitimate”, i.e. supported by a vote.
We present a simple principal-agent experiment in which the principals are allowed to choose between a revenue sharing, a bonus and a trust contract, to offer to an agent. Our findings suggest that a large majority of experimental subjects choose the revenue sharing contract. This choice not only turns out to be the most efficient but at the same time is fair. Overall, the distribution of earnings is only mildly skewed towards the principal. We conclude that under revenue sharing contracts concerns for fairness can go in hand with the use of monetary incentives.
Using online price comparison and shopping platforms makes experiencing slow connections, lags and waiting times for information an unfortunate reality. However, little attention has been paid to analyzing the effects of such delayed display of information on product choice behavior. This article explores the effect of time delays in a multi-attribute choice laboratory experiment by not providing information immediately when requested but after short time delays. Increasing these waiting times reduced the amount of information looked-up but did not affect choice quality. Higher time delays made decision-makers use more deliberate search processes, whereas low time delays induced inefficient oversearching.