choice proliferation simplicity seeking and asset allocation abstract in settings such as investing for retirement or choosing a drug plan individuals typically face a large number of options in this paper we analyze how the size of the choice set influences which alternative is selected we present both laboratory experiments and field data that suggest larger choice sets induce a stronger preference for simple easy to understand options the first experiment demonstrates that in seeming violation of the weak axiom of revealed preference subjects are more likely to select a given sure bet over non degenerate gambles when choosing from a set of 11 options than when choosing from a subset of 3 the second experiment clarifies that large choice sets induce a preference for simpler rather than less risky options lastly using records of more than 500 000 employees from 638 institutions we demonstrate that the presence of more funds in an individual s 401 k plan is associated with a greater allocation to money market and bond funds at the expense of equity funds

trust market participation and economic outcomes evidence from rural china markets can only function properly in the presence of sufficient trust we explore the relation between trusting behavior and market integration in rural china we link the results of a trust experiment to actual behavior in the field participation in the labor market versus informally exchanging labor and find that high trust households are more likely to use formal markets we proceed by exploring the relation between labor market participation and economic outcomes finding tentative evidence of a causal relation running from market participation to higher levels of income

discount rates and credit markets theory and evidence from rural india three models of credit markets 1 the permanent income model 2 upward sloping credit supply to individual borrowers and 3 constrained credit due to imperfect enforcement are tested using credit market data and an experimental study of individuals discount rates in south india the permanent income model is rejected by both the discount rate and the credit market data the discount rate data are consistent with either of the other two models while the credit market data are consistent with a combination of these two models other explanations are found to be insufficient to explain the results of this study

how to identify trust and reciprocity this paper uses a three games or triadic design to identify trusting and reciprocating behavior a large literature on single game trust and reciprocity experiments is based on the implicit assumption that subjects do not have altruistic or inequality averse other regarding preferences such experimental designs test compound hypotheses that include the hypothesis that other regarding preferences do not affect behavior in contrast experiments with the triadic design do discriminate between transfers resulting from trust or reciprocity and transfers resulting from other regarding preferences that are not conditional on the behavior of others decomposing trust from altruism and reciprocity from altruism or inequality aversion is critical to obtaining empirical information that can guide the process of constructing models that can increase the empirical validity of game theory

behavioural development economics lessons from field labs in the developing world abstract explanations of poverty growth and development depend on the assumptions made about individual preferences and the willingness to engage in strategic behaviour economic experiments especially those conducted in the field have begun to paint a picture of economic agents in developing communities that is at variance with the traditional portrait we review this growing literature with an eye towards preference related experiments conducted in the field we also offer lessons on what development economists might learn from experiments we conclude by sharing our thoughts on how to conduct experiments in the field and then offer a few ideas for future research

using artefactual field experiments to learn about the incentives for sustainable forest use in developing economies one vexing problem facing mankind is how to promote sustainable use of common property resources within developed and developing countries alike misuse of fresh water pastures and forests is commonplace while developed countries have in many cases designed principles and laws to promote sustainable resource use developing countries often lack the institutional know how and means to enforce property rights this has led researchers to look for alternative means to address common property resource problems we study behavior and attitudes towards for

consumer preference for a no choice option the traditional focus in the decision making literature has been on understanding how consumers choose among a given set of alternatives the notion that preference uncertainty may lead to choice deferral when no single alternative has a decisive advantage is tested in seven studies building on recent research the article shows that the decision to defer choice is influenced by the absolute difference in attractiveness among the alternatives provided and is not consistent with trade off difficulty or the theory of search these findings are then extended to show that choice deferral can also be modified for the same alternatives by manipulations that make them appear more similar in attractiveness or that decrease the need to differentiate among them the results are consistent with the notion that preference uncertainty results in a hesitation to commit to any single action since small differences in attractiveness among the alternatives are potentially reversible consistent with this premise the effect of attractiveness difference on choice deferral decreased significantly when subjects were first allowed to practice making monetary trade offs among the available alternatives

determinants of conservation among the rural poor a charitable contribution experiment this paper examines how conservation decisions are affected by environmental degradation donations to an environmental ngo and participation in actual conservation activities capture individual preferences for environmental conservation environmental degradation is measured both through survey based data on experiences of deforestation and environmental shocks and through indices of deforestation constructed with gis data the results show that being exposed to environmental degradation is correlated both with higher donations and conservation behavior the relationship between conservation choices and individual social preferences is also explored experimental measures of individual altruism and inequality aversion and survey measures of trust time preferences and civic engagement are correlated with donations and real world conservation decisions respectively these findings show the role of environmental awareness in fostering environmental conservation even in very poor settings they also highlight the potential of experiments which closely mirror real world decisions to generate conclusions generalizable to individual behavior outside the laboratory

can violence harm cooperation experimental evidence abstract in this paper we argue that natural resource conservation is jeopardised by the ability of users to resort to violence to appropriate resources when they become scarce we provide evidence from a lab experiment that participants interacting in a dynamic game of common pool resource extraction reduce their cooperation on efficient levels of resource extraction when given the possibility to appropriate the resource at some cost i e through conflict theoretically cooperation is achievable via the threat of punishment strategies which stop being subgame perfect in the presence of conflict accordingly we argue that the observed reduction of cooperation in the game s early stages in the lab is a consequence of participants correctly anticipating the use of appropriation when resources become scarce

overchoice and assortment type when and why variety backfires almost universally research and practice suggest that a brand that increases its product assortment or variety should benefit through increased market share in this paper we show this is not always the case we introduce the construct assortment type and demonstrate that the effect of assortment size on brand share is systematically moderated by assortment type we define an alignable assortment as a set of brand variants that differ along a single compensatory dimension such that choosing from that assortment only requires within attribute trade offs in contrast we define a nonalignable assortment as a set of brand variants that simultaneously vary along multiple noncompensatory dimensions demanding between attribute trade offs in turn we argue that an alignable assortment can efficiently meet the diverse tastes of consumers thereby increasing brand share but that a nonalignable assortment increases both the cognitive effort and the potential for regret faced by a consumer thereby decreasing brand share we term this effect overchoice across three studies we provide evidence of overchoice and tie the effect to the effort and regret brought about by nonalignability in the process we demonstrate that simplification of information presentation reversibility of choice and a reduction in underlying nonalignability serve to reduce or eliminate this effect

tropic trust versus nordic trust experimental evidence from tanzania and sweden undergraduates in tanzania and sweden participated in one trust game one dictator game and answered a standard set of survey questions relating to trust in both countries we detected a strong and significant relation between dictator donations and proportions returned in trust games indicating that unconditional distribution preferences matter in trust game behaviour in sweden incentive compatible evaluations of unrevealed dictator donations significantly predicted the amount sent in trust games the predictive power of survey trust questions differed between countries a plausible relation between survey trust and trust behaviour was found in sweden but not in tanzania

how does the stock market react to the announcement of green policies abstract we investigate the impact of 19 announcements of environmental regulation on the equities listed on the australian stock exchange over the period 2005 2011 using a well established event study methodology we assess whether these announcements are value constructive or destructive for equity investors additionally we estimate the change in systematic risk following the announcements our results show that the australian market was particularly sensitive to the carbon pollution reduction scheme cprs announcement a cumulative abnormal return of 31 was recorded in the alternative energy sector after australia submitted its target range to the copenhagen accord we observe that a move towards a greener nation has a mixed effect on abnormal returns with apparent sector by sector differences green policies appear to affect the long term systematic risk of industries leading to the diamond risk phenomenon

indecisiveness undesirability and overload revealed through rational choice deferral three reasons why decision makers may defer choice are indecisiveness between various feasible options unattractiveness of these options and choice overload this paper provides a choice theoretic explanation for each of these phenomena by means of three deferral permitting models of decision making that are driven by preference incompleteness undesirability and complexity constraints respectively these models feature rational choice deferral in the sense that whenever the individual does not defer he chooses a most preferred feasible option as a result choices are always consistent with the weak axiom of revealed preference the three models suggest novel ways in which observable data can be used to recover preferences as well as their indecisiveness desirability and complexity components or thresholds several examples illustrate the relevance of these models in empirical and theoretical applications

poverty in dictator games awakening solidarity abstract this paper investigates the effect of recipient poverty and medicines on dictator game giving we develop a new design with three variants 1 subjects do not know they are participating in an experiment 2 dictators receive three 5 bills instead of 15 coins 3 three recipients are used instead of one we performed three different treatments regarding the information about recipients i no info condition ii poverty dictators were informed that their recipients were poor iii medicines donations were given in the form of medicines instead of money we found that 46 percent of the subjects gave the full endowment in the poverty treatment while in the medicines treatment this percentage increased to 72 percent

cognitive reflection and the valuation of energy efficiency abstract based on a stated choice experiment among about 3 600 german households heads on the purchase of electricity using durables this paper explores how cognitive reflection influences consumers valuation of energy efficiency and investigates the interaction with consumers response to the eu energy label our results indicate that consumers with low cognitive reflection value energy efficiency less furthermore we demonstrate that consumers with a low level of cognitive reflection primarily choose appliances based on grade like energy efficiency classes rather than detailed information on annual energy use

does social capital promote industrialization evidence from a rapid industrializer a new stylized fact in development economics is the importance of social capital in promoting economic growth this paper examines the effect of social capital on industrialization in indonesia we analyze a rich set of social capital and social interaction measures including voluntary associational activity and levels of trust and informal cooperation the main finding is that initial social capital does not predict subsequent industrial development across 274 indonesian districts though these findings are for only a single nation and may not apply everywhere they call into question recent claims regarding social capital and economic development

ballot position choice fatigue and voter behaviour in this paper we examine the eect of choice fatigue on decision making we exploit a natural experiment in which voters face the same contest at dierent ballot positions due to dierences in the number of local issues on their ballot facing more decisions before a given contest signi cantly increases the tendency to abstain or rely on decision shortcuts such as voting for the status quo or the rst listed candidate we estimate that without choice fatigue abstentions would decrease by 8 and 6 of the propositions in our dataset would have passed rather than failed

on the empirics of social capital this paper critically examines the way in which empirical evidence is developed in support of a role for social capital in socioeconomic outcomes three leading studies of social capital are reviewed and in each case argued to suffer from various identification problems a general set of conditions under which social capital effects may be identified in linear models is given careful attention to these conditions combined with greater openmindedness as to what constitutes appropriate evidence seems the best route to improving empirical studies of social capital

do you trust your brethren eliciting trust attitudes and trust behavior in a tanzanian congregation this paper describes one possible method for using subject pools other than undergraduate students we also report the results from an experiment in which 145 subjects belonging to a specific church in dar es salaam tanzania were exposed to a trust game and a standard set of attitudinal survey questions in order to study trust and trustworthiness two concepts that are likely to be at the core of the formation of social capital issues of method are discussed and the results are contrasted with those from a trust game with tanzanian undergraduate students as the subject pool c 2006 elsevier b v all rights reserved

trust and cooperation social capital and community resource management social capital is one of the main determinants of community resource management success we use the average amount sent in a trust game as a measure of social capital in five rural villages in india combining these experimental data with household surveys we analyze i how the amount sent is correlated with socio cultural community characteristics ii how social capital affects community resource management and iii to what extent experimental play is consistent with real on farm behavior in terms of providing a semi public good the results are interesting from a policy perspective and provide insight into bridging the gap between lab experiments and the field

volatility behavior of oil industrial commodity and stock markets in a regime switching environment abstract this study supplements previous regime switching studies on wti crude oil and finds two possible volatility regimes for the strategic commodity prices of brent oil wti oil copper gold and silver and the s p 500 index but with varying high to low volatility ratios the dynamic conditional correlations dccs indicate increasing correlations among all the commodities since the 2003 iraq war but decreasing correlations with the s p 500 index the commodities also show different volatility persistence responses to financial and geopolitical crises while the s p 500 index responds to both financial and geopolitical crises implications are discussed

order in product customization decisions evidence from field experiments differentiated product models are predicated on the belief that a product s utility can be derived from the summation of utilities for its individual attributes in one framed field experiment and two natural field experiments we test this assumption by experimentally manipulating the order of attribute presentation in the product customization process of custom made suits and automobiles we find that order affects the design of a suit that people configure and the design and price of a car that people purchase by influencing the likelihood that they will accept the default option suggested by the firm

concurrent elections and turnout causal estimates from a german quasi experiment conventional wisdom suggests that scheduling elections concurrently with other contests increases turnout however causal empirical evidence in favor of this claim is scarce at best moreover it is a priori unclear whether theory would predict a higher turnout if two low office elections are combined instead of a combination of a low office election and a major electoral race using a quasi experiment and a difference in differences estimation approach at the german municipality level i provide evidence that combining two low office elections significantly increases turnout

the dependence structure across oil wheat and corn a wavelet based copula approach using implied volatility indexes abstract this paper examines the dependence structure between three commodities implied volatility indexes oil wheat and corn during bear normal and bull markets and at different scales for this purpose we combine wavelet and copula methods to analyse the changes of the tail dependence at different scales or investment horizons the results support evidence of time varying asymmetric tail dependence between the pair of cereals as well as between oil and the two cereals at different time horizons short term horizon medium term horizon and long term horizon suggesting that the dependence structure is sensitive to time horizons these results have important implications for the analysis of portfolio risk management

in search of homo economicus behavioral experiments in 15 small scale societies we can summarize our results as follows first the canonical model is not supported in any society studied second there is considerably more behavioral variability across groups than had been found in previous cross cultural research and the canonical model fails in a wider variety of ways than in previous experiments third group level differences in economic organization and the degree of market integration explain a substantial portion of the behavioral variation across societies the higher the degree of market integration and the higher the payoffs to cooperation the greater the level of cooperation in experimental games fourth individual level economic and demographic variables do not explain behavior either within or across groups fifth behavior in the experiments is generally consistent with economic patterns of everyday life in these societies

the impact of terrorism on financial markets an empirical study the main focus of this paper is to previous termstudynext term empirically the previous termimpact of terrorismnext term on the behavior of stock bond and commodity previous termmarkets next term we consider terrorist events that took place in 25 countries over an 11 year time period and implement our analysis using different methods an event previous termstudynext term approach a non parametric methodology and a filtered garch evt approach in addition we compare the effect of terrorist attacks on previous termfinancial markets with the impactnext term of other extreme events such as previous termfinancialnext term crashes and natural catastrophes the results of our analysis show that a non parametric approach is the most appropriate method among the three for analyzing the previous termimpact of terrorism on financial markets next term we demonstrate the robustness of this method when interest rates equity previous termmarketnext term integration spillover and contemporaneous effects are controlled we show how the results of this approach can be used for investors portfolio diversification strategies against previous termterrorismnext term risk

upstream downstream transactions and watershed externalities experimental evidence from kenya abstract where environmental policies or projects seek behavioral change understanding underlying norms and preferences is essential to securing environmental outcomes this study models a payment for environmental services intervention in an experimental field laboratory in nyanza province kenya upstream and downstream individuals are paired in a standard investment game in which the upstream mover s investment represents land use decisions and the downstream mover responds with a choice of compensation payment the experimental intervention introduces an enforcement treatment on the downstream movers compensation decisions for a single round underlying social preferences and identity appear to shape individual transactions between upstream and downstream individuals upstream first movers are sensitive to the removal of the enforcement on their downstream partners in the second round and make decisions consistent with crowding out of social preferences the results suggest that environmental interventions may affect resource decisions for individuals who are not themselves direct targets of enforcement

rain emotions and voting for the status quo abstract do emotions affect the decision between change and the status quo we exploit exogenous variation in emotions caused by rain and analyze data on more than 870 000 municipal vote outcomes in switzerland to address this question the empirical tests are based on administrative ballot outcomes and individual postvote survey data we find that rain decreases the share of votes for political change our robustness checks suggest that this finding is not driven by changes in the composition of the electorate and changes in information acquisition in addition we provide evidence that rain might have altered the outcome of several high stake votes we discuss the psychological mechanism and document that rain reduces the willingness to take risks a pattern that is consistent with the observed reduction in the support for change

governance land and distribution a discussion on the political economy of community based conservation abstract the effectiveness of community based conservation cbc has been under discussion through the review of cbc initiatives in developing countries we contribute to the debate by analysing how players influence different factors that determine the outcomes of cbc we highlight several points first the promise of benefits has been overshadowed by constraints on the extraction of natural resources along with the use of governmental schemes to extract partially the rents from cbc which has left little to share inside the communities second cbc design and implementation has often overlooked the asymmetries of power within the community and at the individual level which has produced unequal access to the design decision making and outcomes of this activity third while the elites have had a determinant role in shaping the governance of cbc external agents promotion of cbc has tended to reproduce the existent negotiating power at the community local and national levels fourth land contestation plays a key role in the dynamics of relationship and conflict between the governments corporate interests and the communities finally cbc adaptation to new scenarios depends critically on the process of community empowerment and the building of networks with external agents

rate of time preference intertemporal elasticity of substitution and level of wealth the rate of time preference rtp and the intertemporal elasticity of substitution ies are two important factors shaping intertemporal consumption decisions models in which the rtp and or the ies differ systematically between rich and poor households have different empirical and policy implications for economic development growth and the distribution of income and consumption from those of standard models in which these parameters are constant across households in this chapter we estimate a model in which both rtp and ies are allowed to differ across rich and poor households using household level panel data from india our empirical results are consistent with the view that the rtp is constant across poor and rich households but the ies is larger for the rich than it is for the poor

decision fatigue and heuristic analyst forecasts abstract psychological evidence indicates that decision quality declines after an extensive session of decision making a phenomenon known as decision fatigue we study whether decision fatigue affects analysts judgments analysts cover multiple firms and often issue several forecasts in a single day we find that forecast accuracy declines over the course of a day as the number of forecasts the analyst has already issued increases also consistent with decision fatigue we find that the more forecasts an analyst issues the higher the likelihood the analyst resorts to more heuristic decisions by herding more closely with the consensus forecast self herding i e reissuing their own previous outstanding forecasts and issuing a rounded forecast finally we find that the stock market understands these effects and discounts for analyst decision fatigue

contextual inference in markets on the informational content of product lines context can influence decisions this malleability of choice is usually invoked as evidence that people do not maximize stable preference orderings in a market equilibrium however context conveys payoff relevant information to consumers consequently these consumers rationally violate naive formulations of standard choice theoretic principles i identify informational asymmetries under which apparently anomalous behaviors namely the compromise effect and choice overload arise as market equilibria firms respond to consumers contextual inference in case of the compromise effect a firm may introduce premium loss leaders expensive goods of overly high quality that increase the demand for other goods

spousal control and intra household decision making an experimental study in the philippines i elicit causal effects of spousal observability and communication on financial choices of married individuals in the philippines when choices are private men put money into their personal accounts when choices are observable men commit money to consumption for their own benefit when required to communicate men put money into their wives account these strong treatment effects on men but not women appear related more to control than to gender men whose wives control household savings respond more strongly to the treat ment and women whose husbands control savings exhibit the same response changes in information and communication interact with underlying control to produce mutable gender specific outcomes

free markets and fettered consumers are consumers sufficiently self interested and self reliant so that privatized markets deliver the efficiency and welfare gains they promise why are consumers uncomfortable in markets and in some case sufficiently opposed to market solutions to prevent their implementation what can be done to prepare consumers so that they function satisfactorily in markets and understand the advantages of market based resource allocation this paper examines the foundations of consumer behavior and attitudes in markets and proposes a program of scientific research to determine how consumers cope in privatized markets and the implications for market design of the limits of self reliance

five capital impact assessment appraisal framework based on theory of sustainable well being abstract this paper sets out to formulate an appraisal approach in context with sustainable development in conventional project appraisal such as energy undertakings most emphasis is placed on financial flows and rate of return on infrastructure investments although current greenhouse gas emissions are estimated to pose large costs on future generations these emissions are generally not estimated as part of the investment cost other public goods may also be omitted because their value is not recognized we review conventional cost benefit assessment and propose a new broader evaluation this new evaluation approach is based on the theory that five capital value types support long term well being rather than economic growth alone the theory states that humans depend on the size of stocks and flows from natural manufactured human social and financial capital we describe the five capitals to illustrate the value categories and outline an approach to evaluate all these in the context of energy development

the effects of recent terrorist attacks on risk and return in commodity markets abstract the event study methodology of brown and warner 1985 is adopted and augmented to evaluate the effect of the recent terrorist attacks on risk and returns in commodity markets the methodology is supplemented with various techniques such as the non parametric ranking test and kernel regression to find out if 20 terrorist attacks including in paris nice brussels stockholm manchester jakarta london and melbourne generated abnormal returns asset pricing models are fitted with interaction variables while garch tarch egarch and parch models are used to determine changes in systematic risk our results show abnormal returns and delayed reactions of up to 120 days in the commodity markets evidence which defies the efficient market hypothesis in addition we identify sector and commodity effects in risk analysis

what are the categories of geopolitical risks that could drive oil prices higher acts or threats abstract this study characterizes the oil market as a nonlinear switching phenomenon and examines its dynamics in response to changes in geopolitical risks over low and high risk scenarios we separate the shocks due to geopolitical acts from those due to geopolitical threats to address whether the serious effects of geopolitical risks are mostly due to increased threats of adverse events or to their realization as acts while we find the acts to generate a positive and strong impact on oil price dynamics the effect of threats appears to be moderate or non significant imperfect information in the oil price determination the history of oil supply disruptions emanating from geopolitical events the continued rise in populism in the world oil market volatility multifractility and the time varying degree of weak form efficiency have been advanced to explain the unforeseen responses of oil prices to geopolitical threats to accommodate recent oil related events we construct a composite geopolitical risk indicator by accounting for contemporaneous sources of geopolitical risks namely global trade tensions us china relation risks us iran tensions saudi arabia s uncertainty and venezuela s crisis the combined effects have an outsized impact on oil prices

african evidence on the relation of poverty time preference and the environment abstract it is typically argued in the economics literature that the poor operate with a higher rate of time preference than their wealthier counterparts the poor it is suggested have a higher rate of time preference because they are more concerned about present survival than they are about saving for the future such thinking is also central to the economic growth for environmental conservation and the poverty induced environmental degradation arguments according to these assertions wealth allows people to consider the future and invest in environmental conservation and poverty leaves people with no alternative but to exploit the environment so that they may feed their families today evidence from the food security and famine early warning fields suggests that households in many african contexts behave quite to the contrary during periods of food shortage poor households will often undertake extreme measures in the present including depriving the family of needed calories in order to preserve productive capital for the future such as a plough oxen or seed stock this evidence suggests that poor african households may in fact have very low rates of time preference this calls into question our general assumptions about discount rates for developing countries for which rates of time preference are a theoretical determinant

choosing not to choose on the link between information and abstention abstract we use a dataset that allows us to circumvent a number of estimation difficulties that have plagued previous studies of the relationship between information and abstention our results show that information is a major determinant of abstention

anticipation acquisitions and bidder returns industry shocks and the transfer of information across rivals we document market anticipation of merger bids and show that less anticipated bids earn significantly higher announcement returns subsequent bidders in the industry experience significant and positive abnormal returns around the time of initial industry bid announcements these results suggest that announcement period returns underestimate the wealth effects of bidding after accounting for anticipation bidding activity is on average a significant wealth creating event moreover bidders pursuing public targets increase shareholder wealth and bidders in stock swaps do not lose these results contradict conventional wisdom our results shed light on the correct magnitude of acquisition returns and on the transfer of information throughout an industry around the time of an economic shock the author 2011 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

supersized votes ballot length uncertainty and choice in direct legislation elections voters in polities that make heavy use of direct democracy are frequently confronted with ballots that contain a multitude of propositions claims that direct legislation elections overwhelm voters with choices they are not competent to make should particularly apply to such demanding settings yet evidence on the effects of lengthy ballots on voting behavior is scant this study reviews theories of decision making under uncertainty and tests their predictions in a mixed heteroscedastic model of vote choice that is fitted to a unique collection of survey and contextual data on swiss referendums increasing ballot length is demonstrated to interfere with the voters ability to translate their political preferences into consistent policy choices

financial decision making are women really more risk averse 40 males 33 females gain gambling gain domain loss gambling loss domain a contextual frames b abstract gambling frames studies the application of experimental methods provided stronger control of the economic environment in which decisions were made we elicited data which call into question the prevalence of stereotypic risk attitudes in financial decision making first we find that the comparative risk propensity of male and female subjects is strongly dependent on the financial decision setting second and more important we observe no gender differences in risk propensity when subjects face contextual decisions since in practice financial decisions are always contextual our results suggest that the above gender stereotype may not reflect true male and female attitudes toward financial risks i gender specific risk behavior an experimental design our experiment was designed to examine gender specific risk propensity in decisions relevant for investors and managers table 1 gives an overview of the experimental design in the main treatment we implemented risky choices in the form of investment and insurance decisions choice behavior in this treatment henceforth called the context treatment directly measures the risk behavior of male and female subjects in contextual financial decisions we also ran a control treatment in which the same risky choices were presented as abstract gambling decisions this control treatment henceforth called the abstract treatment allows us to validate the risk behavior induced by our experimental procedure in the light of the above mentioned gambling evidence in the context treatment subjects were confronted with risky choices in two different decision contexts subjects first had to complete a series of investment decisions they were then presented with a series of identical choices this time however framed as insur1 wealth effects from income differences outside the laboratory may still affect risk behavior in our experiment they are controlled for in our model 2 experimental instructions are available in german from the authors or in english from our web page www wif ethz ch publikationen htm ance decisions each investment and insurance decision incorporated a choice between a risky lottery and a certain payoff with the series of choices implemented in the two frames we elicited our subjects certainty equivalents for the same four risky lotteries l1 l2 l3 l4 in both contexts we implemented two frames in the context treatment in order to measure the risk propensity of subjects toward both perceived gains and perceived losses in both frames all possible payoffs for each decision were positive in the investment frame these payoffs were also presented as gains while in the insurance frame the same payoffs were presented as losses relative to an initial endowment therefore elicited certainty equivalents in the investment frame measure subjects risk propensities in the gain domain while certainty equivalents in the insurance frame measure risk propensity in the loss domain if in contextual financial decisions female subjects are generally more risk averse than men our results should display ceteris paribus lower female certainty equivalents in both the investment and insurance frames 3 the four lotteries l1 l2 l3 and l4 each had two possible outcomes payoffs in swiss francs 1 sfr a 0 60 and their probabilities were 30 sfr 6 10 sfr 6 30 sfr 2 10 sfr 2 30 sfr 6 10 sfr 6 and 50 sfr 2 20 sfr 2 respectively 4 experimental evidence suggests that individual risk propensity will vary systematically between the gain and loss domain daniel kahneman and amos tversky 1979 383 vol 89 no 2 gender and economic transactions 3y16 my68 mp 383 friday dec 10 08 20 am lp aer my68 figure 1 differences in mean certainty equivalents ce between male and female subjects by frame note certainty equivalents and male female differences are measured in swiss francs in the abstract treatment we confronted a different group of subjects with exactly the same risky decisions as those in the main treatment however as mentioned before all choices in this control treatment were framed as abstract gambling decisions again two frames were implemented in the gaingambling and loss gambling frames we measured the risk attitudes of subjects toward gambles in the gain and loss domain respectively subjects in both treatments were told in advance that one of their choices would determine their experimental earnings further all subjects completed a post experimental questionnaire which yielded information on each subject s disposable income this information is necessary to exclude wealth effects due to income differences outside the laboratory as an explanation of gender specific choice behavior

altruism spillovers are behaviors in context free experiments predictive of altruism toward a naturally occurring public good abstract this paper addresses the external validity of experiments investigating the characteristics of altruism in the voluntary provision of public goods we conduct two related experiments that allow us to examine whether individuals who act more altruistically in the context free environment are also more likely to act altruistically toward a naturally occurring public good we find that laboratory behavior can be predictive of contributions toward naturally occurring goods but not in a uniform way in fact parametric measures of altruism do a poor job of predicting which subjects are most likely to contribute to a naturally occurring public good

estimating individual discount rates in denmark a field experiment we estimate individual discount rates with respect to time streams of money using controlled laboratory experiments these discount rates are elicited by means of field experiments involving real monetary rewards the experiments were carried out across denmark using a representative sample of 268 people between 19 and 75 years of age individual discount rates are estimated for various households differentiated by socio demographic characteristics such as income and age our conclusions are that discount rates are constant over the 12 month to 3 year horizons used in these experiments and that discount rates vary substantially with respect to several socio demographic variables hence we conclude that it would be reasonable to assume constant discount rates for specific household types but not the same rates across all households

follow the leader theory and evidence on political participation using state by state voting data for u s presidential elections the authors observe that voter turnout is a positive function of predicted closeness to explain the strategic component of political participation they develop a follow the leader model political leaders expend effort according to their chance of being pivotal which depends on the expected closeness of the race at both state and national levels and how voters respond to their effort structural estimation supports this model for example a 1 percent increase in the predicted closeness at the state level stimulates leaders efforts which increases turnout by 0 34 percent

how black candidates affect voter turnout both black and white voter turnout increases 2 3 percentage points with each black democrat on the ballot given the groups representations in the population the white response is numerically greater whites of both parties are less likely to vote for their parties candidate when s he is black the turnout findings are not explained away by voter election or politician characteristics however the fact that there is no turnout response to black republicans suggests that a perception of blacks ideology may be a factor

the adoption and impact of soil and water conservation technology an endogenous switching regression application this paper identifies the factors that affect farmers decisions to adopt soil and water conservation technology in africa and how this technology impacts farm yields and net returns this technology is important because it improves efficiency of water use from rainfall a critical issue in water deficient sub saharan africa an analysis of new data from a survey of 342 rice farmers in northern ghana shows that farmers education capital and labor constraints social networks and extension contacts and farm soil conditions mainly determine adoption of field ridging and the adoption of this technology increases rice yields and net returns significantly jel q15 q24

tying odysseus to the mast evidence from a commitment savings product in the philippines we designed a commitment savings product for a philippine bank and implemented it using a randomized control methodology the savings product was intended for individuals who want to commit now to restrict access to their savings and who were sophisticated enough to engage in such a mechanism we conducted a baseline survey on 1777 existing or former clients of a bank one month later we offered the commitment product to a randomly chosen subset of 710 clients 202 28 4 percent accepted the offer and opened the account in the baseline survey we asked hypothetical time discounting questions women who exhibited a lower discount rate for future relative to current trade offs and hence potentially have a preference for commitment were indeed significantly more likely to open the commitment savings account after twelve months average savings balances increased by 81 percentage points for those clients assigned to the treatment group relative to those assigned to the control group we conclude that the savings response represents a lasting change in savings and not merely a short term response to a new product

a unit root model for trending time series energy variables in this paper we propose a garch based unit root test that is flexible enough to account for a trending variables b two endogenous structural breaks and c heteroskedastic data series our proposed model is applied to a range of time series trending and heteroskedastic energy variables our two main findings are first the proposed trend based garch unit root model outperforms a garch model without trend and second allowing for a time trend and two endogenous structural breaks are important in practice for doing so allows us to reject the unit root null hypothesis

understanding conditions for co management a framed field experiment amongst the tsimane bolivia we experimentally assess the willingness to self enforce restricted resource use by playing a common pool resource extraction game in four tsimane indigenous communities in the bolivian amazon we analyse the role of trust in participant s willingness to self restrict resource use and collaborate with the authorities contrary to game behaviour in the industrialized world we find that amongst the tsimane extractions decrease across rounds we also find that participants who trust a non tsimane and b the authorities extract less than other participants but findings are not robust across rounds using the economic and anthropological literature we interpret the findings arguing that trust in non tsimane which is strongly correlated with market access may capture generalized trust levels and that people with higher levels of generalized trust interact more easily in non personal transactions like the situation presented in the game as co management also entails non personal interactions with and trust in the authorities our findings seem relevant for community based conservation and co management

event studies in economics and finance the event study is an important research tool in economics and finance the goal of an event study is to measure the effects of an economic event on the value of firms event study methods exploit the fact that given rationality in the marketplace the effects of an event will be reflected immediately in security prices thus the impact can be measured by examining security prices surrounding the event in this paper event study methods are described including some of the potential complications an example is included to illustrate the approach