gender differences in trust and reciprocity evidence from a large scale experiment with heterogeneous subjects this article examines gender differences in an experimental trust game recent studies have shown that men trust more and that women are more reciprocal in laboratory experiments participants in these studies however are typically university students who may not be representative of the entire population in this study we use data from a large scale experiment with heterogeneous subjects who are representative of the german population we find that men exhibit not only more trusting behaviour but also more reciprocating behaviour than women moreover our results are indicative of age dependent gender differences for men we find an inverse u shaped relationship between age on the one hand and both trust and reciprocity on the other however we do not find age effects for women

the impact of microfinance on energy access a case study from peripheral districts of lome togo this study seeks to understand the impact of microfinance on energy access in the peripheral districts of lome in togo we use descriptive statistics multiple regression propensity score matching

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

off grid energy services for the poor introducing led lighting in the millennium villages project in malawi lanterns that use light emitting diodes leds powered by batteries which are in turn charged by grid electricity or small solar panels have emerged as a cost competitive alternative to kerosene and other fuel based lighting technologies offering brighter light for longer duration at equal or lower cost over time this paper presents lessons learned from the introduction of solar led lanterns in rural malawi we discuss a market based program using new and existing local commercial structures such as vendors and cooperatives to sell lanterns to village households without subsidy the paper addresses issues of enterprise development community interactions and survey data on lighting use and expenditure patterns before and after led lantern introduction households that purchased a lantern reported high levels of satisfaction with the led lanterns as well as savings in annual kerosene expenditure comparable to the price of the lantern these households also reported monthly incomes comparable to the price of the led lanterns whereas non adopters surveyed reported monthly incomes about half this level suggesting a need for financing options to maximize adoption among poorer populations in rural areas these results suggest that similar market based models of led lighting technology dissemination have the potential to be replicated and scaled up in other off grid regions in developing countries however viability of local cooperatives and supply chains for lantern products over the medium to long term remain to be assessed

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

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

estimation of returns to scale using data envelopment analysis a comment banker 1984 introduced the idea that the sum of the intensity variables in the dea activity analysis model can be used to identify returns to scale a counterexample in chang and guh 1991 shows that banker s method may fail this prompted banker and thrall 1992 to develop an alternative approach to estimate scale efficiency using dea seemingly unaware of the work by byrnes fare and grosskopf 1984 fare grosskopf and lovell 1985 1994 and fare and grosskopf 1985 etc on the same topic their new approach is very similar to the methodology originated in these references the purpose of this comment is to make our method known and to contrast it to the banker and thrall 1992 approach

on representative social capital abstract this paper analyzes the behavior of subjects randomly drawn from the dutch population who reveal their capacity to provide and sustain social capital by their propensity to invest and reward investments in an economic experiment we find that heterogeneity in behavior is characterized by several asymmetries men the young and elderly and low educated individuals invest relatively less but reward significantly more investments the age effects are found to corroborate existing findings whereas those of gender and education do not higher expected levels of investments by others are found to have a positive and significant effect on own investments finally a laboratory experiment with student subjects is found to provide a lower bound of the population level of social capital

if the worst comes to the worst dictator giving when recipient s endowments are risky abstract donors may often not be sure whether a recipient really needs their help does this uncertainty deter generosity we experimentally investigate a situation in which donors do not know the financial endowment of the recipient for certain but still have some information on the distribution the endowments are drawn from in the experiment we find that uncertainty does not deter generosity in fact if we filter out selfish dictators under most specifications of uncertainty dictators give more compared with the donation dictators make to a recipient they know to have the expected value of the endowment with certainty they are particularly concerned about the possibility of a recipient leaving the lab with no payoff from the game

trust and reciprocity between spouses in india abstract i present results from the first trust game conducted among married couples the experiment consisted of a one shot trust game where spouses were taken into separate rooms not allowed to communicate given a significant endowment and both strategies and payoffs were common knowledge results indicate that only 3 percent of spouses in the sender role transfer the entire amount the average proportion sent is 57 percent of the endowment the limited sending is costly because the household on average is walking away with half of the potential earnings the results provide further evidence of the lack of pareto efficiency within the household

energy microfinance intervention for below poverty line households in india more than 72 of india s population resides in rural india1 and it also has a high concentration of people living under abject poverty of the total rural population 27 1 28 3 lives below the poverty line2 bpl a lack of energy finance options is hampering the quality of life of the bpl community the members of this disadvantaged household which forms 27 1 and 23 6 of the india s rural and urban population3 has no ready access to mainstream finance or know how of sustainable energy products nor do they have access to energy service providing agency this lack of energy finance options has provided the marginalized population little means to break the conventional energy paradigm and the corresponding poverty cycle considering the afore mentioned problem we propose an energy microfinance intervention or a model that encompasses two independent entities one has an energy expertise and the other possesses finance management skills alternately we also propose a special purpose entity that comprises of these two entities this entity fosters different institutional technical and financial engineering approaches to the provision of energy finance and infrastructure services necessary for poverty alleviation

modern energy access to all in rural india an integrated implementation strategy abstract expanding energy access to the rural population of india presents a critical challenge for its government the presence of 364 million people without access to electricity and 726 million who rely on biomass for cooking indicate both the failure of past policies and programs and the need for a radical redesign of the current system we propose an integrated implementation framework with recommendations for adopting business principles with innovative institutional regulatory financing and delivery mechanisms the framework entails establishment of rural energy access authorities and energy access funds both at the national and regional levels to be empowered with enabling regulatory policies capital resources and the support of multi stakeholder partnership these institutions are expected to design lead manage and monitor the rural energy interventions at the other end trained entrepreneurs would be expected to establish bioenergy based micro enterprises that will produce and distribute energy carriers to rural households at an affordable cost the escos will function as intermediaries between these enterprises and the international carbon market both in aggregating carbon credits and in trading them under cdm if implemented such a program could address the challenges of rural energy empowerment by creating access to modern energy carriers and climate change mitigation

distinguishing trust from risk an anatomy of the investment game the role of trust in promoting economic activity and societal development has received considerable academic attention by social scientists a popular way to measure trust at the individual level is the so called investment game berg dickhaut and mccabe 1995 it has been widely noted however that risk attitudes can also affect decisions in this game and thus in principle confound inferences about trust we provide novel evidence shedding light on the role of risk attitudes for trusting decisions to the best of our knowledge our data are the first rigorous evidence that i aggregate investment distributions differ significantly between trust and risk environments and ii risk attitudes predict individual investment decisions in risk games but not in the corresponding trust games our results are convergent evidence that trust decisions are not tightly connected to a person s risk attitudes and they lend support to the trust interpretation of decisions in investment games

gordon tullock and experimental economics gordon tullock s research has substantially influenced the development of economic science in general and experimental economics in particular we present the first comprehensive survey of this significant achievement we show how tullock s research in bioeconomics influenced later developments in neuroeconomics and how his pioneering work on rent seeking generated a literature of laboratory tests of his hypothesis we also describe tullock s own experiments and draw attention to his early insights on trust games

competition vs communication an experimental study on restoring trust trust is fragile it is hard to build but easy to destroy in this paper we explore the fragility of trust in a stylized laboratory environment we ask whether transgression outside a direct send and return relationship destroys trust and if so whether a competition against outsiders or an apology for misdeeds helps restore it we find that transgression significantly reduces trust and that the broken trust can be greatly restored by group competition communication via an apology impersonal or not has an insignificant impact by contrast offering explanations for misbehavior is as effective as group competition

computing economies of vertical integration economies of scope and economies of scale using partial frontier nonparametric methods abstract so far in the nonparametric literature only full frontier nonparametric methods have been applied to search for economies of scope and scale particularly the data envelopment analysis method dea however these methods present some drawbacks that might lead to biased results this paper proposes a methodology based on more robust partial frontier nonparametric methods to look for scope and scale economies through this methodology it is possible to assess the robustness of these economies and in particular to assess the influence that extreme data or outliers might have on them the influence of the imposition of convexity on the production set of firms was also investigated this methodology was applied to the water utilities that operated in portugal between 2002 and 2008 there is evidence of economies of vertical integration and economies of scale in drinking water supply utilities and in water and wastewater utilities operating mainly in the retail segment economies of scale were found in water and wastewater utilities operating exclusively in the wholesale and in some of these utilities diseconomies of scope were also found the proposed methodology also allowed us to conclude that the existence of some smaller utilities makes the minimum optimal scales go down

can product demonstrations create markets for sustainable energy technology a randomized controlled trial in rural india abstract the literature on sustainable energy technology sees informational barriers as a major obstacle to technology adoption in the case of solar home systems recent studies report positive socio economic effects on households but technology adoption remains underwhelming in collaboration with a local solar technology provider we conduct a randomized controlled trial in 75 large villages in the state of uttar pradesh india to examine the ability of village solar demonstrations to create markets for solar home systems we find no effect of such demonstrations on technology sales awareness or perceptions of solar technology technology adopters report high levels of satisfaction with product quality and service suggesting that the null finding cannot be attributed to poor technology these findings suggest that lack of awareness is not a binding constraint on the growth of solar technology markets in the study area based on additional surveys we find evidence suggesting that access to credit from rural banks is an important explanation for variation in sales across villages these results do not prove that information and awareness are irrelevant in general but they show that even carefully designed marketing campaigns cannot increase demand for new products in the presence of a binding credit constraint

in aid we trust hearts and minds and the pakistan earthquake of 2005 in 2005 an earthquake in northern pakistan led to a significant inflow of international relief groups four years later trust in europeans and americans was markedly higher among those exposed to the earthquake and the relief that followed these differences reflect the greater provision of foreign aid and foreigner presence in affected villages rather than preexisting population differences or a general impact of disasters on trust we thus demonstrate large scale durable attitudinal change in a representative muslim population trust in westerners among muslims is malleable and not a deeply rooted function of preferences or global as opposed to local policy and actions

moral hazard and reciprocity we investigate the motives behind reciprocal behavior by making selfish acts anonymous and not common knowledge in one treatment subjects were assigned to the role of proposer or responder and played a trust game with random matching for 20 rounds in a second treatment the modified game the procedures were the same but responders were allowed to choose with only 80 probability with 20 probability responders were restricted to keep any money passed only responders knew whether they were restricted or not we find that the behavior of responders is different in this modified trust game the fact that responders can hide selfish acts generates more selfish behavior this in turn makes proposers less likely to pass money to responders thereby destroying trust we find important session effects in the standard trust game but less so in the modified game our experiments show that information conveyed in actions is important to subjects decisions

altruism reciprocity and health a social experiment in restaurant choice abstract we used an experimental game to determine whether people imitate restaurant choice reciprocate food gifts and thus spread health choices we randomly paired 138 subjects and recorded their decision to give or keep restaurant vouchers and their choice of restaurant the majority 83 3 chose an unhealthy restaurant if their randomly assigned partner chose an unhealthy restaurant similarly 77 8 chose a healthy restaurant if their partner did p 0 005 the altruistic were more likely to choose a healthy restaurant p 0 017 in sum restaurant choice is influenced by reciprocity a cycle of projection gifting and reciprocation may explain the social dynamics of food choice we propose policies that capitalize on people s tendency towards altruism and imitation

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

trust under the prospect theory and quasi hyperbolic preferences a field experiment in vietnam abstractwe conduct a field experiment in vietnamese villages to explore the effect of the prospect theory and of quasi hyperbolic time preferences parameters on trust and trustworthiness we find that risk aversion loss aversion and present bias do not influence trustors decisions but higher time discounting increases the amount sent to trustees in the south of vietnam and probability weighting decreases it in the north if time discounting and loss aversion do not influence trustworthiness we show that more risk averse and less present biased trustees return a higher share of their wealth to the trustors these results suggest that adopting a perspective other than the expected utility theory and the exponential discounting approach of time preferences enables one to uncover some channels by which risk and intertemporal time preferences influence trusting behavior in societies

beliefs and actions in the trust game creating instrumental variables to estimate the causal effect in many economic contexts an elusive variable of interest is the agent s expectation about relevant events e g about other agents behavior recent ex perimental studies as well as surveys have asked participants to state their beliefs explicitly but little is known about the causal relation between beliefs and other behavioral variables this paper discusses the possibility of creating exogenous in strumental variables for belief statements by shifting the probabilities of the rele vant events we conduct trust game experiments where the amount sent back by the second player trustee is exogenously varied by a random process in a way that informs only the rst player trustor about the realized variation the procedure allows detecting causal links from beliefs to actions under plausible assumptions the iv estimates indicate a signi cant causal eect comparable to the connection between beliefs and actions that is suggested by ols analyses

dissemination of cooking energy alternatives in india a review abstract energy requirements for cooking account for 36 of total primary energy consumption in india the rural and urban populaces depend mainly on non commercial fuels to meet their energy needs diverse urban growth patterns have led to structural changes in economy and have important ramifications on energy consumption in household sector it is observed that india follows income based ladder starting with fuelwood and ending with sophisticated fuels like liquefied petroleum gas lpg and electricity this paper discusses cooking energy dissemination in the country with an objective of understanding the underlying socioeconomic factors governing the utilization of various fuels energy carriers in cooking the diffusion of renewable energy devices is observed to be far below their estimated potential policy interventions required for better dissemination of renewable energy based devices are also discussed

efficiency decomposition and aggregation in network data envelopment analysis abstract network data envelopment analysis dea is extended from conventional dea to explore the internal structure of network production systems so that the efficiencies are measured more appropriately there are two approaches for discussing the relationships between the system and division efficiencies efficiency decomposition and efficiency aggregation this paper develops a relational model from the viewpoint of efficiency decomposition to derive the relationships between the system and division efficiencies for network systems the system efficiency can be decomposed into a weighted average of the division efficiencies adjusted by a factor and the efficiency of the system is less than the weighted average of those of the divisions the major league baseball example that has been discussed in the literature is used to illustrate the idea presented in this paper the results of the efficiency decomposition model are compared to those obtained from an efficiency aggregation model that defines the aggregate efficiency of the divisions to be the system efficiency this system efficiency is found to be very close to a measure contained in the proposed model the proposed model can thus be used for both efficiency decomposition and aggregation

measuring economies of vertical integration in network industries an application to the water sector this paper provides a framework that aims at distinguishing the technological economies of vertical integration from the vertical economies resulting from an inefficient input allocation due to upstream market imperfections to illustrate our analysis we use consistent panel data econometric methods to estimate cost functions on a sample of north american water utilities contrary to what has been found for other network industries electricity and gas for instance we show that the global and technological economies of vertical integration are not significant except for the smallest utilities

separating reputation social influence and identification effects in a dictator game abstract this study explores the ways in which information about other individual s action affects one s own behavior in a dictator game the experimental design discriminates behaviorally between three possible effects of recipient s within game reputation on the dictator s decision reputation causing indirect reciprocity social influence and identification the separation of motives is an important step in trying to understand how impulses towards selfish or generous behavior arise the statistical analysis of experimental data reveals that the reputation effects have a stronger impact on dictators actions than the social influence and identification

informal risk sharing in an infinite horizon experiment author s charness gary b genicot garance abstract this paper presents the first laboratory study of risk sharing without commitment our experiment captures the main features of a simple model of voluntary insurance between two agents in the model two individuals interact over a potential infinite horizon and suffer random income shocks risk averse individuals have incentives to smooth consumption by making transfers to each other these transfers being voluntary only self enforcing risk sharing arrangements are possible transfers can never be so large as to tempt individuals to renege on them this constraint when binding has strong implications for the shape of the constrained optimal risk sharing arrangement in our experiment participants are matched in pairs each period one of them randomly drawn receives a given amount in addition to its regular income after observing both incomes each person in a pair chooses a non negative transfer to make to the other person two features of the experimental design are crucial first it is common information that all pairs will be dissolved at the end of each period with a given probability participants are informed when this occurs and randomly re matched this replicates the effect of infinite horizon and discounting in the model second at the end of the experiment a single period is randomly drawn to count for cash payment this feature is essential for individuals to care about the utility outcome of each period we find evidence generally consistent with risk sharing with most transfers coming from individuals who received h in the period moreover in support of the theory transfers are much higher with a higher continuation probability and they also are highly correlated with the individual s degree of risk aversion however while the model predicts an increase in transfers with ex ante inequality we observe the opposite effect this may reflect considerations of identity or group membership

bad news an experimental study on the informational effects of rewards both psychologists and economists have argued that rewards often have hidden costs one possible reason is that the principal may have incentives to oer higher rewards when she knows the task to be di cult our experiment tests if high rewards embody such bad news and if this is perceived by their recipients our design allows us to decompose the overall eect of rewards on eort into a direct incentive and an informational eect the results show that most participants correctly interpret high rewards as bad news in accordance with theory the negative informational eect co exists with the direct positive eect

analyzing collective action collective action problems pervade all societies as well as ecological systems used by humans substantial evidence has accrued during the last several decades that human actors are able to solve some but definitely not all collective action problems on their own without external rules and enforcement imposed from the outside in this article i review some of the structural variables that have been found to affect the likelihood of collective action then i address the need to base future work on collective action on a more general theory of human behavior than has been used to model collective action over the last five decades in the last section i discuss how structural variables affect the core relationships of reputation trust and reciprocity as these affect levels of cooperation

the efficiency of the public intervention on the environment evidence based on non parametric and parametric approaches abstract this paper evaluates the efficiency of the allocation of public resources aimed at complying with the european environmental directives a full and partial frontier data envelopment analysis dea is applied to a panel of decision making units i e a set of regions with a specific focus on the air water and biodiversity sectors the malmquist productivity index allows one to analyse regional productivity change while a post dea based upon simar wilson approach allows one to explore the factors that affect the performance overall a specific group of regions outperform for air water intervention while the reverse outcome is obtained for biodiversity the findings also show a rather low technological change especially for biodiversity the post dea indicates that an increase in the tourism and agricultural activity exerts a negative impact on the air water public efficiency while has a positive influence on biodiversity higher education in technical subjects also increases performance

assigning intentions when actions are unobservable the impact of trembling in the trust game author affiliation james c cox department of economics andrew young school of policy studies georgia state university p o box 3992 atlanta ga 30302 3992 usa jccox gsu edu corresponding authorcary a deck department of economics university of arkansas 402 wcob fayetteville ar 72701 usa cdeck walton uark eduthe authors gratefully acknowledge the support of the national science foundation grant number due 0226344 acknowledgment the paper has benefited from the suggestions of the anonymous referees 1 introductionit is well established that individuals in laboratory games do not always pursue their own maximum monetary payoff in the ultimatum game materially self interested second movers should accept any positive payoff and thus materially self interested first movers should offer the smallest possible positive amount or zero however more equal splits are frequently proposed and positive offers are often rejected 1 in an attempt to understand such behavior researchers hypothesize that subjects may attribute intentions to actions 2 for example a minimal proposal might be considered greedy by a second mover thus prompting rejection as a form of punishment a first mover may avoid making a minimal proposal in order to try to avoid rejection or because of altruistic preferences or for both reasons berg dickhaut and mccabe 1995 introduced the investment game which unlike the ultimatum game has a mutually beneficial cooperative outcome in the investment game and the related trust game described below a first mover can forgo a certain payoff in favor of a larger total payoff that will be allocated by a paired second mover while material self interest predicts that the second mover will keep everything and thus the first mover should not forgo the certain payoff more cooperative behavior is frequently observed berg dickhaut and mccabe found that 28 of 32 first movers sent more than the minimum positive amount of money and 11 of the 28 paired second movers returned a greater amount than was received this led berg dickhaut and mccabe to conclude that cooperation was a primitive aspect of behavior ortmann fitzgerald and boeing 2000 among many others find the behavioral pattern to be robust to various treatments however cox and deck 2005 find that the level of social distance in the experiment protocol can affect second mover behavior in the trust game 3 similarly in ultimatum games negative reciprocity or punishment is found to be dependent upon the context in which the game is played 4this literature indicates that choices made by individuals depend in part on the perceived intentions of other players and how people expect their decisions to be interpreted 5 generous actions by the first mover in the investment game are often interpreted as trusting while the second movers sharing the larger total payoff is often interpreted as positive reciprocity however to directly examine the significance of motives one needs to verify that behavior differs for the same nominal payoff decision in different circumstances to accomplish this one can decompose a game into a series of related games some with and some without the hypothesized motivation see cox 2004 6 for example cox and deck 2005 2006 examine the trust game and the associated dictator game in which the decision maker faces the same nominal choices as the second mover in the trust game as shown in figure 1 figure 1 frequency of actions chosen in cox and deck 2005 2006 figure omitted see article image in figure 1 the numbers at the end of a branch are the dollar payoffs in the trust game tree the top bottom number is the first second mover s payoff in the dictator game tree the bottom top is the dictator s other subject s payoff

gift exchange in a multi worker firm one of the main findings of a large body of gift exchange experiments is that in an incomplete contracts environment workers on average do not shirk and usually provide more than the minimum enforceable effort level in general 40 to 60 percent of the workers reward higher wages with higher effort these results are observed for simple one employer one worker relationships in this paper we investigate whether they generalize to the more realistic situation in which the employer employs several workers we compare a bilateral gift exchange game with a treatment in which each employer has four workers we find that effort levels in the latter treatment are only marginally lower gift exchange thus appears to be robust to increases in the size of the workforce and intention based reciprocity rather than social preferences seems to be the main driving force behind gift exchange

the right amount of trust we investigate the relationship between individual trust and individual economic performance we find that individual income is hump shaped in a measure of intensity of trust beliefs heterogeneity of trust beliefs in the population coupled with the tendency of individuals to extrapolate beliefs about others from their own levels of trustworthiness could generate this non monotonic relationship highly trustworthy individuals tend to form overly optimistic beliefs to assume too much social risk and to be cheated more often ultimately performing less well than those with a belief close to the mean trustworthiness of the population on the other hand less trustworthy individuals form overly pessimistic beliefs and avoid being cheated but give up profitable opportunities therefore underperforming the cost of either too much or too little trust is comparable to the income lost by foregoing college our findings in large scale survey data are supported and extended with experimental findings we show that in the trust game own trustworthiness and beliefs about others trustworthiness are strongly correlated and persistent and that patterns in earnings lost due to incorrect beliefs are comparable to those in the survey data

public trust and corruption perception disaster relief public trust in government and nongovernment organizations is essential to the public s willingness to donate and to support those organizations we measure public trust in disaster aid using people s perception of these organizations effectiveness in delivering aid relief to the victims of two recent major earthquakes in china based on the survey data collected in 2013 from about 2100 residents in hong kong we document the vulnerability of these residents trust perceptions in aid delivery we find that the sharp decline in trust perception is highly negatively correlated with their perception of corruption of local governments in china

disaster aid and preferences the long run impact of the tsunami on giving in sri lanka summary do natural disasters produce effects on preferences of victims in the long run we test the impact of the tsunami shock on generosity of a sample of sri lankan affected unaffected microfinance borrowers seven years after the event specifically we test the effect of the shock at the extensive margin by comparing damaged with non damaged individuals in terms of giving and expected giving in a dictator game moreover at the intensive margin we compare the participants based on the amount of damage experienced and recovery aid received the advantage of this last comparison is that differences in observables between the groups are minimized we reduce further identification problems by selecting a random sample of damaged and non damaged borrowers belonging to the same microfinance organization who are therefore likely to share some important common traits that are usually unobservable to researchers we complete our identification strategy with weighted least squares instrumental variable estimates and a sensitivity analysis on the exogeneity assumption the main findings of the paper support the hypothesis that the shock affects participants preferences in the long run first the tsunami negatively affects generosity at the extensive margin as those who suffered at least one damage give and expect less than those who did not second while large recovery assistance does not directly affect giving and expected giving it increases especially the latter indirectly i e when interacted with the number of damages our results reconcile that part of the literature showing evidence of natural shocks having a detrimental effect on social preferences fleming chong alberto bejarano 2011 cassar grosjean whitt 2013 with that supporting instead a positive link solnit 2009 whitt wilson 2007 cassar healy von kessler 2011 furthermore since our study focuses on the long run impact of a natural disaster previous results on short run effects are not necessarily inconsistent with ours

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

house money effects on trust and reciprocity in a typical laboratory investment game experiment participants endowments are provided by the experimenter thus the worst case for the investor is that she loses all of her found money by contrast in naturally occurring environments investment decisions can often lead to a loss of one s own money this paper investigates whether trust found in one shot anonymous laboratory interaction is robust to own money environments our results show that consistent with previous investment game results most investors send a positive amount and most trustees return at least the transfer amount regardless of whether the investors purchase or are gifted their endowment however investments are on average lower when participants use their own money and the fraction of maximum investments the most risky investment decision is only half as large under own money as it is under gifted endowments our results explain why one should exercise caution in placing trust in any government s ability to spend other people s money prudently

indirect reciprocity and strategic reputation building in an experimental helping game abstract we study indirect reciprocity and strategic reputation building in an experimental helping game at any time only half of the subjects can build a reputation this allows us to study both pure indirect reciprocity that is not contaminated by strategic reputation building and the impact of incentives for strategic reputation building on the helping rate we find that pure indirect reciprocity exists but also that the helping decisions are substantially affected by strategic considerations finally we find that strategic do better than non strategic players and non reciprocal do better than reciprocal players casting doubt on previously proposed evolutionary explanations for indirect reciprocity

temporal stability and psychological foundations of cooperation preferences abstract a core element of economic theory is the assumption of stable preferences we test this assumption in public goods games by repeatedly eliciting cooperation preferences in a fixed subject pool over a period of five months we find that cooperation preferences are very stable at the aggregate level and to a smaller degree at the individual level allowing us to predict future behavior fairly accurately furthermore our results provide evidence on the psychological foundations of cooperation preferences the personality dimension agreeableness is closely related to both the type and the stability of cooperation preferences

economies of diversification in the banking industry abstract this paper defines a new measure economies of diversification to examine the cost effect of product line expansion this measure is a special case of expansion path subadditivity and contains economies of scope as a special case a nonparametric frontier technique which isolates the effects of inefficiency and scale is used to measure economies of diversification applied to a set of 468 u s depository institutions operating in 1984 we find slight diseconomies of diversification diseconomies of diversification and inefficiency due to the overutilization of resources are found to be more important determinants of bank costs than is the failure to operate at optimal scale

overcoming obstacles against effective solar lighting interventions in south asia abstract basing on our devised world bank s design principles for effective renewable energy projects in developing countries and an in depth analysis of our two solar lighting projects in bangladesh and india this paper explores three key obstacles that constrain poor people from obtaining solar lighting financial exclusion weak governance and passive ngo and customer participation the low take up rate has a social and psychological impact this paper recommends creating easy access to credit establishing a robust complaint system and developing strategic partnership to overcome the obstacles

economies of scope in the health sector the case of portuguese hospitals abstract background economies of scope are defined as the potential cost savings arising from the joint production of two or more outputs rather than their separate production given the importance of the health sector for the community measuring the existence of potential economies of scope contributes to the improvement of this sectors sustainability objective s to identify economies of scope in portuguese hospitals using frontier based methods methods this paper develops 1 a generalized algorithm to obtain locally convex frontiers using the directional order ldo frontier method and 2 a generalized economies of scope based ratio that allows the introduction of any inefficiency source data this paper uses the 2002 2009 dataset for portuguese hospitals concerning the provision of obstetrics gynaecology and paediatrics ogp and psychiatric psy services results considerable economies and diseconomies of scope were found in the portuguese public hospitals a considerable dependence on the production line and on the merger status of the hospital was observed diseconomies of scope were more likely for larger hospitals i e those with more than 6000 inpatient discharges and or 7500 medical appointments per year conclusions even merged hospitals can exploit economies of scope however when they become outsized entities such efforts become more difficult

a scale elasticity measure for directional distance function and its dual theory and dea estimation abstract in this paper we focus on scale elasticity measure based on directional distance function for multi output multi input technologies explore its fundamental properties and show its equivalence with the input oriented and output oriented scale elasticity measures we also establish duality relationship between the scale elasticity measure based on the directional distance function with scale elasticity measure based on the profit function finally we discuss the estimation issues of the scale elasticity based on the directional distance function via the dea estimator

do negative random shocks affect trust and trustworthiness we report data from a variation of the trust game aimed at determining whether and how inequality and random shocks that affect wealth influence the levels of trust and trustworthiness to tease apart the effect of the shock and the inequality we compare behavior in a trust game where the inequality is initially given and one where it is the result of a random shock that reduces the second mover s endowment we find that first movers send less to second movers but only when the inequality results from a random shock as for the amount returned second movers return less when they are endowed less than first movers regardless of whether the difference in endowments was initially given or occurred after a random shock

the trials and tribulations of the village energy security programme vesp in india the indian ministry of new and renewable energy mnre launched the village energy security programme vesp in 2004 but discontinued it during the 12th five year plan starting in 2012 after a series of unexpected challenges planners structured the program so that a village energy committee vec ran a decentralized village program involving biomass gasifiers straight vegetable oil svo systems biogas plants and improved cookstoves this suite of technologies was intended to produce electricity and thermal energy to meet the total energy requirements of rural communities at the end of january 2011 a total of 79 vesp projects were sanctioned in 9 states and 65 of these projects were fully commissioned yet more than half were not operational the mnre envisaged that the vesp would provide energy services to eradicate poverty improve health reduce drudgery enhance education raise agricultural productivity create employment generate income and reduce migration however vesp projects have had limited success and the trials and tribulations of the vesp offers important lessons for policymakers launching rural energy programs in india and other developing economies

driving forces for consolidation or fragmentation of the us water utility industry a cost function approach with endogenous output abstract this paper empirically analyzes the structure of the us water industry using a multiproduct flexible cost function model with the amount of water delivered to final consumers recognized as endogenous the cross sectional econometric analysis focuses on measures of cost economies in water production and their variation with network characteristics the estimates reveal considerable scale economies in terms of volume particularly for small utilities that tend to have less output density these economies are however counteracted by simultaneous increases in customers and service area size especially for large utilities overall our results indicate that consolidation of small utilities might generate cost efficiencies depending on the concurrent expansion of the network but consolidation of already large utilities without corresponding increases in output density is not likely to be cost effective

agenda control and reciprocity in sequential voting decisions we study how reciprocity affects the extent to which a chair can exploit her control over an agenda if a committee votes sequentially on a known series of binary proposals we show in a parsimonious laboratory experiment that committee members form vote trading coalitions favoring early proposals not only when the sequence of proposals is exogenously given but also when a chair controls the sequence of proposals vote trading occurs even though chairs manipulate the agenda in their favor punishment for chairs exploiting agenda control is weak as chairs reciprocate support by others more frequently than nonchairs jel c92 d71 d72

access to modern energy services an economic and policy framework abstract affordable and accessible modern energy services are a pre requisite for development economic environmental or social and are crucial to reduce poverty and sustain growth hence there is a need to promote the uptake of modern energy the present study investigates the issue of accessibility of modern energy services in relation to three indicators availability affordability and reliability and suggest practical ways of evaluating them and identifies various strategies to provide them to the needy households in a cost effective manner promoting the development of small rural enterprises is a key contributor to achieve this goal and a central aspect in this promotion is the large scale diffusion of sustainable energy technologies which provide affordable and reliable services the suggested framework helps the policymakers to identify technologies that are better than others under the present conditions implementing and scaling up the energy demand requires collaboration among various actors like households local bodies energy utilities governments entrepreneurs research organisations non governmental organisations community groups financial institutions and international agencies

in group versus out group trust the impact of income inequality author affiliation vivian lei department of economics university of wisconsin milwaukee 3210 n maryland avenue bolton hall 818 milwaukee wi 53201 usa and department of economics and finance city university of hong kong hong kong vlei uwm edufilip vesely department of economics university of wisconsin milwaukee 3210 n maryland avenue bolton hall 812 milwaukee wi 53201 usa and department of economics hong kong university of science and technology hong kong vesely uwm edu acknowledgment we are particularly grateful to the center for research on international economics at the university of wisconsin milwaukee city university of hong kong and hong kong university of science and technology for financial and laboratory support we thank kenneth chan john heywood kamhon kan steven tucker two anonymous referees and participants at the 2007 economic science association north american regional meeting and the 10th experimental economics days dijon for valuable comments we thank cici lo and jennifer tse for excellent research assistance 1 introductionwhat promotes trust and what destroys it various studies have shown that institutional development age structure population size religious composition income inequality and ethnic diversity are linked to and may directly impact the overall trust level in a society or community see for example knack and keefer 1997 la porta et al 1997 zak and knack 2001 knack and zak 2002 uslaner 2002 zelmer 2003 berggren and jordahl 2006 bjornskov 2006 of all these variables income inequality measured by the gini coefficient is perhaps the most consistent and robust determinant of social solidarity and trust greater income inequality widens the social distance between different income classes and thereby reduces the overall level of trust there are two things worth noting about this particular result first while it can be shown with cross country data that income inequality is strongly associated with lower trust the causal relation between these two variables is not yet clear due to omitted variables and endogeneity problems second the measure of trust used in most of the empirical literature is based on responses to the question generally speaking would you say that most people can be trusted or that you can t be too careful in dealing with people from the world values surveys responses to this survey question reflect at best respondents attitude regarding generalized trust to say nothing of the finding by glaeser et al 2000 that they are a much better predictor of a society s overall level of trustworthiness rather than of trust note that to study exactly how income inequality affects trust it is necessary to first identify what type of trust generalized or particularized trust that the research question is meant to address contrary to generalized trust that involves faith in a wide range of strangers particularized trust also called in group trust concerns faith in primarily in group members people of one s own kind or people who share the same values and norms via social ties or social identities uslaner 2002 inequality influences particularized trust by allowing social identities that are associated with different income classes to be developed social identities create similarity and similarity cultivates trust among in group members see for example allport 1954 coleman 1990 fukuyama 1995 alesina and la ferrara 2000 hardin 2006 while allport 1954 argues that in group positivity does not necessarily imply out group negativity income inequality could nevertheless activate out group hostility and further facilitate in group favoritism if it creates conflicts over scarce resources or political power between different income classes sherif and sherif 1953 levine and campbell 1972 brewer 1999 given the limited field data that can be directly used to measure the impact of income inequality on particularized trust this article contributes to the literature by studying the relationship between inequality and in group favoritism in a stylized laboratory environment

what motivates common pool resource users experimental evidence from the field this paper develops and tests several models of pure nash strategies of individuals who extract from a common pool resource when they are motivated by a combination of self interest and other motivations such as altruism reciprocity inequity aversion and conformism we test whether an econometric summary of subjects strategies is consistent with one of these motivations using data from a series of common pool resource experiments conducted in three regions of colombia as expected average extraction levels are less than that predicted by a model of pure self interest but are nevertheless sub optimal moreover we find that a model of conformism with monotonically increasing best response functions best describes average strategies our empirical results are inconsistent with models of altruism reciprocity and inequity aversion

income distribution preferences and regulatory change in social dilemmas abstract we present results from an experiment where we elicit preferences over regulatory policies of social dilemmas for small groups these policy choices differ only in income distribution and are made after a common group experience of an unregulated social dilemma game we model two policies a traditional grandfathering allocation of pollution permits and an egalitarian public trust fund we find a sizeable fraction of our participants favor the public trust indicating that social preferences are not sufficiently expressed during the interactive social dilemma game

present bias predicts participation in payments for environmental services evidence from a behavioral experiment in uganda farmers are necessary agents in global efforts to conserve the environment now that croplands and pastures together constitute the largest terrestrial system on earth covering some 48 of ice free land surface whereas standard economic models predict that farmers will participate in conservation programs so long as they are profitable empirical findings from behavioral economics point to a number of normally unobservable preferences that may influence the decision making process this study tests for the first time whether heterogeneity in behavioral preferences correlates with decisions to participate in payments for environmental services pes programs we elicit individual trust and time preferences using economic experiments and link resulting measures to household survey data and participation decisions in a ugandan pes program we find that farmers who exhibit a preference for proximate gains present biased preferences are 47 7 more likely to participate in the program than those who show time consistent or future biased preferences this result has implications for ongoing and planned pes programs involving farmers particularly in africa by highlighting a potential relationship between payment timing and participation and further validates the use of behavioral experiments in explaining real world decisions

collective trust behavior this paper investigates trust behavior in situations where decision makers are large groups and the decision mechanism is collective theories from behavioral economics and psychology suggest that

three player trust game with insider communication we examine behavior in a three player trust game in which the first player may invest in the second and the second may invest in the third any amount sent from one player to the next is tripled the third player decides the final allocation among three players the baseline treatment with no communication shows that the first and second players send significant amounts and the third player reciprocates allowing insider communication between the second and the third players increases cooperation between these two interestingly there is an external effect of insider communication the first player who is outside communication sends 54 more and receives 289 more than in the baseline treatment as a result insider communication increases efficiency from 44 to 68

a multimethod approach to identifying norms and normative expectations within a corporate hierarchy evidence from the financial services industry we use an incentive compatible economic experiment and surveys in the field at a large financial services firm to identify the norms for on the job behavior among financial advisers and their leaders and the normative expectations each group has of the other we examine whistle blowing on a peer an incentive clash between serving the client and earning commissions and a dilemma about fiduciary responsibility to a client we find patterns of agreement among advisers among leaders and between the two groups that are consistent with company guidelines identified ex ante however we also find measurable differences between what leaders expect and the actual norms of advisers when there is such a mismatch we are able to distinguish miscommunication from ethical disagreement between leaders and advisers finally we show that when advisers personal ethical opinions do not match group norms this mismatch is correlated with job dissatisfaction and lying for money in a second experiment this paper was accepted by brad barber teck ho and terrance odean special issue editors

it takes two to cheat an experiment on derived trust abstract social life offers innumerable instances in which trust decisions involve multiple agents of particular interest is the case when a breach of trust is not profitable if carried out in isolation but requires an agreement among agents in such situations the pattern of behaviors is richer than in dyadic games because even opportunistic trustees who would breach trust when alone may act trustworthily based on what they believe to be the predominant course of action anticipating this trusters may be more inclined to trust we dub these motivations derived trustworthiness and derived trust to capture them we design a collective trust game and study it by means of a laboratory experiment we report that overall levels of trustworthiness are almost thirty percentage points higher when derived motivations are present and this generates also higher levels of trust in our set up the effects of derived trustworthiness are comparable in size to positive reciprocity and more important than concerns for equality

can social preferences explain gender differences in economic behavior abstract this study examines whether gender differences in some economic behaviors are due to differences in social preferences as measured by dictator allocation decisions we find that compared to men women are significantly more likely to be inequity averters and significantly less likely to be social surplus maximizers these differences in social preferences explain to a large extent why women send less than men in trust games inequity averters can ensure equal payoffs if nothing is returned by sending one fourth of the endowment while surplus maximizers can increase total payoffs by a factor of three for each dollar sent social preferences also help explain the size of gifts in dictator games and choice of compensation method for simple tasks however after controlling for social preference type gender is still influential in these decisions women give significantly more to charity than men even after accounting for our measure of social preferences women prefer egalitarian payment systems both because they are inequity averters and because low self confidence may lead them to believe they will earn more with equal sharing

individual s religiosity enhances trust latin american evidence for the puzzle this paper explores the effect of religious observance and affiliation to the dominant religion catholicism on trust in institutions towards others and market attitudes the analysis is performed using a latin american database of twenty thousand respondents from 2004 by means of ordered probit models the most interesting results are i trust toward others is positively correlated with religious observance and with catholic affiliation ii there is a positive correlation between

choosing among alternative cost function specifications an application to italian multi utilities abstract the paper investigates the cost properties of a sample of italian utilities providing in combination gas water and electricity services the estimates from a multi product composite cost function rev econ stat 74 1992 221 are compared with the ones coming from other traditional functional forms such as the standard translog st the generalized translog gt and the separable quadratic sq the results show that the composite model provides a better description of data and highlight the presence of global scope and scale economies for the median firm of the sample