Three Essays on Social Issues in Experimental Economics

THREE ESSAYS ON SOCIAL ISSUES IN EXPERIMENTAL ECONOMICS By DANIEL J. LEE AUGUST, 2016 Committee Chair: Dr. Susan K. Laury Major Department: Economics This dissertation consists of three essays, all of which use the toolbox of experimental methods to explore behavioral issues that fall out of the concepts of human capital and public economics. The essays examine how an individual alters her behaviors in response to changes in price, information, and social pressures. Understanding these behavioral changes can help us to better explore the pathways that can then inform optimal policy design. The first essay, Racial Bias and the Validity of the Implicit Association Test, examines Implicit Bias from an economic standpoint. Implicit associations and biases are carried without awareness of conscious direction. In this paper, I develop a model to study giving behaviors under conditions of implicit bias. I test this model by implementing a novel laboratory experiment—a Dictator Game with sorting to study both these giving behaviors, as well as a subject’s willingness to be exposed to a giving environment. In doing so, I adapt the Implicit Association Test (IAT), commonplace in other social sciences, for use in economics experiments. I then compare IAT score to dictator giving and sorting as a necessary test of its validity. I find that the presence of sorting environments identify a reluctance to share and negatively predict giving. However, despite the IAT’s ever-growing popularity, it fails to predict even simple economic behaviors such as dictator giving. These results are indicative that implicit bias fails to overcome selfish interests and thus the IAT lacks external validity. In the second essay, Will Girls be Girls? Risk Taking and Competition in an All-Girls School my coauthors and I conduct an experiment that tests the effect that all-girl schooling has on risk taking and competitive behavior. In it, we compare decisions made by students in an all-girls school to those made by students in a closely matched co-educational school. We further investigate the developmental nature of this behavior by comparing choices made by younger students (Grades 7-8) with those of older students (Grades 11-12). By focusing on the structural differences between those who select into the all-girls’ school, we find that although girls educated in a single-gender environment are the most risk averse, they are also among the most competitive. These results lend support to the hypothesis that “nurture matters” in the gender differences debate. Finally, I discuss an essay on charitable giving, entitled The Richness of Giving: Charity Selection and Charitable Gifts in a Large Field Experiment. It builds on previous work in the charitable giving literature by examining not only how much subjects give to charity, but also which charities subjects prefer. This choice is operationalized in an artefactual field experiment with a representative sample of respondents. These data are then used to structurally model motives for giving. The novelty of this design allows me to ask several interesting questions regarding the choices one undertakes when deciding both whether and how much to give to charity. Further, I ask these questions in the context of a standard utility framework. Given the unique set up of this experiment, I also explore how these distributional preference parameters differ by charity choice and from what we have observed in the past. I find that there is more variation within demographics and charity types than across distributions. I close with a brief summary and personal reflection. THREE ESSAYS ON SOCIAL ISSUES IN EXPERIMENTAL ECONOMICS BY DANIEL J. LEE A Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy in Economics in the Andrew Young School of Policy Studies of Georgia State University GEORGIA STATE UNIVERSITY 2016 Copyright by Daniel J. Lee 2016 ACCEPTANCE This dissertation was prepared under the direction of the candidate’s Dissertation Committee. It has been approved and accepted by all members of that committee, and it has been accepted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Economics in the Andrew Young School of Policy Studies of Georgia State University. Dissertation Chair: Dr. Susan K. Laury Committee: Dr. Charles Courtemanche Dr. John A. List Dr. Michael K. Price Electronic Version Approved: Mary Beth Walker, Dean Andrew Young School of Policy Studies Georgia State University August, 2016