The Impact of Microfinance on Pro-Social Behaviors: Experimental Evidence of Public Goods Contributions in Uganda

Date: 2016-06
By: Bryan McCannon (West Virginia University, Department of Economics)
Zachary Rodriguez (Saint Bonaventure University, School of Business)
URL: http://d.repec.org/n?u=RePEc:wvu:wpaper:16-13&r=net
We ask whether access to microfinance loans by the poor has a spillover effect on their pro†social behaviors. An experimental field study in southern, rural Uganda is conducted using free riding in public goods contributions as an assessment. We document higher levels of contributions by those who have previously received a microloan. This effect cannot be explained by changes in social norms, income effects, or sample selection bias. The results suggest that exposure to microfinance promotes social preferences.
Keywords: experiment, field study, free riding, microfinance, public goods, social norm, social preference, Uganda
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Instruction length and content: Effects on punishment behaviour in public goods games

Date: 2015-12-07
By: Abhijit Ramalingam (University of East Anglia)
Antonio J. Morales (Universidad de Malaga)
James M. Walker (Indiana University)
URL: http://d.repec.org/n?u=RePEc:uea:wcbess:15-22&r=net
Instruction length and content have been shown to affect comprehension levels and decision times of experimental subjects in public goods games. However, to date, there is no evidence of a significant impact on behaviour. We investigate the effects of instruction length and content on comprehension and behaviour in a more complicated setting - a public goods game with punishment. We find that longer instructions, that include examples that highlight the positive externality associated with public goods contributions, increase the comprehension levels of subjects, significantly lowering the time taken to answer the pre-experiment quiz and make decisions. Importantly, the differences in instructions are also associated with significant differences in behaviour. On average, groups that receive shorter instructions fail to use punishment effectively to raise contribution levels while those that receive longer instructions sustain higher contribution levels over time. In the former case, groups target low contributors less frequently than appears necessary to induce greater cooperation.
Keywords: public goods, punishment, instruction length, decision times, contributions, punishment
JEL: C72 C91 C92 H41

Privacy, trust and social network formation

Date: 2015
By: Gaudeul, Alexia
Giannetti, Caterina
URL: http://d.repec.org/n?u=RePEc:zbw:cegedp:269&r=net
We study in the laboratory the impact of private information revelation on the selection of partners when forming individual networks. Our experiment combines a “network game" and a “public-good game". In the network game, individuals decide with whom to form a link with, while in the public-good game they decide whether or not to contribute. The variations in our treatments allow us to identify the effect of revealing one´s name on the probability of link formation. Our main result suggests that privacy mechanisms affect partner selection and the consequent structure of the network: when individuals reveal their real name, their individual networks are smaller but their profits are higher. This indicates that the privacy costs of revealing personal information are compensated by more productive links.
Keywords: privacy,social networks,public goods,trust
JEL: D12 D85

Authority and Centrality: Power and Cooperation in Social Dilemma Networks

Date: 2015-03
By: Ramalingam, Abhijit
Rojo Arjona, David
Schram, Arthur
Van Leeuwen, Boris
URL: http://d.repec.org/n?u=RePEc:tse:iastwp:29140&r=net
We investigate the effects of power on cooperation in repeated social dilemma settings. Groups of five players play either multi-player trust games or VCM-games on a fixed network. Power stems from having the authority to allocate funds raised through voluntary contributions by all members and/or from having a pivotal position in the network (centrality). We compare environments with and without ostracism by allowing players in some treatments to exclude others from further participation in the network. Our results show that power matters but that its effects hinge strongly on the type involved. Reminiscent of the literature on leadership, players with authority often act more cooperatively than those without such power. Nevertheless, when possible, they are quickly ostracized from the group. Thus, this kind of power is not tolerated by the powerless. In stark contrast, centrality leads to less cooperative behavior and this free riding is not punished; conditional on cooperativeness, players with power from centrality are less likely to be ostracized than those without. Hence, not only is this type of power tolerated, but so is the free riding it leads to.
Keywords: power, cooperation, networks, public goods
JEL: C91 D02 D03 H41

Leaders as Role Models for the Voluntary Provision of Public Goods

Date: 2014-10
By: Gächter, Simon (University of Nottingham)
Renner, Elke (University of Nottingham)
URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp8580&r=net
We investigate the link between leadership, beliefs and pro-social behavior. This link is interesting because field evidence suggests that people’s behavior in domains like charitable giving, tax evasion, corporate culture and corruption is influenced by leaders (CEOs, politicians) and beliefs about others’ behavior. Our framework is an experimental public goods game with a leader. We find that leaders strongly shape their followers’ initial beliefs and contributions. In later rounds, followers put more weight on other followers’ past behavior than on the leader’s current action. This creates a path dependency the leader can hardly correct. We discuss the implications for understanding belief effects in naturally occurring situations.
Keywords: leadership, beliefs, experiments, public goods, path dependency, public policy, management
JEL: C72 C90 H41 Z13

Promoting Competition or Helping Less-Endowed? An Experiment on Collective Institutional Choices under Intra-Group Inequality

Date: 2014-06-20
By: Kamei, Kenju
URL: http://d.repec.org/n?u=RePEc:pra:mprapa:56774&r=net
Unequally-distributed resources, whether people’s income or competence, are ubiquitous in our real world. Whether to promote competition or to lead to a more equal environment is often in question in societies or organizations. With heterogeneous endowments, we let subjects collectively choose whether to have a competitive lottery contest – where only one individual in a group wins and receives an award, generating a greater income inequality – or to have a public good that benefits the less-endowed to a greater degree. Our data indicates that highly-endowed individuals contribute little when the public good is selected. The majority of subjects, however, vote in favor of having a public good, contrary to the standard theory predictions. In addition, a belief elicitation task shows that they expect payoffs to be more equally distributed under the public good regime than under the contest regime. Moreover, the subjects’ preferences between the two regimes are little affected by their risk attitudes or the size of awards in competition. These suggest that people’s institutional choices are driven more by their income inequality-averse preferences.
Keywords: heterogeneity, experiment, cooperation, competition, public goods, inequality
JEL: C92 D63 D70 D72 H4

Social Capital to Induce a Contribution to Environmental Collective Action in Indonesia: An Experimental Method

Date: 2014
By: Alin Halimatussadiah
Budy P. Resosudarmo
Diah Widyawati
URL: http://d.repec.org/n?u=RePEc:pas:papers:2014-03&r=net
Social capital is considered to be an important factor in economic development. It is argued that it generates a flow of (economic) benefits through collective action, by reducing free riding and increasing individual contribution. This study examines whether social capital increases individual contribution in a collective action situation. Using a classroom experiment, two games are played in a sequential manner: a trust game to measure level of trust–as a proxy for social capital–and a public goods game to measure individual contribution to collective action. In the public goods game, we apply some treatments to look at the impact of partial disclosure of a group member’s behaviour in the trust game on contributions in the public goods game. In general, the result shows that the level of social capital positively impacts individual contribution to collective action. However, we found no significant evidence to support the impact of partial disclosure of a group member’s behaviour in the trust game on contributions in the public goods game.
Keywords: Social Capital, Collective Action, Trust Game, Public Goods Game
JEL: A14 C91 C92

Optimal Altruism in Public Good Provision

 

Date: 2014-01-29
By: Robert Hahn
Robert Ritz
URL: http://d.repec.org/n?u=RePEc:cam:camdae:1403&r=net
We present a model of altruistically-minded-yet rational-players contributing to a public good. A key feature is the tension between altruism and “crowding-out" effects (players’ efforts are strategic substitutes). We find that more altruistic behaviour can raise or reduce welfare, depending on the fine details of the environment. It is almost always optimal for a player to act more selfishly than her true preference. We discuss applications to a range of public good problems, including global climate policy. Our results highlight that it may be difficult to infer social preferences from observed behaviour.
Keywords: Altruism, climate policy, crowding out, public goods
JEL: D03 H23 H41 Q58

New Zealand Economic Papers: Special Issue: Economic Psychology and Experimental Economics

New Zealand Economic Papers: Special Issue: Economic Psychology and Experimental Economics, 2011, Volume 45, Issue 1 & 2, 1-207.

Introduction

Psychology and economics: An introduction to the special issue
Simon Kemp; Gabrielle Wall
Pages 1 – 4
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Research articles

From anecdotes to novels: Reflective inputs for behavioural economics
Peter E. Earl
Pages 5 – 22
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Aspiration formation and satisficing in search with(out) competition
Werner Güth; Torsten Weiland
Pages 23 – 45
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Are conditional cooperators willing to forgo efficiency gains? Evidence from a public goods experiment
M. Vittoria Levati; Matteo Ploner; Stefan Traub
Pages 47 – 57
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Who makes the pie bigger? An experimental study on co-opetition
Juan A. Lacomba; Francisco Lagos; Tibor Neugebauer
Pages 59 – 68
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An experimental examination of the effect of potential revelation of identity on satisfying obligations
Lucy F. Ackert; Bryan K. Church; Shawn Davis
Pages 69 – 80
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Gender differences in trust and reciprocity in repeated gift exchange games
Ananish Chaudhuri; Erwann Sbai
Pages 81 – 95
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Do separation rules matter? An experimental study of commitment
Filip Vesely; Vivian Lei; Scott Drewianka
Pages 97 – 117
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Overcapitalization and cost escalation in housing renovation
Ti-Ching Peng
Pages 119 – 138
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Over-indebtedness and the interplay of factual and mental money management: An interview study
Bernadette Kamleitner; Bianca Hornung; Erich Kirchler
Pages 139 – 160
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Coherence and bidirectional reasoning in complex and risky decision-making tasks
C. Gustav Lundberg
Pages 161 – 181
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Outwit, outplay, outcast? Sex discrimination in voting behaviour in the reality television show Survivor
Gabrielle Wall
Pages 183 – 193
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Ambiguity, the certainty illusion, and the natural frequency approach to reasoning with inverse probabilities
John Fountain; Philip Gunby
Pages 195 – 207
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