Showing results 1 to 9 of approximately 9.(refine search)
A bureaucratic theory of flypaper effects
An analysis of two competing theories, the median voter model and the bureaucratic model, as they relate to how noncategorical grants to communities are spent.
AUTHORS: Wyckoff, Paul Gary
Flat taxes and the limits to reform
A discussion of proposals to reform the federal income tax system, and an analysis of the economic and political issues surrounding flat-tax reform proposals.
AUTHORS: Wyckoff, Paul Gary
Unpacking social interactions
As empirical work in identifying social effects becomes more prevalent, researchers are beginning to struggle with identifying the composition of social interactions within any given reference group. In this paper, we present a simple econometric methodology for the separate identification of multiple social interactions. The setting under which we achieve separation is special, but is likely to be appropriate in many applications.
AUTHORS: Cohen-Cole, Ethan; Zanella, Giulio
Contracts with social multipliers
We develop a model of contracting in which individual effort choices are subject to social pressure to conform to the average effort level of others in the same risk-sharing group. As in related models of social interactions, a change in exogenous variables or contract terms generates a social multiplier. In this environment, small differences in fundamentals such as skill or effort cost can lead to large differences in group productivity. We characterize the optimal contract for this environment and describe the properties of equilibria, properties that agree with stylized facts on effort compression in revenue-sharing settings. The model also implies potential sorting into groups on the basis of idiosyncratic effort costs. We estimate a significant social multiplier on physician productivity, using data on medical partnerships.
AUTHORS: Prasad, Kislaya; Burke, Mary A.
Another hidden cost of incentives: the detrimental effect on norm enforcement
Monetary incentives are often considered as a way to foster contributions to public goods in society and firms. This paper investigates experimentally the effect of monetary incentives in the presence of a norm enforcement mechanism. Norm enforcement through peer punishment has been shown to be effective in raising contributions by itself. We test whether and how monetary incentives interact with punishment and how this in turn affects contributions. Our main findings are that free riders are punished less harshly in the treatment with incentives, and as a consequence, average contributions to the public good are no higher than without incentives. This finding ties to and extends previous research on settings in which monetary incentives may fail to have the desired effect.
AUTHORS: Fuster, Andreas; Meier, Stephan
Gender discrimination and social identity: experimental evidence from urban Pakistan
Gender discrimination in South Asia is a well-documented fact. However, gender is only one of an individual?s many identities. This paper investigates how gender discrimination depends on the social identities of interacting parties. We use an experimental approach to identify gender discrimination by randomly matching 2,836 male and female students pursuing bachelor?s-equivalent degrees in three different types of institutions?Madrassas (religious seminaries), Islamic universities, and liberal universities?that represent distinct identities within the Pakistani society. Our main finding is that gender discrimination is not uniform in intensity and nature across the educated Pakistani society and varies as a function of the social identity of both individuals who interact. While we find no evidence of higher-socioeconomic-status men discriminating against women, men of lower socioeconomic status and higher religiosity tend to discriminate against women--but only women of lower socioeconomic status who are closest to them in social distance. Moreover, this discrimination is largely taste-based. Our findings suggest that social policies aimed at empowering women need to account for the intersectionality of gender with social identity.
AUTHORS: Delavande, Adeline; Zafar, Basit
Bayesian social learning, conformity, and stubbornness: evidence from the AP top 25
The recent nonexperimental literature on social learning focuses on showing that observational learning exists, that is, individuals do indeed draw inferences by observing the actions of others. We take this literature a step further by analyzing whether individuals are Bayesian social learners. We use data from the Associated Press (AP) U.S. College Football Poll, a weekly subjective ranking of the top twenty-five teams. The voters' aggregate rankings are available each week prior to when voters have to update their individual rankings, so voters can potentially learn from their peers. We find that peer rankings: 1) are informative, as conditioning on them improves the accuracy of our estimated Bayesian posterior rankings in a nontrivial way, and 2) influence the way voters adjust their rankings, but the influence is less than the Bayesian amount. Voters' revisions are closer to Bayesian when the ranked team loses as compared to when it wins, which we attribute to losses being less ambiguous and more salient signals. We find evidence of significant voter heterogeneity, and that voters are less responsive to peer rankings after they have been on the poll a few years. We interpret the data to imply that reputation motives cause voters to "conform," but not enough to overcome the overall tendency to underreact to social information, that is, to be "stubborn."
AUTHORS: Stone, Daniel F.; Zafar, Basit
The empirical content of models with multiple equilibria in economies with social interactions
We study a general class of models with social interactions that might display multiple equilibria. We propose an estimation procedure for these models and evaluate its efficiency and computational feasibility relative to different approaches taken to the curse of dimensionality implied by the multiplicity. Using data on smoking among teenagers, we implement the proposed estimation procedure to understand how group interactions affect health-related choices. We find that interaction effects are strong both at the school level and at the smaller friends-network level. Multiplicity of equilibria is pervasive at the estimated parameter values, and equilibrium selection accounts for about 15 percent of the observed smoking behavior. Counterfactuals show that student interactions, surprisingly, reduce smoking by approximately 70 percent with respect to the equilibrium smoking that would occur without interactions.
AUTHORS: Bisin, Alberto; Moro, Andrea; Topa, Giorgio
An experimental investigation of why individuals conform
Social interdependence is believed to play an important role in how people make individual choices. This paper presents a simple model constructed on the premise that people are motivated by their own payoff as well as by how their actions compare with those of other people in their reference group. I show that conformity of actions may arise either from learning about the norm (social learning), or from adhering to the norm because of image-related concerns (social influence). To disentangle the two empirically, I use the fact that image-related concerns can be present only if actions are publicly observable. The model predictions are tested in a "charitable contribution" experiment in which the actions and identities of the subjects are unmasked in a controlled and systematic way. Both social learning and social influence seem to play an important role in the subjects' choices. In addition, individuals gain utility simply by making the same choice as the reference group (social comparison) and change their contributions in the direction of the social norm even when their identities are hidden. Once the identities and contribution distributions of group members are revealed, individuals conform to the modal choice of the group. Moreover, I find that social ties (defined as subjects knowing one another from outside the experimental environment) affect the role of social influence. In particular, a low-contribution norm evolves that causes individuals to contribute less in the presence of people they know.
AUTHORS: Zafar, Basit