THE EFFECT OF REWARDS AND SANCTIONS IN PROVISION OF PUBLIC GOODS

A growing number of field and experimental studies focus on the institutional arrangements by which individuals are able to solve collective action problems. Important in this research is the role of reciprocity and institutions that facilitate cooperation via opportunities for monitoring, sanctioning, and rewarding others. Sanctions represent a cost to both the participant imposing the sanction and the individual receiving the sanction. Rewards represent a zero-sum transfer from participants giving to those receiving rewards. We contrast reward and sanction institutions in regard to their impact on cooperation and efficiency in the context of a public goods experiment . ( JEL C92)     

VANISHING LEADERSHIP AND DECLINING RECIPROCITY IN A SEQUENTIAL CONTRIBUTION EXPERIMENT

We examine experimentally how and why voluntary contributions are affected by sequentiality. Instead of deciding simultaneously in each round, subjects are randomly ordered in a sequence which differs from round to round. We compare sessions in which subjects observe the contributions from earlier decisions in each round (“sequential treatment with information”) to sessions in which subjects decide sequentially within rounds, but cannot observe earlier contributions (“sequential treatment without information”). We also investigate whether average contributions are affected by the length of the sequence by varying group size. Our results show that sequentiality alone has no effect on contributions, but that the level of contributions increases when subjects are informed about the contributions of lower‐ranked subjects. We provide evidence that the so‐called “leadership effect” vanishes within rounds, and that group size has no significant impact on the average level of contributions in our sequential contribution games. (JEL C92, H41, D63)     

FOSTERING THE BEST EXECUTION REGIME: AN EXPERIMENT ABOUT PECUNIARY SANCTIONS AND ACCOUNTABILITY IN FIDUCIARY MONEY MANAGEMENT

Asset management often involves a conflict of interests between investors and fund managers. A main goal of financial regulators is to identify and mitigate this conflict. This article focuses on measures that may foster protection of investors' interests. In an experiment capturing the essential elements of asset management, we find that managers' accountability does not prevent their opportunistic behavior if not backed by a threat of punishment. Further, investors inefficiently sanction managers if not completely aware of managers' choices. To effectively protect investors in financial intermediations, financial regulators should ensure both managers' accountability and a credible sanctioning system.     

MONETARY REWARDS AND DECISION COST IN EXPERIMENTAL ECONOMICS

A survey of thirty-one experimental studies which report data on the comparative effects of monetary rewards and opportunity cost shows: (1) several studies in which increased rewards shift the central tendency of the data toward the predictions of rational models; (2) in virtually all cases rewards reduce the variance of the data around the predicted outcome. This is consistent with a model in which rewards are balanced against decision cost in agent behavior and explicates the argument that when rational models fail it can be attributed to low opportunity cost of deviations from the rational prediction.     

COMMUNICATION and FREE-RIDING BEHAVIOR: THE VOLUNTARY CONTRIBUTION MECHANISM

We examine experimentally the role of active communication as a mechanism for improving economic efficiency in a voluntary contribution public goods environment. With no communication this environment has been shown to induce significant subop-timality, approaching zero contributions with iteration of the decision environment. Communication is shown to improve group optimality significantly. We examine the robustness of our results in increasingly complex environments and in environments in which there has been a history of communication but active communication is no longer available.     

VOLUNTARY CONTRIBUTION GAMES: EFFICIENT PRIVATE PROVISION OF PUBLIC GOODS

This paper reports on a series of laboratory experiments designed to evaluate a mechanism for the voluntary provision of public good. The public good is provided if the total contributions meet or exceed a threshold and all contributions are returned if the public good is not provided. The members of the group all know the threshold, the incomes, and the valuations assigned the public good by all other members. The results support the prediction that this mechanism will yield Pareto efficient outcomes and suggest that economic agents adopt strategies which form equilibria satisfying certain refinements to the Nash equilibrium.     

VOLUNTARY DISCLOSURE AND EARNINGS EXPECTATIONS IN MULTI-LEVEL MARKETING

Multi-level marketing (MLM) firms recruit individuals into a business opportunity but are not required to disclose the earnings of past participants. Some MLMs voluntarily create income disclosures, which may serve both marketing and risk-management functions. We create an economic experiment to explore the impact of MLM income disclosure on consumer interest and expectations. Results suggest that disclosure does not significantly alter interest in the business opportunity but does reduce expectations, on average, when subjects are asked to estimate annual income in a lab environment. We discuss findings in the context of current regulatory policy. (JEL D18, D82, M38)     

REWARDS, EXPERIENCE AND DECISION COSTS IN FIRST PRICE AUCTIONS

Consistent with a model of asymmetric risk aversion, subjects in first price auctions consistently bid above the risk neutral Nash prediction. It has been argued that this is due to low opportunity cost of deviating from the risk neutral bid. We increase opportunity cost (and payoff levels) by factors of 0, 1, 5, 10, and 20, from the normal levels generating payoffs up to $250 for risk neutral subjects and observe an insignificant increase in the slope of individual bid functions. The RMSE of bids declines significantly. This is consistent with a reward/decision cost model of bidding behavior.     

VOLUNTARY ACTIVITIES AND DAILY HAPPINESS IN THE UNITED STATES

This article analyzes differences in daily happiness between those individuals in the United States who perform voluntary activities during the day and those who do not. Using the Well‐Being Module of the American Time Use Survey 2010, we find that those who devote any time to voluntary activities during the day report higher levels of daily happiness than those who do not. Comparing the happiness obtained from a range of activities, we find that volunteering is among the most enjoyable, indicating that time spent on voluntary activities is utility‐enhancing. We document that the effect of voluntary activities on the experienced utility of individuals can be decomposed into a “time‐composition” effect and an “activity” effect, with the latter explaining between 11% and 46% of the observed difference. (JEL D13, J16, J22)     

DESIGN AND EVALUATION OF A MIGRATION EXPERIMENT IN THAILAND

In many less developed countries, planners are concerned about the concentration of population in one or two major cities. The authors implemented a small-scale experimental program in Northeast Thailand designed to alter patterns of outinigration from a rural area, specifically to redirect migration to urban centers within the same region rather than toward Bangkok. Using data from a baseline survey and a follow-up survey 12 months later, strong effects on mobility behavior, modest effects on information, and little or no effect on community evaluations and mobility plans are discerned. Implications for the attitude-behavior literature are discussed.     

REWARDS AND FRUSTRATIONS OF BEING A SOCIAL WORKER: A QUALITATIVE STUDY

This paper deals with aspects of actual professional experience of social workers, in order to grasp a framework for professional rewards and frustrations. A qualitative research tool was chosen, life histories, and ten social workers were interviewed. The subjects were women who graduated between the 1950s and the 1990s from schools of social work in Brazil, and whose practice, present or past, involves direct contact with clients. The reasons explaining satisfying professional situations are rooted in professional experiences which were translated into personal development, the establishment of personal ties and the acquisition of skills. Perceptions of having contributed towards solving a difficult situation and recognition from their clients were positively appraised. These are rewarding situations from which social workers derive the feeling of having created something which is positive for the clients and for themselves. Unpleasant situations were described as unfair situations experienced by clients, poor working conditions and difficulties concerning inter‐professional relationships. Inferences on the feminine role as influencing social workers' rewards and frustrations with the profession, as well as inferences on possible unconscious configurations underlying some of the data were drawn in the conclusions.     

COMPETITION AND COOPERATION IN A PUBLIC GOODS GAME: A FIELD EXPERIMENT

We explore the effects of competitive and cooperative motivations on contributions in a field experiment. A total of 10,000 potential political donors received solicitations referencing past contribution behavior of members of the competing party (competition treatment), the same party (cooperative treatment), or no past contribution information (control). We first theoretically analyze the effect of these treatments on the contribution behavior of agents with different social preferences in a modified intergroup public good (IPG) game. Then, we report the empirical results: Contribution rates in the competitive, cooperative, and control treatments were 1.45%, 1.08%, and 0.78%, respectively. With the exception of one large contribution, the distribution of contributions in the competitive treatment first order stochastically dominates that of the cooperative treatment. Qualitatively, it appears that the cooperative treatment induced more contributions around the common monetary reference point, while the competitive treatment led to more contributions at twice this amount. These results suggest that eliciting competitive rather than cooperative motivations can lead to higher contributions in IPG settings. (JEL D72, H41, C93)     

JOB VALUES, REWARDS, AND WORK CONDITIONS AS FACTORS IN JOB SATISFACTION AMONG MEN AND WOMEN

Sex differences in job satisfaction are explored utilizing data from the National Opinion Research Center (NORC) General Social Surveys, 1974–1982. Theoretically, differences in job satisfaction are accounted for by job rewards, job values, work conditions, and individual attributes. This study confirms that women receive significantly fewer job rewards than men, have significantly different job conditions, and possess slightly different work values. However, there is no difference in job satisfaction between women and men. As a consequence, these factors may not affect levels of job satisfaction, or men's and women's job satisfaction may be determined by different determinants. Alternatively, the relative level of these factors compared to one's past or expected levels may be more important than absolute levels. The multiple regression analyses reveal that similar determinants influence women's and men's job satisfaction, but that the determinants operate differently. Age and occupational prestige were significant predictors in both full models. Moreover, for both men and women a sense that one's personal situation is improving is more important than concrete rewards.     

A DUAL DEFINITION FOR THE FACTOR CONTENT OF TRADE AND ITS EFFECT ON FACTOR REWARDS IN US MANUFACTURING SECTOR

We introduce a dual definition of the Factor Content of Trade (FCT) using the concept of the Equivalent Autarky Equilibrium. Estimating a symmetric normalized quadratic revenue function for the U.S. manufacturing sector between 1965 and 1991, we find that the FCT for capital is positive, while the FCT for skilled and unskilled labor is negative, suggesting that the Leontief Paradox is not present. Then the growth rate of the factor rewards is decomposed to the FCT, endowments, and technological change effects. We find that technological change is the most important determinant in explaining wage inequality between skilled and unskilled labor. (JEL F11, F16, J31)     

COMBINING MONETARY AND SOCIAL SANCTIONS TO PROMOTE COOPERATION

We employ an experimental approach to consider the impact of a combination of formal and informal sanctions on contribution levels for a specific type of public good. We find that when both sanctions are available, contributions and overall welfare are higher than when only one of the two sanctioning systems is available. The availability of an array of sanctions of varying severity appears to enhance welfare. (JEL C92 )     

A GAME THEORETIC ANALYSIS OF VOLUNTARY EUTHANASIA AND PHYSICIAN ASSISTED SUICIDE

In countries/states where voluntary euthanasia (VE) or physician-assisted suicide (PAS) is legal, the patient's decision about whether to request VE or PAS heavily relies on the information others provide. We use the tools of microeconomic theory to study how communication between the patient, his family and his physician influences the patient's decision. We argue that families have considerable power over the patient and that the amount of information that is transmitted from physician to patient might be severely diminished as a result of legalizing VE or PAS. We discuss our main results in the context of the ongoing normative debate over the legalization of VE and PAS. (JEL D8, I12)     

VOLUNTARY ASSOCIATION AFFILIATION AND NATIONAL DIVERSITY*

Par nature, les associations volontaires sont des intermédiaires qui établissent les liens nécessaires entre les institutions de la société. Plus une société est hétérogene, plus elle requiert d'associations qui peuvent représenter les divers intérêts et, à la fois, empêcher ces divers intérêts de mener à une désorganisation individuelle et sociale. L'analyse de données de cinq nations révèle une correspondance entre la diversité nationale et l'affiliation à des associations volontaires. Cette correspondance est vue comme fournissant un support partiel à la thèse avancée. It is argued that voluntary associations are interstitial in character, providing needed linkages between society's institutions. More heterogeneous societies require greater numbers of associations to represent divergent interests and at the same time to prevent these varied interests from leading to personal and social disorganization. Analysis of data from five nations shows a correspondence between national diversity and voluntary organization affiliation. The correspondence is interpreted as partial support for the thesis advanced.     

INTERVIEW MODE EFFECTS IN SURVEYS OF DRUG AND ALCOHOL USE: A FIELD EXPERIMENT

This research explores the impact of interview mode on respondents'willingness to reveal illicit or undesirable behavior and mechanismsby which interview mode influences response tendencies. A fieldexperiment was designed to control mode effects due to samplingand screening so that the impact of response anonymity (throughuse of self-administered questionnaires ([SAQs]) and socialdistance in the interviewer-respondent relationship (telephonevs. personal communication) could be tested. Respondents aged18–45 were randomly as-signed to interview mode: telephone,face-to-face, or self-administered. Admission of illicit druguse and alcohol use was most likely in the personal mode withSAQs, slightly less likely in personal mode without SAQs, andleast likely in the telephone mode. The magnitude of the modedifferentials was larger for blacks than for whites, and largeramong respondents who are more mistrustful of others. Resultssupport the notion that response effects due to mode of interviewderive, at least in part, from interview mode differences inability to assuage respondents' confidentiality concerns. Greatersocial distance between interviewer and respondent in the telephoneinterview, compared with face-to-face communication, makes itmore difficult for the researcher to make convincing confidentialityguarantees. The response anonymity provided by SAQs also appearsto increase respondents' willingness to reveal sensitive behavior,especially among racial/ethnic minorities.     

ONTARIO STUDENT PARTY ACTIVISTS: A NOTE ON DIFFERENTIAL PARTICIPATION IN A VOLUNTARY ORGANIZATION

Bien qu'un bon nombre d'études de participation politique aient été faites auprès de publics de masse, le degré de participation de ceux que Ton désigne habituellement d'activistes politiques a été presque complétement ignoré. Cette note de recherche porte sur le degré de participation à l'intérieur de clubs universitaires rattachés à un parti politique á partir de données obtenues au moyen de questionnaires envoyés à un échantillon d'activistes dans plusieurs universités ontariennes au printemps de 1970. L'analyse par classification multiple est utilisée pour mesurer l'effet de plusieurs variables sur le degré de participation. Un résultat important se trouve dans ce que plusieurs variables qui peuvent servir à expliquer pourquoi on devient membre d'une association volontaire telle qu'un club politique sont inutiles pour expliquer le degré de participation dans les activités du club.
Although there have been a number of studies of political participation among mass publics, there have been virtually no efforts made to study differential participation among those conventionally designated as political activists. This research note focuses on differential participation within university political party clubs, using data derived from questionnaires sent to a sample of political club activists in the several Ontario universities in the spring of 1970. Multiple classification analysis is used to assess the impact of several variables on differential participation. A major finding is that some variables, useful for explaining who joins a voluntary organization such as a political club, are unable to explain level of participation in the club's activities.