Xiaogeng Xu in Chicago

Phd student Xiaogeng Xu is in Chicago this week presenting Giving When Responsible For Others' Risks at the conference Science of philanthropy initiative at University of Chicago. 

Abstract:

Social welfare decisions may influence a number of people in a state. The social decision makers always face uncertain outcomes, as it is hard to foresee whether people can benefit as much as their intended impacts. A handful studies have enlightened the issue of risk taking in decisions on others' behalf. Instead, this study steps backward a bit, and asks who are to make the social welfare decisions? Ask everyone to be involved in the decision making, or let the socially minded people make the decisions through a self-selection? Would the two institutions of decision making lead to different risk-takings in social welfare decisions? If yes, is the difference due to the institutional impacts, or to the intrinsic differences of self-selected decision makers from the rest population? To answer these questions, this study uses an experiment that contains both institutions of decision making and lets subjects make risky decisions on others' behalf. This study finds out that risk taking is much higher in self-selected institution than all-involved institution with controlling subjects' individual risk preferences and other background characteristics. This stark difference is driven by both institutional impacts and different extents of social care between self-selected decision makers and other subjects. Both of the two effects are significantly large.

Armando Garcia Pires in Vienna

Armando Garcia Pires presented the paper Gender and Entrepreneurial Success: Evidence from a Field Experiment written with Lars Ivar Oppedal Berge at Arnoldshain Seminar XV in Vienna, Austria this week.

Abstract:

A number of field experiments on business training and business grants in developing countries show that it is much more difficult to improve business outcomes for women than for men entrepreneurs. Similarly, several empirical studies in developing countries find that it is very challenging to increase the entrepreneurial performance of firms in the informal sector. We build on theoretical predictions derived from Lucas (1978) model of entrepreneurship, to look at these two puzzles. First, if women entrepreneurs in addition to being constrained in business ability and access to capital are also time constrained, interventions that only target business ability and credit constraints might not be sufficient. Second, if informal entrepreneurs face business constraints on access to credit and entrepreneurial ability, interventions that target these two constraints can have a positive impact (and more so than for formal entrepreneurs). These theoretical predictions are supported with data from a field experiment in Tanzania with microfinance clients.

thomas de Haan in Vienna

Thomas de Haan presented the project Fairness preferences in the face of limited information at the ESA conference in Vienna this week. 

"In this project we investigate, theoretically and experimentally, the role of limited information about performance in a collective production task on redistributional preferences.

In our study we focus both on distribution decisions by one of two matched workers, as well as distribution decisions made by a monetarily unaffected spectator. For both the setting with a stakeholder and a spectator redistribution decision, we will compare two situations. One, where decision makers have full information regarding what influence worker performance and what influence 'random factor' luck had in determining the workers' contribution to the total income. Two, where decision makers have limited information regarding the worker's actual performance.

Building on the fairness preferences model from Cappelen et al. (2007, AER), we predict that stakeholders who are ex-ante pessimistic about other workers' performance, should become less prone to redistribute in the face of limited information if they hold a meritocratic fairness ideal. In contrast meritocratic spectators are predicted to become more egalitarian in their redistribution choices when facing limited information. We report the results of a laboratory experiment conducted in Bergen in 2016 as well as recently in May 2017."

This is a project together with Alexander Cappelen, Bertil Tungodden and Caroline Bonn.



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