Michael Kremer NPR, talking about Busia, Kenya and randomized control trials

 

You can read the transcript as well as listen to the show at the link:

How randomized trials and the town of Busia, Kenya changed economics

Morality in Economics, as viewed from Sociology (Georg Kanitsar in European J. of Sociology)

Georg Kanitsar, a young sociologist, undertakes the task of looking at how economists think about morality (with a focus on experimental and behavioral econ, and market design). His view of how economists think may shed some light (for economists) on how sociologists think. (I quote below from near the beginning and near the end of his paper.)

Kanitsar, G. (2023). Putting Morals into Economics: From Value Neutrality to the Moral Economy and the Economization of Morality. European Journal of Sociology / Archives Européennes De Sociologie, 1-30. doi:10.1017/

"Abstract: The economic discipline plays a performative role in constructing the moral order of market society. Yet, little attention has been paid to what economists explicitly regard as moral or how they conceive of morality. This article reflects a recent attempt to put morals into economics, that is, to introduce morality as a research topic in behavioural and experimental economics. It maps three research programs that theorize the moral economy. The programs emphasize the moral foundations of market society, the moral limits of market expansion, and the moral consequences of market trading and, thus, appear irreconcilable with classifications of economists as market enthusiasts or moral agnostics. At the same time, however, the literature centres on an “economized” form of morality that is corrective to market inefficiencies, attributed to the responsibility of the individual, and expressed in rational terms. In doing so, this literature contributes to redefining moral problems in economic terms."

"I consider efforts to incorporate morality into an economic framework advanced by two influential branches of the discipline—behavioural economics and market experiments. To gain an overview of relevant research in these branches, I assemble a database of 39 recent articles and identify 20 key articles among them.

...

" I explore the “economization of morality” by elucidating the moral arguments and the moral background of two authoritative programs in present-day economics: behavioural economics/experiments and market design/experiments. While many renowned economists have produced notable work on morality, these two research programs currently exert a unique influence on the economic discipline and are highly industrious in exporting its findings to policy making.

...

"Discourse in the economic mainstream was long dominated by market enthusiasts and moral agnostics, but the recent surge of behavioural and market experiments has again drawn attention to morality as a research topic in economics. At the argumentative level, the reviewed literature reveals a genuine break with market fundamentalism in the narrow sense. I have identified three strands that shed light on the moral economy and emphasize the moral foundations, limitations, and consequences of markets. Thus, economics has not been deaf to appeals to “put morals into markets” [Amable Reference Amable2011]. At the background level, however, the integration of morality is steered by the discipline’s theoretical and methodological underpinnings. In consequence, a very specific understanding of morality lies at the heart of these research efforts; a form of morality that is functional to market efficiency and attributed to utility-maximizing individuals.

...

"Behavioural economics thus strikes out in the opposite direction as scholarship in economic sociology. On the surface, both disciplines take as a starting point a view of market society as divided in arm’s-length transactions and social ties, and both disciplines have rediscovered morality as their subject matter. Yet, behavioural economics addresses the social sphere with tools that were tailor-made for the neoclassical analysis of markets. The field maintains the analytical primacy on efficiency and rationality, which it inherited from its parent discipline. In experiments, social exchanges are represented as contractual, anonymous, and temporary encounters, and money is regarded as a neutral tool used to express valuations. Conversely, economic sociology views markets as diverse “arenas of social interaction” [Beckert Reference Beckert2009: 245]. Market transactions are considered as far from universal, arelational, and disembedded [Aspers Reference Aspers, Beckert and Zafirovski2005], and the cultural meanings of money rarely reduce it to a qualityless, neutral, and homogenous medium of exchange [Zelizer Reference Zelizer1989]. Thus, the “moral economy” of behavioural economics is situated next to the “amoral economy” of neoclassical economics [Bowles Reference Bowles2016], echoing the traditional opposition between separate spheres of the economic and the moral [Thompson Reference Thompson E1971]. By contrast, economic sociology is increasingly devoted to identifying the multiple moralities underlying economic processes [Beckert Reference Beckert2012; Zelizer Rotman Reference Zelizer Rotman2017], convinced that “all economies are moral economies” [Fourcade Reference Fourcade2017: 665]."

Workshop on Experimental Economics and Entrepreneurship: call for papers

 Nico Lacetera writes:

We are happy to announce the Third Workshop on Experimental Economics and Entrepreneurship, sponsored by the Belk College of Business of the University of North Carolina at Charlotte.

The workshop is organized by David J. Cooper (University of Iowa), Florian Englmaier (Ludwig Maximilian University of Munich), Nicola Lacetera (University of Toronto), Krista Saral (University of North Carolina at Charlotte) and Artie Zillante (University of North Carolina at Charlotte). It will take place in Charlotte, NC on October 18-19, 2023, immediately preceding the North American Annual Meeting of the Economic Science Association, in the same location.

The workshop is meant to promote partnerships between economic experimenters and scholars studying entrepreneurship, and to expose graduate students and recent PhD graduates in Economics and Management to the benefits and challenges of research at the intersection of experimental economics and entrepreneurship. The workshop will include a mixture of presentations by senior scholars in entrepreneurship and experimental economics, talks by more junior scholars, and presentations by graduate students. The conference is designed to encourage participants to interact and hopefully discuss ideas for future projects.

This is an open call for submissions for doctoral students, post-doctoral researchers, and faculty who obtained their doctoral degrees in 2019 or later. If you are interested in participating and presenting your research, please apply by submitting the following material to esaconference@uncc.edu by June 1, 2013:      

•    A cover letter including contact information.
•    An extended abstract of the paper you plan to present.  This should not be more than a page long.  If a paper is available, this can be submitted as well, but this is not required for consideration.

 The decision about accepted applications will be communicated not later than June 20, 2023. Each accepted and confirmed applicant will have two hotel nights covered as well as normal travel expenses.  

In addition to the selected workshop presentations, here is the current list of invited speakers who will be attending:

 

Jennifer Brown (University of Utah)

Jana Gallus (UCLA)

Orsola Garofalo (Copenhagen Business School)

Rem Koning (Harvard Business School)

Ronnie Chaterjee (Duke University)

Tim Salmon (Southern Methodist University)

We look forward to receiving your applications!

David, Florian, Nico, Krista, Artie

Experiments and market design, video (I'm interviewed by Chiara Spina from INSEAD)

Professor Chiara Spina interviewed me about the use of experiments in market design (20 minute video). (We spoke about a number of experiments I collaborated on with Judd Kessler, among others.)

Computational and Experimental Economics Summer School June 11-16, 2023, Barcelona

 Rosemarie Nagel sends me the following announcement:

We invite graduate students and young faculty to the
2nd Computational and Experimental Economics Summer School
June 11-16, 2023, BESLAB, UPF, Barcelona, Spain

The goal of the summer school is to develop a foundation for using computational models
and simulations to complement and/or explain results from human subject experiments.
In particular, throughout the curriculum, students will learn how to implement a variety of agent-based models
that have successfully captured regularities observed in the experimental and field data.
They will participate in experiments and develop an original project in groups of 3-4 participants.

In addition, the summer school will include a two-day workshop on computational and experimental economics (June 14-15)
with presentations by leading researchers who are interested in experimental and computational economics.

The deadline for applications is March 31, 2023.

You can find how to participate here:

Organizers
Herbert Dawid (Bielefeld University)
John Ledyard (Caltech)
Rosemarie Nagel (ICREA-UPF, and BSE)

Yaroslav Rosokha  (Purdue University)

Guest lecturers

Mikhail Anufriev (University of Technology Sydney)
Cars Hommes (University of Amsterdam and Bank of Canada)
Annie Liang (Northwestern. University)
Valentyn Panchenko (University of New South Wales)

 

Compensation for participating in clinical trials

 Here's an opinion piece from Medpage Today:

It's Time to Pay Clinical Trial Participants More — Accelerating trial enrollment can catalyze access to much-needed medications  by Gunnar Esiason 

He writes:

"Most people I know with cystic fibrosis have participated in at least one, if not several clinical trials. 

...

"Participating in a trial can be like working for a company that hasn't invested in its employees in a long time. In this case, the employees are clinical trial participants. The pay is low despite the time required to participate in research and the growing number of trials that need participants.

"From 2019-2022, the number of registered clinical trials grew by 25%opens in a new tab or window globally -- yet participant pay remains arbitrary and inconsistentopens in a new tab or window between studies. It's almost like mismatched supply and demand curves, where participants are in high demand but unwilling to participate.

"Increasing trial participant pay might be a path toward alleviating the participant supply crunch in trials hungry for patients. One key benefit of increasing pay for patients could be substantial: namely, speeding up clinical trials through a more competitive enrollment process.

...

"More than 80% of clinical trials fail to enroll on time, leading to costs of anywhere from $600,000 to $8 million per dayopens in a new tab or window and making trials take up to twice as longopens in a new tab or window.

"And yet it has been shownopens in a new tab or window that moderately increasing pay can motivate participation without being an "unjust inducement." In other words, patients are encouraged to participate -- but not coerced to do so.

"If increasing participant pay can accelerate trial enrollment, then a safe and effective drug can reach the market faster and therefore reduce the amount of time products remain in the pre-revenue stage. The return on investment for study sponsors who increase participant pay should be clear from a business perspective.

"From a patient perspective, even a marginal improvement in time to accessing new drugs is something worth celebrating. For patients, we pay the cost of delays with our health."

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Some earlier related posts:

Monday, February 22, 2021

Ethical Payment in Human Infection Challenge Studies in the American Journal of Bioethics

Monday, March 1, 2021

Compensating challenge vaccine trial participants: further discussion in the American Journal of Bioethics

Thursday, October 29, 2020

Paying participants in challenge trials of Covid-19 vaccines, by Ambuehl, Ockenfels, and Roth

"we note that increasing hourly pay by a risk-compensation percentage as proposed in the target article provides compensation proportional to risk only if the risk increases proportionally with the number of hours worked. (Some risky tasks take little time; imagine challenge trials to test bulletproof vests.) "

Sunday, November 1, 2020

What do we know about the effects of payments to participants in challenge trials for vaccines, and other public spirited activities?

Canada experiments with decriminalization of opioids and other drugs in British Columbia

 From the CBC:

What you need to know about the decriminalization of possessing illicit drugs in B.C.  B.C. granted exemption by federal government in November 2022; pilot will run until 2026  by Akshay Kulkarni ·

"it is no longer a criminal offence to possess small amounts of certain illicit drugs in B.C. for people aged 18 or above.

"It's part of a three-year pilot by the federal government, which granted B.C. an exemption from the Controlled Drugs and Substances Act (CDSA) on May 31, 2022. 

...

"Under the exemption, up to 2.5 grams of the following four drug types can be legally possessed:

"Cocaine (crack and powder). Methamphetamine. MDMA. Opioids (including heroin, fentanyl and morphine).

"Fentanyl and its analogues were detected in nearly 86 per cent of drug toxicity deaths from 2019 until 2022, according to the latest report from the B.C. Coroners Service."

"Financial incentives for vaccination do not have negative unintended consequences," in Nature

 Here's a recent article in Nature whose title effectively summarizes its conclusions, and brings some evidence from RCTs to bear on the issue of whether financial incentives corrupt innate values:

Florian H. Schneider, Pol Campos-Mercade, Stephan Meier, Devin Pope, Erik Wengström & Armando N. Meier, "Financial incentives for vaccination do not have negative unintended consequences. Nature (2023). https://doi.org/10.1038/s41586-022-05512-4

Abstract: Financial incentives to encourage healthy and prosocial behaviours often trigger initial behavioural change1,2,3,4,5,6,7,8,9,10,11, but a large academic literature warns against using them12,13,14,15,16. Critics warn that financial incentives can crowd out prosocial motivations and reduce perceived safety and trust, thereby reducing healthy behaviours when no payments are offered and eroding morals more generally17,18,19,20,21,22,23,24. Here we report findings from a large-scale, pre-registered study in Sweden that causally measures the unintended consequences of offering financial incentives for taking the first dose of a COVID-19 vaccine. We use a unique combination of random exposure to financial incentives, population-wide administrative vaccination records and rich survey data. We find no negative consequences of financial incentives; we can reject even small negative impacts of offering financial incentives on future vaccination uptake, morals, trust and perceived safety. In a complementary study, we find that informing US residents about the existence of state incentive programmes also has no negative consequences. Our findings inform not only the academic debate on financial incentives for behaviour change but also policy-makers who consider using financial incentives to change behaviour.

"We exploit a randomized controlled trial (RCT) in the context of financial incentives for COVID-19 vaccination (P.C.-M. et al., unpublished, and ref. 5). Participants were offered payments of 200 Swedish krona (SEK; about US $24 at the time) for taking a first dose of a COVID-19 vaccine, which increased first-dose uptake by 4 percentage points 30 days after the trial (uptake remained higher even 3 months later). The RCT setting is ideal in that it allows us to compare individuals who were randomly offered financial incentives for vaccination with individuals who were not offered any financial incentives. We combine the RCT data with new Swedish administrative records for second-dose uptake and with rich, individual-level survey data.

...

"We complement our evidence from Sweden with evidence on the effects of large-scale incentive programmes implemented by US state governments. In a pre-registered study in the USA (n = 3,062), participants randomly assigned to the incentives condition received detailed information about their state’s COVID-19 vaccine incentive programme, whereas participants in the control condition did not receive this information. Because most of the participants were unaware that their state offered incentives for vaccination, this experimental design overcomes the identification problems by creating random variation in perceived exposure to incentives. In line with the evidence from Sweden, we find no negative impacts of being informed about incentive programmes on the willingness of participants to take a further dose"

Amnon Rapoport (1936-2022)

 Amnon Rapoport, a pioneer of experimental game theory, has died. 

Here's a brief obituary:

Amnon Rapoport, Distinguished Professor Emeritus of Management and Organizations at the University of Arizona, passed away on December 6th

I don't find his date of birth on the web, but in August of 1996 I participated in a conference in honor of his 60th birthday, at the University of North Carolina at Chapel Hill, where he had both studied and taught in the Department of Psychology.  Amnon had already had several heart attacks by then, and his students, who loved him, thought it prudent to have a celebration of his work at that relatively young age, but that caution proved unnecessary. 

Here's the volume of papers presented at that conference, edited by three of his students:

Budescu, David V., Ido Erev, and Rami Zwick, eds. Games and human behavior: Essays in honor of Amnon Rapoport. Erlbaum, 1999.

I first learned of his work when, as a grad student, I took a course in game theory taught by Michael Maschler, who told us about Amnon's experiments on the bargaining set.

He was a man ahead of his time, and maybe situated in the wrong discipline.  It seemed to him natural that psychologists should take a leading role in the experimental study of game theory, and he noted with some regret that instead that literature had been ceded to economists. Here's a paragraph from the introduction to 

Rapoport, Amnon. Experimental studies of interactive decisions. Vol. 5. Springer Science & Business Media, 2012.

"The history of experimentation in psychology is rich and old. It would have been quite natural and highly desirable for psychologists to extend their scope of research and assume a major role in the study of economic decision behavior. Psychology professes to be the general study of human behavior. Most psychologists are trained to regard their discipline as an observational science; they do not have to overcome the conditioning of many economists who think of economics as an a priori science. Psychologists' knowledge of experimental techniques is comprehensive. and their experience in conducting experiments. analyzing data. and discovering empirical regularities exceeds that of most economists. However. with the exception of research on individual choice behavior - where psychologists like Tversky, Kahneman, and Slovic have played a major role - psychologists have not contributed in any significant way to the growing research in experimental economics. Social psychologists for whom interactive behavior is the core of their discipline, have virtually abandoned the study of economic decisions in small groups to their colleagues in economics and related disciplines. "

Here's his cv as of 2017, and his google scholar page.

**********

Update: here's an email that Rami Zwick sent to the Economic Science Association (ESA):

"Dear ESA community,

It is with great sadness that we announce the passing of our teacher, mentor, colleague, co-author and friend, Professor Amnon Rapoport, in Tucson Arizona on December 6, 2022. 

Professor Rapoport served on the faculty of the University of California, Riverside School of Business; University of Arizona; UNC Chapel Hill; University of Haifa, Israel; and the Hebrew University of Jerusalem, Israel. He earned his Bachelor of Arts degree in psychology and philosophy from the Hebrew University of Jerusalem, then went on to earn his M.A. and Ph.D. in quantitative psychology at UNC Chapel Hill. 

Professor Rapoport was one of the pioneers and leaders in the experimental study and quantitative modeling of human decisions in social and interactive contexts. During his distinguished career, he published four books (and edited others) and more than 300 research papers and chapters in leading psychological, management, operation, marketing, decision theory, economics, and political science journals, and is recognized as a leading authority in many of these areas. His most important and influential work was on experimental studies of interactive decision-making behavior. This includes theoretical and empirical research on: 

• Coalition formation 

• Bargaining 

• Social dilemmas 

• Behavioral operations management 

• Behavioral game theory 

• Dynamic pricing 

• Directed networks 

 Professor Rapoport’s work was theory-driven, and, in most cases, the theory was represented formally by mathematical (primarily, but not exclusively, game theoretical) models. At the same time, he was a meticulous and rigorous, yet imaginative and creative experimentalist. In fact, he was one of the pioneers of computerized experimentation in the domain of individual and group decision making. 

With a career spanning over 60 years, Professor Rapoport nurtured and supported the careers of generations of scholars and researchers. He will be greatly missed by his family, friends, colleagues, co-authors, and students."

2022 Exeter Prize to Sandro Ambuehl, Douglas Bernheim, and Axel Ockenfels

 Here's an announcement in an email from the Economic Science Association (ESA):

"We are happy to announce the winners of the 2022 Exeter Prize for the best paper published in the previous calendar year in a peer-reviewed journal in the fields of Experimental Economics, Behavioural Economics and Decision Theory.

The winners are Sandro Ambuehl (University of Zurich), Douglas Bernheim (Stanford University), and Axel Ockenfels (University of Cologne) for their paper “What motivates paternalism? An experimental study”, published in The American Economic Review. 

There is a growing interest in how “choice architects” design choices for others.  This paper provides new insights about how and why people in the role of a choice architect limit the decisions of others.  Ambuehl, Bernheim and Ockenfels use the tools of experimental economics to study how subjects help other subjects (“choosers”) to be more patient in tempting intertemporal choices (in which a small, immediate outcome is pitted against a large, delayed outcome).  A key result is that choice architects do act to restrict the choice set of choosers to help them avoid temptation.  A key strength the paper is offering insight into the motivations behind this decision.  The paper proposes and tests two possible motivations:  1) A “mistakes-projective paternalism” in which the choice architect assumes others share his/her susceptibilities to temptations and uses choice sets to minimize temptations and 2) an “ideals-projective paternalism” in which the choice architect assumes others follow his/her values and limit the choice set to those valued outcomes.  The results provide clear evidence for the latter motivation.  The paper provides evidence about additional beliefs and motivations.  Choice architects believe that they are improving the welfare of choosers and they underestimate how many people they are affecting with their restrictions.  Finally, the behavior of choice architects in the laboratory predicts support for real-world paternalistic policies (regarding, for example, taxes on alcohol and tobacco) and the motivation to make choices harder is consistent with “ideals-projective paternalism.”

The winning paper was selected by the panel of Rick Larrick (Duke University), Muriel Niederle (Stanford University), and Tomasz Strzalecki (Harvard University)."

 

Machine learning plays the ultimatum game via sentence completion by Large Language Models

 One currently growing class of artificial intelligence, machine learning models are Large Language Models, which are trained on potentially all the text on the internet to do sentence completion, i.e. to pick the next words in a sentence. In this way they can generate texts that may be hard to distinguish from human texts, and engage in conversations that may be hard to distinguish from human conversations.

Here's a paper that uses LLM's to (among other things) play the responder in ultimatum games, by varying offers made by a proposer, and information about the proposer and responder, and then having it complete the sentence "[the responder] decides to ___", where valid completions begin with "accept" or "reject".

Using Large Language Models to Simulate Multiple Humans by Gati Aher, Rosa I. Arriaga, Adam Tauman Kalai

Abstract: "We propose a method for using a large language model, such as GPT-3, to simulate responses of different humans in a given context. We test our method by attempting to reproduce well-established economic, psycholinguistic, and social experiments. The method requires prompt templates for each experiment. Simulations are run by varying the (hypothetical) subject details, such as name, and analyzing the text generated by the language model. To validate our methodology, we use GPT-3 to simulate the Ultimatum Game, garden path sentences, risk aversion, and the Milgram Shock experiments. In order to address concerns of exposure to these studies in training data, we also evaluate simulations on novel variants of these studies. We show that it is possible to simulate responses of different people and that their responses are largely consistent with prior human studies from the literature. Using large language models as simulators offers advantages but also poses risks. Our use of a language model for simulation is contrasted with anthropomorphic views of a language model as having its own behavior."

***********

Here's a sample prompt for the ultimatum game:

Here is a graph of the results: a simple language model (LM-1) predicts flat acceptance or rejection regardless of offers, but the larger model LM-5 predicts that the probability of acceptance grows with the offer, in a way comparable to some human data. (The learning models LM-1 to LM-5 are increasingly large versions of GPT-3.)

I guess we'll have to add participation in experiments to the job categories threatened with takeover by AI's...

What is needed to gain support for effective algorithms in hiring, etc?

 Here's an experiment motivated in part by European regulations on transparency of algorithms.

Aversion to Hiring Algorithms: Transparency, Gender Profiling, and Self-Confidence  by Marie-Pierre Dargnies, Rustamdjan Hakimov and Dorothea Kübler

Abstract: "We run an online experiment to study the origins of algorithm aversion. Participants are either in the role of workers or of managers. Workers perform three real-effort tasks: task 1, task 2, and the job task which is a combination of tasks 1 and 2. They choose whether the hiring decision between themselves and another worker is made either by a participant in the role of a manager or by an algorithm. In a second set of experiments, managers choose whether they want to delegate their hiring decisions to the algorithm. In the baseline treatments, we observe that workers choose the manager more often than the algorithm, and managers also prefer to make the hiring decisions themselves rather than delegate them to the algorithm. When the algorithm does not use workers’ gender to predict their job task performance and workers know this, they choose the algorithm more often. Providing details on how the algorithm works does not increase the preference for the algorithm, neither for workers nor for managers. Providing feedback to managers about their performance in hiring the best workers increases their preference for the algorithm, as managers are, on average, overconfident."

"Our experiments are motivated by the recent debates in the EU over the legal requirements for algorithmic decisions. Paragraph 71 of the preamble to the General Data Protection Regulation (GDPR) requires data controllers to prevent discriminatory effects of algorithms processing sensitive personal data. Articles 13 and 14 of the GDPR state that, when profiling takes place, people have the right to “meaningful information about the logic involved” (Goodman and Flaxman 2017). While the GDPR led to some expected effects, e.g., privacy-oriented consumers opting out of the use of cookies (Aridor et al. 2020), the discussion over the transparency requirements and the constraints on profiling is still ongoing. Recently, the European Parliament came up with the Digital Services Act (DSA), which proposes further increasing the requirements for algorithm disclosure and which explicitly requires providing a profiling-free option to users, together with a complete ban on the profiling of minors. Our first treatment that focuses on the workers aims at identifying whether making the algorithm gender-blind and therefore unable to use gender to discriminate, as advised in the preamble of the GDPR and further strengthened in the proposed DSA, increases its acceptance by the workers. The second treatment is a direct test of the importance of the transparency of the algorithm for the workers. When the algorithm is made transparent in our setup, it becomes evident which gender is favored. This can impact algorithm aversion differently for women and men, for example if workers’ preferences are mainly driven by payoff maximization.

"The treatments focusing on the managers’ preferences aim at understanding why some firms are more reluctant than others to make use of hiring algorithms. One possible explanation for not adopting such algorithms is managerial overconfidence. Overconfidence is a common bias, and its effect on several economic behaviors has been demonstrated (Camerer et al. 1999, Dunning et al. 2004, Malmendier and Tate 2005, Dargnies et al. 2019). In our context, overconfidence is likely to induce managers to delegate the hiring decisions to the algorithm too seldom. Managers who believe they make better hiring decisions than they actually do, may prefer to make the hiring decisions themselves. Our paper will provide insights about the effect of overconfidence on the delegation of hiring decisions to algorithms. Similar to the treatments about the preferences of workers, we are also interested in the effect of the transparency of the algorithm on the managers’ willingness to delegate the hiring decisions. Disclosing the details of the algorithm can increase the managers’ trust in the algorithm."

Learning and competition in the lab, in France, and in India

 Three NBER working papers this week particularly caught my eye: a lab experiment, a natural experiment, and a field experiment.

The first is a reminder of why simple reinforcement learning models have as much predictive power as they do. It's an experiment that shows that even when others' experience is made clearly visible, there's a tendency to rely on 'own experience'.

Not Learning from Others by John J. Conlon, Malavika Mani, Gautam Rao, Matthew W. Ridley & Frank Schilbach  WORKING PAPER 30378 DOI 10.3386/w30378 August 2022

Abstract: We provide evidence of a powerful barrier to social learning: people are much less sensitive to information others discover compared to equally-relevant information they discover themselves. In a series of incentivized lab experiments, we ask participants to guess the color composition of balls in an urn after drawing balls with replacement. Participants' guesses are substantially less sensitive to draws made by another player compared to draws made themselves. This result holds when others' signals must be learned through discussion, when they are perfectly communicated by the experimenter, and even when participants see their teammate drawing balls from the urn with their own eyes. We find a crucial role for taking some action to generate one's `own' information, and rule out distrust, confusion, errors in probabilistic thinking, up-front inattention and imperfect recall as channels.

******

The second is a careful study of affirmative action for women in French chess tournaments: a requirement that teams include a woman had many effects, including improvement in the quality of play by French women.

Trickle-Down Effects of Affirmative Action: A Case Study in France by José De Sousa & Muriel Niederle, WORKING PAPER 30367 DOI 10.3386/w30367 August 2022

Abstract: "The introduction of a quota in the French chess Club Championship in 1990, an activity many players engage in next to playing in individual tournaments, provides a quite unique environment to study its effects on three levels. We find that women selected by the quota improve their performance. We show large spillover and trickle-down effects: There are more and better qualified women. International comparisons confirm that the results are unique to France and that there are no substantial adverse effects on French male players. We discuss the properties of this quota and how to implement it in other environments."

The concluding paragraph:

"We speculate that one reason for the success of the French chess quota was due to the fact that it was an “output” rather than a “pure representation” quota. At least one ninth of the performance of teams in the Club Championship was determined by the performance of female players. Such an “output” based quota provides organization with different incentives than a pure representation quota does. We use economic departments to discuss the different gender quotas and how each of them might be implemented. We hope that future work will provide theoretical properties of various quotas as well as find other areas where output quotas are already, or could be, implemented."

*********

The third is about the difficulty of inducing competition in close quarters.

Does the Invisible Hand Efficiently Guide Entry and Exit? Evidence from a Vegetable Market Experiment in India by Abhijit Banerjee, Greg Fischer, Dean Karlan, Matt Lowe & Benjamin N. Roth, WORKING PAPER 30360 DOI 10.3386/w30360, August 2022

Abstract: "What accounts for the ubiquity of small vendors operating side-by-side in the urban centers of developing countries? Why don’t competitive forces drive some vendors out of the market? We ran an experiment in Kolkata vegetable markets in which we induced (via subsidizing) some vendors to sell additional produce. The vendors earned higher profits, even when excluding the value of the subsidy. Nevertheless, after the subsidies ended vendors largely stopped selling the additional produce. Our results are consistent with collusion and inertial business practices suppressing competition and efficient market exit."

U. Chicago celebrates Michael Kremer

 Theory in practice--Nobel laureate Michael Kremer is building up development economics at UChicago.  By Lucas McGranahan, The University of Chicago Magazine — Summer/22

"In 1985 a new college graduate named Michael Kremer traveled to Kenya hoping to learn more about a topic he had studied at Harvard: economic development in low-income countries. He didn’t anticipate that an official in the village where he was staying would invite him to teach at a new school—but Kremer stayed in the country for a year to do just that. In fact, he cofounded an organization, WorldTeach, to send more teachers to Kenya and ultimately to several other developing countries.

...

"When he returned to Kenya in the early 1990s, Kremer was just starting his academic career as an economist at MIT. ... One friend, a Kenyan who was working for a small Dutch nongovernmental organization operating in Africa, was trying to identify schools in which to roll out a program intended to improve learning. Kremer offered a casual suggestion: select schools in a systematic way, then compare outcomes in those schools with outcomes in the same number of similar schools where the program was not operating.

"After returning home Kremer heard from his friend that the NGO was interested in trying out the approach. It was the start of a relationship that helped determine the trajectory of Kremer’s research in economics: he got involved not only with the Kenyan school study but with other experiments being done by the organization, today called ICS Africa, helping it develop evidence-backed programs.

"Kremer’s desire to help was evolving into a scientific methodology, one that would complement the most established approaches in his discipline.

“Randomized controlled trials had been used in medicine for a very long time,” he says, noting that some economists and other social scientists had also used them. And yet the technique had not broken through widely in economics, which largely either focused on theoretical models or relied on existing data. 

...

"Kremer was born in New York City to parents who were both children of Jewish immigrants from Europe. He came of age in the orbit of Kansas State University, where his father, Eugene Kremer, taught architecture, and his mother, Sara Lillian Kremer, was a professor of English. He credits his mother, who authored two books on literary representations of the Holocaust, with teaching him the necessity of addressing preventable suffering and injustice in the world—the key motivation behind his work, from founding WorldTeach to conducting research in Kenya and beyond.

"Kremer and his wife and collaborator Rachel Glennerster—a British development economist who joined the UChicago faculty as an associate professor in 2021—take this intention to heart in their research as well as in their personal philanthropy: they’re part of the Giving What We Can Pledge, a commitment to give 10 percent or more of their lifetime income to high-impact charities.

...

"In the early 2000s, Kremer and a colleague set out to study a group of 75 schools in Kenya. They found that a school-based program providing deworming pills to all students reduced absenteeism by more than 25 percent—a staggering result improving the health and well-being of the children directly affected, and likely of the entire local population and its economy over time. In their 2004 paper, the authors argue that the positive spillover effects easily justify providing free universal treatment to school-age children in high-risk areas.

"Officials took note. After the study, with the support of NGOs, the program was scaled nationwide by the Kenyan government. From there it was picked up by multiple Indian states—and then by the Indian national government. Today the world’s second most populous country holds National Deworming Day twice a year, administered through public schools.

...

"In his Nobel lecture Kremer shared his greatest hope for the work he does: “innovations in social institutions designed to accelerate scientific and technological change and orient it toward human needs.”

Evidence based medical policy: compensation for donors, by Luke Semaru and Arthur Matas in the AJT

The American Journal of Transplantation has posted ahead of print a great article proposing clinical trials of a sensible system by which kidney donors might be compensated.  It's main point is that evidence might be useful...

 A Regulated System of Incentives for Living Kidney Donation: Clearing the Way for an Informed Assessment by Luke Semaru, and Arthur J. Matas

First published: 25 June 2022 https://doi.org/10.1111/ajt.17129

This article has been accepted for publication and undergone full peer review but has not been through the copyediting, typesetting, pagination and proofreading process, which may lead to differences between this version and the Version of Record. Please cite this article as doi:10.1111/ajt.17129

Abstract: "The kidney shortage continues to be a crisis for our patients. Despite numerous attempts to increase living and deceased donation, annually in the United States, thousands of candidates are removed from the kidney transplant waiting list because of either death or becoming too sick to transplant. To increase living donation, trials of a regulated system of incentives for living donation have been proposed. Such trials may show: 1) a significant increase in donation, and 2) that informed, incentivized donors, making an autonomous decision to donate, have the same medical and psychosocial outcomes as our conventional donors. Given the stakes, the proposal warrants careful consideration. However, to date, much discussion of the proposal has been unproductive. Objections commonly leveled against it: fail to engage with it; conflate it with underground, unregulated markets; speculate without evidence; and reason fallaciously, favoring rhetorical impact over logic. The present paper is a corrective. It identifies these common errors so they are not repeated, thus allowing space for an assessment of the proposal on its merits."

The article begins with some relevant history:

"The  concept  of  incentives  for  living  donation  arose  early  in  the  history  of  kidney  transplantation.  In  the 1960s, the framers of the Uniform Anatomical Gift Act noted “every  payment  is  not necessarily  unethical”,  but  “until  the  matter  of  payment becomes a  problem  of  some  dimensions,  the  matter  should  be  left  to  the  decency  of  intelligent  human  beings”.1  In  1983, the  matter  of payment  became a problem when,  in response to the organ shortage, a physician  (whose license had previously  been revoked) established a company to broker international  kidney sales. Impoverished  residents of low-income countries  were to be flown  to the United States to sell their kidneys at a nominal  price. This was met with general condemnation,  and in part, led to passage of the  National  Organ  Transplant  Act (NOTA,  Public Law 98-507) which made it a federal crime to “knowingly  acquire, receive or otherwise transfer any  human  organ for valuable consideration for use in human  transplantation...”.  At  the  same  time,  the  World  Medical  Association,  the  World  Health  Organization,   the  Council  of  Europe,  and  the  International  Council of the Transplantation  Society, among others, issued statements  of opposition to the sale of organs. "

...

"We are not tempted to conclude,  for example, that,  since in the 1920s Prohibition brought  about  an increase in political corruption  and organized crime, the sale of alcohol,  when  legal  and  regulated,  would  do  the  same.  For the same reason, we should not be tempted to conclude  that, since participants in unregulated  markets were swindled by outlaws, incentivized  donors in a regulated system will fare the same."

FDA Contemplating Clinical Trials of Pig-Organ Transplants (WSJ)

The WSJ has the story:

FDA Planning to Allow Clinical Trials of Pig-Organ Transplants. Move could be an important step in effort to ease the shortage of human donor organs.  By Amy Dockser Marcus and Liz Essley Whyte

"The Food and Drug Administration is devising plans to allow clinical trials testing the transplantation of pig organs into humans, a person familiar with the matter said.

"If the agency follows through, the trials could be a key step in an effort to ease the deadly shortage of human donor organs. The planning comes in the wake of a handful of experimental surgeries involving the transplantation of pig organs into a critically ill man and in brain-dead patients.

"It is unclear when the trials would begin, the person said, adding that proposals from researchers would be handled case by case."

Behavioral economics and market design are quite different -- Nick Chater and George Loewenstein reflect

 Experimental economics is one of the empirical foundations of what we now call behavioral economics.  Market design sometimes depends on experiments, and is sometimes behavioral.  And when behavioral economists talk about "choice architecture" there is a clear connection with market design, although market design focuses more directly on the 'rules of the game' than on the psychology of human behavior.  Despite the connections, the two fields always felt quite different.

Here's a new working paper by two eminent behavioral scientists, one trained as a psychologist and one as an economist, saying that behavioral economics is oriented to individual level behavior, which is quite different from system level design and behavior, and that it can be costly to mistake one for the other.

The i-Frame and the s-Frame: How Focusing on Individual-Level Solutions Has Led Behavioral Public Policy Astray  by Nick Chater and George Loewenstein

Abstract: An influential line of thinking in behavioral science, to which the two authors have long subscribed, is that many of society’s most pressing problems can be addressed cheaply and effectively at the level of the individual, without modifying the system in which individuals operate. Along with, we suspect, many colleagues in both academic and policy communities, we now believe this was a mistake. Results from such interventions have been disappointingly modest. But more importantly, they have guided many (though by no means all) behavioral scientists to frame policy problems in individual, not systemic, terms: to adopt what we call the “i-frame,” rather than the “s-frame.” The difference may be more consequential than those who have operated within the i-frame have understood, in deflecting attention and support away from s-frame policies. Indeed, highlighting the i-frame is a long-established objective of corporate opponents of concerted systemic action such as regulation and taxation. We illustrate our argument, in depth, with the examples of climate change, obesity, savings for retirement, and pollution from plastic waste, and more briefly for six other policy problems. We argue that behavioral and social scientists who focus on i-level change should consider the secondary effects that their research can have on s-level changes. In addition, more social and behavioral scientists should use their skills and insights to develop and implement value-creating system-level change.

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updated reference: Chater N, Loewenstein G. The i-frame and the s-frame: How focusing on individual-level solutions has led behavioral public policy astray. Behav Brain Sci. 2022 Sep 5:1-60. doi: 10.1017/S0140525X22002023. Epub ahead of print. PMID: 36059098.

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This is not the first time that G.L. has warned of this. Here's his 2010 NYT op-ed:

Economics Behaving Badly By GEORGE LOEWENSTEIN and PETER UBEL, July 14, 2010

"As policymakers use it to devise programs, it’s becoming clear that behavioral economics is being asked to solve problems it wasn’t meant to address. Indeed, it seems in some cases that behavioral economics is being used as a political expedient, allowing policymakers to avoid painful but more effective solutions rooted in traditional economics."

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Here's a recent Social Science Bites podcast  in which GL is interviewed by David Edmonds. It touches on some of Loewenstein's vast accomplishments (he pioneered many of the most important topics in behavioral economics before they were widely recognized as important...). It focuses on the "empathy gap" that we exhibit when we fail to appreciate how we'll behave when we're in a different affective state. He also answers questions about where his ideas come from, and eclectic research methods.

George Loewenstein on Hot and Cold Affect

Harm reduction for drugs: an experiment in British Columbia

 Here's a news story in the Guardian, and the policy paper from British Columbia about the new efforts on harm reduction there.

Canada to decriminalize some drugs in British Columbia for three years. Policy aims to stem record number of overdose deaths by easing a fear of arrest by those who need help

Here's the official report of the Provincial Health Officer of British Columbia. I think the choice of cover picture does a good job of capturing the tension between treating drug users as criminals or as patients.

STOPPING THE HARM. DECRIMINALIZATION OF PEOPLE WHO USE DRUGS IN BC

A beachfront lot for you in the metaverse--or maybe an experimental lab

 With Facebook transforming itself into Meta, we're starting to hear a lot about the metaverse, a term that may have been coined by Neal Stephenson in the novel Snowcrash.

Scott Kominers, who recently signed on to an Andreessen Horowitz ("a16z" for short) expedition to the metaverse, offers this view of why you might want to set up shop there yourself sometime:

Metaverse Land: What Makes Digital Real Estate Valuable by Scott Duke Kominers

 Reading it, I realized that I had something of an early metaverse experience, involving an experiment in May 2008 in Second Life, eventually memorialized in a paper in a special issue of JEBO in honor of Werner Güth:

Greiner, Ben, Mary Caravella, and Alvin E. Roth. "Is avatar-to-avatar communication as effective as face-to-face communication? An Ultimatum Game experiment in First and Second Life." Journal of Economic Behavior & Organization 108 (2014): 374-382. 

We needed a metaverse laboratory in Second Life, and in order for us to be able to control communication between subjects, they each had to be teleported to a room more than a mile distant from anyone else (so that they would be beyond the range of Second Life chat tools). So our lab was an unusual bit of metaverse real estate: a tower of laboratory rooms floating above our island, each a mile above the room below it. (Construction in the metaverse is more flexible than in the physical universe.) Here's the description from the paper:

"Within Second Life, the sessions took place on an “island” under our control. We restricted access to the island to those participants’ avatars who had signed up to the session. Participants were received in a virtual laboratory building, the interior of which closely resembled the CLER layout (see screenshot 1 in Appendix B). They received a Linden$400 showup-fee, plus their income from the Ultimatum Game. At the beginning, participants received general instructions and were randomly matched to pairs and roles. In the no-communication treatment SL-NC, participants were teleported to private “decision rooms” (distant enough from each other to prevent any chat communication) and made their choices. In the avatar-to-avatar communication treatment SL-A2A, participants were first teleported in pairs to “discussion rooms” (see screenshot 2 in Appendix B) where they were free to discuss any topic for 5 min, before being teleported to their private decision room. In their decision room, participants received instructions on the Ultimatum Game. Decisions were made on an interactive wall in the decision room, which resembled the zTree input mask used in the laboratory sessions (see screenshot 3 in Appendix B). After all decisions were made, participants were informed of their payoffs and paid in Linden$ via the Second Life money transfer mechanism."

The Development Innovation Lab at the University of Chicago, Led by Michael Kremer

 Here's the announcement from Chicago:

The Development Innovation Lab Launches at the University of Chicago, Led by Nobel Laureate Michael Kremer

The Becker Friedman Institute’s Development Economics Center is pleased to announce the launch of the Development Innovation Lab at UChicago. The launch will take place during Innovation and Development Week, to be held April 25-29 on the University of Chicago campus.

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...

DIL’s team of professional researchers are actively engaged in cutting-edge research, including a new meta-analysis finding that water treatment reduces the odds of child mortality (death before age five) by about 30%. Drawing from this historic work, GiveWell recently announced its decision to recommend a grant of $64.7 million in new spending on water treatment, which could save thousands of lives.

“The University of Chicago’s commitment to development economics, through the launch of the Development Innovation Lab provides a tremendous opportunity to develop new knowledge on ways to address global poverty and ultimately to expand economic opportunity and improve lives,” said Kremer. “I look forward to helping build and grow the development economics community at UChicago and to advancing new research and experimentation to address a range of social and economic challenges.”

"Kremer was among the first economists to evaluate interventions in developing countries through randomized control trials. In 1998, he started a project on deworming in Kenya that has since improved the lives of millions of people. By randomizing treatments for intestinal worms at the school level, he and his collaborators found that their research initiative reduced student absenteeism by a quarter—and even carried positive outcomes to neighboring schools. Subsequent work also found that deworming had long-run impacts, leading to higher labor supply for men and more education for women.

"In addition to that research, Kremer helped develop the advance market commitment, proposing the idea of a contract that would guarantee a viable market for a costly product. Such commitments have stimulated private investment in vaccine research and the distribution of vaccines for diseases in the developing world."