Discussion Paper No. 113
November 5, 2021
Historic Sex-Ratio Imbalances Predict Female Participation in the Market for Politicians
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We analyze the long-term effects of gender imbalances on female labor force participation, in particular in the market for politicians. We exploit variation in sex ratios - the number of men divided by the number of women in a region - across Germany induced by WWII. In the 1990 elections, women were more likely to run for office in constituencies that had relatively fewer men in 1946. We do not find a significant effect of the sex ratio on the likelihood of a woman winning the election. These results suggest that while women were more likely to run for a seat in parliament in constituencies with lower historical sex ratios, voters were not more inclined to vote for them. Voter demand effects thus do not appear to be as strong as candidate supply effects.
Keywords:
female politicians; gender stereotypes; occupational choice; sex imbalance;
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Discussion Paper No. 112
Social Image Concerns and Welfare Take-Up
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Using a laboratory experiment, we present first evidence that social image concerns causally reduce the take-up of an individually beneficial transfer. Our design manipulates the informativeness of the take-up decision by varying whether transfer eligibility is based on ability or luck, and how the transfer is financed. We find that subjects avoid the inference both of being low-skilled (ability stigma) and of being willing to live off others (free-rider stigma). Using a placebo treatment, we exclude other explanations for the observed stigma effects. Although stigma reduces take-up, elicitation of political preferences reveals that only a minority of "taxpayers" vote for the public transfer.
Keywords:
stigma; signaling; redistribution; non take-up; welfare program;
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Discussion Paper No. 75
November 4, 2021
Job Search with Subjective Wage Expectations
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This paper analyzes how subjective expectations about wage opportunities influence the job search decision. We match data on subjective wage expectations with administrative employment records. The data reveal that unemployed individuals over-estimate their future net re-employment wage by 10% on average. In particular, the average individual does not anticipate that wage offers decline in value with their elapsed time out of em- ployment. How does this optimism affect job finding? We analyze this question using a structural job search framework in which subjective expectations about future wage offers are not constrained to be consistent with reality. Results show that wage optimism has highly dynamic effects: upon unemployment entry, optimism decreases job finding by about 8%. This effect weakens over the unemployment spell and eventually switches sign after about 8 months of unemployment. From then onward, optimism prevents un- employed individuals from becoming discouraged and thus increases search. On average, optimism increases the duration of unemployment by about 6.5%.
Keywords:
job search; subjective expectations; structural estimation;
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Discussion Paper No. 70
Signal Sell: Product Lines when Consumers Differ Both in Taste for Quality and Image Concern
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This paper analyzes optimal product lines when consumers differ both in their taste for quality and in their desire for social image. The market outcome features partial pooling and product differentiation that is not driven by heterogeneous valuations for quality but by image concerns. A typical monopoly outcome is a two-tier product line resembling a "masstige" strategy as observed in luxury goods markets. Products can have identical quality and differ only in price and image, thereby rationalizing quality-equivalent line extensions. Under competition, both average quality and market coverage are (weakly) higher but monopoly can yield higher welfare than competition.
Keywords:
image concern; conspicuous consumption; two-dimensional screening; nonlinear pricing;
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Discussion Paper No. 64
Fairness in Markets and Market Experiments
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Whether pro-social preferences identified in economic laboratories survive in natural market contexts is an important and contested issue. We investigate how fairness in a laboratory experiment framed explicitly as a market exchange relates to preferences for fair trade products before and after the market experiment. We find that the willingness to buy at a higher price when higher wages are paid to the worker correlates both with the choice for a fair trade product before the laboratory experiment and with whether the participants are willing to pay a positive fair trade premium, elicited at the end of the experiment. These results support the notion that fairness preferences as assessed in laboratory experiments capture preferences for fair behavior in comparable situations outside the laboratory.
Keywords:
fairness; market experiments; external validity; fair trade;
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Discussion Paper No. 61
Who Cares About Social Image?
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This paper experimentally investigates how concerns for social approval relate to intrinsic motivations to purchase ethically. Participants state their willingness-to-pay for both a fair trade and a conventional chocolate bar in private or publicly. A standard model of social image predicts that all participants increase their fair trade premium when facing an audience. We find that the premium is indeed higher in public than in private. This effect, however, is driven by participants who preferred a conventional chocolate bar over a fair trade one in a pre-lab choice. For those who chose the fair trade chocolate bar, public exposure does not change the fair trade premium. This is captured by a generalized model where intrinsic preferences and the concern for social approval are negatively correlated.
Keywords:
image concerns; ethical consumption; fair trade; social approval; experiments;
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Discussion Paper No. 40
November 3, 2021
Gender Differences in Willingness to Compete: The Role of Public Observability
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A recent literature emphasizes the importance of the gender gap in willingness to compete as a partial explanation for gender differences in labor market outcomes. However, whereas experiments investigating willingness to compete typically do so in anonymous environments, real world competitions often have a more public nature, which introduces potential social image concerns. If such image concerns are important, we should expect public observability to further exacerbate the gender gap. We test this prediction using a laboratory experiment that varies whether the decision to compete, and its outcome, is publicly observable. Across four different treatments, however, all treatment effects are close to zero. We conclude that the public observability of decisions and outcomes does not exert a significant impact on male or female willingness to compete, indicating that the role of social image concerns related to competitive decisions may be limited.
Keywords:
gender differences; competitiveness; social image; experiment;
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Discussion Paper No. 15
Meta-Search and Market Concentration
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Competing intermediaries search on behalf of consumers among a large number of hor- izontally differentiated sellers. Consumers either pick the best deal offered by a random in- termediary, or compare the intermediaries. A higher number of deal finders has the direct effect of decreasing their search effort, but also increases the incentives for consumers to be- come informed. A higher share of informed consumers in turns increases the search effort of deal finders, so that the sign of the total effect is ambiguous. If the total effect of lower concentration is to increase search effort, it always decreases the price offered by sellers.
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Discussion Paper No. 14
Gender Differences in Tournament Choices: Risk Preferences, Overconfidence or Competitiveness?
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A large number of recent experimental studies show that women are less likely to sort into competitive environments. While part of this effect may be explained by gender differences in risk attitudes and overconfidence, previous studies have attributed the majority of the gender gap to gender differences in a separate ‘competitiveness’ trait. We re-examine this result using a novel experimental technique that allows us to separate competitiveness from alternative explanations by experimental design. In contrast to the literature, our results imply that the whole gender gap is driven by risk attitudes and overconfidence, which has important implications for future research.
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Discussion Paper No. 21
A Framework for Separating Individual Treatment Effects From Spillover, Interaction and General Equilibrium Effects
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This paper suggests a causal framework for disentangling individual level treatment effects and interference effects, i.e., general equilibrium, spillover, or interaction effects related to treatment distribution. Thus, the framework allows for a relaxation of the Stable Unit Treatment Value Assumption (SUTVA), which assumes away any form of treatment-dependent interference between study participants. Instead, we permit interference effects within aggregate units, for example, regions or local labor markets, but need to rule out interference effects between these aggregate units. Borrowing notation from the causal mediation literature, we define a range of policy-relevant effects and formally discuss identification based on randomization, selection on observables, and difference-in-differences. We also present an application to a policy intervention extending unemployment benefit durations in selected regions of Austria that arguably affected ineligibles in treated regions through general equilibrium effects in local labor markets.
Keywords:
treatment effect; general equilibrium effects; spillover effects; interaction effects; interference effects; inverse probability weighting; propensity score; mediation analysis; difference-in-differences;
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