Discussion Paper No. 171
July 30, 2019
The Standard Portfolio Choice Problem in Germany
Authors:
Breunig, Christoph (HU Berlin)Huck, Steffen (WZB Berlin and UCL)
Schmidt, Tobias (QuantCo)
Weizsäcker, Georg (HU Berlin and DIW Berlin)
Abstract:
We study an investment experiment with a representative sample of German households. Respondents invest in a safe asset and a risky asset whose return is tied to the German stock market. Experimental investments correlate with beliefs about stock market returns and exhibit desirable external validity at least in one respect: they predict real-life stock market participation. But many households are unresponsive to an exogenous increase in the risky asset's return. The data analysis and a series of additional laboratory experiments suggest that task complexity decreases the responsiveness to incentives. Modifying the safe asset's return has a larger effect on behaviour than modifying the risky asset's return.
Keywords:
stock market expectations; stock market participation; portfolio choice; financial literacy; complexityJEL-Classification:
D01; D14; D84; G11Download:
Open PDF fileDiscussion Paper No. 130
December 20, 2018
Giving Once, Giving Twice: A Two-Period Field Experiment On Intertemporal Crowding in Charitable Giving
Authors:
Adena, Maja (WZB Berlin)
Huck, Steffen (WZB Berlin and University College London)
Abstract:
We study intertemporal crowding between two fundraising campaigns for the same charitable organization by manipulating donors' beliefs about the likelihood of future campaigns in two subsequent field experiments. The data shows that initial giving is decreasing in the likelihood of a future campaign while subsequent giving increases in initial giving. While this refutes the predictions of a simple expected utility model, the pattern is in line with a model that allows for (anticipated or unanticipated) habit formation provided that donations in the two periods are substitutes.
Keywords:
charitable giving; field experiments; intertemporal crowding
JEL-Classification:
C93; D64; D12
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Discussion Paper No. 96
May 11, 2018
God Does Not Play Dice, but Do We?
On the Determinism of Choice in Long-Run Interactions
Authors:
Backhaus, Teresa (WZB)Breitmoser, Yves (HU Berlin)
Abstract:
When do we cooperate and why? This question concerns one of the most persistent divides between "theory and practice", between predictions from game theory and results from experimental studies. For about 15 years, theoretical analyses predict completely-mixed "behavior" strategies, i.e. strategic randomization rendering "when" and "why" questions largely moot, while experimental analyses seem to consistently identify pure strategies, suggesting long-run interactions are deterministic. Reanalyzing 145,000 decisions from infinitely repeated prisoner's dilemma experiments, and using data-mining techniques giving pure strategies the best possible chance, we conclude that subjects play semi-grim behavior strategies similar to those predicted by theory.
Keywords:
repeated game; behavior; tit-for-tat mixed strategy; memory; belief-free equilibrium; laboratory experimentJEL-Classification:
C72; C73; C92; D12Download:
Open PDF fileDiscussion Paper No. 86
March 22, 2018
Online Fundraising, Self-Image, and the Long-Term Impact of Ask Avoidance
Authors:
Adena, Maja (WZB)
Huck, Steffen (WZB)
Abstract:
We provide the first field evidence for the role of pure self-image, independent of social image, in charitable giving. In an online fundraising campaign for a social youth project run on an opera ticket booking platform we document how individuals engage in self-deception to preserve their self-image. In addition, we provide evidence on stark adverse long-run effects of the fundraising campaign for ticket sales. "Avoiding the ask," opera customers who faced more insistent online fundraising buy fewer tickets in the following season. Our results suggest that fundraising management should not decide in isolation about their campaigns, even if very successful. Rather broader operational concerns have to be considered.
Keywords:
online fundraising; quasi-experiment; self-image
JEL-Classification:
D64; D03; D12; C93; L31
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Discussion Paper No. 54
November 2, 2017
Testing Consumer Theory: Evidence From a Natural Field Experiment
Authors:
Adena, Maja (WZB)
Huck, Steffen (WZB)
Rasul, Imran (UCL)
Abstract:
We present evidence from a natural field experiment designed to shed light on whether individual behavior is consistent with a neoclassical model of utility maximization subject to budget constraints. We do this through the lens of a field experiment on charitable giving. We find that the behavior of at least 80% of individuals, on both the extensive and intensive margins, can be rationalized within a standard neoclassical choice model in which individuals have preferences, defined over own consumption and their contribution towards the charitable good, satisfying the axioms of revealed preference.
Keywords:
natural field experiment; revealed preference
JEL-Classification:
C93; D01; D12; D64
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Discussion Paper No. 16
March 25, 2017
Matching Donations Without Crowding Out?
Some Theoretical Considerations, a Field, and a Lab Experiment
Authors:
Adena, Maja (WZB Berlin)
Huck, Steffen (WZB Berlin and UCL)
Abstract:
Is there a way of matching donations that avoids crowding out? We introduce a novel matching method where the matched amount is allocated to a different project, present some simple theoretical considerations that predict reduced crowding out or crowding in (depending on the degree of substitutability between the two projects) and present evidence from a large-scale natural field experiment and a laboratory experiment. Similar to findings in the literature, conventional matching for the same project results in partial crowding out in the field experiment and, as predicted, crowding out is reduced under the novel matching scheme. The lab experiment provides more fine-tuned evidence for the change in crowding and yields further support for the theory: the novel matching method works best when the two projects are complements rather than substitutes.
Keywords:
charitable giving; matched fundraising; natural field experiment
JEL-Classification:
C93; D64; D12