Testing Economic Theory

Economics has volumes of work on theory. I try to test economic theory using data from the lab and the field. These tests of economic theory provide a richer understanding for our conceptualization of basic economic principles.

Trading experience modulates anterior insula to reduce the endowment effect

Lester C. P. Tong, Karen J. Ye, Kentaro Asai, Seda Ertac, John A. List, Howard C. Nusbaum, and Ali Hortacsu

PNAS 2016

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Trading experience has been shown to reduce the endowment effect, a decision-making bias that distorts market prices and reduces trade. Understanding the mechanisms underlying how experience changes this bias will provide important insights for developing interventions to improve market efficiency. Using functional magnetic resonance imaging, we show that market experience causes a reduction in right anterior insula activation during selling, which mediates a decrease in the endowment effect. These findings suggest that trading mitigates negative affective responses in the context of selling. People often demand a greater price when selling goods that they own than they would pay to purchase the same goods—a well-known economic bias called the endowment effect. The endowment effect has been found to be muted among experienced traders, but little is known about how trading experience reduces the endowment effect. We show that when selling, experienced traders exhibit lower right anterior insula activity, but no differences in nucleus accumbens or orbitofrontal activation, compared with inexperienced traders. Furthermore, insula activation mediates the effect of experience on the endowment effect. Similar results are obtained for inexperienced traders who are incentivized to gain trading experience. This finding indicates that frequent trading likely mitigates the endowment effect indirectly by modifying negative affective responses in the context of selling.

Are CEOs expected utility maximizers?

John A. List, Charles F. Mason

Journal of Econometrics 162 (2011) 114–123

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Are individuals expected utility maximizers? This question represents much more than academic curiosity. In a normative sense, at stake are the fundamental underpinnings of the bulk of the last halfcentury’s models of choice under uncertainty. From a positive perspective, the ubiquitous use of benefitcost analysis across government agencies renders the expected utility maximization paradigm literally the only game in town. In this study, we advance the literature by exploring CEO’s preferences over small probability, high loss lotteries. Using undergraduate students as our experimental control group, we find that both our CEO and student subject pools exhibit frequent and large departures from expected utility theory. In addition, as the extreme payoffs become more likely CEOs exhibit greater aversion to risk. Our results suggest that use of the expected utility paradigm in decision making substantially underestimates society’s willingness to pay to reduce risk in small probability, high loss events.

What Happens in the Field Stays in the Field: Professionals Do Not Play Minimax in Laboratory Experiments

Levitt, Steven D., John A. List, and David Reiley

Econometrica, (2010), forthcoming.

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The minimax argument represents game theory in its most elegant form: simple but with stark predictions. Although some of these predictions have been confirmed in field data, tests of minimax have generally failed in laboratory experiments that make use of student subjects. In a seminal study, Palacios-Huerta and Volij (2007) present evidence that potentially resolves this puzzle: soccer players (both amateur and professional) play minimax strategies in laboratory experiments. They attribute this result to an ability on the part of the soccer players to transfer expertise they have learned shooting penalty kicks to card games played in the lab. These results induced us to carry out similar experiments using subject pools with unrivaled experience applying analytical thought in card games: world class bridge and poker players. In contrast to Palacios- Huerta and Volij’s soccer players, we find little evidence that real-world experience transfers to the lab for either subject pool. These poker players, who have vast experience with high-stakes randomization, play the mixed strategy equilibrium in these games roughly as often as our student subjects. We proceed to test whether a sample of professional soccer players from the U.S. play according to theory. Again, we observe little evidence in line with the predicted mixed strategy equilibrium. Coupling complementary experimental treatments that pit professionals against preprogrammed computers with answers to post-survey questionnaires permits us to explore why professionals do not perform well in the lab.

Investment under Uncertainty: Testing the Options Model with Professional Traders

Haigh, Michael and John A. List

Review of Economics and Statistics, (2010), forthcoming

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An important class of investment decisions is characterized by unrecoverable sunk costs, resolution of uncertainty through time, and the ability to invest in the future as an alternative to investing today. The options model provides guidance in such settings, including an investment decision rule called the ‘bad news principle’: the downside investment state influences the investment decision whereas the upside investment state is ignored. This study takes a new approach to examining predictions of the options model by using the tools of experimental economics. Our evidence, which is drawn from student and professional trader subject pools, is broadly consonant with the options model.

Checkmate: Exploring Backward Induction Among Chess Player

Levitt, Steven D., John A. List, and Sally Sadoff

American Economic Review, (2010), forthcoming.

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It is difficult to overstate the profound impact that game theory has had on the economic approach and on the sciences more generally. For that reason, understanding how closely the assumptions that underpin game theoretic analysis conform to actual human decision-making is a question of first-order importance to economists. In this spirit, backward induction represents one of the most basic concepts in game theory.

The Market: Catalyst for Rationality and Filter of Irrationality

List, John A. and Daniel L. Millimet

The B.E. Journal of Economic Analysis & Policy, (2008), 8(1 – Frontiers), Article 47.

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Assumptions of individual rationality and preference stability provide the foundation for a convenient and tractable modeling approach. While both of these assumptions have come under scrutiny in distinct literatures, the two lines of research remain disjointed. This study begins by explicitly linking the two literatures while providing insights into perhaps the central issue facing behavioral economics today: to what extent does market experience mitigate various forms of individual irrationality? We find considerable evidence that the market is a catalyst for rationality. The study then focuses on aggregate market outcomes by examining empirically whether individual rationality is a prerequisite for market efficiency. Using field data gathered from more than 380 subjects of age 6-18 in multi-lateral bargaining markets at a shopping mall, we find that the market is a filter of irrationality—even when markets are populated solely by irrational buyers, aggregate market outcomes quickly converge to neoclassical predictions.

Naturally Occurring Markets and Exogenous Laboratory Experiments: A Case Study of the Winner’s Curse

Harrison, Glenn W. and John A. List

Economic Journal, (2008), 118(528), pp. 822-843.

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We examine the relevance of experimental findings from laboratory settings that abstract from the field context of the task that theory purports to explain. Using common value auction theory as our guide, we identify naturally occurring settings in which one can test the theory. Experienced agents bidding in familiar roles do not fall prey to the winner’s curse. Yet, experienced agents fall prey to the winner’s curse when bidding in an unfamiliar role. We conclude that the theory predicts field behaviour well when one is able to identify naturally occurring field counterparts to the key theoretical conditions.

Exploring the Impact of Financial Incentives on Stereotype Threat: Evidence from a Pilot Study

Fryer, Roland G., Steven D. Levitt, and John A. List

American Economic Review, (2008), 98(2—P&P), pp. 370-375.

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An influential finding in experimental psychology is the presence of stereotype threat: making gender salient induces large gender gaps in performance on math tests.

Naturally Occurring Preferences and Exogenous Laboratory Experiments: A Case Study of Risk Aversion

Harrison, Glenn W., John A. List, and Charles Towe

Econometrica, (2007), 75 (2), pp. 433-458.

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Does individual behavior in a laboratory setting provide a reliable indicator of behavior in a naturally occurring setting? We consider this general methodological question in the context of eliciting risk attitudes. The controls that are typically employed in laboratory settings, such as the use of abstract lotteries, could lead subjects to employ behavioral rules that differ from the ones they employ in the field. Because it is field behavior that we are interested in understanding, those controls might be a confound in themselves if they result in differences in behavior. We find that the use of artificial monetary prizes provides a reliable measure of risk attitudes when the natural counter- part outcome has minimal uncertainty, but that it can provide an unreliable measure when the natural counterpart outcome has background risk. Behavior tended to be moderately risk averse when artificial monetary prizes were used or when there was minimal uncertainty in the natural nonmonetary outcome, but subjects drawn from the same population were much more risk averse when their attitudes were elicited using the natural nonmonetary outcome that had some background risk. These results are consistent with conventional expected utility theory for the effects of background risk on attitudes to risk.

A fundraising mechanism inspired by historical tontines: Theory and experimental evidence

Lange, Andreas, John A. List, and Michael K. Price

Journal of Public Economics, (2007), 91(9), pp. 1750-1782.

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The tontine, which is an interesting mixture of group annuity, group life insurance, and lottery, has a peculiar place in economic history. In the seventeenth and eighteenth centuries it played a major role in raising funds to finance public goods in Europe, but today it is rarely encountered outside of a dusty footnote in actuarial course notes or as a means to thicken the plot of a murder mystery. This study provides a formal model of individual contribution decisions under a modern variant of the historical tontine mechanism that is easily implemented by private charities. Our model incorporates desirable properties of the historical tontine to develop a mechanism to fund the private provision of a public good. The tontine-like mechanism we derive is predicted to outperform not only the voluntary contribution mechanism but also another widely used mechanism: charitable lotteries. Our experimental test of the instrument provides some evidence of the beneficial effects associated with implementing tontine-like schemes. We find that the mechanism has particular power in cases where agents are risk averse or in situations where substantial asymmetries characterize individual preferences for the public good.

A Test of Diminishing Marginal Value

Horowitz, John, John A. List, and Kenneth E. McConnell

Economica, (2007), 74(296), pp. 650-663.

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The notion of diminishing marginal value had a profound impact on the development of neoclassical theory. Early neoclassical scholars had difficulty convincing contemporaries of the new paradigm’s value until political economists used the critical assumption of diminishing marginal value to link utility and demand. While diminishing marginal value remains a key component of modern economic intuition, there is little direct verification of this behavioural property. This paper reports experiments on a myriad of subject pools to examine behaviour in both price and exchange settings. We report results from nearly 900 subjects across 19 treatments and find strong evidence of diminishing marginal value.

Using Lotteries to Finance Public Goods: Theory and Experimental Evidence

Lange, Andreas, John A. List, and Michael K. Price

International Economic Review, (2007), 48(3), pp. 901-927.

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This study explores the economics of charitable fund-raising. We begin by developing theory that examines the optimal lottery design while explicitly relaxing both risk-neutrality and preference homogeneity assumptions. We test our theory using a battery of experimental treatments and find that our theoretical predictions are largely confirmed. Specifically, we find that single- and multiple-prize lotteries dominate the voluntary contribution mechanism both in total dollars raised and the number of contributors attracted. Moreover, we find that the optimal fund-raising mechanism depends critically on the risk postures of potential contributors and preference heterogeneity.

On the Interpretation of Giving in Dictator Games

List, John A.

Journal of Political Economy, (2007), 115(3), pp. 482-494.

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The dictator game represents a workhorse within experimental economics, frequently used to test theory and to provide insights into the prevalence of social preferences. This study explores more closely the dictator game and the literature’s preferred interpretation of its meaning by collecting data from nearly 200 dictators across treatments that varied the action set and the origin of endowment. The action set variation includes choices in which the dictator can ‘take’ money from the other player. Empirical results question the received interpretation of dictator game giving: many fewer agents are willing to transfer money when the action set includes taking. Yet, a result that holds regardless of action set composition is that agents do not ubiquitously choose the most selfish outcome. The results have implications for theoretical models of social preferences, highlight that ‘institutions’ matter a great deal, and point to useful avenues for future research using simple dictator games and relevant manipulations.

Information Cascades: Evidence from a Field Experiment with Financial Market Professionals

Alevy, Jonathan E., Michael S. Haigh, and John A. List

Journal of Finance, (2007), 62(1), pp. 151-180.

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Previous empirical studies of information cascades use either naturally occurring data or laboratory experiments. We combine attractive elements from each of these lines of research by observing market professionals from the Chicago Board of Trade (CBOT) in a controlled environment. Analysis of over 1,500 individual decisions suggests that CBOT professionals behave differently from our student control group. For instance, professionals are better able to discern the quality of public signals and their decisions are not affected by the domain of earnings. These results have implications for market efficiency and are important in both a positive and normative sense.

Putting Behavioral Economics to Work: Testing for Gift Exchange in Labor Markets Using Field Experiments

Gneezy, Uri and John A. List

Econometrica, (2006), 74(5), pp. 1365- 1384.

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Recent discoveries in behavioral economics have led scholars to question the underpinnings of neoclassical economics. We use insights gained from one of the most influential lines of behavioral research-gift exchange-in an attempt to maximize worker effort in two quite distinct tasks: data entry for a university library and door-to-door fundraising for a research center. In support of the received literature, our field evidence suggests that worker effort in the first few hours on the job is considerably higher in the ‘gift’ treatment than in the ‘nongift’ treatment. After the initial few hours, however, no difference in outcomes is observed, and overall the gift treatment yielded inferior aggregate outcomes for the employer: with the same budget we would have logged more data for our library and raised more money for our research center by using the market-clearing wager at her than by trying to induce greater effort with a gift of higher wages.

How Elections Matter: Theory and Evidence from Environmental Policy

List, John A. and Daniel M. Sturm

Quarterly Journal of Economics, (2006), 121(4), pp. 1249-1281.

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This paper explores to what extent secondary policy issues are influenced by electoral incentives. We develop a two-dimensional political agency model, in which a politician decides on both a frontline policy issue and a secondary policy issue. The model predicts when the incumbent should manipulate the secondary policy to attract voters. We test our model by using panel data on environmental policy choices in the U. S. states. In contrast to the popular view that secondary policies are largely determined by lobbying, we find that there are strong effects of electoral incentives.

The Uncertainty Effect: When a Risky Prospect is Valued Less than its Worst Possible Outcome

Gneezy, Uri, John A. List, and George Wu

Quarterly Journal of Economics, (2006), 121(4), pp. 1283-1309.

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Expected utility theory, prospect theory, and most other models of risky choice are based on the fundamental premise that individuals choose among risky prospects by balancing the value of the possible consequences. These models, therefore, require that the value of a risky prospect lie between the value of that prospect’s highest and lowest outcome. Although this requirement seems essential for any theory of risky decision-making, we document a violation of this condition in which individuals value a risky prospect less than its worst possible realization. This demonstration, which we term the uncertainty effect, draws from more than 1000 experimental participants, and includes hypothetical and real pricing and choice tasks, as well as field experiments in real markets with financial incentives. Our results suggest that there are choice situations in which decision-makers discount lotteries for uncertainty in a manner that cannot be accommodated by standard models of risky choice.

Toward an Understanding of the Economics of Charity: Evidence from a Field Experiment

Landry, Craig, Andreas Lange, John A. List, Michael K. Price, and Nicholas G. Rupp.

Quarterly Journal of Economics, (2006), 121(2), pp. 747-782.

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This study develops theory and uses a door-to-door fund-raising field experiment to explore the economics of charity. We approached nearly 5000 households, randomly divided into four experimental treatments, to shed light on key issues on the demand side of charitable fund-raising. Empirical results are in line with our theory: in gross terms, the lotteries raised more money than the voluntary contributions treatments. Interestingly, in terms of both maximizing current contributions and inducing participation, we find that a one-standard deviation increase in female solicitor physical attractiveness is similar to that of the lottery incentive.

The Behavioralist Meets the Market: Measuring Social Preferences and Reputation Effects in Actual Transactions

List, John A.

Journal of Political Economy, (2006), 114(1), pp. 1-37.

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The role of the market in mitigating and mediating various forms of behavior is perhaps the central issue facing behavioral economics to- day. This study designs a field experiment that is explicitly linked to a controlled laboratory experiment to examine whether, and to what extent, social preferences influence outcomes in actual market trans- actions. While agents drawn from a well-functioning marketplace be- have in accord with social preference models in tightly controlled laboratory experiments, when they are observed in their naturally occurring settings, their behavior approaches what is predicted by self- interest theory. In the limit, much of the observed behavior in the marketplace that is consistent with social preferences is due to reputational concerns: suppliers who expect to have future interactions with buyers provide higher product quality only when the buyer can verify quality via a third-party certifier. The data also speak to theories of how reputation effects enhance market performance. In particular, reputation and the monitoring of quality are found to be complements, and findings suggest that the private market can solve the lemons problem through third-party verification.

Demand Reduction in a Multi-Unit Auctions with Varying Numbers of Bidders: Theory and Evidence from a Field Experiment

Engelbrecht-Wiggans, Richard, John A. List, and David H. Reiley

International Economic Review, (2006), 47(1), pp. 203-232.

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Recent auction theory and experimental results document strategic demand reduction by bidders in uniform-price auctions. The present article extends this area of research to consider the effects of varying the number of bidders. Our theoretical model predicts that demand reduction should decrease with an increase in the number of bidders. Considerable demand reduction remains even in the asymptotic limit, although truthful bidding yields profits very close to those of equilibrium play. We experimentally confirm several of our predictions by examining bidding behavior of subjects in an actual marketplace, auctioning dozens of sports cards using both uniform-price and Vickrey auction formats.

Friend or Foe? A Natural Experiment of the Prisoner’s Dilemma

List, John A.

Review of Economics and Statistics, (2006), 88(3), pp. 463-471.

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This study examines data drawn from the game show Friend or Foe? which is similar to the classic prisoner’s dilemma tale: partnerships are endogenously determined, and players work together to earn money, after which they play a one-shot prisoner’s dilemma game over large stakes: varying from $200 to (potentially) more than $22,000. The data reveal several interesting insights; perhaps most provocatively, they suggest that even though the game is played in front of an audience of millions of viewers, some of the evidence is consistent with a model of discrimination. The observed patterns of social discrimination are unanticipated, however.

Cyclicality and the Labor Market for Economists

Gallet, Craig A., John A. List, and Peter F. Orazem

Southern Economic Journal, (2005), 72(2), pp. 284-304.

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The 1987 academic market was strong, whereas the 1997 market was weak. A multimarket theory of optimal search suggests that job seekers will respond to a weakening market by changing their search strategies at the extensive margin (which markets to enter) and the intensive margin (how many applications to submit per market). Employers respond to the weakening market by raising their hiring standards. High-quality applicants will obtain an increased share of academic interviews in weak markets while applicants from weaker schools will increasingly secure interviews outside of the academic market. Empirical results show that in the bust market, graduates of elite schools shifted their search strategies to include weaker academic institutions, while graduates of lower-ranked schools shifted their applications away from academia and toward the business sector. In bust conditions, academic institutions increasingly concentrate their interviews on elite school graduates, women, and U.S. residents.

Demand Reduction in Multi-Unit Auctions: Evidence from a Sportscard Field Experiment: Reply

Engelbrecht-Wiggans, Richard, John A. List, and David H. Reiley

American Economic Review, (2005), 95(1), pp. 472-476.

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Recent auction theory and experimental results document strategic demand reduction by bidders in uniform-price auctions. The present article extends this area of research to consider the effects of varying the number of bidders. Our theoretical model predicts that demand reduction should decrease with an increase in the number of bidders. Considerable demand reduction remains even in the asymptotic limit, although truthful bidding yields profits very close to those of equilibrium play. We experimentally confirm several of our predictions by examining bidding behavior of subjects in an actual marketplace, auctioning dozens of sportscards using both uniform-price and Vickrey auction formats.

The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field

List, John A.

Quarterly Journal of Economics, (2004), 119(1), pp. 49-89.

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Empirical studies have provided evidence that discrimination exists in various markets, but they rarely allow the analyst to draw conclusions concerning the nature of discrimination. By combining data from bilateral negotiations in the sportscard market with complementary field experiments, this study provides a framework that amends this shortcoming. The experimental design, which includes data gathered from more than 1100 market participants, provides sharp endings: (i) there is a strong tendency for minorities to receive initial and final offers that are inferior to those received by majorities, and (ii) overall, the data indicate that the observed discrimination is not due to animus, but represents statistical discrimination.

The Hidden Costs and Returns of Incentives – Trust and Trustworthiness among CEOs

Fehr, Ernst and List, John A.

Journal of the European Economic Association, (2004), 2(5), pp. 743-771.

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We examine experimentally how Chief Executive Officers (CEOs) respond to incentives and how they provide incentives in situations requiring trust and trustworthiness. As a control we compare the behavior of CEOs with the behavior of students. We find that CEOs are considerably more trusting and exhibit more trustworthiness than students thus reaching substantially higher efficiency levels than students. Moreover we find that, for CEOs as well as for students, incentives based on explicit threats to penalize shirking backfire by inducing less trustworthy behavior, giving rise to hidden costs of incentives. However, the availability of penalizing incentives also creates hidden returns: if a principal expresses trust by voluntarily refraining from implementing the punishment threat, the agent exhibits significantly more trustworthiness than if the punishment threat not available. Thus trust seems to reinforce trustworthy behavior. Overall, trustworthiness is highest if the threat to punish is available but not used, while it is lowest if the threat to punish is used. Paradoxically, however, most CEOs and students use the threat, CEOs use it less.

Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace

List, John A.

Econometrica, (2004), 72(2), pp. 615-625.

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Several experimental studies have provided evidence that suggest indifference curve shave a kink around the current endowment level. These results, which clearly contradict closely held economic doctrines, have led some influential commentators to call for an entirely new economic paradigm to displace conventional neoclassical theory-e.g., prospect theory, which invokes psychological effects. This paper pits neo- classical theory against prospect theory by investigating data drawn from more than 375 subjects actively participating in a well-functioning marketplace. The pattern of results suggests that prospect theory adequately organizes behavior among inexperienced consumers, but consumers with intense market experience behave largely in accordance with neoclassical predictions. Moreover, the data are consistent with the notion that consumers learn to overcome the endowment effect in situations beyond specific problems they have previously encountered. This ‘transference of behavior’ across domains has important implications in both a positive and normative sense.

Testing Neoclassical Competitive Theory in Multilateral Decentralized Markets

List, John A.

Journal of Political Economy, (2004), 112(5), pp. 1131-1156.

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Expected utility theory, prospect theory, and most other models of risky choice are based on the fundamental premise that individuals choose among risky prospects by balancing the value of the possible consequences. These models, therefore, require that the value of a risky prospect lie between the value of that prospect’s highest and lowest outcome. Although this requirement seems essential for any theory of risky decision-making, we document a violation of this condition in which individuals value a risky prospect less than its worst possible realization. This demonstration, which we term the uncertainty effect, draws from more than 1000 experimental participants, and includes hypothetical and real pricing and choice tasks, as well as field experiments in real markets with financial incentives. Our results suggest that there are choice situations in which decision-makers discount lotteries for uncertainty in a manner that cannot be accommodated by standard models of risky choice.

Does Market Experience Eliminate Market Anomalies?

List, John A.

Quarterly Journal of Economics, (2003), 118(1), pp. 41-71.

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This study examines individual behavior in two well functioning market places to investigate whether market experience eliminates the endowment effect.

The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign

List, John A. and David Lucking-Reiley

Journal of Political Economy, (2002), 110(1), pp. 215-233.

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The theory of riskless choice, as pioneered by Jeremy Bentham and James Mill, characterizes utility maximization as an individual process whereby decision makers’ preferences are consistent and stable. If preferences are labile and subject to the whims of circumstance then no optimization principles may underlie even the most straight forward of choices.

Testing neoclassical competitive market theory in the field

List, John A.

Proceedings of the National Academy of Science, (2002), 99(24), pp. 15827-15830.

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This study presents results from a pilot field experiment that tests predictions of competitive market theory. A major advantage of this particular field experimental design is that my laboratory is the market place: subjects are engaged in buying, selling, and trading activities whether I run an exchange experiment or am a passive observer. In this sense, I am gathering data in a natural environment while still maintaining the necessary control to execute a clean comparison between treatments. The main results of the study fall into two categories. First, the competitive model predicts reasonably well in some market treatments: the expected price and quantity levels are approximated in many market rounds. Second, the data suggest that market composition is important: buyer and seller experience levels impact not only the distribution of rents but also the overall level of rents captured. An unexpected result in this regard is that average market efficiency is lowest in markets that match experienced buyers and experienced sellers and highest when experienced buyers engage in bargaining with inexperienced sellers. Together, these results suggest that both market experience and market composition play an important role in the equilibrium discovery process.

Academic Economists Behaving Badly? A Survey on Three Areas of Unethical Behavior

List, John A., Charles D. Bailey,Patricia J. Euzent, and Thomas L. Martin

Economic Inquiry, (2001), 39(1), pp. 162-170.

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This article measures the degree to which academic economists have engaged in unethical behavior and the degree to which academic economists believe the profession as a whole engages in unethical behavior. Three main types of unethical behavior are examined: (1) falsification of research; (2) expropriation of graduate student research funding or including an undeserving co-author on a research paper; and (3) exchange of grade for gifts, money, or sex. Using a unique data set gathered at the 1998 American Economic Association (AEA) meetings, we find that there is a significant amount of misconduct, particularly in the second category.

Determinants of securing academic interviews after tenure denial: evidence from a zero-inflated Poisson model

List, John A.

Applied Economics, (2001), 33(11), pp. 1423-1431.

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This paper uses a new data set to estimate empirically the optimal job search strategies for recently non-tenured economists seeking to obtain an academic job. Estimates from a zero inflated Poisson model suggest that a portion of interview counts is beyond the candidate’s control as age, colour of skin, gender, and citizenship all play a part in the interview decision. A candidate can substantially enhance the probability of obtaining initial interviews by maintaining quality research and teaching portfolios, however.

Interview Scheduling Strategies for New Ph.D. Economists

List, John A.

Journal of Economic Education, (2000), 31(2), pp. 191-201

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In this study, I investigated those factors using a data set gathered at the 1997 American Economic Association (AEA) meetings in New Orleans. My purpose was to increase the information available to Ph.D. candidates who wish to maximize their post graduation job prospects. In addition, this study may guide undergraduates and master’s candidates who seek to pursue a Ph.D. in economics. The results of the findings, however, could benefit more than job seekers-they may provide academic departments and private industry with a comparative baseline for making decisions to interview job candidates.

Demand Reduction in a Multiunit Auctions: Evidence from a Sportscard Field Experiment

List, John A. and David Lucking-Reiley

American Economic Review, (2000), 90(4), pp. 961-972.

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The story begins with a real-world observation: the existence of multi-unit uniform price auctions. It continues with a theory of demand reduction in uniform price auctions. Next comes the experiment: John List and David Lucking-Reiley’s (2000) field experiment at a sportscard show, which tests the predictions of that particular theory.

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