Dai, Z., Hogarth, R. M., & Villeval, M. C. (2015)." Ambiguity on audits and cooperation in a public goods game." European Economic Review, 74, 146-162. Listed two times as SSRN's Top Ten download list for: Game Theory & Bargaining Theory eJournal. Paper can be downloaded here Revised version can be found here
"The efficiency of crackdowns: A lab-in-the-field experiment in public transportations" with Fabio Galeotti and Marie Claire Villeval , forthcoming, Theory and Decision This paper is the winner of the first best paper award of AFSEE 2015
Abstract The concentration of high frequency controls in a limited period of time (“crackdowns”) constitutes an important feature of many law enforcement policies around the world. In this paper, we offer a comprehensive investigation on the relative efficiency and effectiveness of various crackdown policies using a lab-in-the-field experiment with real passengers of a public transport service. We introduce a novel game, the daily public transportation game, where subjects have to decide, over many periods, whether to buy or not a ticket knowing that there might be a control. Our results show that (a) concentrated crackdowns are less effective and efficient than random controls; (b) prolonged crackdowns reduce fare-dodging during the period of intense monitoring but induces a burst of fraud as soon as they are withdrawn; (c) pre-announced controls induces more fraud in the periods without control. Overall, we also observe that real fare-dodgers fraud more in the experiment than non-fare-dodgers. Published version Working paper is downloadable at SSRN
"Cheating in the Lab Predicts Fraud in the Field: An Experiment in Public Transportations" with Fabio Galeotti and Marie Claire Villeval, forthcoming, Management Science
Listed on SSRN's Top Ten download list for: AARN: Emerging Areas of Theory (Sub-Topic), AARN: Theory (Topic), Decision Making, Organizational Behavior & Performance eJournal and ORG: Rationality, Cognition, & Decision Making (Topic). // Listed on SSRN's Top Ten download list for: CSN: Business // Listed 2 times on SSRN's Top Ten download list for: ERN: Behavioral Economics (Topic) and ERN: Experimental Economics (Topic). Abstract: We conduct an artefactual field experiment using a diversified sample of passengers of public transportations to study attitudes towards dishonesty. We find that the diversity of behavior in terms of dis/honesty in laboratory tasks and in the field correlate. Moreover, individuals who have just been fined in the field behave more honestly in the lab than the other fare-dodgers, except when context is introduced. Overall, we show that simple tests of dishonesty in the lab can predict moral firmness in life,although frauders who care about social image cheat less when behavior can be verified ex post by the experimenter.
Endogenous crackdowns: Theory and Experimental evidence Abstract
We present a simple model to analyze the efficacy of endogenous crackdowns, i.e., sudden and dramatic increases of audit probability triggered by a low level of compliance. We test this model experimentally. Our results show that: (a) compliance reacts quickly to the occurrence of crackdowns; (b) subjects report more than half of their income even during non-crackdown periods; (c) announcements of crackdown increase significantly tax compliance both when crackdowns are pre-announced and when they are announced ex post; (d) subjects are able to coordinate quickly to end crackdowns. Our results have important implications for policy-makers in terms of designing more effective crackdown policies.
"Testing fare evasion in the lab: The moral cost of dishonesty" with Fabio Galeotti and Marie Claire Villeval
Abstract We study the impact of the size of deception on cheating behavior for various probabilities of detection and various amounts of fine in risky or ambiguous environments. We combine the control offered by the laboratory environment with the realism from using a representative sample of the adult population using public transportations in a big French city. For this sample, we are able to identify actual cheating behavior in public transportations. In this artefactual field experiment, subjects make successive decisions between buying and not buying a ticket for various distances, a longer distance without a ticket representing a bigger deception than a short distance fare dodging. Our results show that: (1) Both fare-dodgers and non-fare-dodgers in real life respond to changes in the certainty, the detection probability, and the severity of punishment. (2) Actual fare-dodgers cheat significantly more in the game than non-fare-dodgers. (3) The cheating rate is significantly lower for longer distances even in the common knowledge absence of control, suggesting that even actual fare-dodgers have moral costs of lying.
(Working paper coming soon)
"A Portrait of the Individual Investor: Survey Evidence from 17 difference provinces in China"with Yong Meng and Nathalie Odin
SSRN's Top Ten download list for: Labor: Demographics & Economics of the Family eJournal. SSRN's Top Ten download list for: PSN: Markets & Investment (Topic).
Abstract: We randomly interviewed 2129 individual investors in 17 different provinces in China to study the individual demographic characteristics of Chinese individual investors. We find that (1) 96.33% individual investors are less than 60 years old and only 11.55% of them are retired or are student, which is in sharp contrast to stories of dowdy grandmothers and college graduates among individual investors in China; (2) they are generally well educated (72.03% of them hold a degree above secondary school level); (3) their investment is mostly lower than $ 15,657 (88.09%) and the ratio of investment/income in the stock market is lower than 0.5 (95.4%), which implies their impact on the price changes of financial market may be exaggerated. More interestingly, we also find a robust gender difference in terms of investor sentiment: compared to female individual investors, male individual investors are more i) rational, ii) loss tolerable, and iii) optimistic, as determined by the questionnaire.