Catherine C. Eckel

Sex Differences and Statistical Stereotyping in Attitudes Toward Financial Risk

Subjects in a laboratory experiment completed the Zuckerman Sensation-Seeking Scale (SSS) then chose among five alternative gambles with substantial financial stakes. The gambles differed in expected return and variance. Gambles were presented in one of two different frames in a between-subjects design. In one, subjects were paid a fixed sum for completing the survey and that sum was then at risk in the subsequent gamble choices. In the other, all payoff amounts for the gambles were non-negative. Subjects were paid according to their choices and the outcomes of the gambles. We tested for sex differences in this choice task and found women to be consistently more risk averse, on average, than men. We observed no difference across frames. Subjects were then asked to guess the gamble choices of each of the other participants and were rewarded for each correct answer. Subjects of both sexes did substantially better than chance in guessing the particular choices of individuals of both sexes, but both men and women overestimated the risk aversion of others, especially that of women, and most strongly of all with respect to mens predictions of womens choices. Possible real-world implications of biased assumptions about womens risk attitudes are discussed.

The Value of a Smile: Game Theory with a Human Face

Many economists and biologists view cooperation as anomalous: animals (including humans) that pursue their own self-interest have superior survival odds to their altruistic or cooperative neighbors. However, in many situations there are substantial gains to the group that can achieve cooperation among its members, and to individuals who are members of those groups. For an individual, the key to successful cooperation is the ability to identify cooperative partners. The ability to signal and detect the intention to cooperate would be a very valuable skill for humans to posses. Smiling is frequently observed in social interactions between humans, and may be used as a signal of the intention to cooperate. However, given that humans have the ability to smile falsely, the ability to detect intentions may go far beyond the ability to recognize a smile. In the present study, we examine the value of a smile in a simple bargaining context. 120 subjects participate in a laboratory experiment consisting of a simple two-person, one-shot “trust” game with monetary payoffs. Each subject is shown a photograph of his partner prior to the game; the photograph is taken from a collection that includes one smiling and one non-smiling image for each of 60 individuals. These photographs are also rated by a separate set of subjects who complete a semantic differential survey on affective and behavioral interpretations of the images. Results lend some support to the prediction that smiles can elicit cooperation among strangers in a one-shot interaction. Other characteristics of faces also appear to elicit cooperation. Factor analysis of the survey data reveals an important factor, termed “cooperation”, which is strongly related to trusting behavior in the game. This factor is correlated with smiling, but is somewhat more strongly predictive of behavior than a smile alone. In addition, males are found to be more cooperative, especially towards female images, whereas females are least cooperative towards female images.

Rebate versus matching: does how we subsidize charitable contributions matter?

A rebate subsidy of rate sr is functionally equivalent to a matching subsidy of rate sm=sr/(1−sr). Other things equal, an individual should respond identically to the two subsidies. We test the effect on charitable giving of the framing of a subsidy as a rebate or as a match. Subjects make a series of ‘dictator’ allocation decisions, dividing an endowment between themselves and their chosen charities. Allocation decisions vary by the endowment level, the net price of giving, and the form of the subsidy. We find that contributions are significantly higher with matching subsidies than with rebate subsidies.

Chapter 113 Men, Women and Risk Aversion: Experimental Evidence

This paper reviews the results from experimental measures of risk aversion for evidence of systematic differences in the behavior of men and women. In most studies, women are found to be more averse to risk than men. Studies with contextual frames show less consistent results.

Eliciting Risk Preferences: When is Simple Better?

We study the estimation of risk aversion preferences with experimental data. The focus is on the trade-offs that arise when choosing between two different elicitation methods that have different degrees of difficulty for subjects. We analyze how and when the simpler, but coarser, elicitation method may be preferred to the more complex, but finer, one. Results indicate that the more complex measure has an overall superior predictive accuracy, but its downside is that subjects exhibit noisier behavior; conversely, the simpler measure has the opposite costs and benefits. Our main result is that subjects’ numerical skills can help better assess this tradeoff: the simpler task may be preferred when subjects exhibit low numeracy as it generates less noisy behavior but similar predictive accuracy than the more complex task; conversely, for subjects with higher numerical skills, the greater predictive accuracy of the more complex task more than outweighs the larger noise. We explore timeconsistency and preference heterogeneity under the two methods and provide methodological suggestions for future work.

The relative price of fairness: gender differences in a punishment game

Ideas of fairness influence economic transactions. Men and women may differ systematically in the nature and extent of this influence. We investigate gender differences in the impact of fairness on the outcome of economic transactions. In our “punishment game” subjects may choose to split a larger pie with a “bad” partner, or a smaller pie with a “good” partner. We find that a higher relative price for fairness reduces its effect on the outcome of the transaction for women, but not for men. Our interpretation of this result is that men are more likely than women to make decisions on principle.

Judging a Book by its Cover: Beauty and Expectations in the Trust Game

This research examines one mechanism by which people decide whether to trust strangers. Using a laboratory setting that provides subjects with controlled information about their counterparts, we test whether attractive subjects gain a “beauty premium” in a game involving trust and reciprocity. Attractive trustees are viewed as more trustworthy; they are trusted at higher rates and as a consequence earn more in the first stage of the game. Attractiveness does not guarantee higher earnings, as we find a “beauty penalty” attached to attractive trusters in the second stage of the game. This penalty arises because attractive trusters do not live up to expectations of them on the part of the trustees. Trustees withhold repayment when their expectations are dashed. `This punishment is larger when the disappointing truster is attractive.

Chapter 57 Differences in the Economic Decisions of Men and Women: Experimental Evidence

This chapter reviews the results from public goods, ultimatum, and dictator experiments for evidence of systematic differences in the behavior of men and women. While the results do not offer consistent evidence of behavioral differences between men and women, there are some intriguing patterns in the data. No significant evidence of systematic differences in the play of men and women is evident in those settings where subjects are exposed to risk. In those settings where risk is absent, systematic differences are revealed. This finding is conditioned by the level of risk.

Giving to Secular Causes by the Religious and Nonreligious: An Experimental Test of the Responsiveness of Giving to Subsidies

Although evidence indicates that religious persons are more generous on average than nonreligious persons, little work has been done to determine if this greater generosity is a general pattern or is, rather, specific to church-based institutions. Limited research addresses if, or how, religious and nonreligious givers respond to subsidies. This article uses experimental data to examine differences in the amount and pattern of giving to secular charities in response to subsidies by self-identified religious and nonreligious participants. The results indicate no significant difference in either the amount or pattern of giving or in the response to subsidies by religious and nonreligious participants; however, giving by religious participants is significantly more responsive to income changes than giving by nonreligious participants.

Volunteers and Pseudo-Volunteers: The Effect of Recruitment Method in Dictator Experiments

We report the results of experiments that test for behavioral differences between volunteer subjects recruited in the usual way and pseudo-volunteer subjects in experiments conducted during class time. In a series of dictator games, we find that psuedo-volunteers are more generous on average than their volunteer counterparts, and that non-monetary factors such as religious or altruistic preferences have a greater effect on the giving behavior of pseudo-volunteers.