Neil J. Buckley

Value Orientations, Income and Displacement Effects, and Voluntary Contributions

Identifying the value orientations of subjects participating in market or non-market decisions by having them participate in a ring game may be helpful in understanding the behaviour of these subjects. This experiment presents the results of changes in the centre and the radius of a value orientations ring in an attempt to discover if the measured value orientations exhibit income or displacement effects. Neither significant income effects nor displacement effects are identified. An external validity check with a voluntary contribution game provides evidence that value orientations from rings centred around the origin of the decision-space explain significant portions of voluntary contributions while value orientations from displaced rings do not.

Subsidizing public inputs

Investment in research and development may (with some probability) lead to reductions in a firm’s production cost. If the production-cost savings associated with successful research and development is freely disseminated to other firms as soon as it is realized, too few resources may be allocated to this input. In such an environment, subsidies to the public input can lead to optimal input use. Four alternative subsidy instruments are considered in this paper. Two are incremental subsidies and the others are conventional level subsidies. One of the incremental subsidies and one of the level subsidies crudely capture characteristics of incentive mechanisms used in the United States and Canada. A laboratory implementation of these instruments generally confirms that incremental subsidies are inferior to level subsidies.

Implications of Alternative Emission Trading Plans: Experimental Evidence

Two approaches to emissions trading are cap-and-trade, in which an aggregate cap on emissions is distributed in the form of emission allowances and baseline-and-credit, in which firms earn emission reduction credits for emissions below their baselines. Theoretical considerations suggest the long-run equilibria of the two plans will differ if baselines are proportional to output, because a variable baseline is equivalent to an output subsidy. To test this prediction we have developed a computerized environment in which subjects representing firms can adjust both their emission rates (per unit output) and capacity levels. Subjects buy or sell emission rights (allowances or credits) in a sealed bid call auction. The demand for output is simulated. All decisions are tracked through a double-entry bookkeeping system. This environment is to be used to compare short and long run responses to the alternative trading methods. Initial experiments in this environment will alternately hold emission rate and capacity choice constant. We report on six experimental sessions with variable emissions rates but fixed capacity and two pilot sessions with variable capacity but fixed emission rates.

Willingness-to-Pay for Parallel Private Health Insurance: Evidence from a Laboratory Experiment

Debate over the effects of public versus private health care finance persists in both academic and policy circles. This paper presents the results of a revealed preference laboratory experiment that tests how characteristics of the public health system affect a subjects willingness-to-pay (WTP) for parallel private health insurance. Consistent with the theoretical predictions of Cuff et al. (2010), subjects’ average WTP is lower and the size of the private insurance sector smaller when the public system allocates health care based on need rather than randomly and when the probability of receiving health care from the public system is high. (Les debats continuent quant aux effets compares du financement prive et public des soins de santea la fois dans le monde academique et le monde des definisseurs de politiques. Ce memoire presente les resultats d’une experience de laboratoire destinee a reveler les preferences et a montrer comment des caracteristiques du systeme public de soins de sante affectent la volonte de payer pour des services paralleles d’assurance sante privee. En ligne avec les predictions theoriques de Cuff et al. (2010), la volonte moyenne de payer est plus faible et la taille du secteur de l’assurance privee plus petite quand le regime public est fonde sur les besoins plutot qu’aleatoire, et quand la probabilite de recevoir les soins du regime public est elevee.)

Socio-economic Influences on the Health of Older Canadians: Estimates Based on Two Longitudinal Surveys

It is well established that there is a positive statistical relationship between socio-economic status (SES) and health, but identifying the direction of causation is difficult. This study exploits the longitudinal nature of two Canadian surveys, the Survey of Labour and Income Dynamics and the National Population Health Survey, to study the link from SES to health (as distinguished from the health-to-SES link). For people aged 50 and older, who are initially in good health, we examine whether changes in health status over the next two to four years are related to prior SES, as represented by income and education. Although the two surveys were designed for different purposes and had different questions for income and health, the evidence they yield with respect to the probability of remaining in good health is similar. Both suggest that SES does play a role and that the differences across SES groups are quantitatively significant, increase with age, and are much the same for men and women.

Judgments regarding the fair division of goods: the impact of verbal versus quantitative descriptions of alternative divisions

This article uses a stated-preference survey to investigate the impact on judgments regarding the fair division of a fixed supply of a good of differing types of information by which to describe five distributional principles. The three types of information are quantitative information only (the predominant approach in existing studies), verbal information only, and both quantitative and verbal information. The five distributional principles are equal division among recipients, Rawlsian maximin, total benefit maximization (TBM), equal benefit (EB) for recipients, and allocation according to relative need (RN) among recipients. We find important informational effects on judgments of the fair division of each of two health-related goods (pain-relief pills and apples consumed to obtain an essential vitamin): judgments based on quantitative information only are consistent with previous research; changing to verbal descriptions causes a notable shift in support among principles, and in particular greater support for the principle of TBM; judgments based on both quantitative and verbal information match more closely those made with only quantitative information. The pattern of judgments is consistent with the hypothesis that subjects do not fully understand the relationship between the conceptual meaning of the principles (as described verbally) and their implied quantitative divisions. We also find evidence of modest differential judgments across goods (pills vs. apples), sample effects (university vs. community), and sex effects, and little support for a non-zero allocation principle.

Willingness-To-Pay for Parallel Private Health Insurance: Evidence from a Laboratory Experiment (Volonté De Payer Pour Des Services Parallèles D’Assurance Santé: Résultats D’Une Expérience De Laboratoire)

Debate over the effects of public versus private health care finance persists in both academic and policy circles. This paper presents the results of a revealed preference laboratory experiment that tests how characteristics of the public health system affect a subjects willingness-to-pay (WTP) for parallel private health insurance. Consistent with the theoretical predictions of Cuff et al. (2010), subjects’ average WTP is lower and the size of the private insurance sector smaller when the public system allocates health care based on need rather than randomly and when the probability of receiving health care from the public system is high. (Les debats continuent quant aux effets compares du financement prive et public des soins de santea la fois dans le monde academique et le monde des definisseurs de politiques. Ce memoire presente les resultats d’une experience de laboratoire destinee a reveler les preferences et a montrer comment des caracteristiques du systeme public de soins de sante affectent la volonte de payer pour des services paralleles d’assurance sante privee. En ligne avec les predictions theoriques de Cuff et al. (2010), la volonte moyenne de payer est plus faible et la taille du secteur de l’assurance privee plus petite quand le regime public est fonde sur les besoins plutot qu’aleatoire, et quand la probabilite de recevoir les soins du regime public est elevee.)

Effort Provision and Communication in Teams Competing over the Commons

Schott et al. (2007) have shown that the “tragedy of the commons” can be overcome when individuals share their output equally in groups of optimal size and there is no communication. In this paper we investigate the impact of introducing communication in groups that may or may not be linked to output sharing groups. Communication reduces shirking, increases aggregate effort and reduces aggregate rents, but only when communication groups and output-sharing groups are linked. The effect is stronger for fixed groups (partners treatment) than for randomly reassigned groups (strangers treatment). Performance is not distinguishable from the no-communication treatments when communication is permitted but subjects share output within groups different from the groups within which they communicate. Communication also tends to enhance the negative effect of the partnered group assignment on the equality of individual payoffs. We use detailed content analysis to evaluate the impact of communication messages on behavior across treatments.

A Behavioral Economic Study of Tax Rate Selection by the Median Voter: Can the Tax Rate Be Influenced by the Name of the Publicly Provided Private Good?

This paper presents the results of a behavioral economics study to test if the tax rates submitted to finance the public provision of a private good are influenced by changing the name of the private good. A revealed-preference laboratory decision-making experiment is used to test if participants choose significantly different tax rates to support provision of a private good named as a health care investment compared to an identical good named as a neutral monetary investment. Although some previous studies focusing on both framing and context effects find differences associated with health versus non-health environments, these studies have not involved voting over public provision of a private good. In our experimental environment, participants with different income endowments provide their preferred proportional tax rates for financing public provision of a private good in either a neutral or a health context. The implemented tax rate is the median preferred tax rate, and once the budget is determined, each participant receives the same quantity of the publicly provided private good. In each context, the payoff functions are the same. The only difference between the contexts is the name attached to the publicly provided private good, regardless of the name attached to the publicly provided private good, consuming it imposes no externalities. This controls for the positive externality characteristics of many health care goods, but not for preferences evoked by the merit good character of health care which factor into decisions about the public provision of health care. We find that the theoretical predictions of the median voter model are generally supported by the data. However, the conjecture that the implemented tax rate would be affected by context is not supported by the results.

Do the Number of Appropriators from the Commons Matter in Controlled Laboratory Environments

Many controlled laboratory experiments have shown non-binding communication among appropriators from a common pool to be an effective way to reduce over-appropriation from the commons. The controlled laboratory environments have tended to be environments with fewer than 10 participants. Recent work by Buckley et al. (2017) found that non-binding communication is not successful in reducing appropriation effort in a controlled laboratory environment with 12 participants. A conjecture was that there might be a difference between 12 participants and 8 participants (the typical number used by Ostrom et al. 1994 in their seminal work and used in many subsequent studies by others). This paper presents an environment that utilizes the CPR setting identical to that used by Buckley et al. (2017) reduces the number of appropriators from 12 to 8. Eight sessions (4 with and 4 without non-binding communication) are run using the Buckley et al. (2017) environment with 8 participants. The results suggest that the number of participants may not be an important factor in driving the differences between the impact that non-binding communication has on the Buckley et al. (2017) and Ostrom et al. (1994) environments. Alternate conjectures are presented to account for the differences.