Utteeyo Dasgupta

Letting the Briber Go Free: An Experiment on Mitigating Harassment Bribes

This paper examines the effectiveness of using asymmetric liability to combat harassment bribes. Basu (2011) advocates legal immunity for bribe-givers, while retaining culpability for bribe-takers. Results from our experiment indicate that while this policy has the potential to significantly reduce corrupt practices, weak economic incentives for the bribe-giver, or retaliation by bribe-takers can mitigate the positive disciplining effect of such an implementation. As a result, asymmetric liability on its own may face challenges in the field.

Does Heterogeneity Help in Overcoming the Public Goods Dilemma in a Sequential Contribution Environment

This paper compares behavior of heterogeneous groups with homogeneous groups in public goods production. In heterogeneous groups members differ in their opportunity costs of contribution, while in homogeneous groups, members have the same opportunity costs. Members of three-player groups sequentially make all-or-nothing contributions towards the production of a public good where contribution decisions, payoffs, and opportunity costs of preceding players in the group are known to each group member. We find that heterogeneous groups perform better than homogeneous groups controlling for average opportunity costs at the group level. Our results also indicate that subjects develop an endogenous contribution norm to sustain public goods production where subjects in the first positions, and subjects with relatively low opportunity costs contribute most often.

Choosing to Be Trained: Evidence from a Field Experiment

This paper combines unique experimental and survey data to examine the determinants of self-selection into a training program. Women residing in selected disadvantaged areas in New Delhi, India were invited to apply for a six-month long subsidized training program in stitching and tailoring. A random subset of applicants and non-applicants to the training program were invited to participate in an artefactual field experiment and in a detailed socio-economic survey. We find that applicants and non-applicants differ both in terms of socio-economic characteristics (elicited through survey data), and behavioral traits (elicited using a field experiment). Identifying these characteristics can help policy-makers design and promote programs so as to make them more appealing to the target group, and thus improve take-up rates. Our results also suggest that as a methodology, there is valuable information to be gained by dissecting the black box of unobservables using behavioral data from experiments.

Shooting in the Dark: Do Prices Matter in Ambiguous Environments?

Abstract In an experiment, we evaluate whether prices of investment options influence choice in an ambiguous environment. We find that even with feedback on previous period’s investment, and repeated decision-making, prices do influence choice in our ambiguous environment. Modal behaviour is rational, that is, for each category of investment subjects choose the lowest available price. However, there is a tendency to associate high-priced ambiguous investment options with better quality. This effect becomes stronger as the price differences between available investment options become larger.

Nudging Students Forward Towards Backward Induction

This paper uses variations in a popular parlor game to provide useful instructional benefits. The paper builds a classroom activity to nudge students towards thinking in a backward-inductive manner. The pedagogic innovation is in introducing the game repeatedly with progressively smaller action spaces in every repetition. As the numbers of available actions become smaller and smaller in the reduced games, students stumble on to the backwardly inductive winning strategy. The described procedures are also useful in laying down the intuitive foundations of the concepts of dominant strategies, and first- and second-mover advantages.

Are Entry Threats Always Credible

Abstract This paper studies the efficacy of entry threats in a contestable environment using experiments. It is hypothesized here that the entrant firm’s home market profits influence the entrant’s competitive behavior even when entry is costless and completely reversible. In the experiment, entrants and incumbents tacitly collude when each has its own monopoly market. In contrast, an entrant from a competitive market practices hit-and-run entry whenever such opportunities exist, forcing the incumbent monopolist to price at average cost. The experiment results suggest that the usefulness of hit-and-run competitive threat in a contestable environment depends crucially on the relative profits in the entrant’s and the incumbent’s home and entry markets.

Explaining Randomized Evaluation Techniques Using Classroom Games

Over the last decade, randomized evaluations have taken the field of development economics by storm. Despite the availability of strong review pieces in the topic, there is no pedagogical paper on randomized evaluation. This paper bridges the gap by introducing three interactive classroom games to communicate the concepts of Average Treatment Effect (ATE), Intent–to-Treat Effect (ITT), Sub-group Average Treatment Effect (SATE), and Externality Effect (EE). The classroom games are easy to implement and provide students an opportunity to participate in a simple randomized trial of their own.

Potential competition in the presence of sunk entry costs: an experiment

This paper studies the effect of sunk entry-costs on potential competition in a multi-market framework, where potential entrants have different home market profits. Although sunk-entry-costs are supposed to increase entry barriers, the experimental results suggest that firms view entry costs differently depending on their home market profits. It is found that subjects are reluctant to enter, and compete in another market if they are already earning monopoly rents. Subjects instead, collude tacitly and earn monopoly rents in home markets, thereby weakening the effect of potential competition. In contrast, subjects who earn small secure returns in their home markets aggressively enter the contestable market whenever there are scopes for earning net profits. The threat of entry and the effects of potential competition are strong in the latter situation, forcing the monopoly incumbents to lower prices to limit-pricing levels.