Abstract:

In this paper we study the effects of acute stress on speculative behavior using a controlled laboratory experiment with 416 men and women. We employ a recently introduced measure that captures individual speculative behavior, the Speculation Elicitation Task, and an efficient stress-inducing procedure, the Trier Social Stress Test for Groups, and pay special attention to the gender-specific effects. Our design allows for a separation of the main channels behind the treatment effects. We observe strong gender differences: The treatment – stress-inducing – procedure increases men's willingness to speculate compared to control men, but decreases it by about the same amount for women. As we do not observe any role of the task-specific risk-preferences and attention, and only a little change in the strategic expectations on others' behavior and in beliefs, we conclude that the behavioral change is driven by the change in preferences, although in the opposite directions for both genders. The analysis of salivary cortisol and subjective mood shows that the subjects were under a considerable level of stress.

Full text

Abstract:

We introduce a novel experimental design to study the implications of different information structures for agents’ behaviour in the lab. Our design is based on a visual presentation of the density function, which allows us to circumvent the language of distributions and conditional probabilities when communicating with subjects.

We show that a small variation in the design makes the stochastic choice rules that participants follow either continuous or discontinuous in the state. We apply the design to a coordination game of incomplete information. When choice rules are continuous, the average play of the experiment participants is close to the risk-dominant equilibrium, as predicted by the theory. When discontinuous choice rules are available, play tends to shift towards behaviour corresponding to the payoff-dominant equilibrium.

​

Full text

Abstract:

Research on the effectiveness of financial literacy counseling is growing. Surprisingly, in the era where financial intermediation tools and policies are being actively developed in Armenia there is scarce evidence on the effect of financial trainings on borrowers’ behavior. The purpose of this paper is to investigate the link between financial literacy and financial planning and decision-making.  

Using pre- and post-test surveys’ data from financial literacy trainings conducted by the Savings Banks Foundation for International Cooperation (SBFIC) in cooperation with the Central Bank of Armenia (CBA), immediate learning outcomes of the sessions are observed. To identify longer term effects a follow up survey was conducted among the randomly selected participants and non-participants residing in the same communities at the end of 2015. Application of quasi-experimental inference methods -  propensity score matching - confirms positive effect of training on financial literacy. In particular, participants of the program were better at identifying better saving options, understanding the effects of exchange rate changes and calculating their liabilities on loans.

The evidence about efficiency of financial decision-making as a result of participation in trainings is less clear-cut. We find that participants scrutinize more loan offers before making a decision, but we do not observe evidence of achieving better outcomes in terms of loan interest rate or maturity. At the same time counseled participants changed their loan currency to local one more often compared with non-trained respondents. We discuss implications for financial inclusion and behavior theories and derive policy recommendations.

Abstract:

The effects of gender diversity on team performance are usually studied in the context of corporate boards (Ahern and Dittmar, 2012; Eckbo et al., 2018) and political parties (Besley et al., 2017). However, without the control for the quality of team members it is difficult to identify diversity effects. To test if gender diversity matters for the team performance, we need data with the reliable assessment of the team member quality. We use the database of the trivia game “What? Where? When?” which has information on performance and gender composition of the team, and allows to track each player individually. We use individual dummies as measure of player quality. We find that in this specification gender composition of the team has no statistically significant effect. Hence, gender diversity does not matter.

​

Initial draft of the paper

​

Abstract:

This paper analyzes the effects of a state support program for micro and small enterprises in Georgia in 2016. Grants were awarded through a scoring system, according to which only those business plans that scored above a certain threshold were able to claim government subsidies. We use a sharp discontinuity design to study the impact of these government subsidies on firm-level outcomes. Official data from the implementing agency, Enterprise Georgia, was complemented by a firm-level survey of both program beneficiaries and non-beneficiaries. This unique, combined data set allows us to examine a wide range of the social and economic impacts of the government program. We find significant treatment effects on total firm investment in the first year of the program. However, these impacts disappear in subsequent periods. The subsidies appear to have had no effect on sales or employment, even at the early stages of the program. Individual, entrepreneur level social and economic outcomes also seem to be unaffected by the government subsidies. If anything, entrepreneurs receiving support are less likely to be content with the job they are doing. 

​

Full text

​

Abstract:

On many online platforms, sellers offer products with additional fees and features. Platforms often deliberately shroud these fees from consumers. Examples are shipping fees, luggage fees on flight-aggregator websites, or fees for room service and other upgrades on hotel-booking platforms. We explore the incentives of two-sided platforms to disclose additional fees and design a transparent marketplace when consumers might naively ignore shrouded additional fees. First, we find that platforms have stronger incentives to shroud additional fees than sellers in the absence of platforms. This result holds for monopoly platforms and in some competitive settings. Second, competition might induce platforms to regulate additional fees, which benefits consumers. We discuss connections to frequent practices like drip pricing, and platforms like Amazon or eBay regulating shipping fees.

​

Full text