Schwerpunktseminar
Behavioral Economics: Implications for Policy Design Marta Serra-‐Garcia, PhD
Dates: Meeting June 20 to 21, 2013 at Bildungshaus St. Martin
Preliminary discussion: April 26, 2013 from 16:00 to 18:00 at Schackstr. 4, VI Etage, Zi. 406 Description
In recent years, several standard economic assumptions about individual behavior, e.g. self-‐interest or perfect self-‐control, have been questioned by evidence stemming from multiple lab and field experiments. This evidence has led to the development of new theories, within the field of behavioral economics, as well as new policy interventions based on these theories. The aim of this seminar is to study how new theoretical models within behavioral economics can help policy makers design more effective policy interventions. The main task for students in their “Seminar papers” will be to summarize one or two related research papers and evaluate these critically.
Topics
1. Savings decisions
- The power of default options
• Madrian, Brigitte and Dennis Shea, 2001. “The Power of Suggestio: Inertia in 401(k) Participation and Savings Behavior” Quarterly Journal of Economics Vol. CXVI (4), 1149-‐
1187.
• James J. Choi, David Laibson, Brigitte C. Madrian, Andrew Metrick, 2004. “For Better or for Worse: Default Effects and 401(k) Savings Behavior”. Perspectives on the Economics of Aging, David A. Wise editor, University of Chicago Press.
- The power of commitment and reminders
• Ashraf, Nava, Dean Karlan and Wesley Yin, 2006. “Tying Odysseus to the Mast: Evidence from a Commitment Savings Product in the Philippines” Quarterly Journal of Economics Vol. CXXI (2), 635-‐672.
• Karlan, Dean, Margaret McConnell, Sendhil Mullainathan and Jonathan Zinman, 2010.
“Getting to the Top of Mind: How Reminders Increase Saving” Working Paper.
2. Credit decisions
• Bertrand, Marianne, Dean Karlan, Sendhil Mullainathan, Eldar Shafir and Jonathan Zinman, 2010. “What’s Advertising Content Worth? Evidence from a Consume Credit Marketing Field Experiment” Quarterly Journal of Economics, 263-‐306.
• Bertrand, Marianne and Adair Morse, 2011. “Information Disclosure, Cognitive Biases and Payday Borrowing” Journal of Finance Vol. LXVI (6), 1865-‐1893.
3. The Decision to Work
- Individual decisions to work
• Camerer, Colin, Linda Babcock, George Loewenstein, Richard Thaler, 1997. “Labor Supply of New York City Cabdrivers: One Day at a Time” Quarterly Journal of Economics Vol. CXII
(2), 407-‐441.
• Kaur, Supreet, Michal Kremer and Sendhil Mullainathan, 2010. “Self-‐Control and the Development of Work Arrangements” American Economic Review, 100 (2), 624-‐28.
- Incentives
• Gneezy, Uri and Aldo Rustichini, 2000. “Pay Enough or Don’t Pay at All” Quarterly Journal of Economics Vol. CXV (3), 791-‐810.
• Kube, Sebastian, Michel Marechal and Clemens Puppe, 2011. “The currency of reciprocity:
gift-‐exchange in the workplace” American Economic Review, forthcoming,
4. Incentives to exercise
• Della Vigna, Stefano and Ulrike Malmendier, 2003. “Paying Not to Go to the Gym”, American Economic Review, Vol. 96 (3), 694-‐719.
• Charness, Gary and Uri Gneezy, 2009. “Incentives to Exercise” Econometrica Vol. 77 (3), 909-‐931.
5. Incentives to donate
• Laundry, Craig, Andreas Lange, John List, Michael Price and Nicholas Rupp. “Toward an Understanding of the Economics of Charity: Evidence from a Field Experiment” Quarterly Journal of Economics Vol. CXXI (2), 747-‐782.
• Della Vigna, Stefano, John List and Ulrike Malmendier, 2012. “Testing for Altruism and Social Pressure in Charitable Giving” Quarterly Journal of Economics Vol. CXXVII (2), 1-‐56.
6. Education
- Effects of deadlines
• O’Donoghue, Ted, and Matthew Rabin, 1999. “Doing It Now or Later,” American Economic Review, LXXXIX, 103–124.
• Ariely, Dan and Wertenbroch, 2002. “Procrastination, Deadlines and Performance: Self-‐
Control by Precommitmen” Psychological Science Vol. 13 (3), 219-‐224.
- Incentives to Study
• Fryer, Roland, 2011. “Financial Incentives and Student Achievement: Evidence from Randomized Trials” Quarterly Journal of Economics Vol. CXXVI, 1755-‐1798.
• Levitt, Steven, John List, Susanne Neckermann and Sally Sadoff, 2012. “The behavioralist goes to school: Leveraging behavioral economics to improve educational performance”.
ZEW Discussion Papers No. 12-‐038.
7. Development - Agriculture
• Duflo, Esther, Michael Kremer and Jonathan Robinson, 2011. “Nudging Farmers to Use Fertilizers: Theory and Experimental Evidence from Kenya” American Economic Review 101, 2350-‐2390.
• Brune, Lasse, Xavier Giné, Jessica Goldberg, and Dean Yang. 2011. “Commitments to Save:
A Field Experiment in Rural Malawi.” World Bank Policy Research Working Paper 5748.
- Health Interventions
• Dupas, Pascaline, 2009. “What Matters (and What Does Not) in Households’ Decisions to Invest in Malaria Prevention?” American Economic Review: Papers & Proceedings 99 (2), 224-‐230.
• Miguel, Edward and Michael Kremer, 2004. “Worms: Identifying Impacts on Education
and Health in the Presence of Treatment Externalities” Econometrica Vol. 72 (1), 159-‐217.
Timing
You will be asked to choose one of these (sub-‐)topics at the end of our preliminary discussion on April 26.
You will be asked to hand in your paper on June 14, electronically (by e-‐mail). Should you fail to submit your paper by June 14, 23:59, you will fail the seminar.
Practical Guidelines for your Seminar Paper a. Content
Your paper should provide a critical overview of the topic you chose. It may based only on the two papers provided to you in the reading list, or you may add other references – more effort, that will be compensated with a better grade. Your paper should, at least, (1) clearly summarize the main hypothesis, design and results of the papers on the reading list, (2) critically assess their design and/or findings and (3) provide policy implications based on these findings. The better you address these three points, the higher your grade will be.
b. Structure
Another important component of your grade is the clarity and preciseness in your writing. You should convey your main ideas within 10 pages. The language and structure you use are important. Generally, seminar papers are structured as follows: (1) introduction, (2) main argument – with different headings depending on your topic, (3) discussion, (4) policy implications and (5) conclusion.
In addition to the main parts, your paper should have a cover page that includes its title, your name, matrikelnummer, date, name of the seminar and seminar instructor. It should also have a contents page, which lists the sections of your paper and their pages, and a reference list. The reference list should follow the format of any of the papers you find on the reading list. It should list all the papers you cite, i.e. mention, in the main text.
Citations in the text should be done in the following manner:
- One or two authors: “name 1 (& name 2) (year)”, e.g. Dupas (2009).
- Three or more authors: “Name 1 et al. (year)”, e.g. Duflo et al. (2011).
These citations should appear in the main text, in most cases at the end of a sentence, such as “… as shown by Dupas (2009).”
You may use footnotes in your paper to make additional notes that are not central to your argument. It is recommendable to use only a few footnotes.
c. Discussions
You may come to discuss with me your ideas or questions during visiting hours. Visiting hours will be announced in the preliminary discussion. You may also e-‐mail me with questions.
d. Presentation
In our meeting in June 20-‐21, you will be asked to present your paper. The presentation should follow the same structure as your paper and present its main ideas. You presentation should be approx. 30 minutes long.
