I study experimentally (1) the impacts of the framing of redistribution policy and past wages on individuals' work effort decisions and (2) the effect of costly monitoring in social dilemmas.<br/><br/> To examine the effect of the framing of redistribution policy on individuals' work effort decisions, I devise two theoretically equivalent treatments: the redistributive tax (TAX) treatment and the redistributive transfer (TRANSFER) treatment in a novel public goods experiment. I find evidence supporting the existence of a framing effect. On average, subjects in the TRANSFER treatment group chose 25.27% higher effort levels than those in the TAX treatment group. I also find that the negative effect of using the TAX rather than the TRANSFER framing is significantly larger among subjects who judge their mechanism to be unfair.<br/><br/> To examine the impact of past wages on individuals' work effort choices, I design a simple, real-effort experiment with four treatments. Subjects experience a wage increase in one treatment and a wage decrease in another treatment; the other two treatments are used as control treatments in comparison with the former two treatments. I find that subjects overreact to the wage increase but under-react to the wage decrease. Male subjects' average effort is higher than female subjects. However, interestingly, the wage increase and the wage decrease both have a more pronounced effect on female subjects than their male counterparts.<br/><br/> Last, I investigate the effect of costly monitoring in a voluntary contribution mechanism (VCM) experiment with punishment opportunities. Unlike the standard VCM with punishment, the subjects in my experiment need to specify the members whose allocation(s) they wish to observe. They pay a fixed amount per group member monitored in the costly monitoring treatments, and can observe contributions of each member they select at no additional cost in the free monitoring treatments. Unsurprisingly, I find that the hindrance to information reduces both contributions and average net payoffs. However, surprisingly, the extra cost of monitoring has significant effects on punishment behavior. Conditional on monitoring, it not only reinforces the punishment of free-riding, but also deters some perverse punishment.
He, Tai-Sen,
"Laboratory Experiment and Incentives: Three Experimental Studies"
(2013).
Economics Theses and Dissertations.
Brown Digital Repository. Brown University Library.
https://doi.org/10.7301/Z05719BM
