Three Essays on Field and Lab-in-the-Field Experiments in Economics.

Abstract

The first chapter contributes to the debate about culture as potential determinant of economic growth by investigating the prevalence of six widely discussed norms of distributive justice in poor, rural communities of Malawi. Specifically, the distribution over strict egalitarianism, inequality aversion, liberal egalitarianism, luck egalitarianism, libertarianism, and the principle of equality of opportunity is determined using a lab-in-the-field experiment. I am using a two-person dictator game with a production phase. I find that decisions are mainly guided by strict egalitarianism and libertarianism, and less strongly by other norms. Interestingly, despite the large in uence of strict egalitarianism, subjects react significantly to all experimental variations. The second chapter draws lessons from an original randomized experiment in Malawi. In order to understand why roads in relatively good condition in rural areas may not be used by buses, a minibus service was subsidized over a six month period over a distance of 20 kilometres to serve five villages. Using randomly allocated prices for use of the bus, this experiment demonstrates that at very low prices, bus usage is high. Bus usage decreases rapidly with increased prices. However, based on the results on take-up and minibus provider surveys, this experiment demonstrates that at any price, low (with high usage) or high (with low usage), a bus service provider never breaks even on this road. The third chapter explores the effect of incomplete information about pie size on social norms motivated by the following observations: (a) cultural norms regarding distributive justice may be fully internalized by a population or be domain-specific to a particular informational environment and (b) each scenario may lead to different impacts on growth and development in dynamic surroundings. The chapter studies how divisions of an effort-generated social surplus depend on whether the receiver in a dictator game knows the size of the social surplus or not. I find that while dictators act more selfish under incomplete information the effect is small compared to the effects norms of distributive justice have on decision making.