scholarly journals The Causal Effect of Competition on Prices and Quality: Evidence from a Field Experiment

2014 ◽  
Author(s):  
Matias Busso ◽  
Sebastian Galiani
2019 ◽  
Vol 11 (1) ◽  
pp. 33-56 ◽  
Author(s):  
Matias Busso ◽  
Sebastian Galiani

This paper provides experimental evidence on the effect of increased competition on prices and quality in the retail sector. We randomized the entry of 61 firms into 72 markets serving the beneficiaries of a conditional cash transfer program in the Dominican Republic. Six months after the intervention, entry into the market led to reductions in prices ranging from 2 to 6 percent and to a statistically significant improvement in self-reported service quality. Prices dropped more in areas where the number of entrants was larger. Competition seems to have driven part of the clientele away from incumbent retailers. (JEL C93, I38, L11, L15, L81, O14)


2021 ◽  
Author(s):  
Ina Ganguli ◽  
Marieke Huysentruyt ◽  
Chloé Le Coq

We conducted a field experiment to identify the causal effect of extrinsic reward cues on the sorting and performance of nascent social entrepreneurs. The experiment, carried out with one of the United Kingdom’s largest support agencies for social entrepreneurs, encouraged 431 nascent social entrepreneurs to submit a full application for a grant competition that provides cash and in-kind mentoring through a one-time mailing sent by the agency. The applicants were randomly assigned to one of three groups: one group received a standard mailing that emphasized the intrinsic incentives of the program, or the opportunity to do good (Social treatment), and the other two groups received a mailing that instead emphasized the extrinsic incentives—either the financial reward (Cash treatment) or the in-kind reward (Support treatment). Our results show that an emphasis on extrinsic incentives has a causal impact on sorting into the applicant pool: the extrinsic reward cues led fewer candidates to apply and “crowded out” the more prosocial candidates while “crowding in” the more money-oriented ones. The extrinsic reward cues also increased application effort, which led these candidates to be more successful in receiving the grant. Yet the selection resulting from the extrinsic incentive cues led to worse performance at the end of the one-year grant period. Our results highlight the critical role of intrinsic motives in the selection and performance of social enterprises and suggest that using extrinsic incentives to promote the development of successful social enterprises may backfire in the longer run. This paper was accepted by Toby Stuart, entrepreneurship and innovation.


2020 ◽  
Vol 15 (2) ◽  
pp. 310-331
Author(s):  
Beth E. Schueler

Catching students up who have fallen behind academically is a key challenge for educators, and can be difficult to do in a cost-effective manner. This field experiment examines the causal effect of a program designed to provide struggling sixth and seventh graders with math instruction delivered in small groups of roughly ten students by select teachers over weeklong vacation breaks. The program was implemented in a set of low-performing Massachusetts middle schools undergoing turnaround reforms. Attendance at these “Vacation Academies” increased the probability that students scored proficient or higher on Common Core–aligned math exams by 10 percentage points and reduced students’ exposure to exclusionary discipline by decreasing out-of-school suspensions post-Academy. I find suggestive evidence of positive spillover effects on English Language Arts achievement and end-of-course grades in math and reading. Participants assigned to a single primary teacher for the entire week saw larger reductions in out-of-school suspensions than did students who rotated through teachers specializing in particular lessons. However, teacher specialization was associated with greater test score gains, suggesting a trade-off in outcomes depending on program design. Overall, the program's low cost and lack of a highly competitive teacher selection process make it a scalable approach to individualizing instruction.


2017 ◽  
Vol 43 (1) ◽  
pp. 27-41 ◽  
Author(s):  
Pornsit Jiraporn ◽  
Pandej Chintrakarn ◽  
Shenghui Tong ◽  
Sirimon Treepongkaruna

Exploiting the passage of the Sarbanes–Oxley Act (SOX) as an exogenous regulatory shock, we investigate whether board independence substitutes for external audit quality. Based on over 14,000 observations across 18 years, our difference-in-difference estimates show that firms forced to raise board independence are far less likely to employ a Big 4 auditor. In particular, board independence lowers the propensity to use a Big 4 auditor by approximately 38%. Firms with stronger board independence enjoy more effective governance and therefore do not need as much external audit quality as those with less effective governance do. Based on a natural experiment, our empirical strategy is far less vulnerable to endogeneity and is thus considerably more likely to show a causal effect, rather than merely an association.


2014 ◽  
Vol 1 (2) ◽  
pp. 159-169 ◽  
Author(s):  
Alexander Coppock

AbstractA field experiment carried out by Butler and Nickerson (Butler, D. M., and Nickerson, D. W. (2011). Can learning constituency opinion affect how legislators vote? Results from a field experiment. Quarterly Journal of Political Science 6, 55–83) shows that New Mexico legislators changed their voting decisions upon receiving reports of their constituents’ preferences. The analysis of the experiment did not account for the possibility that legislators may share information, potentially resulting in spillover effects. Working within the analytic framework proposed by Bowers et al. (2013), I find evidence of spillovers, and present estimates of direct and indirect treatment effects. The total causal effect of the experimental intervention appears to be twice as large as reported originally.


2019 ◽  
Vol 19 (2) ◽  
Author(s):  
Beatrice Schindler Rangvid

Abstract Grading bias against boys may be one of the reasons why boys underperform in school compared to girls. This study assesses the causal effect of blind grading of boys relative to girls using difference-in-differences methods and exploiting two separate identification strategies: a unique full cohort natural experiment providing exogenous variation in blind grading, and a field experiment where the exact same exam papers are scored twice (blind and non-blind). Even though the two strategies hinge on different assumptions, the results persistently suggest against the existence of systematic gender biases in non-blind evaluation. The results are robust to different model specifications.


Social Forces ◽  
2021 ◽  
Author(s):  
Tamás Keller ◽  
Károly Takács ◽  
Felix Elwert

Abstract High school track choice determines college access in many countries. We hypothesize that some qualified students avoid the college-bound track in high school simply because they overestimate admission requirements. To test this hypothesis, we conducted a randomized field experiment that communicated the admission standards of local secondary schools on the academic track to students in Hungary before the application deadline. We targeted the subset of students (“seeds”) who occupied the most central position in the classroom-social networks, aiming to detect both direct effects on the track choice of targeted seeds and spillover effects on their untreated peers. We found neither a direct effect nor a spillover effect on students’ applications or admissions on average. Further analyses, however, revealed theoretically plausible heterogeneity in the direct causal effect of the intervention on the track choice of targeted seeds. Providing information about admission standards increased applications and admissions to secondary schools on the academic track among seeds who had a pre-existing interest in the academic track but were unsure of their chances of admission. This demonstrates that publicizing admissions standards can set students on a more ambitious educational trajectory. We discuss the implications for theory and policy.


2020 ◽  
Author(s):  
Mohsen Mosleh ◽  
Cameron Martel ◽  
Dean Eckles ◽  
David Gertler Rand

Americans are much more likely to be socially connected to co-partisans, both in daily life and on social media. But this observation does not necessarily mean that shared partisanship per se drives social tie formation, because partisanship is confounded with many other factors. Here, we test the causal effect of shared partisanship on the formation of social ties in a field experiment on Twitter. We created bot accounts that self-identified as people who favored the Democratic or Republican party, and that varied in the strength of that identification. We then randomly assigned 842 Twitter users to be followed by one of our accounts. Users were roughly three times more likely to reciprocally follow-back bots whose partisanship matched their own, and this was true regardless of the bot’s strength of identification. Interestingly, there was no partisan asymmetry in this preferential follow-back behavior: Democrats and Republicans alike were much more likely to reciprocate follows from co-partisans. These results demonstrate a strong causal effect of shared partisanship on the formation of social ties in an ecologically valid field setting, and have important implications for political psychology, social media, and the politically polarized state of the American public.


2013 ◽  
Vol 1 (1) ◽  
pp. 117-137 ◽  
Author(s):  
R. Michael Alvarez ◽  
Ines Levin ◽  
Julia Pomares ◽  
Marcelo Leiras

Voting technologies frame the voting experience. Different ways of presenting information to voters, registering voter choices and counting ballots may change the voting experience and cause individuals to re-evaluate the legitimacy of the electoral process. Yet few field experiments have evaluated how voting technologies affect the voting experience. This article uses unique data from a recent e-voting field experiment in Salta, Argentina to study these questions. It employs propensity-score matching methods to measure the causal effect of replacing traditional voting technology with e-voting on the voting experience. The study's main finding is that while e-voters perceive the new technology as easier to use and more likely to register votes as intended—and support replacing traditional voting technologies with e-voting—the new technologies also raise some concerns about ballot secrecy.


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