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Grow Rich While You Sleep: Selection in Experiments with Voluntary Participation

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Author Info

  • Gautier, Pieter

    ()
    (VU University Amsterdam)

  • van der Klaauw, Bas

    ()
    (VU University Amsterdam)

Abstract

We use data from a promotion campaign of NH-Hoteles to study self-selection of participants in a gift-exchange experiment. The promotion campaign allowed guests to pay any non negative amount of money for a stay in one of 36 hotels in Belgium and the Netherlands. The data allow us to distinguish between ‘regular guests’, who booked prior to the announcement of the promotion campaign and guests who booked after the campaign was announced. During the promotion campaign we varied the posted price of a room that was communicated to the guests. Only the regular guests respond to the exogenous variation in the posted price and they pay substantially more on average. This different behavior cannot be explained by differences in satisfaction or observed compositional differences between both groups. We argue that the promotion campaign mainly attracted individuals who find it relatively unimportant to be viewed as prosocial.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2373.

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Length: 24 pages
Date of creation: Oct 2006
Date of revision:
Publication status: published as 'Selection in a field experiment with voluntary participation' in: Journal of Applied Econometrics, 2012, 27, 63-84
Handle: RePEc:iza:izadps:dp2373

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Keywords: field experiment; self-selection; gift-exchange game;

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  1. Botond Koszegi & Matthew Rabin, 2005. "A Model of Reference-Dependent Preferences," Levine's Bibliography 784828000000000341, UCLA Department of Economics.
  2. John List & David Reiley, 2008. "Field experiments," Artefactual Field Experiments, The Field Experiments Website 00091, The Field Experiments Website.
  3. Benabou, Roland & Tirole, Jean, 2005. "Incentives and Prosocial Behavior," IZA Discussion Papers 1695, Institute for the Study of Labor (IZA).
  4. Uri Gneezy & John A. List, 2006. "Putting Behavioral Economics to Work: Testing for Gift Exchange in Labor Markets Using Field Experiments," NBER Working Papers 12063, National Bureau of Economic Research, Inc.
  5. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  6. Ruffle, Bradley J., 1998. "More Is Better, But Fair Is Fair: Tipping in Dictator and Ultimatum Games," Games and Economic Behavior, Elsevier, Elsevier, vol. 23(2), pages 247-265, May.
  7. Soetevent, Adriaan R., 2005. "Anonymity in giving in a natural context--a field experiment in 30 churches," Journal of Public Economics, Elsevier, Elsevier, vol. 89(11-12), pages 2301-2323, December.
  8. Ernst Fehr & Georg Kirchsteiger & Arno Riedl, 2003. "Gift Exchange and Reciprocity in Competitive Experimental Markets," Labor and Demography, EconWPA 0305002, EconWPA.
  9. Ofer H. Azar, 2003. "The implications of tipping for economics and management," Others, EconWPA 0309002, EconWPA.
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