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Field
Intervention (Hidden)
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Before
We have three main treatments. Markets have 4 participants and last 40 rounds. A participant's task in each round is to choose how much time to devote to producing goods Orange and Blue. They can discover possibilities for trade and specialization to generate gains from trade. Everyone chooses a photograph that most closely represents them. Images differ in race and gender and are selected from the Chicago Face Database.
In the homogenous market condition, all market participants are of the same race. In the mixed market condition, markets consist of two 2 white participants (of the same sex) and 2 black (or south Asian) participants. There are two versions of the mixed market condition. In one, the main gains from trade are available within-race, while in the other condition, they are found across-race.
We also plan to change the observability of people's actions as another treatment dimension, which will increase search costs and potentially amplify homophily effects.
Update 10/11/2023: We have discovered in the first three treatments that the language differs across treatments and also between same-race and different-race pairs. As communication is critical to overcoming the transaction costs present in this environment, we plan to run two treatments designed to change participants' communication. These treatments are more directly relevant to our question than varying search costs explicitly via the information people have. In one treatment, we will add a screen with language tips (be positive, use pronouns, be authentic, and strive for achievement), as we have discovered that these communication characteristics facilitate exchange. In the other treatment, we will restrict chat to be bilateral only. Both treatments will be run for the Across setting.
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After
We have three main treatments. Markets have 4 participants and last 40 rounds. A participant's task in each round is to choose how much time to devote to producing goods Orange and Blue. They can discover possibilities for trade and specialization to generate gains from trade. Everyone chooses a photograph that most closely represents them. Images differ in race and gender and are selected from the Chicago Face Database.
In the homogenous market condition, all market participants are of the same race. In the mixed market condition, markets consist of two 2 white participants (of the same sex) and 2 black (or south Asian) participants. There are two versions of the mixed market condition. In one, the main gains from trade are available within-race, while in the other condition, they are found across-race.
We also plan to change the observability of people's actions as another treatment dimension, which will increase search costs and potentially amplify homophily effects. Update 03/06/2024: We will instead lower the search costs by giving information about market participants' production advantages and consumption needs. We decided to do this because efficiency levels are clearly below 50% in the main treatments, and there is more room for an effect if we decrease rather than increase search costs. The idea is the same.
Update 10/11/2023: We have discovered in the first three treatments that the language differs across treatments and also between same-race and different-race pairs. As communication is critical to overcoming the transaction costs present in this environment, we plan to run two treatments designed to change participants' communication. These treatments are more directly relevant to our question than varying search costs explicitly via the information people have. In one treatment, we will add a screen with language tips (be positive, use pronouns, be authentic, and strive for achievement), as we have discovered that these communication characteristics facilitate exchange. In the other treatment, we will restrict chat to be bilateral only. Both treatments will be run for the Across setting.
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