How does advice influence the job search behavior?

The experiment will consist of 4 treatments, in 2 pairs. In pair 1, there will be no search costs, in pair 2, search costs are represented by a real-effort coding task. In each pair, there will be two treatments, in Treatment 1, participants complete the search task 10 times and leave advice. In Treatment 2, participants receive advice and complete the search task 10 times.

2022-01-25

2022-02-28

We record the reservation wage choices of the participants and the advices given (recommended reservation wage + free-form message).

The main part of the experiment consists of an infinite-horizon search task, played for 10 rounds. Within a round, the following sequence of events occurs. In period 1, participants choose a reservation wage (that, is, a minimum acceptable offer), after which an offer is uniform randomly drawn from the set of integer numbers between 1 and 100 points. Participants know the offer distribution and cannot change their reservation wage after seeing their offer received. If the offer received is at least as large as the reservation wage, the participant accepts the offer and earns the value of the offer for the remaining periods of the round, without making any further
decisions. Otherwise, she moves to the next period where she chooses a reservation wage and draws an offer again, without being able to recall previous offers. In period 1 and in every subsequent period of searching, participants receive 30 points which is not paid after an offer is accepted. This process is repeated until the end of the round.

The number of periods in a round is determined randomly determined: after any given period, with 95% probability, there will be a next period, while with 5% probability, the round ends. This random termination method creates infinite horizon in the experiment.

The sum of points earned in all periods of a round constitutes the participants’ payoffs from a round. The payoffs from the whole search task are the participant’s payoffs from a randomly chosen round.

We have two versions of this search task: one as described above, another with search costs. Search costs will be implemented by a real-effort coding task. After submitting the reservation wage, participants will have to code three letters to numbers using a coding table. They will receive their offer only after finishing the coding correctly.

Both for the conditions without and with search costs, we will have two treatments. Treatment 1 consists of three parts. In Part 1,
participants complete the 10 periods of search task as described above. In Part 2, they leave advice to a randomly chosen participant of Treatment 2 suggesting a strategy to follow in the search task. The advice consists of a recommended reservation wage and a free-form text
message. Advice giving is incentivized: the advisor’s payoffs from Part 2 are equal to half of the payoffs of their advisee in the search task. In Part 3, participants fill out a survey which asks about demographic information (gender, age, education, student status), and contains a risk preference elicitation task and a cognitive reflection test, both of the latter are incentivized.


Treatment 2 consists of two parts. Part 1 contains the 10 rounds of search task. Before starting the first round, each participant in Treatment 2 receives advice from a randomly chosen participant of Treatment 1. Part 2 contains the same survey as described above. In both
treatments, the total payoffs of a participant is the sum of payoffs from all parts of the experiment.

We ensure that the search tasks in the two treatments are experimentally comparable in the sense that the information set of the participants and their expected payoffs before the search task are the same. We achieve this by first giving the experimental instructions of the search task (namely Part 1 in both treatments) to the participants and showing them the instructions of the latter parts only after they completed the search task. In addition, participants of Treatment 2 not know that their choices in the search task affect the payoffs of the participants in Treatment
1. This rules out any influence of other-regarding preferences when making decisions in the search task.

The randomization is done by the computer, and the arrival of participants to the experiment on the Prolific website, where we recruit the participants.

Prolific registered and active participants.

Yes

We will recruit 400 participants in total. 100 in Treatment 1, no search cost. 100 in Treatment 2, no search costs. 100 in Treatment 1, with search cost. 100 in Treatment 2, with search costs.

For reservation wage: 100 participants * 10 rounds * the number of periods they search (endogenous) * 4 Treatments For advice: 100 participants in Treatment 1, no search costs + 100 participants in Treatment 1, with search costs

For Reservation wage: 100 participants * 10 rounds * the number of periods they search (endogenous)
For Advice: 100 participants