Research in Progress

 “Sunspots and Equilibrium Selection: an Experiment”

The theoretical prediction of multiple equilibria in a particular environment proves to be rather difficult to test empirically. This study uses a laboratory experiment to investigate whether a generic sunspot, such as a completely uninformative announcement by an outsider, can help us detect multiplicity in a dynamic global game setting. When theory predicts a unique equilibrium, the sunspot should have no effect on behavior. In the presence of multiplicity, the sunspot serves as a coordination device. The preliminary experimental results suggest that the effect of the uninformative announcement is much stronger in the second stage of the experiment where theory predicts multiplicity of equilibria than in the first stage where theory predicts a unique equilibrium. Moreover, the announcement seems to affect actions through its effect on beliefs.

“Gender Differences in Performance Under Affirmative Action” (with Anat Bracha, Boris Maciejovsky, and Daniel Mochon)

In this study, we investigate the effects of affirmative action on performance in mathematical tasks under a piece-rate incentive scheme. Initially, subjects are divided into groups of four people, each consisting of two men and two women. The experiment is comprised of two rounds. Prior to the first round, subjects are assigned to various treatment conditions. In the affirmative action treatment, subjects are informed that two of the four participants who score the highest in the first round will be selected into the second round. However, one of the two subjects must be a woman. In the control treatment, subjects are told that selection into the second round is based solely on the performance in the first round. Our preliminary findings suggest that women score lower and attempt fewer questions in the first round when they expect affirmative action to take place. In order to explore the potential reasons for this effect, we are currently planning to conduct a “random affirmative action” treatment, where two subjects with an odd randomly assigned id number are selected into the second round.

“Heroes of Our Time: Political Elites in Russia and the Effects of Their Background on Economic Outcomes”

Even though Russia transitioned to a democratic institutional system in 1991, old Communist institutions persist in some of its regions. These “shadow institutions” have a significant effect on economic outcomes and, in particular, on small business development. We purport to use an IV estimation methodology to show that regions run by old Communist elites have had lower levels of economic development than regions led by newcomers to the political arena.