A fab paper mixing experimental economics with behavioral economics. Unfortunately I can’t find a free version of the paper.
It is written by four econs- Steven Levitt, John List, Susanne Neckermann and Sally Sadoff. The first two names are well-known.
They say beh eco has become serious business and applied in a many econ fields. However, it is missing in education sector and this is an area which should benefit greatly from beh eco. They run experiments to show this:
A long line of research on behavioral economics has established the importance of factors that are typically absent from the standard economic framework: reference dependent preferences, hyperbolic preferences, and the value placed on non-financial rewards. To date, these insights have had little impact on the way the educational system operates. Through a series of field experiments involving thousands of primary and secondary school students, we demonstrate the power of behavioral economics to influence educational performance. Several insights emerge.
First, we find that incentives framed as losses have more robust effects than comparable incentives framed as gains.
Second, we find that non-financial incentives are considerably more cost-effective than financial incentives for younger students, but were not effective with older students.
Finally, and perhaps most importantly, consistent with hyperbolic discounting, all motivating power of the incentives vanishes when rewards are handed out with a delay. Since the rewards to educational investment virtually always come with a delay, our results suggest that the current set of incentives may lead to underinvestment.
For policymakers, our findings imply that in the absence of immediate incentives, many students put forth low effort on standardized tests, which may create biases in measures of student ability, teacher value added, school quality, and achievement gaps.
This research needs to be expanded in other areas as well. Nothing better to see beh eco being applied..
