Working Papers

Temptation in Vote-Selling: Evidence from a Field Experiment in the Philippines
(with Allen Hicken, Nico Ravanilla and Dean Yang) (2017)

Abstract: We report the results of a randomized field experiment in the Philippines on the effects of two common anti-vote-selling strategies involving eliciting promises from voters. An invitation to promise not to vote-sell is taken up by most respondents, reduces vote-selling, and has a larger effect in races with smaller vote-buying payments. The treatment reduces vote-selling in the smallest-stakes election by 10.9 percentage points. Inviting voters to promise to “vote your conscience” despite accepting money is significantly less effective. The results are consistent with a behavioral model in which voters are only partially sophisticated about their vote-selling temptation.

The Informational and Incentive Effects of Supplier Awards
(with Ruth Beer and Hyun-Soo Ahn) (2017)

Abstract: Many firms recognize exceptional supplier performance by giving out a ``Supplier of the Year'' or ``Outstanding Supplier'' award. These awards are usually symbolic since they have no immediate monetary value for a supplier and no direct cost to a buyer. Giving these awards can be beneficial for a buyer: if the employees working for a supplier care about being rewarded, symbolic awards can incentivize a supplier to exert higher effort. On the other hand, in a market with multiple buyers and suppliers, an award may have another effect, which we denote ``competition effect''. When an award is announced to other buyers indicating that a particular supplier is good, this can intensify a competition to do business with a good supplier. We develop a theoretical model that captures a supplier's value for the award in a setting with two buyers and two suppliers. We show that the average provision of quality is higher when awards are available whether these are private (only observable to the recipient) or public (observable to everyone). In addition, public awards result in buyers paying a higher price to get a good supplier. We then test these results with a laboratory experiment. Our experimental results show that private symbolic awards have incentive effects and lead to higher provision of quality and higher buyer's profits. When the awards are public this profit premium disappears. This happens for two reasons, first because buyers have to pay higher prices to get the good suppliers, and second because making the award public crowds out the intrinsic value of the award for suppliers. We also find that significant efficiency gains occur only when the award is private and the quality is public. This suggests that symbolic awards provide a noisy signal of a supplier's type and therefore fail to capture the full efficiency gain of transparent transactions.

The Impact of Decision Rights and Long Term Relationships on Innovation Sharing
(with Ruth Beer and Hyun-Soo Ahn) (2017)

Abstract: While innovation sharing between a buyer and a supplier can increase the efficiency and total profit of a supply chain, many suppliers are reluctant to do so. Sharing innovations leaves the supplier in a vulnerable position if the buyer exploits the information (e.g. by re-sharing the supplier's innovation with competing suppliers). In this paper, we examine conditions under which a collaborative relationship can arise in this situation, with a supplier voluntarily sharing an innovation and a buyer repaying that trust by sharing the surplus increase rather than seeking competing bids from other suppliers. First we show, both theoretically and experimentally, that decisions to collaborate are affected by the length of the relationship between the firms - longer relationships lead to higher collaboration and higher total profits. We additionally show that collaboration depends not just on the firm-level relationship length, but also on the long- or short-run focus of the employees within the firms that make decisions. We model the buyer as a dual decision maker, with long-run and/or short-run focused employees (``engineers'' and ``procurement managers'') determining the buyer's actions. We characterize the equilibrium of this model and show that collaborative outcomes depend on the level of control the long-run employee has within the buyer. Our experimental results verify this intuition. Collaborative relationships occur more often when the engineer has more control. However, the supplier's decision to share an innovation depends primarily on the firm-level relationship length, while the buyer's decision to seek competition depends more on the relationship focus of the controlling employees. Consequently, buyers' profits increase with long-run firm relationships (for any decision maker), while suppliers' profits only significantly increase with a long-run decision maker. Finally, while suppliers and engineers should theoretically ignore the actions of the previous procurement managers, we find that both suppliers' and engineers' actions are correlated with the previous procurement managers' decision.

Other Papers

Gift Exchange in the Lab - It is not (only) how much you give...
(with Florian Englmaier) (2012)

Managerial Payoff and Gift Exchange in the Field
(with Florian Englmaier) (2012)

Does Experience Always Pay? Welfare and Distribution Effects in Games with Heterogeneously Experienced Players
(with Robert Slonim) 2006