November 23, 2015
News /
Posted by NCID

Alexander Coutts, assistant professor of Economics at the Nova School of Business and Economics (Universidade Nova de Lisboa) presented his research on “Social Learning in Experimental Games: Evidence from Rwanda” at the NCID Weekly Seminar session.

The researcher explained how artifactual and lab experiments are increasingly in applied in developing countries and is wary of some risks. “We have to make sure when doing experiments that they keep the same format and each person has access to the same information,” therein producing legitimate statistical results.

In his case they conducted the experiment in 150 villages in the southwest of Rwanda, interacting with 12 people per village in a period of 80 days, which calculates to an average of 3 villages per day.

According to Alexander Coutts every participant received 400 Rwandan Franc –in 100 franc coins—, and then they had to make the decision to allocate the money between themselves or to the group. The contributions towards the group were then combined, tripled and, distributed back equally to everybody, whereas money kept was not multiplied.

“The standard theoretical prediction is to choose the contribution equal to zero, because the only thing that contributing does is lower the immediate payoff. So, this is the basic tradeoff, it’s better if everybody contributes but individually the best you can do is always keep of the money to yourself”, explained Alexander Coutts.

 

Communication between villages

In the analysis Alexander Coutts found that communication between individuals from different villages led to increasing contributions for the group.

“For each additional day that we were visiting the villages there was an extra 17 RWF of contribution”, explained Alexander Coutts. According to him some participants were giving advice to future participants, “the key is these people that are called ‘conditional cooperators’ are very important in generating this effect”, said Coutts.

Coutts believes that the information flow between communities altered the individual behavior perhaps specifically because the experiment was done in rural Rwanda.

“In a typical lab experiment in say, New York City, participants are less likely to know other participants—said Coutts—. I believe social learning can occur in other contexts in developing countries, but I think it is an open question whether information networks operate similarly within other countries, or if Rwanda is a special case.”

According to Coutts the main message from this paper is that people communicate across communities about issues affecting them. “So policies that work to disseminate information can use this to their advantage. Similarly, policy makers might be interested in improving the connectedness of rural communities, to improve such knowledge sharing,” explained Alexander Coutts.

Returning to his central concern. This project highlights that when doing field experiments, information can travel and it does have an effect on statistical results.