Confucianism and Preferences Evidence From Lab Experiments in Taiwan and China Confucian Ch3

Figure 1: Cumulative Distribution of Safe Choices in Lottery Game I By Treatment Status Cumulative Probability 1 .8 .6 .4 .2 0 0 2 4 6 8 # of Safe Choices in Risk Aversion Game c.d.f. of Control 10 c.d.f. of Treatment Figure 2: Cumulative Distribution of Low-Loss Choices in Lottery Game II By Treatment Status Cumulative Probability 1 .8 .6 .4 .2 0 0 2 4 6 # of Low-Loss Choices in Loss Aversion Task c.d.f. of Control 8 c.d.f. of Treatment 22 Figure 3: Probability Distribution of Tokens Invested 0 .1 % .2 .3 .4 By Tokens Given and Treatment Status 0 25 50 75 100 Treatment 125 150 Control Figure 4: Average Share of Tokens Returned 0 % Token Returned .1 .2 .3 By Token Received and Treatment Status 75 150 225 Treatment 300 375 450 Control 23 Figure 5: Proportion of Tokens Allocated to Earlier Payment Stratified by Treatment Status and by Interest Rates .2 .4 .6 .8 6 weeks versus 10 Weeks 0 0 .2 .4 .6 .8 Today versus 4 Weeks .5% 1% 1.5% Treatment 2% 2.5% Control .5% 1% 1.5% Treatment 2% 2.5% Control 24 Table 1: Risk Aversion Experiment Choice A (Safe Option) Choice B (Risky Option) Differences in Expected Payoff (A-B) 1 10% Probability Winning 200 tokens 90% Probability Winning 160 tokens 10% Probability Winning 385 tokens 90% Probability Winning 10 tokens 116.5 2 20% Probability Winning 200 tokens 80% Probability Winning 160 tokens 20% Probability Winning 385 tokens 80% Probability Winning 10 tokens 83 3 30% Probability Winning 200 tokens 70% Probability Winning 160 tokens 30% Probability Winning 385 tokens 70% Probability Winning 10 tokens 49.5 4 40% Probability Winning 200 tokens 60% Probability Winning 160 tokens 40% Probability Winning 385 tokens 60% Probability Winning 10 tokens 16 5 50% Probability Winning 200 tokens 50% Probability Winning 160 tokens 50% Probability Winning 385 tokens 50% Probability Winning 10 tokens -17.5 6 60% Probability Winning 200 tokens 40% Probability Winning 160 tokens 60% Probability Winning 385 tokens 40% Probability Winning 10 tokens -51 7 70% Probability Winning 200 tokens 30% Probability Winning 160 tokens 70% Probability Winning 385 tokens 30% Probability Winning 10 tokens -84.5 8 80% Probability Winning 200 tokens 20% Probability Winning 160 tokens 80% Probability Winning 385 tokens 20% Probability Winning 10 tokens -118 9 90% Probability Winning 200 tokens 10% Probability Winning 160 tokens 90% Probability Winning 385 tokens 10% Probability Winning 10 tokens -151.5 25 Table 2: Eliciation of Loss Aversion Choice A (Low Loss Option) Choice B (High Loss Option) Differences in Expected Payoff (A-B) 7.5 1 50% Probability Winning 60 tokens 50% Probability Losing 35 tokens 50% Probability Winning 75 tokens 50% Probability Losing 65 tokens 2 50% Probability Winning 55 tokens 50% Probability Losing 35 tokens 50% Probability Winning 75 tokens 50% Probability Losing 65 tokens 5 3 50% Probability Winning 50 tokens 50% Probability Losing 35 tokens 50% Probability Winning 75 tokens 50% Probability Losing 65 tokens 2.5 4 50% Probability Winning 45 tokens 50% Probability Losing 35 tokens 50% Probability Winning 75 tokens 50% Probability Losing 65 tokens 0 5 50% Probability Winning 40 tokens 50% Probability Losing 35 tokens 50% Probability Winning 75 tokens 50% Probability Losing 50 tokens -10 6 50% Probability Winning 40 tokens 50% Probability Losing 35 tokens 50% Probability Winning 75 tokens 50% Probability Losing 45 tokens -12.5 7 50% Probability Winning 35 tokens 50% Probability Losing 35 tokens 50% Probability Winning 75 tokens 50% Probability Losing 40 tokens -17.5 Table 3: Choices for Convex Time Budget Task Game Interest Rate (r ) Sooner Date (t) Later Date (t+h) 1 0.50% today 4 weeks 2 1% today 4 weeks 3 1.50% today 4 weeks 4 2% today 4 weeks 5 2.50% today 4 weeks 6 0.50% 6 weeks 10 weeks 7 1% 6 weeks 10 weeks 8 1.50% 6 weeks 10 weeks 9 2% 6 weeks 10 weeks 10 2.50% 6 weeks 10 weeks Note: Subjects decide how much (of the 300 tokens) to receive earlier rather than later for each of the 10 games. The amount allocated at the later date would earn interest at the corresponding interesting rate. 26 Table 4: Subject Characteristics Stratified by Schools Peking University 0.503 (0.501) 22.48 (2.485) 0.503 (0.501) National Taiwan University 0.425 (0.496) 21.25 (2.259) 0.290 (0.455) P-value of Hypothesis Testing 0.13 Majoring in Science or Engineering Related Fields (1= Yes; 2=No) 0.436 (0.497) 0.297 (0.458) 0.00 Conservative upbringing (1=certainly not.. 4 = certainly yes) 2.785 (0.858) 2.737 (0.727) 0.52 2.795 (0.091) 3.228 (0.092) 0.00 Female Age Graduate Students a b Father's education level 0.00 0.00 b Mother's education level 2.443 2.892 0.00 (0.089) (0.082) Observations 185 195 Note: The means are reported for each question. Standard deviations are reported in parentheses. The last column reports the p-values of the two-way tests of the equality of the means between schools. a. Graduate students would report their current field of study. We use the standard definition of Science, Technology, Engineering and Mathematics (STEM) fields. b. 1=below high school;2=high school;3=associate degree;4=bachelor degree;5=graduate degree 27 Table 5: Randomization Check VARIABLES Female Panel A: National Taiwan University Graduate Father's Mother's Conservative Student Education Education Upbringing Age Confucius Prime -0.033 0.402 Constant Observations R-squared 0.02 -0.153 -0.052 (0.058) (0.814) (0.139) (0.195) (0.175) (0.120) (0.083) 21.04*** 0.235*** 3.238*** 2.882*** 2.804*** 0.324*** (0.0397) (0.450) (0.0734) (0.0863) (0.114) (0.0737) (0.0468) 195 195 195 193 194 195 194 0.001 0.008 0.014 0.000 0.000 0.011 0.003 Female Age Confucius Prime -0.038 0.115 Observations -0.02 0.441*** VARIABLES Constant 0.109 STEM Major Panel B: Peking University Graduate Father's Mother's Conservative Student Education Education Upbringing 0.027 -0.011 0.063 -0.230 STEM Major -0.049 (0.059) (0.467) (0.115) (0.232) (0.167) (0.130) (0.041) 0.522*** 22.42*** 0.489*** 2.800*** 2.411*** 2.900*** 0.460*** (0.0236) (0.263) (0.0423) (0.164) (0.0714) (0.0761) (0.0726) 185 185 185 185 185 184 182 R-squared 0.001 0.001 0.001 0.000 0.001 0.018 0.002 Note: Confucius Prime is a dummy for subjects receiving Confucian-salient primes. Randomization checks are separated by schoool. Robust standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1. Dependent variables are subjects' characteristics. Conservative upbringing is the answer to question "Did your parents emphasize traditional values (such as Confucianism) at home? 1= certainly not, .. 4 = certainly yes." We use the standard definition of Science, Technology, Engineering and Mathematics (STEM) fields. 28 Table 6: The Priming Effects on Risk Preferences, Trust/Trustworthy and Time Preferences (1) VARIABLES Mean(Dep Variable) (2) Number of Safe Coefficient of Choices in Relative Risk Lottery Task I Aversion (3) Number of Low loss Choices in Task II (4) (5) Coefficient of Loss Aversion Share of Tokens Invested in Investment Game (6) (7) Average Share of Tokens Returned in Share of Investment Token Invest Game in Today (8) Share of Token Invest in 6 wks 5.65 0.45 3.64 1.54 0.40 0.23 0.61 0.47 [1.64] [0.47] [1.25] [1.38] [0.35] [0.19] [0.39] [0.40] -0.259** -0.074** -0.115 -0.052 0.016 0.049* 0.025 0.006 (0.115) (0.033) (0.117) (0.145) (0.038) (0.023) (0.040) (0.042) 6.630*** (1.123) 0.726** (0.310) 5.130*** (0.829) 3.199** (1.267) 0.459 (0.319) -0.017 (0.263) 0.738*** (0.276) 0.288 (0.271) Individual Characteristics Included Yes Yes Yes Yes Yes Yes Yes Yes Observations 373 373 373 373 185 188 1,865 1,855 Standard Dev (Dep Variable) Confucius Prime Constant R-squared 0.039 0.037 0.061 0.044 0.020 0.044 0.098 0.069 Note: Standard errors are clustered at the session level. Confucius Prime is a dummy for subjects receiving Confucian-salient primes. Variables indicating the father's and mother's education level, a dummy variable indicating pku student, subject's age, a dummy variable indicating graduate student, a dummy indicating science/engineering related major, an index for conservative upbringing, and a dummy variable for female are included. 29 Table 7: Time Preference Parameters By Treatment Status Confucius Prime Neutral Prime (1) Delta (Discount Factor) (2) Beta (Present Bias) 0.9914 (0.0002) 0.9932 (0.0001) 0.0000 0.9359 (0.0017) 0.9270 (0.0016) 0.0001 P-Value for F-Test [Confucius-Prime=Neutral Prime] Note: Standard errors are in parentheses. These parameters are estimated using individual risk aversion (imputed using subjects' choice made in ncentivized lottery choice described in Section 3.2) and assume the mean weekly expenditure level to be 1657 NTD, as calculated based on the exit survey. Confucius Prime indicate subjects receiving Confucian-salient primes and neutral prime indicate subjects receiving nuetral primes. Column 1 reports the estimation of discount factor and column 2 reports the estimation for present bias. The p-value of the two-way tests of the equality between treatment and control groups is reported. 30 Table 8: Confucius Priming Effects by Schools (1) VARIABLES Mean(Dep Variable) Standard Dev(Dep Variable) Confucius Prime ( γ0) Confucius Prime *NTU (γ1) NTU constant Individual Characteristics Included P-value from F-test (γ0+γ1=0) Observations (2) Number of Safe Coefficient of Choices in Relative Risk Lottery Task I Aversion (3) Number of Low loss Choices in Task II (4) (5) Coefficient of Loss Aversion Share of Tokens Invested in Investment Game (6) Average Share of Tokens Returned in Investment Game (7) (8) Share of Share of Token Invest Token Invest in Today in 6 wks 5.65 0.45 3.64 1.54 0.40 0.23 0.61 0.47 [1.64] [0.47] [1.25] [1.38] [0.35] [0.19] [0.39] [0.40] -0.332* (0.172) 0.143 (0.213) -0.206 (0.200) 6.803*** (1.194) -0.094* (0.050) 0.039 (0.062) -0.052 (0.056) 0.769** (0.329) -0.219* (0.109) 0.203 (0.215) 0.155 (0.134) 4.928*** (0.826) -0.258 (0.224) 0.401 (0.302) -0.030 (0.223) 3.136** (1.134) 0.039 (0.040) -0.045 (0.075) 0.055 (0.051) 0.411 (0.318) 0.033 (0.024) 0.031 (0.050) -0.017 (0.040) -0.012 (0.243) 0.035 (0.055) -0.02 (0.078) -0.177*** (0.056) 0.920*** (0.284) -0.002 (0.062) 0.015 (0.082) -0.133** (0.058) 0.417 (0.279) Yes Yes Yes Yes Yes Yes Yes Yes 0.189 373 0.040 0.186 373 0.037 0.933 373 0.062 0.442 373 0.049 0.927 185 0.021 0.132 188 0.046 0.794 1,865 0.098 0.813 1,855 0.069 R-squared Note: standard errors are clustered at the session level for Columns 1-6 and clustered at the individual level for Columns 7 and 8. Confucius Prime is a dummy for subjects receiving Confucian-salient primes. NTU is a dummy for subjects from National Taiwan University. Variables indicating the father's and mother's education level, subject's age, a dummy indicating science/engineering related major, an index for conservative upbringing, a dummy variable indicating graduate student, and a dummy variable for female are included. The p-value from F-test (γ0+γ1=0) for each regression is also reported. 31 Table 9: Time Preference Parameters By Treatment Status By Schools VARIABLES Confucius Prime Neutral Prime PKU Delta (Discount Factor) (1) NTU Delta (Discount Factor) (2) PKU Beta (Present Bias) (3) NTU Beta (Present Bias) (4) 0.9913 (0.0003) 0.9945 (0.0001) 0.9914 (0.0002) 0.9919 (0.0003) 0.9450 (0.0023) 0.9420 (0.0023) 0.9290 (0.0019) 0.9180 (0.0025) P-value of F-Test for Differences in Parameter 0.0000 0.1078 0.3575 0.0005 Note: These parameters are estimated using individual risk aversion (imputed using subjects' choice made in ncentivized lottery choice described in Section 3.2) and assuming mean expenditure level at 1746 for NTU students and 1539 for PKU studentsas calculated based on the exit surve. Confucius Prime indicates subjects receiving Confucian-salient primes and neutral prime indicates subjects receiving nuetral primes. Columns 1 and 2 report the estimation of discount factor and columns 3 and 4 reports the estimation for present bias. Confucius Prime is a dummy for subjects receiving Confuciansalient primes. Neutral Prime is a dummy for subjects receiving Confucian-salient primes. NTU is a dummy for subjects from National Taiwan University. The p-value of the two-way tests of the equality of between treatments and controls group for each column is reported. 32