Behavioral economics provides a rich set of explicit models of non-classical preferences and belief formation which can be used to estimate structural models of decision making. At the same time, experimental approaches allow the researcher to exogenously vary components of the decision making environment. The synergies between behavioral and experimental economics provide a natural setting for the estimation of structural models. This Element will cover examples supporting the following arguments 1) Experimental data allows the researcher to estimate structural models under weaker assumptions and can simplify their estimation, 2) many popular models in behavioral economics can be estimated without any programming skills using existing software, 3) experimental methods are useful to validate structural models. This Element aims to facilitate adoption of structural modelling by providing Stata codes to replicate some of the empirical illustrations that are presented. Examples covered include estimation of outcome-based preferences, belief-dependent preferences and risk preferences.

En 1887 un curé québécois, Charles Bellemare, de Shawinigan découvre qu'il existe en Normandie, à Chambray-sur-Eure, un ecclésiastique portant le même nom que lui. Il lui écrit. C'est le début d'une étonnante correspondance, où pendant plus de douze ans, nos deux prêtres vont se décrire mutuellement leur pays et confronter leurs expériences de curé de campagne. Tout un monde aujourd'hui disparu revit, avec une singulière fraîcheur, à travers ce double tableau de la rude mais pieuse Mauricie et de la riante mais peu dévote vallée de l'Eure à la fin du siècle dernier. Un rare exemple de publication franco-québécoise, entre « cousins » en quelque sorte...

We derive bounds on the causal effect of belief-dependent preferences (reciprocity and guilt aversion) on choices in sequential two-player games without exploiting information or data on the (higher-order) beliefs of players. We show how informative bounds can be derived by exploiting a specific invariance property common to those preferences. We illustrate our approach by analyzing data from an experiment conducted in Denmark. Our approach produces tight bounds on the causal effect of reciprocity in the games we consider. These bounds suggest there exists significant reciprocity in our population - a result also substantiated by the participants' answers to a post-experimental questionnaire. On the other hand, our approach yields high implausible estimates of guilt aversion. We contrast our estimated bounds with point estimates obtained using data on self-declared higher-order beliefs, keeping all other aspects of the model unchanged. We find that point estimates fall within our estimated bounds suggesting that elicited higher-order belief data in our experiment is weakly (if at all) affected by a potential endogeneity problem due to e.g. false consensus effects.

We show how to bound the effect of belief-dependent preferences on choices in sequential two-player games without information about the (higher-order) beliefs of players. The approach can be applied to a class of belief-dependent preferences which includes reciprocity (Dufwenberg and Kirchsteiger, 2004) and guilt aversion (Battigalli and Dufwenberg, 2007) as special cases. We show how the size of the bounds can be substantially reduced by exploiting a specific invariance property common to preferences in this class. We illustrate our approach by analyzing data from a large scale experiment conducted with a sample of participants randomly drawn from the Dutch population. We find that behavior of players in the experiment is consistent with significant guilt aversion: some groups of the population are willing to pay at least 0.16e to avoid 'letting down' another player by 1e. We also find that our approach produces narrow and thus very informative bounds on the effect of reciprocity in the games we consider. Our bounds suggest the model of reciprocity we consider is not a significant determinant of decisions in our experiment. -- belief-dependent preferences ; guilt aversion ; reciprocity ; partial identification

Subjective performance evaluations are commonly used to provide feedback and incentives to workers. However, such evaluations can generate significant disagreements and conflicts, the severity of which may be driven by many factors. In this paper we show that a workers' level of self-confidence plays a central role in shaping reactions to subjective evaluations - overconfident agents engage in costly punishment when they receive evaluations below their own, but provide limited rewards to principals when evaluations exceed their own. In contrast, underconfident agents do not significantly react to evaluations below their own, but reward significantly evaluations exceeding their own. Our analysis exploits data from a principal-agent experiment run with a large sample of the Danish working age population, varying the financial consequences associated with the evaluations workers receive. In contrast to existing economic models of reciprocal behavior, reactions to evaluations are weakly related to the financial consequences of the evaluations. These results point towards a behavioral model of reciprocity that intertwines the desire to protect self-perceptions with over-/underconfidence.