Essays in development and experimental economics

This dissertation is a two-part essays on development economics and experimental economics. In the first essay ”Pathways to Preventive Health, Evidence from India’s Rural Roads Program” we estimate the impact of a massive nationwide road construction program on the usage, provision, and awareness of preventive health care. Under this program, the government mandates to connect all villages with a population of at least 500 within the reach of the nearest link road via an all-weather road. Using the population of the village, we match the household survey data (DLHS-3) with the program placement data at the village (treatment) level. We use a Fuzzy Regression Discontinuity (FRD) technique to overcome the problem of endogenous program placement. Our results suggest that the provision of roads increases the use of preventive health care by women and households. We further show that this increase in health care usage comes not only from increase in income or reduction in travel cost but also from: a) increase in the awareness amongst households and individual, b) improvement in health care supply, and c) increase in social interaction within and between villages. Our results show additional benefits of providing roads and provides important insights for increasing preventive health care use in developing countries. In the second essay ”The Path to Equilibrium in Sequential and Simultaneous Games” we study in the laboratory three-player and four-player, two-action, dominance solvable games of complete information. We consider sequential and simultaneous versions of games that have the same equilibrium actions. Our objective is to test whether players play differently in the sequential games than in the simultaneous games and in case we see a difference in their behavior between these two games, with the help of mousetracking technique we want to know whether the players also analyze the two games differently. We find slightly more equilibrium choices in sequential than in simultaneous, and an overall good fit of level k theory. Two attentional variables are highly predictive of equilibrium behavior in both versions: looking at the payoffs necessary to compute the Nash equilibrium and looking at payoffs in the order predicted by sequential elimination of the strategies. Finally, the sequence of lookups reveals different decision making processes between sequential and simultaneous games, even among subjects who play the equilibrium strategy. Subjects have a harder time finding the player with a dominant strategy in simultaneous than in sequential. However conditional on finding such player, the unraveling logic of iterated elimination of dominated strategies is performed (equally) fast and efficient in both games.