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on Experimental Economics |
| By: | Gelkha Buitrago; Werner Güth; M. Vittoria Levati |
| Abstract: | A novel two-person "charity game" is used to experimentally investigate whether anticipation of help crowds out incentives to work, and therefore impulses to help. We distinguish two treatments differing in whether the causes of neediness are verifiable or not. Helping behavior does not vary significantly between treatments, but is positively correlated with dictator giving, suggesting idiosyncratic attitudes to help. Needy subjects are unaffected by anticipated help, but react optimally to chance. |
| Keywords: | Experiments, Helping, Responsibility, Imperfect information |
| JEL: | C72 C92 |
| Date: | 2006–10 |
| URL: | https://d.repec.org/n?u=RePEc:esi:discus:2006-24&r=exp |
| By: | John Duffy; Jack Ochs |
| Abstract: | We report results from an experiment that examines play in an indefinitely repeated, 2-player Prisoner’s Dilemma game. Each experimental session involves N subjects and a sequence of indefinitely repeated games. The main treatment consists of whether agents are matched in fixed pairings or matched randomly in each indefinitely repeated game. Within the random matching treatment, we vary the information that players have about their opponents. Contrary to a theoretical possibility suggested by Kandori (1992), a cooperative norm does not emerge in the treatments where players are matched randomly. On the other hand, in the fixed pairings treatment, the evidence suggests that a cooperative norm does emerge as players gain more experience. |
| Date: | 2006–06 |
| URL: | https://d.repec.org/n?u=RePEc:pit:wpaper:274&r=exp |
| By: | John Bone; John D Hey; John Suckling |
| Abstract: | This paper identifies, and tests experimentally, a prediction of Nash Bargaining Theory that may appear counterintuitive. The context is a simple bargaining problem in which two players have to agree a choice from three alternatives. One alternative favours one player and a second favours the other. The third is an apparently reasonable compromise, but is in fact precluded as an agreed choice by the axioms of Nash Bargaining Theory. Experimental results show that agreement on this third alternative occurs rather often. So the axiomatic Nash theory is not well-supported by our evidence. Our subjects' behaviour could be interpreted as the paying of an irrationally (according to the Nash theory) high price in order to reach a compromise agreement. |
| Keywords: | Experiments, Nash Bargaining Theory |
| JEL: | C78 C92 |
| Date: | 2006–08 |
| URL: | https://d.repec.org/n?u=RePEc:yor:yorken:06/18&r=exp |
| By: | Dennis Dittrich; Martin Kocher |
| Abstract: | We present an experimental test of a shirking model where monitoring intensity is endogenous and effort a continuous variable. Wage level, monitoring intensity and consequently the desired enforceable effort level are jointly determined by the maximization problem of the firm. As a result, monitoring and pay should be complements. In our experiment, between and within treatment variation is qualitatively in line with the normative predictions of the model under selfishness assumptions. Yet, we also find evidence for reciprocal behavior. The data analysis shows, however, that it does not pay for the employer to rely on the reciprocity of employees. |
| Keywords: | incentive contracts, supervision, efficiency wages, experiment, incomplete contracts, reciprocity |
| JEL: | C91 J31 J41 |
| Date: | 2006–10 |
| URL: | https://d.repec.org/n?u=RePEc:esi:discus:2006-23&r=exp |
| By: | John Duffy; Tatiana Kornienko |
| Abstract: | We explore whether natural human competitiveness can be exploited to stimulate charitable giving in a controlled laboratory experiment involving three different treatments of a sequential \"dictator game\". Without disclosing the actual amounts given and kept, in each period players are publicly ranked -- by the amount they give away, by the amount they keep for themselves, or spuriously. Our results are generally supportive of the hypothesis that competitive urges can encourage or frustrate charitable behavior, depending on the competitive frame. We find some support for an alternative hypothesis that relative concerns are due to information-gathering rather than competition. |
| Date: | 2006–07 |
| URL: | https://d.repec.org/n?u=RePEc:pit:wpaper:275&r=exp |
| By: | Maria Alejandra Velez (Department of Resource Economics, University of Massachusetts Amherst); James J. Murphy (Department of Resource Economics, University of Massachusetts Amherst); John K. Stranlund (Department of Resource Economics, University of Massachusetts Amherst) |
| Abstract: | This paper uses experimental data to test for a complementary relationship between formal regulations imposed on a community to conserve a local natural resource and nonbinding verbal agreements to do the same. Our experiments were conducted in the field in three regions of Colombia. Each group of five subjects played 10 rounds of an open access common pool resource game, and 10 additional rounds under one of five institutions— communication alone, two external regulations that differed by the level of enforcement, and communication combined with each of the two regulations. Our results suggest that the hypothesis of a complementary relationship between communication and external regulation is supported for some combinations of regions and regulations, but cannot be supported in general. We therefore conclude that the determination of whether formal regulations and informal communication are complementary must be made on a community-by-community basis. |
| Keywords: | common pool resources, experiments, institutions, communication, regulation |
| JEL: | C93 H41 Q20 Q28 |
| Date: | 2006–09 |
| URL: | https://d.repec.org/n?u=RePEc:dre:wpaper:2006-3&r=exp |
| By: | Douglas D. Davis (Department of Economics, VCU School of Business) |
| Abstract: | This paper reports an experiment conducted with extensively repeated posted-offer markets to examine interrelationships between seller concentration, static market power and pricing. Although contexts exist where both increased concentration and static market power raise prices, repeated-game effects also importantly affect outcomes. When sellers have static market power, dynamic effects cause prices to increase by more than the changes in static equilibrium predictions. Moreover, in a design where sellers have no static market power, but where the market structure facilitates dynamic price signaling activity, higher prices arise in three and four seller markets than in duopolies. |
| Keywords: | experiments, market concentration, antitrust policy |
| JEL: | C9 D4 L4 |
| Date: | 2006–09 |
| URL: | https://d.repec.org/n?u=RePEc:vcu:wpaper:0603&r=exp |
| By: | David Masclet (CREM - CNRS); Thierry Pénard (CREM – CNRS) |
| Abstract: | Several online market sites, such as eBay, have implemented reputation management mechanisms in order to improve cooperation. In this article, we aim at investigating the emergence of trust and cooperation in presence of reputation mechanism. In a series of experiments based on the trust game introduced by Berg Dickhault and McCabe (1995) , we examine different reputation systems. Our experimental design, thus, involves several treatments depending on the reputation system involved: simultaneous evaluation, sequential evaluation, evaluation with endogeneous choice in the moment of the evaluation. Our results indicate that reputation systems increase both the level of trust and the level of cooperation. However, our study also shed light on the limits of such systems. Indeed, evaluation can be used in a strategic way or in reprisal to received evaluation, that may attenuate its efficiency. |
| Keywords: | Trust, Experimental Economics, Evaluation, Reciprocity, E-commerce |
| JEL: | C72 C91 |
| Date: | 2006 |
| URL: | https://d.repec.org/n?u=RePEc:tut:cremwp:200620&r=exp |
| By: | Lise Vesterlund; Laurent Muller; Martin Sefton; Richard Steinberg |
| Date: | 2005–01 |
| URL: | https://d.repec.org/n?u=RePEc:pit:wpaper:264&r=exp |
| By: | John Duffy; Margit Tavits |
| Abstract: | We report results from a laboratory experiment that provides the first direct test of the pivotal voter model. This model predicts that voters will rationally choose to vote only if their expected benefit from voting outweighs the cost. The expected benefit calculation involves the use of the voter’s subjective probability that s/he will be pivotal to the election outcome; this probability is typically unobservable. In one of our experimental treatments we elicit these subjective probabilities using a proper scoring rule that induces truthful revelation of beliefs. The cost of voting and the payoff to the election winner are known constants, so the subjective probabilities allow us to directly test the pivotal voter model. We find some support for the model: While a higher subjective probability of being pivotal does increase the likelihood that an individual chooses to vote, the decisiveness probability thresholds used by subjects are not as crisp as the theory would predict. We find some evidence that individuals learn over time to adjust their probabilities of being pivotal so that they are more consistent with the historical frequency of decisiveness, although such learning appears slow; many subjects\' assessments of their pivotalness remain substantially higher than is warranted by the electoral history. |
| Date: | 2006–09 |
| URL: | https://d.repec.org/n?u=RePEc:pit:wpaper:273&r=exp |
| By: | Ortona, Guido; Ottone, Stefania; Ponzano, Ferruccio; Scacciati, Francesco |
| Abstract: | The paper illustrates the results of some experiments aiming to test the effect of taxation on the effort. Differently from previous experiments (Levy-Garboua et al., Sutter and Weck-Hannemann, Swenson), in our research the revenue of taxation is not depleted but employed, more realistically, to finance welfare provisions. The result is no more a reduction of effort, as in previous experiments, but a slight increase. This behavior is coherent with a theoretical model suggested by Bird in 2001. |
| JEL: | D31 H23 H53 |
| Date: | 2006–10 |
| URL: | https://d.repec.org/n?u=RePEc:uca:ucapdv:71&r=exp |
| By: | Giovanna Devetag; Andreas Ortmann |
| Abstract: | Coordination games with Pareto-ranked equilibria have attracted major theoretical attention over the past two decades. Two early path-breaking sets of experimental studies were widely interpreted as suggesting that coordination failure is a common phenomenon in the laboratory. We identify the major determinants that seem to affect the incidence, and/or emergence, of coordination failure in the lab and review critically the existing experimental studies on coordination games with Pareto-ranked equilibria since that early evidence emerged. We conclude that coordination failure is likely to be the exception rather than the rule, both in the lab and outside of it. |
| Keywords: | coordination games, Pareto-ranked equilibria, payoff-asymmetric equilibria, staghunt games, optimization incentives, robustness, coordination, coordination failure |
| JEL: | C72 C92 |
| Date: | 2006 |
| URL: | https://d.repec.org/n?u=RePEc:trn:utwpce:0605&r=exp |
| By: | Maria Alejandra Velez (Department of Resource Economics, University of Massachusetts Amherst); James J. Murphy (Department of Resource Economics, University of Massachusetts Amherst); John K. Stranlund (Department of Resource Economics, University of Massachusetts Amherst) |
| Abstract: | With data from framed common pool resource experiments conducted with artisanal fishing communities in Colombia, we estimate a hierarchical linear model to investigate within-group and between-group variation in individual harvest strategies across several institutions. Our results suggest that communication serves to effectively coordinate individual strategies within groups, but that these coordinated strategies vary considerably across groups. In contrast, weakly enforced regulatory restrictions on individual harvests (as well as unregulated open access) produce significant variation in the individual strategies within groups, but these strategies are roughly replicated across groups so that there is little between-group variation. |
| Keywords: | common pool resources, field experiments, communication, regulation, hierarchical linear models |
| JEL: | C93 H41 Q20 Q28 |
| Date: | 2006–09 |
| URL: | https://d.repec.org/n?u=RePEc:dre:wpaper:2006-4&r=exp |
| By: | Vincent P. Crawford |
| Date: | 2006–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:cla:levrem:321307000000000462&r=exp |
| By: | Andreas Blume; Andreas Ortmann |
| Date: | 2005–01 |
| URL: | https://d.repec.org/n?u=RePEc:pit:wpaper:197&r=exp |
| By: | Lise Vesterlund; John Duffy; Jack Ochs |
| Date: | 2005–01 |
| URL: | https://d.repec.org/n?u=RePEc:pit:wpaper:267&r=exp |
| By: | Lise Vesterlund; Bill Harbaugh; Kate Krause |
| Date: | 2005–01 |
| URL: | https://d.repec.org/n?u=RePEc:pit:wpaper:268&r=exp |