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on Cognitive and Behavioural Economics |
| By: | Mariana Blanco; Bogaçhan Çelen; Andrew Schotter |
| Abstract: | The theory of reciprocity is predicated on the assumption that people are willing to reward nice or kind acts and to punish unkind ones. This assumption raises the question as to how to define kindness. In this paper we offer a new definition of kindness that we call “blame-freeness.” Put most simply, blame-freeness states that in judging whether player i has been kind or unkind to player j in a social situation, player j would have to put himself in the strategic position of player i, while retaining his preferences, and ask if he would have acted in a manner that was worse than i did under identical circumstances. If j would have acted in a more unkind manner than i acted, then we say that j does not blame i for his behavior. If, however, j would have been nicer than i was, then we say that “j blames i” for his actions (i’s actions were blameworthy). We consider this notion a natural, intuitive and empirically relevant way to explain the motives of people engaged in reciprocal behavior. After developing the conceptual framework, we then test this concept in a laboratory experiment involving tournaments and find significant support for the theory. |
| Date: | 2010–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:007270&r=cbe |
| By: | David K Levine; Jie Zheng |
| Date: | 2010–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:661465000000000098&r=cbe |
| By: | Cox, James C. (Georgia State University); Orman, Wafa Hakim (University of Alabama in Huntsville) |
| Abstract: | Trust is a crucial component of social capital. We use an experimental moonlighting game with a representative sample of the U.S. population, oversampling immigrants, to study trust, positive, and negative reciprocity between first-generation immigrants and native-born Americans as a measure of immigrant assimilation. We also survey subjects in order to relate trusting and trustworthy behavior with demographic characteristics and traditional, survey-based measures of social capital. We find that immigrants are as trusting as native-born U.S. citizens when faced with another native-born citizen, but do not trust other immigrants. Immigrants appear to be less trustworthy overall but this finding disappears when we control for demographic variables and the amount sent by the first mover. The length of time an immigrant has been a naturalized U.S. citizen appears to increase trustworthiness but does not affect trusting behavior. Women and older people are less likely to trust, but no more or less trustworthy. |
| Keywords: | moonlighting game, trust, reciprocity, immigration, experiment |
| JEL: | C93 J61 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5063&r=cbe |
| By: | Rebitzer, James B. (Boston University); Taylor, Lowell J. (Carnegie Mellon University) |
| Abstract: | Employers structure pay and employment relationships to mitigate agency problems. A large literature in economics documents how the resolution of these problems shapes personnel policies and labor markets. For the most part, the study of agency in employment relationships relies on highly stylized assumptions regarding human motivation, e.g., that employees seek to earn as much money as possible with minimal effort. In this essay, we explore the consequences of introducing behavioral complexity and realism into models of agency within organizations. Specifically, we assess the insights gained by allowing employees to be guided by such motivations as the desire to compare favorably to others, the aspiration to contribute to intrinsically worthwhile goals, and the inclination to reciprocate generosity or exact retribution for perceived wrongs. More provocatively, from the standpoint of standard economics, we also consider the possibility that people are driven, in ways that may be opaque even to themselves, by the desire to earn social esteem or to shape and reinforce identity. |
| Keywords: | agency, motivation, employment relationships, behavioral economics |
| JEL: | D2 J0 M5 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5058&r=cbe |
| By: | Katrin Schmelz (Max Planck Institute of Economics, Jena, IMPRS "Uncertainty") |
| Abstract: | E-nstructions facilitates the use of electronic instructions in computerized laboratory experiments. This tool has been primarily designed to be used in combination with z-Tree (Fischbacher, 2007), but it should work in combination with other experimental softwares which help developing and conducting experiments. This article provides a set of guidelines for the installation and the use of E-nstructions. |
| Keywords: | Experiments, Experimental software, instructions |
| JEL: | C91 C92 |
| Date: | 2010–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-047&r=cbe |
| By: | Gerlinde Fellner; Yoshio Iida; Sabine Kröger; Erika Seki |
| Abstract: | This article experimentally examines voluntary contributions when group members’ marginal returns to the public good vary. The experiment implements two marginal return types, low and high, and uses the information that members have about the heterogeneity to identify the applied contribution norm. We find that norms vary with the information environment. If agents are aware of the heterogeneity, contributions increase in general. However, high types contribute more than low types when contributions can be linked to the type of the donor but contribute less otherwise. Low types, on the other hand, contributes more than high types when group members are aware of the heterogeneity but contributions cannot be linked to types. Our results underline the importance of the information structure when persons with different abilities contribute to a joint project, as in the context of teamwork or charitable giving. |
| Keywords: | Public Goods, Voluntary contribution mechanism, Heterogeneity, Information, Norms |
| JEL: | C9 H41 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1025&r=cbe |
| By: | de Meza, David (London School of Economics); Irlenbusch, Bernd (University of Cologne); Reyniers, Diane (London School of Economics) |
| Abstract: | This high-stakes experiment investigates the effect on buyers of mandatory disclosures concerning an insurance policy's value for money (the claims ratio) and the seller's commission. These information disclosures have virtually no effect despite most buyers claiming to value such information. Instead, our data reveal that whether the subject is generally trusting plays an important role. Trust is clearly associated with greater willingness to pay for insurance. Unlike in previous work, trust in our setting is not about obligations being fulfilled. The contract is complete, simple and the possibility of breach is negligible. However, as for much B2C insurance marketing, face-to-face selling plays a crucial role in our experimental design. Trusting buyers are more suggestible, so take advice more readily and buy more insurance, although they are no more risk averse than the uninsured. Moreover, trusting buyers feel less pressured by sellers, and are more confident in their decisions which suggests that they are easier to persuade. Therefore, in markets where persuasion is important, public policy designed to increase consumer information is likely to be ineffective. |
| Keywords: | insurance selling, trust, persuasion |
| JEL: | C91 G22 M30 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5060&r=cbe |
| By: | Nicolas Jacquemet (Centre d'Economie de la Sorbonne - Paris School of Economics); Adam Zylbersztejn (Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | This paper reports experimental results from a one-shot game with two Nash equilibria : the first one is efficient, the second one relies on weakly dominated strategies. The experimental treatments consider three information-enhancing mechanisms in the game : simple repetition, cheap-talk messages and observation of past actions from the current interaction partner. Our experimental results show the use of dominated strategies is quite widespread. Any kind of information (through learning, words or actions) increases efficiency. As regards coordination, we find that good history performs better than good messages ; but bad history performs worse than bad messages. |
| Keywords: | Coordination game, communication, cheap-talk, observation. |
| JEL: | C72 D83 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:10064&r=cbe |