nep-exp New Economics Papers
on Experimental Economics
Issue of 2005‒01‒16
seven papers chosen by
Daniel Houser
George Mason University

  1. Experimenting over a Long Distance - A method to facilitate intercultural experiments By Gari Walkowitz; Clemens Oberhammer; Heike Hennig-Schmidt
  2. Why People Reject Advantageous Offers – Non-monotone Strategies in Ultimatum Bargaining By Heike Hennig-Schmidt; Zhu-Yu Li; Chaoliang Yang
  3. Minority Game - Experiments and Simulations of Traffic Scenarios By Thorsten Chmura; Thomas Pitz
  4. An Extended Reinforcement Algorithm for Estimation of Human Behaviour in Congestion Games By Thorsten Chmura; Thomas Pitz
  5. Envy Freeness in Experimental Fair Division Problems By Dorothea K. Herreiner; Clemens Puppe
  6. Equitable Allocations in Experimental Bargaining Games: Inequality Aversion versus Efficiency By Dorothea K. Herreiner; Clemens Puppe
  7. Detection Biases in Bluffing - Theory and Experiments By Holm, Håkan

  1. By: Gari Walkowitz; Clemens Oberhammer; Heike Hennig-Schmidt
    Abstract: We report a new method for Experimenting over a Long Distance (ELD) allowing to simultaneously run decentralized interactive experiments in geographically separated subject pools. We apply ELD to an intercultural trust experiment with participants from Argentina, China and Germany.
    Keywords: interactive intercultural experiments, investment game, trust
    JEL: C72 C81 C91 F00 O57
    Date: 2004–06
  2. By: Heike Hennig-Schmidt; Zhu-Yu Li; Chaoliang Yang
    Abstract: When using the strategy method in ultimatum bargaining, many researchers ask responders for the minimal acceptable offer only implicitly assuming strategies to be monotone. Recent research has shown, however, that subjects decline disadvantageous and advantageous proposals. We report on an ultimatum game video experiment where more than 50 percent of the responders rejected advantageous offers. Proposers and responders acted together in groups of three people each and were video taped during decision making. The videotapes then were content analyzed. Our experimental design provides the unique opportunity to learn from participants’ spontaneous discussions about their motivations for rejecting advantageous offers. Main motives are social concern, non-expectancy of high offers, emotional, ethical, and moral reasons, group-specific decision rules and aversion against unpleasant numbers.
    Keywords: ultimatum game, video experiments, strategy method, content analysis, non-monotone strategies, social preferences
    JEL: C78 C81 C91 C92 F00 O53 O57
    Date: 2004–12
  3. By: Thorsten Chmura; Thomas Pitz
    Abstract: This paper reports laboratory experiments and simulations on a minority game. The minority game is the most important example for a classic non-zerosum- game. The game can be applied on different situations with social and economic contests. We chose an elementary traffic scenario, in which subjects had to choose between a road A and a road B. Nine subjects participated in each session. Subjects played 100 rounds and had to choose between one of the roads. The road which the minority of players chose got positive payoffs. We constructed an extended reinforcement model which fits the empirical data.
    Date: 2004–12
  4. By: Thorsten Chmura; Thomas Pitz
    Abstract: The paper reports simulations applied on two similar congestion games: the first is the classical minority game. The second one is a asymmetric variation of the minority game with linear payoff functions. For each game simulation results based on an extended reinforcement algorithm are compared with real experimental statistics. It is shown that the extension of the reinforcement model is essential for fitting the experimental data and estimating the players behaviour.
    Keywords: congestion game, minority game, laboratory experiments, reinforcement algorithm, payoff sum model
    JEL: C91 C92 C15 R4
    Date: 2004–12
  5. By: Dorothea K. Herreiner; Clemens Puppe
    Abstract: In the recent experimental literature several social preference models have been suggested that address observed behavior not reducible to the pursuit of self-interest. Inequality aversion is one such model where preferences are distributional. Frequently, envy is suggested as the underlying rationale for inequality aversion. Envy is a central criterion in the theoretical literature on fair division, whose definition (Foley 1967) differs from the more casual use of the word in the experimental literature. We present and discuss results from free-form bargaining experiments on fair division problems where the role of envy in Foley’s sense can be analyzed and compared to social preferences. We find that envy freeness does matter as a secondary criterion.
    Keywords: Fairness, Envy Freeness, Social Preferences, Bargaining
    JEL: A13 C78 C91 D63
    Date: 2004–12
  6. By: Dorothea K. Herreiner; Clemens Puppe
    Abstract: In this paper, we report on a series of free-form bargaining experiments in which two players have to distribute four indivisible goods among themselves. In one treatment the monetary payoffs associated with each bundle of goods are common knowledge; in a second treatment only the ordinal ranking of the bundles is given. We find that in both cases, the following qualitative rule yields a good explanation of individual behavior: First determine the most equal distribution, then find a Pareto improvement provided that this does not create “too much” inequality. In the ordinal treatment, individuals apparently use the ranks in the respective preference orderings over bundles as a substitute for the unknown monetary value. Interestingly, we find much less Pareto-damaging behavior due to inequality aversion in the ordinal treatment.
    Date: 2004–09
  7. By: Holm, Håkan (Department of Economics, Lund University)
    Abstract: People may be better at recognizing lies than truths or better at recognizing truths than lies. Such detection biases are analyzed theoretically and experimentally. The detection bias shrinks the equilibrium set to a unique non-pooling equilibrium, in which, the better a player is to detect lies the more often will the opponent player lie. In the experiment, subjects were telling the truth too often according to standard predictions. Other findings were a significant positive correlation between self-rated bluffing ability and actual bluffing performance. Furthermore, the subjects were more prone to lie to a woman than to a man.
    Keywords: Bluffing; Game theory; Truth detection; Lie detection; Experiment
    JEL: C72 C91 D82
    Date: 2004–12–22

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