nep-exp New Economics Papers
on Experimental Economics
Issue of 2005‒01‒23
six papers chosen by
Daniel Houser
George Mason University

  1. Experimental Evidence on the Multibidding Mechanism By David Perez-Castrillo; Robert F. Veszteg
  2. On the Microstructure of Price Determination and Information Aggregation with Sequential and Asymmetric Information Arrival in an Experimental Asset Market By Martin Barner, Francesco Feri, Charles Plott
  3. Economic and Hypothetical Dictator Game Experiments: Incentive Effects at the Individual Level By Avner Ben-Ner; Ori Levy
  4. Voting for the Electoral System: an Experiment. By Ortona, Guido
  5. Cultural Goods and Willingness-to-pay: An Experiment Design. (Bienes Culturales y Willingness-to-Pay: Una Perspectiva de Diseño Experimental). By Francisco Marco-Serrano
  6. An Experimental Study of the Effects of Inequality and Relative Deprivation on Trusting Behavior By Lisa R. Anderson; Jennifer M. Mellor; Jeffrey Milyo

  1. By: David Perez-Castrillo; Robert F. Veszteg
    Abstract: Pérez-Castrillo and Wettstein (2002) and Veszteg (2004) propose the use of a multibidding mechanism for situations where agents have to choose a common project. Examples are decisions involving public goods (or public "bads"). We report experimental results to test the practical tractability and effectiveness of the multibidding mechanisms in environments where agents hold private information concerning their valuation of the projects. The mechanism performed quite well in the laboratory: it provided the ex post efficient outcome in roughly three quarters of the cases across the treatments; moreover, the largest part of the subject pool formed their bids according to the theoretical bidding behavior.
    Keywords: experiments, mechanisms, uncertainty
    JEL: C91 C72
    Date: 2005–01–13
  2. By: Martin Barner, Francesco Feri, Charles Plott
    Abstract: Experiments were conducted on an asset with the structure of an option. The information of any individual is limited, as if only the direction of movement of the option value known for a single period without information of the value from when movement was initiated. However, if all information of all insiders were pooled, the value of the option would be known with certainty. The results are the following: (1) Information becomes aggregated in the prices as if fully informative rational expectations operated; and (2) The mechanism through which information gets into the market is captured by a path dependent process that we term "The Fundamental Coordination Principle of Information Transfer in Competitive Markets". The early contracts tend to be initiated by insiders who tender limit orders. The emergence of bubbles and mirages in the markets are coincident with failures and circumstances that prevent the operation of the "Fundamental Principle."
    Keywords: Microstructure, Information, Rational Expectations experiments, Information Aggregation, Belief Formation, Bubbles, Cascades, Mirages
    Date: 2004–08
  3. By: Avner Ben-Ner; Ori Levy
    Abstract: The paper compares behavior in economic dictator game experiments played with actual money (amounts given by "dictator" subjects) with behavior in hypothetical dictator game experiments where subjects indicate what they would give, although no money is actually exchanged. The average amounts transferred in the two experiments are remarkably similar. Moreover, we uncover meaningful individual differences in real and hypothetical allocations and demonstrate the importance of two personality traits - agreeableness and extraversion - in reconciling them. We conclude that extraverts are "all talk;" agreeable subjects are "for real."
    Keywords: Dictator Game, Incentives, Individual Differences, Personality
    JEL: C91 D81
  4. By: Ortona, Guido
    Abstract: he choice of the electoral system should be delegated to the citizens. However, citizens are not sufficiently informed to choose the system directly. It is argued that they may instead state their preferences for two basic characteristics of a Parliament, i.e. Governability and Representativeness. It is then possible to choose the system through a purely technical procedure. An experiment illustrates the method.
    JEL: D72
    Date: 2004–12
  5. By: Francisco Marco-Serrano
    Abstract: Within the framework of the Experimental Economics a Market Experiment is designed in order to test the existence of a dual demand (those from consumers and non-consumers) for Cultural Goods, following previous research (Rausell-Köster et al. (2001), Rausell-Köster and Marco-Serrano (2000), Rausell-Köster and Carrasco-Arroyo (1998)).
    Keywords: experiment design, consumers & non-consumers, inverse free- rider, cultural goods
    JEL: P Q Z
    Date: 2005–01–19
  6. By: Lisa R. Anderson (Department of Economics, College of William and Mary); Jennifer M. Mellor (Department of Economics, College of William and Mary); Jeffrey Milyo (Department of Economics and Truman School of Public Affairs, University of Missouri)
    Abstract: Several non-experimental studies report that income inequality and other forms of population-based heterogeneity reduce levels of trust in society. However, recent work by Glaeser et al. (2000) calls into question the reliability of widely used survey-based measures of trust. Specifically, survey responses regarding trust attitudes did not reflect subjects' actual behavior in a trust game. In this paper, we conduct a novel experimental test of the effects of inequality on trust and trustworthiness. Our experimental design induces inequality by varying the show-up fees paid to subjects, in contrast to previous experiments that focus on broad cultural or national differences in trust. We do not find robust support for the hypothesis that inequality per se dampens trusting behavior among all subjects; however, we do find some evidence that trust and trustworthiness are influenced by an individual's relative position in the group. Finally, we confirm previous findings that common survey-based measures of social trust are not associated with actual trusting behavior.
    Keywords: Trust, social capital, heterogeneity, inequality, experiment
    JEL: C9 Z13
    Date: 2005–01–13

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