|
on Experimental Economics |
| By: | Ernst Fehr; Susanne Kremhelmer; Klaus M. Schmidt |
| Abstract: | We report on several experiments on the optimal allocation of ownership rights. The experiments confirm the property rights approach by showing that the ownership structure affects relationship-specific investments and that subjects attain the most efficient ownership allocation despite starting from different initial conditions. However, in contrast to the property rights approach, the most efficient ownership structure is joint ownership. These results are neither consistent with the self-interest model nor with models that assume that all people behave fairly, but they can be explained by the theory of inequity aversion that focuses on the interaction between selfish and fair players. |
| Keywords: | Ownership Rights, Double Moral Hazard, Fairness, Reciprocity, Incomplete Contracts |
| JEL: | C7 C9 J3 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:224&r=exp |
| By: | Susana Cabrera; C. Mónica Capra; Rosario Gómez |
| Abstract: | We report results of one-shot traveler’s dilemma game experiments to test the predictions of a model of introspection. The model describes a noisy out-of-equilibrium process by which players reach a decision of what to do in one-shot strategic interactions. To test the robustness of the model and to compare it to other models of introspection without noise, we introduce non-binding advice. Advice has the effect of coordinating all players’ beliefs onto a common strategy. Experimentally, advice is implemented by asking subjects who participated in a repeated traveler’s dilemma game to recommend an action to subjects playing one-shot games with identical parameters. In contrast to observations, models based on best-response dynamics would predict lower claims than the advised. We show that our model’s predictions with and without advice are consistent with the data. |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:0504&r=exp |
| By: | C. Mónica Capra; Matilde Fernández; Irene Ramírez-Comeig |
| Abstract: | This paper tests the separating role of contracts that involve both interest rates and collateral in credit markets with asymmetric information. To test this prediction data from real credit markets and controlled experiments are used. Using a sample of credits to small and medium-sized firms in Valencia, Spain, we relate two different types of contracts with an objective approximation to each ex ante borrower risk, i. e., the real outcome of each loan and other relevant variables. Moreover, two incentive compatible contracts are designed and decisions analyzed under two different experimental treatments, one with moral hazard. Results confirm that borrowers of lower risk choose contracts with higher collateral and a lower interest rate. However, it is ascertained that moral hazard reduces separation. |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:0505&r=exp |
| By: | Juergen Bracht (Department of Economics, University of Aberdeen Business School); Charles Figuières (INRA, UMR LAMETA); Marisa Ratto (Leverhulme Centre for Market and Public Organisation, University of Bristol) |
| Abstract: | The paper reports on experiments designed to compare the performance of two incentive mechanisms in public goods problems. One mechanism rewards and penalizes deviations from the average contribution of the other agents to the public good (tax-subsidy mechanism). Another mechanism allows agents to subsidize the other agents’ contributions (compensation mechanism). It is found that both mechanisms lead to an increase in the level of contribution to the public good. The tax-subsidy mechanism allows for good point prediction of the average level of contribution. The compensation mechanism predicts the level of contributions less reliably. |
| Keywords: | public goods, voluntary provision, incentive mechanisms. |
| JEL: | H42 D62 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:iep:wpidep:0409&r=exp |
| By: | Ondrej Rydval; Andreas Ortmann |
| Abstract: | We investigate experimentally the conjecture that loss avoidance solves the tension in stag-hunt games for which payoff dominance and risk dominance make conflicting predictions. Contrary to received textbook wisdom, money-losing outcomes do shift behavior, albeit not strongly, toward the payoff-dominant equilibrium. |
| Keywords: | Loss avoidance, Selection principle, Stag-hunt games, Coordination games, Experiment |
| JEL: | C72 C9 D9 D84 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp245&r=exp |
| By: | Tilman Becker; Michael Carter; Jörg Naeve |
| Abstract: | We analyze a one-shot experiment on the traveler's dilemma in which members of the Game Theory Society, were asked to submit both a (possibly mixed) strategy and their belief concerning the average strategy of their opponents. Very few entrants expect and play the unique Nash equilibrium, while we observe a fifth playing the cooperative solution of the game, i.e. a strictly dominated strategy. The experimental data suggest to analyze the game as one of incomplete information. Most strategies observed are in the support of its Bayesian Nash equilibria. A notable exception is the Nash equilibrium strategy of the original game. |
| Keywords: | Traveler's Dilemma; Experiment; Experts; Incomplete Information |
| JEL: | C91 C72 |
| URL: | http://d.repec.org/n?u=RePEc:hoh:hohdip:252&r=exp |