|
on Experimental Economics |
| By: | Judit Kovacs; Werner Güth |
| Abstract: | Fairness like other social norms is usually stabilized by punishing norm deviations. Reward uncertainty, however, questions whether norm deviations can be detected and thus punished. By investing in information acquisition, a responder in an ultimatum experiment determines endogenously whether unfair offers are detected and sanctionable. In our experiment a proposer and a responder can distribute among themselves 12 black and 12 white chips where the monetary value of a white chip for the proposer can be rather high ('high payoff mode') or low ('low payoff mode'). The responder can buy information about the proposer's reward type, resulting in commonly known monetary rewards. According to our results more than half of the responders did not buy reward information (30 out of 55). Buying reward information on average did not help the responder nor did it improve efficiency. Surprisingly, commonly known reward information resulted in a lower share of efficient offers. A possible explanation is that mistrust distracts attention. |
| URL: | http://d.repec.org/n?u=RePEc:esi:discus:2005-04&r=exp |
| By: | Dennis A. V. Dittrich; Werner Güth; Martin Kocher; Paul Pezanis-Christou |
| Abstract: | Bidding challenges learning theories since experiences for the same bid vary stochastically: the same choice can result in a gain or a loss. In such an environment the question arises how the nearly universally documented phenomenon of loss aversion affects the adaptive dynamics. We analyze the impact of loss aversion in a simple auction for different learning theories. Our experimental results suggest that a version of reinforcement learning which accounts for loss aversion fares as well as more sophisticated alternatives. |
| Keywords: | loss aversion, bidding, auction, experiment, learning |
| URL: | http://d.repec.org/n?u=RePEc:esi:discus:2005-03&r=exp |
| By: | Werner Güth; Matteo Ploner; Vittoria Levati |
| Abstract: | The present research experimentally examines the influence of group identity on trust behavior in an investment game. In one treatment, group identity is manipulated only through the creation of artificial (minimal) groups. In other treatments group members are additionally related by outcome interdependence established in a prior public goods game. In moving from the standard investment game (where no group identity is prompted) to minimal group identity to two-dimensional group identity, we find no significant differences in trust decisions. However, trust is significantly positively correlated with contribution decisions. This suggests that cooperative attitudes are idiosyncratic preferences, which are not affected by the creation of an arbitrary group identity. |
| Keywords: | trust, group identity, outcome interdependence, experiment |
| URL: | http://d.repec.org/n?u=RePEc:esi:discus:2005-06&r=exp |
| By: | Luis G. Gonzalez; Vittoria Levati; Graciela Gonzalez-Farias |
| Abstract: | A conditional cooperator in a public goods game wants to match his partners' expected contribution. We investigate theoretically and empirically, whether (and to what extent) conditional cooperation can explain how individual contributions evolve in a repeated two-person public goods experiment using a perfect strangers design. To identify a random utility model including non-pecuniary preferences we also elicit participants' beliefs. Our econometric results show that the distribution of preferences in the population can be captured by a latent-class mixed logit specification with three subpopulations, and that 55 % of participants can be regarded as conditional cooperators. Thus, the decline in average contribution levels may be attributed to the presence of conditional cooperators who have to revise their expectations about the others' behavior. |
| URL: | http://d.repec.org/n?u=RePEc:esi:discus:2005-05&r=exp |
| By: | Dellaert,Benedict G.C.; Golounov,Vladislav Y.; Prabhu,Jaideep (METEOR) |
| Abstract: | A potentially powerful way to assist consumers in making dynamic shopping decisions is to disclose price information to them before they shop, for example by posting prices on the Internet. This paper addresses the differential impact of disclosing either only current, or both current and future prices, on consumer shopping decisions in multi-period tasks involving multiple product purchases. In the context of an Internet-based experiment, we find that consumer expenditure deviates more strongly from that of a normative model when both current and future prices are disclosed than if only current prices are disclosed. We investigate the behavioral effects underlying this finding by estimating a model that allows for variations in consumer discounting, strength of store price format preferences, as well as choice consistency between different price disclosure conditions. |
| Keywords: | marketing ; |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2005006&r=exp |
| By: | Andreas Nicklisch; Leon Zucchini |
| Abstract: | This study investigates the dynamic efficiency of an emission regulation regime where companies competitively pay for emission licences. We embed the emission licence market in a Cournot model where the price of emission licences is subject to strategic tradeoff between licences and abatement technologies. Unlike the standard Cournot model, agents have two action parameters, quantities bought on the licence market and investments into abatement technology. We want to investigate the implications of this market design on the strategic behavior regarding companies' incentives to invest in those technologies. Data from a series of laboratory experiments supports the theoretical predictions for subjects' investment into abatement technology. With respect to the adaptation process of individual quantities for licences we find that a majority of subjects adjusts on the market by imitation while a minority entertains a trial and error notion. |
| Keywords: | Cournot market, emission regulation, experimental economics, dynamic efficiency, learning |
| JEL: | Q52 Q53 Q55 |
| URL: | http://d.repec.org/n?u=RePEc:esi:discus:2005-07&r=exp |
| By: | Yasuyo Hamaguchi; Toshiji Kawagoe |
| Abstract: | Antitrust authorities of many countries have been trying to establish appropriate competition policies based on economic analysis. Recently an anti-cartel policy called a "leniency program" has been introduced in many countries as an effective policy to dissolve cartels. In this paper, we studied several kinds of leniency programs through laboratory experiments. We experimentally controlled for two factors: 1) cartel size: the number of cartel members in a group, small (two-person) or large (seven-person), 2) schedule of reduced fine: the number of firms that are given reduced fines. The experimental results showed that (1) an increase in the number of cartel members in a group increased the number of cartels dissolved, (2) changing the coverage of reduced fine had no significant effect both in two-player case and in seven-player case. |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:05003&r=exp |