nep-exp New Economics Papers
on Experimental Economics
Issue of 2005‒07‒18
nine papers chosen by
Daniel Houser
George Mason University

  1. Randomized Sign Test for Dependent Observations on Discrete Choice under Risk By Anat Bracha; Jeremy Gray; Rustam Ibragimov; Boaz Nadler; Dmitry Shapiro; Glena Ames; Donald J. Brown
  2. Actions and Beliefs: Estimating Distribution-Based Preferences Using a Large Scale Experiment with Probability Questions on Expectations By Charles Bellemare; Sabine Kröger; Arthur van Soest
  3. Do Women Shy Away From Competition? Do Men Compete Too Much? By Muriel Niederle; Lise Vesterlund
  4. Group Cooperation Under Alternative Peer Punishment Technologies: An Experiment By Marco Casari; Luigi Luini
  5. Social Learning in Market Games By Carlo Altavilla; Luigi Luini; Patrizia Sbriglia
  6. Genetic Action Trees A New Concept for Social and Economic Simulation By Thomas Pitz; Thorsten Chmura
  7. Egalitarian Punishment in Humans By Tim Johnson; Richard McElreath; Oleg Smirnov
  8. The limits of Consequentialism: An experimental approach By Fernado Aguiar; Pablo Brañas-Garza
  9. The Welfare Economics of Adaptive Preferences By Carl Christian von Weizsäcker

  1. By: Anat Bracha; Jeremy Gray (Dept. of Psychology, Yale University); Rustam Ibragimov; Boaz Nadler (Dept. of Mathematics, Yale University); Dmitry Shapiro; Glena Ames (Cowles Foundation, Yale University); Donald J. Brown (Cowles Foundation, Yale University)
    Abstract: This paper proposes nonparametric statistical procedures for analyzing discrete choice models of affective decision making. We make two contributions to the literature on behavioral economics. Namely, we propose a procedure for eliciting the existence of a Nash equilibrium in an intrapersonal, potential game as well as randomized sign tests for dependent observations on game-theoretic models of affective decision making. This methodology is illustrated in the context of a hypothetical experiment -- the Casino Game.
    Keywords: Behavioral economics, Affective decision making, Intrapersonal potential games, Randomized sign tests, Dependent observations, Adapted sequences, Martingale-difference sequences
    JEL: C12 C32 C35 C72 C91 D11 D81
    Date: 2005–06
  2. By: Charles Bellemare (Université Laval, CIRPÉE and IZA Bonn); Sabine Kröger (University of Arizona); Arthur van Soest (RAND Corporation, Tilburg University and IZA Bonn)
    Abstract: We combine the choice data of proposers and responders in the ultimatum game, their expectations elicited in the form of subjective probability questions, and the choice data of proposers ("dictators") in a dictator game to estimate a structural model of decision making under uncertainty. We use a large and representative sample of subjects drawn from the Dutch population. Our results indicate that there is considerable heterogeneity in preferences for equity in the population. Changes in preferences have an important impact on decisions of dictators in the dictator game and responders in the ultimatum game, but a smaller impact on decisions of proposers in the ultimatum game, a result due to proposer’s subjective expectations about responders’ decisions. The model which uses subjective data on expectations has better predictive power and lower noise level than a model which assumes that players have rational expectations.
    Keywords: ultimatum game, inequity aversion, subjective expectations
    JEL: C93 D63 D84
    Date: 2005–07
  3. By: Muriel Niederle; Lise Vesterlund
    Abstract: Competitive high ranking positions are largely occupied by men, and women remain scarce in engineering and sciences. Explanations for these occupational differences focus on discrimination and preferences for work hours and field of study. We examine if absent these factors gender differences in occupations may still occur. Specifically we explore whether women and men, on a leveled playing field, differ in their selection into competitive environments. Men and women in a laboratory experiment perform a real task under a non-competitive piece rate and a competitive tournament scheme. Although there are no gender differences in performance under either compensation, there is a substantial gender difference when participants subsequently choose the scheme they want to apply to their next performance. Twice as many men as women choose the tournament over the piece rate. This gender gap in tournament entry is not explained by performance either before or after the entry decision. Furthermore, while men are more optimistic about their relative performance, differences in beliefs only explain a small share of the gap in tournament entry. In a final task we assess the impact of non-tournament-specific factors, such as risk and feedback aversion, on the gender difference in compensation choice. We conclude that even controlling for these general factors, there is a large residual gender gap in tournament entry.
    JEL: L0 C9
    Date: 2005–07
  4. By: Marco Casari; Luigi Luini
    Abstract: This paper experimentally studies peer punishment under three alternative technologies. We find that the choice of peer punishment technology has a substantial impact on group performance. First, under a technology where at least two subjects in the group must agree before another group member can be punished, group cooperation and group net earnings are the highest. Second, outcomes are similar regardless of whether punishment choices are simultaneously or sequential. These results suggest that punishment is not perceived as a second-order public good but is instead an emotional reaction unresponsive to changes in the strategic environment.
    Keywords: decentralized punishment, public goods, other-regarding preferences, team production, experiments.
    JEL: C91 C92 D23
    Date: 2005–05
  5. By: Carlo Altavilla; Luigi Luini; Patrizia Sbriglia
    Abstract: The aim of our experiments is to test the effect of different information settings on firms’ behaviour in duopoly price and quantity games. We find that, when players have full information on their rivals’ choices, the imitation rule prevails and such learning behaviour induces more competitive outcomes in the Cournot market designs. By the same token, when information on the average industrial profit is provided, there is evidence of an increase in cooperation, and the majority of players experiment with new strategies when their payoff falls below the average profit (F. Palomino and F. Vega-Redondo, 1999; H. Dixon, 2000)
    Keywords: Learning, Cournot and Bertrand experiments
    JEL: D83 C91
    Date: 2005–05
  6. By: Thomas Pitz (Laboratory of Experimental Economics University of Bonn); Thorsten Chmura (Laboratory of Experimental Economics University of Bonn)
    Abstract: Multi-Agent Based Simulation is a branch of Distributed Artificial Intelligence that builds the base for computer simulations which connect the micro and macro level of social and economic scenarios. This paper presents a new method of modelling the formation and change of patterns of action in social systems with the help of Multi-Agent Simulations. The approach is based on two scientific concepts: Genetic Algorithms [Goldberg 1989, Holland 1975] and the theory of Action Trees [Goldman 1971]. Genetic Algorithms were developed following the biological mechanisms of evolution. Action Trees are used in analytic philosophy for the structural description of actions. The theory of Action Trees makes use of the observation of linguistic analysis that through the preposition by a semi-order is induced on a set of actions. Through the application of Genetic Algorithms on the attributes of the actions of an Action Tree an intuitively simple algorithm can be developed with which one can describe the learning behaviour of agents and the changes in action spaces. Using the extremely simplified economic action space, in this paper called “SMALLWORLDâ€, it is shown with the aid of this method how simulated agents react to the qualities and changes of their environment. Thus, one manages to endogenously evoke intuitively comprehensible changes in the agents‘ actions. This way, one can observe in these simulations that the agents move from a barter to a monetary economy because of the higher effectiveness or that they change their behaviour towards actions of fraud.
    Keywords: Multi agent system, genetic algorithms, actiontrees, learning, decision making, economic and social behaviour, distributed artificial intelligence
    JEL: C8
    Date: 2005–07–14
  7. By: Tim Johnson (Max Planck); Richard McElreath (UC Davis - Anthropology); Oleg Smirnov (University of Miami)
    Abstract: Participants in laboratory public goods games are often willing to decrease the earnings of others at a cost to themselves. What motivates this behaviour is unclear: in the conventional public goods game, punishment aimed at promoting cooperation cannot be distinguished from punishment seeking to attain equality. To resolve this problem and better understand punishment behaviour, we deviate from the public goods framework and create an experimental game that isolates egalitarian motives. Subjects are placed in small groups and each is allocated a randomly determined sum of money; subjects are shown the amount given to other group members and are allowed to reduce others’ incomes at a personal cost. Results show that individuals punish, at a cost to themselves, even when no cooperation norm can be enforced. The magnitude of punishment increases with income and, furthermore, the group member with the most income receives a disproportionate amount of punishment. Costly punishment of top earners suggests that relative status concerns influence human social competition. When employed in cooperative games where income correlates positively with defection, such behaviour could be misperceived as the sanctioning of defection.
    JEL: C9
    Date: 2005–07–14
  8. By: Fernado Aguiar (IESA/CSIC); Pablo Brañas-Garza (Department of Economic Theory and Economic History, University of Granada)
    Abstract: Over the last two decades there has been a complex debate about the nature and limits of the consequentialism. Using these ideas this paper revises giving (altruism) in experimental dicatator games. We use results from several experimental papers plus an experiment ad-hoc designed to motivate altruism.
    Keywords: dictator game, fairness, consequentialism
    JEL: D63 D64 C91
    Date: 2005–07–11
  9. By: Carl Christian von Weizsäcker (Max Planck Institute for Research on Collective Goods, Bonn, Germany)
    Abstract: In this paper I demonstrate that a reasonable welfare theoretic concept of "progress" can be made consistent with the assumption of endogenously changing preferences as long as these preference changes correspond to the pattern of "adaptive preferences". The main theorem of the paper shows that under certain additional conditions "adaptive preferences" imply the existence of a complete pre-ordering of the consumption space in terms of "improvement paths" which allow endogenous preference changes. It is then shown that welfare economics of "improvement paths" is also possible with interpersonal influences on preferences. A conjecture is developed that results of recent empirical and experimental research into human economic behaviour corroborate the hypothesis of "adaptive preferences".
    Keywords: Welfare Economics, Endogenous Preferences, Adaptive Preferences, Interpersonal Influences on Preferences, Improvement Paths, Bounded Rationality
    Date: 2005–06

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