nep-exp New Economics Papers
on Experimental Economics
Issue of 2005‒08‒03
four papers chosen by
Daniel Houser
George Mason University

  1. Actions and Beliefs: Estimating Distribution-Based Preferences Using a Large Scale Experiment with Probability Questions on Expectations By Charles Bellemare; Sabine Kroger; Arthur van Soest
  2. Marriage Matching and the Proposers' Advantage By Onur Celik; Vicki Knoblauch
  3. Efficiency in Repeated Trade with Hidden Valuations By Susan Athey; David Miller
  4. Bidding and Performance in Repo Auctions: Evidence from ECB Open Market Operations By Kjell G. Nyborg; Ulrich Bindseil; Ilya A. Strebulaev

  1. By: Charles Bellemare; Sabine Kroger; Arthur van Soest
    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 resopnders' 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
  2. By: Onur Celik (University of Connecticut); Vicki Knoblauch (University of Connecticut)
    Abstract: Despite an extensive literature exploring two-sided matching problems, there remains much to learn about even the simplest marriage matching model. We adopt as our primary tool a simple measure of how well men do and how well women do under a given matching, and use this tool to demonstrate that a group with randomly generated preferences does very well when matched with a group with identical preferences, and that if both groups. preferences are randomly generated, then the proposers' advantage is quite large. We then use theoretical calculations (that is, we examine randomly generated examples) to illustrate, evaluate and extend our findings.
    Keywords: Two-Sided Matching, Mechanism, Proposers' Advantage
    JEL: C78 D63 D70
    Date: 2005–06
  3. By: Susan Athey; David Miller
    Date: 2005–07–28
  4. By: Kjell G. Nyborg (UCLA Anderson School of Management); Ulrich Bindseil (European Central Bank); Ilya A. Strebulaev (Stanford University, Graduate School of Business)
    Abstract: Repo auctions are used to inject central bank funds against collateral into the banking sector. The ECB uses standard discriminatory auctions and hundreds of banks participate. The amount auctioned over the monthly reserve maintenance period is in principle exactly what banks collectively need to fulfil reserve requirements. We study bidder-level data and find: (i) Bidder behavior is different from what is documented for treasury auctions. Private information and the winner’s curse seem to be relatively unimportant. (ii) Underpricing is positively related to the difference between the interbank rate and the auction minimum bid rate, with the latter appearing to be a binding constraint. (iii) Bidders are more aggressive when the imbalance of awards in the previous auction is larger. (iv) Large bidders do better than small bidders. Some of our findings suggests that bidders are concerned with the loser’s nightmare and have limited amounts of the cheapest eligible collateral.
    Keywords: Repo auctions, Multiunit auctions, Reserve requirements, Loser’s nightmare, Money markets, Central bank, Collateral, Open market operations
    JEL: G21 G12 D44 E43 E50
    Date: 2005–07

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