nep-exp New Economics Papers
on Experimental Economics
Issue of 2006‒02‒26
twelve papers chosen by
Daniel Houser
George Mason University

  1. Sorting in Experiments with Application to Social Preferences By Edward Lazear; Ulrike Malmendier; Roberto Weber
  2. Altruism and Gender in the Trust Game By Alessandro Innocenti; Maria Grazia pazienza
  3. Bargaining Outside the Lab - A Newspaper Experiment of a Three-Person Ultimatum Game By Carsten Schmidt; Matthias Sutter; Werner Güth
  4. An Experimental Evaluation of Popular Well-Being Measures By Martin Kroh
  5. Posted - Offer Markets In Near Continuous Time: an Experimental Investigation By Douglas D. Davis; Oleg Korenok
  6. Rebates, Matches, and Consumer Behavior By Douglas D. Davis; Edward L. Millner
  7. An Experimental Evaluation of the Serial Cost Sharing Rule By Laura Razzolini; Michael Reksulak; Robert Dorsey
  8. Bertrand colludes more than Cournot By Suetens S.; Potters J.
  9. Strategic Buyers, Horizontal Mergers and Synergies: An Experimental Investigation* By Douglas D. Davis; Bart J. Wilson
  10. Different positive feelings leading to different ad evaluations: the case of coziness, excitement and romance By Faseur, T.; Geuens, M.
  11. The Dynamics of Trust and Trustworthiness on EBay. An Evolutionary Analysis of Buyer Insurance and Seller Reputation By Friederike Mengel; Axel Ockenfels; Werner Güth
  12. Conflict, Trust, and Effectiveness in Teams Performing Complex Tasks: A Study of Temporal Patterns By Raes Anneloes M.L.; Heijltjes Mariëlle G.; Glunk Ursula; Roe Robert A.

  1. By: Edward Lazear; Ulrike Malmendier; Roberto Weber
    Abstract: Experiments provide a controlled setting where factors can be isolated and studied more easily than in the field, but they often do not allow participants to sort into or out of environments based on their preferences, beliefs, and skills. We conduct an experiment to demonstrate the importance of sorting in the context of social preferences. When individuals are constrained to play a dictator game, 74% of the subjects share. But when subjects are allowed to avoid the situation altogether, less than one third share. This reversal of proportions illustrates that the influence of sorting limits the generalizability of experimental findings that do not allow sorting. Moreover, institutions designed to entice pro-social behavior may induce adverse selection. We find that increased payoffs prevent foremost those subjects from opting out who share the least initially. Thus the impact of social preferences remains much lower than in a mandatory dictator game, even if sharing is subsidized by higher payoffs. Our experiment also sheds light on the motives for sharing. While much sharing is consistent with other-regarding preferences, the majority of subjects share without really wanting to, as evidenced by their willingness to avoid the dictator game and to even pay for avoiding it.
    JEL: B41 C90 D64
    Date: 2006–02
  2. By: Alessandro Innocenti; Maria Grazia pazienza
    Abstract: This paper analyses gender differences in the trust game. Our experiment implements the triadic design proposed by Cox (2004) to discriminate between transfers resulting from trust or trustworthiness and transfers resulting from altruistic preferences. We observe that women exhibit a higher degree of altruism than men for both trust and trustworthiness but relatively more for trustworthiness. This result provides an explanation to the experimental finding that women reciprocate more than men.
    Keywords: gender differences; trust; trustworthiness; altruism; gender pairing
    JEL: C90 C91 D64 J16
    Date: 2006–02
  3. By: Carsten Schmidt; Matthias Sutter; Werner Güth
    Abstract: In a large scale newspaper experiment 5,132 readers of the German weekly, Die Zeit, participated in a three-person bargaining game. In our data analysis we focus on (1) the influence of age, gender, profession and the medium chosen for participation on bargaining behavior and on (2) the external validity of student behavior (inside and outside the lab). We find that older participants and women care more about equal distributions and that Internet users are more self-regarding than those using mail or fax. Decisions made by students in the lab are rather similar to those made by students in the newspaper experiment. Furthermore, student behavior is not different from non-student behavior when the same age group is considered, indicating a high degree of external validity of student data.
    Keywords: ultimatum bargaining, newspaper experiment, Internet experiment
    JEL: C72 C93 D63
    Date: 2005–12
  4. By: Martin Kroh
  5. By: Douglas D. Davis (Department of Economics, VCU School of Business); Oleg Korenok (Department of Economics, Virginia Commonwealth University)
    Abstract: This paper reports an experiment conducted to evaluate a “near continuous” variant of the posted-offer trading institution, where the number of periods in a market session is increased by reducing sharply each period’s maximum length. Experimental results suggest that extensive rapid repetition improves considerably the drawing power of equilibrium predictions in some environments that have been problematic for markets organized under posted-offer trading rules. Nevertheless, the drawing power of static market predictions remains imperfect. We also observe that the extra data collected in the near continuous framework allows new insights into price convergence and signaling.
    Keywords: experiment, Monopoly, Pricing, Price Signaling
    JEL: C92 L12 L11
    Date: 2005–11
  6. By: Douglas D. Davis (Department of Economics, VCU School of Business); Edward L. Millner (Department of Economics, VCU School of Business)
    Abstract: An experiment conducted to examine the effects of different discount formats on consumer purchases is reported. Participants made a series of purchase decisions for chocolate bars given (a) “rebates” from the listed price, (b) “matching” quantities of chocolates for each bar purchased, and (c) simple price reductions. Contrary to standard theoretical predictions, and consistent results in the context of charitable contributions by Eckel and Grossman (2003), we find that participants purchase significantly more chocolate bars under a “matching” sales format than under a comparable “rebate” format. Inattention to the net consequences of decisions, as well as some “rebate aversion”, explain the preference for matching discounts.
    Keywords: Consumer Behavior, Experiment, Discount Formats
    JEL: C91 D11 D46
    Date: 2004–09
  7. By: Laura Razzolini (Department of Economics, VCU School of Business); Michael Reksulak (Georgia Southern University); Robert Dorsey (FNC, Inc.)
    Abstract: This paper proposes an experimental test of the strategic equilibrium properties of the serial cost sharing rule originally proposed by Shenker (1990) and then analyzed by Moulin and Shenker (1992). We report measure of the performance and efficiency of the serial mechanism by comparing the choices and payoffs attained by the subjects to the expected first best allocations. Experimental evidence shows that, while some learning is needed, the serial mechanism leads to almost efficient allocations.
    Date: 2004–11
  8. By: Suetens S.; Potters J.
    Abstract: On the basis of evidence of past oligopoly experiments, we argue that there is often significantly more tacit collusion in Bertrand price-choice than in Cournot quantity-choice markets.
    Date: 2005–12
  9. By: Douglas D. Davis (Department of Economics, VCU School of Business); Bart J. Wilson (Interdisciplinary Center for Economic Science, George Mason University)
    Abstract: This paper reports an experiment designed to evaluate interrelationships between strategic buyers, market power and merger-induced synergies. The experiment consists of 40 posted-offer quadropolies. Treatments include the use of simulated or human buyers, seller consolidations and merger-induced fixed cost and unit cost synergies. In the simulated-buyer markets we observe behavior generally consistent with comparative static predictions: prices rise post-merger, and unit (but not fixed) cost synergies may exert some price-moderating effect. The addition of powerful buyers changes results markedly. Although prices are lower in the human buyer markets, outcomes are more variable and predicted comparative static effects are no longer observed.
    Date: 2006–01
  10. By: Faseur, T.; Geuens, M.
    Abstract: This study contributes to the debate about the valence-based versus the multi-dimensional views of feelings. By conducting an experiment using 317 subjects, we compared the differential impact of three different positive feelings on ad effectiveness. Support for the multi-dimensional view of feelings was found in the sense that ad- and context-evoked coziness, excitement and romance had a different impact on attitudes to ads. Moreover, in the area of context effects further support for the multi-dimensional view of feelings was found: the exciting, the romantic and the cozy ads scored best after recounting a feeling-congruent story.
    Date: 2006–02–12
  11. By: Friederike Mengel; Axel Ockenfels; Werner Güth
    Abstract: Applying an evolutionary framework, we investigate how a reputation mechanism and a buyer insurance (as used on Internet market platforms such as eBay) interact to promote trustworthiness and trust. Our analysis suggests that the costs involved in giving reliable feedback determine the gains from trade that can be obtained in equilibrium. Buyer insurance, on the other hand, can affect the trading dynamics and equilibrium selection. We find that, under reasonable conditions, buyer insurance crowds out trust and trustworthiness.
    Date: 2006–01
  12. By: Raes Anneloes M.L.; Heijltjes Mariëlle G.; Glunk Ursula; Roe Robert A. (METEOR)
    Abstract: In this study we analyze the evolution of intra-team conflict and trust in teams that perform complex tasks. Using a longitudinal research design with six time intervals over a period of ten months, we collected data on 41 teams. Our findings suggest the existence of two distinct temporal patterns. One pattern develops in a stable manner and is characterized by high levels of trust and relatively low levels of task and relationship conflict. The other pattern is unstable with low, deteriorating levels of trust and high, amplifying levels of task and relationship conflict. These patterns are associated with significant differences in team effectiveness. On a self-perception as well as a stakeholder measure of team effectiveness, teams with stable patterns outperformed teams with unstable patterns.
    Keywords: management and organization theory ;
    Date: 2006

This nep-exp issue is ©2006 by Daniel Houser. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.