nep-exp New Economics Papers
on Experimental Economics
Issue of 2006‒04‒22
ten papers chosen by
Daniel Houser
George Mason University

  1. Social Ties and Coordination on Negative Reciprocity: The Role of Affect By Ernesto Reuben; Frans van Winden
  2. The Importance of Emotions for the Effectiveness of Social Punishment By Astrid Hopfensitz; Ernesto Reuben
  3. Active Decisions and Pro-social Behavior: A Field Experiment on Blood Donation By Alois Stutzer; Lorenz Goette; Michael Zehnder
  4. Promoting Helping Behavior with Framing in Dictator games. By Pablo Brañas-Garza
  5. Gift Exchange and the Separation of Ownership and Control By Sandra Maximiano; Randolph Sloof; Joep Sonnemans
  6. Are there pre-programme effects of Swedish active labour market policies? Evidence from three randomised experiments By Hägglund, Pathric
  7. behavioral and neural foundations of framing-effects By sacha bourgeois-gironde; élise payzan; raphael giraud
  8. Experimental Strategy for Investigating the Neural Basis of Framing Effects By Sacha Bourgeois-Gironde; Elise Payzan
  9. Epistemological Foundations for Neuroeconomics By Elise Payzan; Sacha Bourgeois-Gironde
  10. Learning Under Ambiguity By Larry Epstein; Martin Schneider

  1. By: Ernesto Reuben (Department of Economics, University of Copenhagen); Frans van Winden (University of Amsterdam)
    Abstract: This is an experimental study of a three-player power-to-take game where a proposer is matched with two responders. We compare a treatment in which subjects are anonymous to each other (strangers) with one in which responders know each other from outside the lab (friends). We focus on the responders’ decisions, beliefs, and emotions. We find that friends punish the proposer more than strangers, and that they are more likely to coordinate their punishment (without communication). Both punishment and coordination are explained by the responders’ emotional reactions. Furthermore, the responders’ expectations are better predictors of emotions and destruction than their fairness perceptions.
    JEL: Z13 D74 C92 D63
  2. By: Astrid Hopfensitz (University of Geneva); Ernesto Reuben (Department of Economics, University of Copenhagen)
    Abstract: This paper experimentally explores how the enforcement of cooperative behavior in a social dilemma is facilitated through institutional as well as emotional mechanisms. Recent studies emphasize the importance of anger and its role in motivating individuals to punish free riders. However, we find that anger also triggers retaliatory behavior by the punished individuals. This makes the enforcement of a cooperative norm more costly. We show that in addition to anger, ‘social’ emotions like guilt need to be present for punishment to be an effective deterrent of uncooperative actions. They play a key role by subduing the desire of punished individuals to retaliate and by motivating them to behave more cooperatively in the future.
    JEL: Z13 C92 D74 H41
    Date: 2005–07
  3. By: Alois Stutzer (University of Zurich and IZA Bonn); Lorenz Goette (University of Zurich, CEPR and IZA Bonn); Michael Zehnder (University of Zurich)
    Abstract: In this paper, we propose a decision framework where people are individually asked to either actively consent or dissent to some pro-social behavior. We hypothesize that confronting individuals with the choice of engaging in a specific pro-social behavior contributes to the formation of issue-specific altruistic preferences while simultaneously involving a commitment. The hypothesis is tested in a large-scale field experiment on blood donation. We find that this "active-decision" intervention substantially increases the stated willingness to donate blood, as well as the actual donation behavior of people who have not fully formed preferences beforehand.
    Keywords: active decision, pro-social behavior, field experiment, blood donation
    JEL: C93 D64 I18
    Date: 2006–04
  4. By: Pablo Brañas-Garza (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: A number of recent papers on double-blind dictator games have obtained significant generous behavior when information regarding the recipient or any other social context is provided. In contrast, the lack of information discourages other-regarding behavior and the subject’s behavior closely approximates the game-theoretic prediction based on the selfishness assumption. This paper uses framing to explore the role of helping—behavior in dictator games. The whole experiment includes both classroom and regular experiments for the baseline and the framing treatment. To promote these motivations we included a “non—neutral” sentence at the end of the instructions, which reads “Note that he relies on you”. Our baseline and framed DG are statistically different from each other, indicating that the additional sentence promotes generous-regarding behavior.
    Keywords: dictator game, framing effects, helping behavior, altruism.
    JEL: D63 D64 C91
    Date: 2006–04–08
  5. By: Sandra Maximiano (Faculty of Economics and Econometrics, Universiteit van Amsterdam); Randolph Sloof (Faculty of Economics and Econometrics, Universiteit van Amsterdam); Joep Sonnemans (Faculty of Economics and Econometrics, Universiteit van Amsterdam)
    Abstract: Numerous gift exchange experiments have found a positive relationship between employers' wage offers and workers' effort levels. In (almost) all these experiments the employer both owns and controls the firm. Yet in reality many firms are characterized by the separation of ownership and control. In this paper we explore to what extent this affects the wage-effort relationship observed. We compare the standard bilateral gift exchange game between an owner-manager and a worker with two trilateral ones where the firm is owned by a shareholder and controlled by a manager. The wage-effort relationship we observe is the same in all three situations. Most strikingly, workers still reward higher wages with higher effort levels, even when the manager responsible for choosing the wage does not share in the firm's profits at all. The results of a fourth treatment in which the wage is exogenously given suggest that workers feel reciprocal towards the firm as a whole; both ownership and control are important for the gift exchange relationship.
    Keywords: Gift exchange; multi-level hierarchy; reciprocity; experimental economics
    JEL: J41 C91 M52
    Date: 2006–04–06
  6. By: Hägglund, Pathric (Swedish Institute for Social Research, Stockholm University)
    Abstract: In this paper experimental data from three Swedish demonstration programmes in 2004 are used to study pre-programme effects of active placement efforts. In one of the experiments, targeted towards a broad group of UI receivers, arranged job-search activities in groups combined with increased monitoring of job-search efforts generated a 46 per cent increase in the escape rate between referral to and start of the programme services. This translates into a two-week reduction of the ongoing UI spell. Referrals to increased monitoring alone did not have the same effect on exit behaviour. In the other two experiments, targeted towards youth and highly educated respectively, referrals to active placement efforts had no effect on the pre-programme outflow.
    Keywords: Pre-programme effect; policy evaluation; social experiment
    JEL: C93 J64
    Date: 2006–03–27
  7. By: sacha bourgeois-gironde (IJN - Institut Jean-Nicod - - CNRS : UMR8129 - Ecole des Hautes Etudes en Sciences Sociales;Ecole Normale Supérieure de Paris); élise payzan; raphael giraud
    Abstract: We present the leading hypotheses of a work in progress aiming at testing and comparing neural activities in the case of a cognitive illusion (the bat-and-ball illusion) and in the case of a typical instance of framing effects. We focus on contrasted answers linked to Stanovich's system 1 vs system 2. We expect to see such a contrast in the case of the bat-and-ball illusions but not in the case of framing-effects which cannot be called 'cognitive illusions' in the same sense. Another focus of interest in our study is about a possible "sense of rationality" experienced by subjects giving intuitive erroneous answers to cognitive tasks after significant reaction times. We try to consider in which sense data pointing to the existence of such feelings of irrationality could be experimentally relevant to the classification of cognitive illusions and biases.
    Keywords: cognitive illusions, framing-effects, behavioural decision-theory, fMRI
    Date: 2005–06–01
  8. By: Sacha Bourgeois-Gironde (IJN - Institut Jean-Nicod - - CNRS : UMR8129 - Ecole des Hautes Etudes en Sciences Sociales;Ecole Normale Supérieure de Paris); Elise Payzan (LSE - London School of Economics - - London School of Economics)
    Abstract: We investigate subjective reactions when subjects realize they have been victims of framing-effects in situations of risky choices - that is, when they violated the invariance principle in decision-theory. We try to assess various explanations of this violation in terms of bounded rationality and cognitive biases. One criterion we use in our assessment is a feeling of cognitive discomfort subjects may have after norm infringement. In ourexperimental study of framing effects, it is crucial to confront these "feelings of irrationality" and contextual reasons (moral and/or emotional) subjects may give to justify their violation of the invariance principle.
    Keywords: framing effects, cognitive biases, bounded rationality, debriefings.
    Date: 2006–01–11
  9. By: Elise Payzan; Sacha Bourgeois-Gironde (IJN - Institut Jean-Nicod - - CNRS : UMR8129 - Ecole des Hautes Etudes en Sciences Sociales;Ecole Normale Supérieure de Paris)
    Abstract: Neuroeconomics is an emerging field crossing neuroscientific data, the use of brain-imaging tools, experimental and behavioral economics, and an attempt at a better understanding of the cognitive assumptions that underlie theoretical predictive economic models. In this paper the authors try two things: 1) To assess the epistemological biases that affect Neuroeconomics as it is currently done. A number of significant experiments are discussed in that perspective. 2) To imagine an original way - apart from what is already being done - to run experiments in brain-imaging that are relevant to the discussion of rationality assumptions at the core of economic theory.
    Keywords: Neuroeconomics, Rationality Assumptions, Abduction
    Date: 2005–12–23
  10. By: Larry Epstein (University of Rochester); Martin Schneider (New York University)
    Abstract: This paper considers learning when the distinction between risk and ambiguity matters. It first describes thought experiments, dynamic variants of those provided by Ellsberg, that highlight a sense in which the Bayesian learning model is extreme - it models agents who are implausibly ambitious about what they can learn in complicated environments. The paper then provides a generalization of the Bayesian model that accommodates the intuitive choices in the thought experiments. In particular, the model allows decision-makers’ confidence about the environment to change — along with beliefs — as they learn. A calibrated portfolio choice application shows how this property induces a trend towards more stock market participation and investment.
    Keywords: ambiguity, learning, noisy signals, ambiguous signals, quality information, portfolio choice, portfolio diversification, Ellsberg Paradox
    JEL: D81 D83 D9 G11 G12
    Date: 2006–04

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