nep-exp New Economics Papers
on Experimental Economics
Issue of 2006‒05‒13
four papers chosen by
Daniel Houser
George Mason University

  1. Friendship in a Public Good Experiment By Marco Haan; Peter Kooreman; Tineke Riemersma
  2. Intertemporal Price Discrimination and Competition By Ralph-C Bayer
  3. Mutual Monitoring in Teams: Theory and Experimental Evidence on the Importance of Reciprocity By Jeffrey Carpenter; Samuel Bowles; Herbert Gintis
  4. Endogenous Communication and Tacit Coordination in Market Entry Games - An explorative experimental study By Andersson, Ola; Carlsson, Hans; Holm, Håkan

  1. By: Marco Haan (University of Groningen); Peter Kooreman (University of Groningen and IZA Bonn); Tineke Riemersma (University of Groningen)
    Abstract: We conduct a public good experiment with high school teenagers. Some groups exclusively consist of students that we know to be friends. Other groups exclusively consist of students that we know not to be friends, and that are mere classmates. We find that ‘friends’ contribute more to the public good than ‘classmates’ do. Contributions of ‘classmates’ sharply decrease in the last round, in line with the literature on public good experiments. However, contributions of ‘friends’ sharply increase in the last round.
    Keywords: experimental economics, public goods, friendship
    JEL: C91 C92 H41
    Date: 2006–04
  2. By: Ralph-C Bayer (School of Economics, University of Adelaide)
    Abstract: In this study we investigate the impact of competition on markets for non-durable goods where intertemporal price discrimination is possible. We develop a simple model of different potential scenarios for intertemporal price discrimination and implement it in a laboratory experiment. We compare the outcomes in monopolies and duopolies. Surprisingly, we find that competition does not necessarily prevent intertemporal price discrimination, as our model predicts. However, competition generally reduces sales prices, but by far less than theory predicts. As expected, competition increases efficiency.
    Keywords: Price Discrimination, Oligopoly, Market Experiments.
    JEL: L12 L13 C91
    Date: 2006–05
  3. By: Jeffrey Carpenter (Middlebury College and IZA Bonn); Samuel Bowles (Santa Fe Institute and University of Siena); Herbert Gintis (Central European University and Santa Fe Institute)
    Abstract: Monitoring by peers is often an effective means of attenuating incentive problems. Most explanations of the efficacy of mutual monitoring rely either on small group size or on a version of the Folk theorem with repeated interactions which requires reasonably accurate public information concerning the behavior of each player. We provide a model of team production in which the effectiveness of mutual monitoring depends not on these factors, but rather on strong reciprocity: the willingness of some team members to engage in the costly punishment of shirkers. This alternative does not require small group size or public signals. An experimental public goods game provides evidence for the behavioral relevance of strong reciprocity in teams.
    Keywords: team production, public good, monitoring, punishment, experiment
    JEL: C92 H41 J41 J54 Z13
    Date: 2006–04
  4. By: Andersson, Ola (Department of Economics, Lund University); Carlsson, Hans (Department of Economics, Lund University); Holm, Håkan (Department of Economics, Lund University)
    Abstract: This paper explores experimentally the effects of costly communication possibilities in market entry games. It is shown that these effects depend on whether entry costs are symmetric or asymmetric. In the former, but not the latter case, communication possibilities increase coordination success substantially and are likely to generate inferior outcomes for consumers. Furthermore, cost asymmetries provide a tacit coordination cue that is robust to changes in the game and is used by experienced players as a substitute to communication. It is also shown that although communication opens up for aggressive market domination strategies, such strategies are not used often successful.
    Keywords: Communication; Market Entry; Coordination
    JEL: C72 C91 D43 K21 L41
    Date: 2006–05–03

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.