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on Experimental Economics |
| By: | Julio J. Rotemberg |
| Abstract: | I suppose that people react with anger when others show themselves not to be minimally altruistic. With heterogeneous agents, this can account for the experimental results of ultimatum and dictator games. Moreover, it can account for the surprisingly large fraction of individuals who offer an even split, with parameter values that are more plausible than those required to explain outcomes in these experiments with the models of Levine (1998), Fehr and Schmidt (1999), Dickinson (2000), and Bolton and Ockenfels (2000). |
| Keywords: | Game theory |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:06-12&r=exp |
| By: | Jeffery Carpenter; Samuel Bowles; Herbert Gintis |
| 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. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:mdl:mdlpap:0608&r=exp |
| By: | Daniel Houser; Thomas Stratmann |
| Abstract: | Substantial academic interest and public policy debate centers on campaign finance reform. Campaign resources can provide benefits to constituencies if candidates use them to fund the distribution of useful information. On the other hand, voters can potentially be harmed if candidates trade policy favors to special interests in exchange for contributions. Unfortunately, because informative field data on this topic are very difficult to obtain, the effects of different campaign finance strategies on election outcomes and economic welfare remain largely uninformed by empirical analyses. This paper reports data from novel laboratory experiments designed to shed light on the campaign finance debate. Our experiment is based on a model where power-hungry candidates are motivated to trade favors for campaign contributions. Our data is consistent with the model’s predictions. We find that voters’ revise their beliefs in response to candidate advertising in a way that is consistent with theory. Moreover, in relation to privately financed electoral competitions, in publicly financed campaigns (i) high-quality candidates are elected more frequently, and (ii) margins of victory are larger. Both of these outcomes are predicted by theory. We conduct policy experiments on various campaign finance strategies, including the widely suggested caps on private fundraising. Our results suggest that caps can improve voter welfare but do not increase the likelihood that high-quality candidates will be elected. |
| JEL: | C90 D72 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1727&r=exp |
| By: | Joana Pais; Ágnes Pintér |
| Abstract: | We present an experimental study where we analyze three well- known matching mechanisms - the Boston, the Gale-Shapley, and the Top Trading Cycles mechanisms - in three different informational set- tings. Our experimental results are consistent with the theory, sug- gesting that the TTC mechanism outperforms both the Boston and the Gale-Shapley mechanisms in terms of efficiency and it is as suc- cessful as the Gale-Shapley mechanism regarding the proportion of truthful preference revelation, whereas manipulation is stronger un- der the Boston mechanism. In addition, even though agents are much more likely to revert to truthtelling in lack of information about the others' payooffs - ignorance may be beneficial in this context - , the TTC mechanism results less sensitive to the amount of information that participants hold. These results therefore suggest that the use of the TTC mechanism in practice is more desirable than of the others. |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp142006&r=exp |