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on Experimental Economics |
| By: | Cason, Timothy N.; Sharma, Tridib |
| Abstract: | This study reports a laboratory experiment wherein subjects play a hawk-dove game. We try to implement a correlated equilibrium with payoffs outside the convex hull of Nash equilibrium payoffs by privately recommending play. We find that subjects are reluctant to follow certain recommendations. We are able to implement this correlated equilibrium, however, when subjects play against robots that always follow recommendations, including in a control treatment in which human subjects receive the robot "earnings." This indicates that the lack of mutual knowledge of conjectures, rather than social preferences, explains subjects' failure to play the suggested correlated equilibrium when facing other human players. |
| Keywords: | Game Theory ; Experiments ; Coordination ; Common Knowledge |
| JEL: | C72 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:pur:prukra:1191&r=exp |
| By: | Junmin Wan (Osaka University) |
| Abstract: | We examine the validity of a new system of taxation called lottery receipts in China theoretically and empirically. Tax collection is difficult as the government difficultly monitors the actual economic dealings. To bring out the private information on transaction known only to a seller and a buyer, the government has set up a lottery receipt system which has been tried out in many areas. If the net revenue from a lottery receipt is invested in pure public goods, the lottery receipt will been purchased even if the consumer has expected quasi-linear utility. By issuing a lottery receipt, the government may prevent tax evasion caused by conspiracies between consumers and firms and collect tax effectively. Estimation is performed based on panel data for different periods from a total of 37 districts in Beijing and Tianjin during 1998-2003. The lottery receipt experiment has significantly raised the business tax, the growths of business tax and total tax revenues. |
| Keywords: | tax evasion, business tax, lottery receipt experiment, random trend (growth) model |
| JEL: | H26 D81 D82 |
| Date: | 2006–09 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:0625&r=exp |
| By: | Zheng, Charles |
| Abstract: | This paper analyzes auctions where budget-constrained bidders have options to declare bankruptcy. It predicts a bidding equilibrium that changes is continuously in a borrowing rate available to bidders. When the borrowing rate is above a threshold, high-budget bidders win, and the likelihood of bankruptcy is low. When the borrowing rate is below the threshold, the winner is the most budget-constrained bidder and is most likely to declare bankruptcy. This result explains the “high bids and broke winners” anomaly in the C-Block FCC spectrum auction. Based on its equilibrium analysis, the paper proves that a seller can profit from offering to finance the highest bidder at a below-market interest rate, even with default risk. |
| Keywords: | auction; budget; default; spectrum auction; C-block auction; FCC; PCS |
| Date: | 2006–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12665&r=exp |