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on Experimental Economics |
| By: | David Masclet (CREM - Centre de Recherche en Economie et Management - [CNRS : UMR6211] - [Université Rennes I][Université de Caen], CIRANO - [Centre Interuniversitaire de Recherche en ANalyse des Organisations]); Youenn Loheac (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]); Laurent Denant-Boemont (CREM - Centre de Recherche en Economie et Management - [CNRS : UMR6211] - [Université Rennes I][Université de Caen]); Nathalie Colombier (CREM - Centre de Recherche en Economie et Management - [CNRS : UMR6211] - [Université Rennes I][Université de Caen]) |
| Abstract: | This paper focuses on decision making under risk, comparing group and individual risk preferences in a lottery-choice experiment inspired by Holt and Laury (2002). The experiment presents subjects with a menu of unordered lottery choices which allows us to measure risk aversion. In the individual treatment, subjects make lottery choices individually ; in the group treatment, each subject was placed in an anonymous group of three, where unanimous lottery choice decisions were made via voting. Finally, in a third treatment, called the choice treatment, subjects could choose whether to be on their own or in a group. Our main findings are that groups are more likely than individuals to choose safe lotteries for decisions with low winning percentages. Moreover, groups converge toward less risky decisions because subjects who were relatively less risk averse were more likely to change their vote in order to conform to the group average decision ; more risk-averse individuals were less likely to change their preferences. Finally our results reveal a positive relationship between preference for risk and willingness to decide alone. |
| Keywords: | Experiment, decision rule, individual decision, group decision. |
| Date: | 2006–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00118973_v1&r=exp |
| By: | Siegfried Berninghaus; Werner Güth; M. Vittoria Levati; Jianying Qiu |
| Abstract: | In a stochastic duopoly market, sellers must form state-specific aspirations expressing how much they want to earn given their expectations about the other's behavior. We define individually and mutually satisficing sales behavior for given individual beliefs and aspiration profiles. In a first experimental phase, whenever satis¯cing is not possible, beliefs or aspirations have to be adapted, or other strategy profiles must be found. In a second phase, participants are free to select non-satisficing sales profiles. The results reveal that most people are satisficers who, either mandatorily or deliberately, tend to adjust aspiration levels if they cannot be satisfied. |
| Keywords: | Satisficing behavior, bounded rationality, duopoly |
| JEL: | C72 C92 D43 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:esi:discus:2006-32&r=exp |
| By: | Jim Engle-Warnick†; Ed Hopkins |
| Abstract: | We report experiments designed to test the theoretical possibility, first discovered by Shapley (1964), that in some games learning fails to converge to any equilibrium, either in terms of marginal frequencies or of average play. Subjects played repeatedly in fixed pairings one of two 3 × 3 games, each having a unique Nash equilibrium in mixed strategies. The equilibrium of one game is predicted to be stable under learning, the other unstable, provided payoffs are sufficiently high. We ran each game in high and low payoff treatments. We find that, in all treatments, average play is close to equilibrium even though there are strong cycles present in the data. |
| Keywords: | : Games, Learning, Experiments, Stochastic Fictitious Play, Mixed Strategy Equilibria. |
| JEL: | C72 C73 C92 D83 |
| URL: | http://d.repec.org/n?u=RePEc:edn:esedps:153&r=exp |
| By: | Avner Ben-Ner; Louis Putterman |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2006-23&r=exp |
| By: | Lionel Page; Louis Lévy-Garboua; Claude Montmarquette |
| Abstract: | The explanation of social inequalities in education is still a debated issue in economics. Recent empirical studies tend to downplay the potential role of credit constraint. This article tests a different potential explanation of social inequalities in education, specifically that social differences in aspiration level result in different educational choices. Having existed for a long time in the sociology of education, this explanation can be justified if aspiration levels are seen as reference points in a Prospect Theory framework. In order to test this explanation, this article applies the method of experimental economics to the issue of education choice and behaviour. One hundred twenty-nine individuals participated in an experiment in which they had to perform a task over fifteen stages grouped in three blocks or levels. In order to continue through the experiment, a minimum level of success was required at the end of each level. Rewards were dependent on the final level successfully reached. At the end of each level, participants could either choose to stop and take their reward or to pay a cost to continue further in order to possibly receive higher rewards. To test the impact of aspiration levels, outcomes were either presented as gains or losses relative to an initial sum. In accordance with the theoretical predictions, participants in the loss framing group choose to go further in the experiment. There was also a significant and interesting gender effect in the loss framing treatment, such that males performed better and reached higher levels. <P>Expliquer les inégalités sociales en éducation demeure un défi pour les économistes. Des études récentes tendent à indiquer que les contraintes de crédit ne joueraient pas un rôle déterminant dans l’explication. Notre étude examine l’importance de niveaux d’aspirations sociales différentes pour expliquer les différences observées dans les choix éducationnels. Cette explication trouve sa logique en associant les aspirations sociales à des points de référence dans le cadre de la théorie des perspectives (prospect theory). Notre article mobilise l’économie expérimentale pour étudier la question des choix éducationnels dans ce contexte. Cent trente-neuf sujets ont participé à une expérience dans laquelle ils devaient réaliser une tâche distribuée sur quinze étapes regroupées en blocs ou niveaux. Pour poursuivre l’expérience, un minimum de succès dans les tâches réalisées devait être atteint. À la fin de chaque niveau, les participants choisissaient d’arrêter et d’encaisser leurs gains acquis ou de poursuivre contre un tarif donné pour espérer réaliser des gains supérieurs. Pour tester l’impact des différents niveaux d’aspirations, les résultats étaient mesurés comme des gains ou des pertes relativement à un montant donné. En conformité avec les prédictions théoriques, les participants dans le traitement perte ont choisi de poursuivre plus souvent l’expérience que ceux dans le traitement gain. Nous avons également noté un effet lié au genre du participant dans le traitement perte, avec les hommes performant mieux que les femmes et atteignant des niveaux supérieurs. |
| Keywords: | education inequality, prospect theory, experimental economics, inégalité en éducation, théorie de la prospective, économie expérimentale |
| JEL: | I21 D80 J24 C91 |
| Date: | 2006–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2006s-27&r=exp |
| By: | Olivier Bochet; Talbot Page; Louis Putterman |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2005-09&r=exp |
| By: | Gary Charness (University of California Santa Barbara); Ramón Cobo-Reyes (Department of Economic Theory and Economic History, University of Granada.); Natalia Jiménez (Department of Economic Theory and Economic History, University of Granada.) |
| Abstract: | This paper explores the effect of the possibility of third-party intervention on behavior in a variant of the Berg, Dickhaut, and McCabe (1995) “Investment Game”. A third-party’s material payoff is not affected by the decisions made by the other participants, but this person may choose to punish a responder who has been overly selfish. The concern over this possibility may serve to discipline potentially-selfish responders. We also explore a treatment in which the third party may also choose to reward a sender who has received a low net payoff as a result of the responder’s action. We find a strong and significant effect of third-party punishment, in both punishment regimes, as the amount sent by the first mover is more than 60% higher when there is the possibility of third-party punishment. We also find that responders return a higher proportion of the amount sent to them when there is the possibility of punishment, with this proportion slightly higher when reward is not feasible. Finally, third parties punish less when reward is feasible, but nevertheless spend more on the combination of reward and punishment when these are both permitted than on punishment when this is the only choice for redressing material outcomes. |
| Keywords: | Trust, punishment, third-party intervention, responsibility-alleviation |
| JEL: | A13 B49 C91 D63 |
| Date: | 2006–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:gra:wpaper:06/13&r=exp |