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on Experimental Economics |
| By: | Christoph Vanberg (Max Planck Institute of Economics, Jena, Germany.) |
| Abstract: | I conduct an experiment to assess whether majority voting on a non- binding sharing norm affects subsequent behavior in a dictator game. In a baseline treatment, subjects play a one shot dictator game. In a voting treatment, subjects are ï¬rst placed behind a 'veil of ignorance' and vote on the amount that those chosen to be dictators 'should' give. The outcome of the vote is referred to as a 'non-binding agreement.' The results show that a norm established in this fashion does not induce more 'fairness' on the part of those subsequently chosen to be dictators. In fact, dictators were signiï¬cantly more likely to offer nothing under the treatment. I outline a simple model to account for this 'crowding out' effect of a norm that may demand ‘too much’ of some subjects. |
| Keywords: | Dictator game, communication, voting, promises, agreements, behavioral economics, guilt aversion, reciprocity, fairness, obligations |
| JEL: | C91 C92 D63 D64 D70 |
| Date: | 2007–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-036&r=exp |
| By: | Frederic Koessler (THEMA (CNRS), Universite de Cergy-Pontoise,); Charles Noussair (Department of Economics, Faculty of Economics and Business Administration, Tilburg University); Anthony Ziegelmeyer (Max Planck Institute of Economics, Strategic Interaction Group) |
| Abstract: | We study sequential parimutuel betting markets with asymmetrically informed bettors, using an experimental approach. In one treatment, groups of eight participants play twenty repetitions of a sequential betting game. The second treatment is identical, except that bettors are observed by other participants who assess the winning probabilities of each potential outcome. In the third treatment, the same individuals make bets and assess the winning probabilities of the outcomes. A favorite-longshot bias is observed in the ï¬rst and second treatments, but does not exist in the third treatment. Information aggregation is better in the third than in the other two treatments, and contrarian betting is almost completely eliminated by the belief elicitation procedure. Making bets improves the accuracy of stated beliefs. We propose a theoretical model, the Adaptive Model, to describe individual behavior and we ï¬nd that it effectively explains betting decisions, especially in the third treatment. |
| Keywords: | Parimutuel betting, Information aggregation, Elicited beliefs, Experimental economics |
| JEL: | C72 C92 D82 |
| Date: | 2007–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-033&r=exp |
| By: | Philippe Jehiel; Steffen Huck; Tom Rutter |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:843644000000000120&r=exp |
| By: | Fabrizio Botti (LUISS Guido Carli); Anna Conte (University of Rome II “Tor Vergata”, University of Rome I “La Sapienza”, and LUISS Guido Carli); Daniela T. Di Cagno (LUISS Guido Carli); Carlo D'Ippoliti (University of Rome I “La Sapienza”, and LUISS Guido Carli) |
| Abstract: | Experimental economics focuses on eliciting preferences, studying individuals one at a time to take into account their heterogeneity. Experiments have the appealing property of collecting enough observations to perform such an analysis. In real word, and in natural experiments, individuals cannot be observed according to experimenters’ needs. We propose a method that aggregates over individuals taking into account their heterogeneity. Using data from a natural experiment, we estimate three models of decision making under risk: Expected Utility, Rank-Dependent Expected Utility and Regret-Rejoice. Our results show that individual-wise analyses can be substituted by pooled approaches without losing information about individual heterogeneity. |
| Keywords: | Panel Data, Unobserved heterogeneity, Choice under risk |
| JEL: | C15 C23 C25 D81 |
| URL: | http://d.repec.org/n?u=RePEc:lui:wpaper:144&r=exp |
| By: | Ozlem Ozdemir (Yeditepe University) |
| Abstract: | This experimental study, first, compares the individual valuations of two risk reduction mechanisms: self-insurance and self-protection. Second, it investigates these valuations when the loss amount is ambiguous, and compare these values with valuations when loss amounts are known. results confirm that there exists no "framing effect" due to the two risk reduction mechanisms. Ambiguity in the loss amount has a weak impact on the valuation, and using different representations of ambiguity does not change the valuation. Moreover, the mean ratios of ambiguous to risky bids are greater than one for low loss amounts indicating ambiguity aversion. These ratios are not significantly different from one for high loss amounts regardless of the probability of loss levels. Finally, 28 percent of the sample behaved consistent with the predictions of "anchoring and adjustment", while only 6 percent supported the "maximin" predictions. |
| Keywords: | self-insurance, self-protection, risk, uncertainty |
| JEL: | C91 D81 |
| Date: | 2007–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-034&r=exp |
| By: | Nadine Chlaß (Max Planck Institute of Economics, Strategic Interaction Group); Jens J. Krüger (Friedrich-Schiller-University Jena, Department of Economics) |
| Abstract: | This Monte-Carlo study investigates sensitivity of the Wilcoxon signed rank test to certain assumption violations in small samples. Emphasis is put on within-sample-dependence, between-sample dependence, and the presence of ties. Our results show that both assumption violations induce severe size distortions and entail power losses. Surprisingly, these consequences do vary substantially with other properties the data may display. Results provided are particularly relevant for experimental settings where ties and within-sample dependence are frequently observed. |
| Keywords: | Wilcoxon signed rank test, ties, dependent observations, size and power |
| JEL: | C12 C14 C15 |
| Date: | 2007–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-032&r=exp |
| By: | Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group) |
| Abstract: | Can one define and test the hypothesis of (un)bounded rationality in stochastic choice tasks without endorsing Bayesianism? Similar to the state specificity of assets, we rely on state-specific goal formation. In a given choice task, the list of state-specific goal levels is optimal if one cannot increase the goal level for one state without having to decrease that for other states. We show that this allows to relate optimality more easily to bounded rationality where we interpret goal levels as aspirations. If for the latter there exist choices satisfying all state-specific aspirations and if one such choice is used, we speak of satisficing which may or may not be optimal. |
| Keywords: | Satisficing, bounded rationality, optimality |
| JEL: | B4 D81 D10 |
| Date: | 2007–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-035&r=exp |