nep-exp New Economics Papers
on Experimental Economics
Issue of 2007‒11‒24
eight papers chosen by
Daniel Houser
George Mason University

  1. Feedback in Tournaments under Commitment Problems: Theory and Experimental Evidence By Oliver Gürtler; Christine Harbring
  2. The Focusing and Informational Effects of Norms on Pro-Social Behavior By Erin Krupka; Roberto A. Weber
  3. Three Very Simple Games and What It Takes to Solve Them By Ondrej Rydval; Andreas Ortmann; Michal Ostatnicky
  4. On the Acceptability of the Ambient Tax Mechanism: An Experimental Investigation By Kene Boun My; François Cochard; Anthony Ziegelmeyer
  5. The Minnesota Income Tax Compliance Experiment: Replication of the Social Norms Experiment By Coleman, Stephen
  6. Childcare voucher and labour market behaviour: Experimental evidence from Finland By Tarja Viitanen
  7. On the Incentive Effects of Uncertainty in Monitoring Agents - A Theoretical and Experimental Analysis By Judith Avrahami; Werner Güth; Yaakov Kareev; Tobias Uske
  8. Affective Decision Making: a Behavioral Theory of Choice By Anat Bracha; Donald J Brown

  1. By: Oliver Gürtler (University of Bonn); Christine Harbring (University of Cologne and IZA)
    Abstract: In this paper, we analyze a principal's optimal feedback policy in tournaments. We close a gap in the literature by assuming the principal to be unable to commit to a certain policy at the beginning of the tournament. Our analysis shows that in equilibrium the principal reveals intermediate information regarding the agents’ previous performances if these performances are not too different. Moreover, we investigate a situation where the principal is not able to credibly communicate her information. Having presented our formal analysis, we test these results using data from laboratory experiments. The experimental findings provide some support for the model.
    Keywords: tournament, commitment problems, feedback, experiment
    JEL: C91 D83 J33 M52
    Date: 2007–10
  2. By: Erin Krupka (IZA); Roberto A. Weber (Carnegie Mellon University)
    Abstract: This paper reports an experiment examining the effect of social norms on pro-social behavior. We test two predictions derived from work in psychology regarding the influence of norms. The first is a "focusing"influence, whereby norms only impact behavior when an individual’s attention is drawn to them; and the second is an "informational" influence, whereby a norm exerts a stronger impact on an individual the more others he observes behaving consistently with that norm. We find support for both effects. Either thinking about or observing the behavior of others produces increased pro-social behavior - even when one expects or observes little pro-social behavior on the part of others - and the degree of prosocial behavior is increasing in the actual and expected pro-social behavior of others. This experiment eliminates strategic influences and thus demonstrates a direct effect of norms on behavior.
    Keywords: norms, pro-social behavior, experiments, dictator game
    JEL: D63 C91
    Date: 2007–11
  3. By: Ondrej Rydval (Max Planck Institute of Economics, Jena, Germany, and CERGE-EI); Andreas Ortmann (CERGE-EI, Charles University Prague and Academy of Sciences of the Czech Republic); Michal Ostatnicky (CERGE-EI, Charles University Prague and Academy of Sciences of the Czech Republic)
    Abstract: We study the nature of dominance violations in three minimalist dominance-solvable guessing games, featuring two or three players choosing among two or three strategies. We examine how subjects' reported reasoning translates into their choices and beliefs about others' choices, and how reasoning and choices relate to their measured cognitive and personality characteristics. Only about a third of our subjects reason in accord with dominance; they always make dominant choices and almost always expect others to do so. By contrast, around 60% of subjects describe reasoning processes inconsistent with dominance, yet a quarter of them actually make dominant choices and a fifth of them expect others to do so. Dominance violations seem to arise mainly due to subjects misrepresenting the strategic nature of the guessing games. Reasoning errors are more likely for subjects with lower ability to maintain and allocate attention, as measured by working memory, and for subjects with weaker intrinsic motivation and premeditation attitudes.
    Keywords: cognition, bounded rationality, beliefs, guessing games, experiment
    JEL: C72 C92 D83
    Date: 2007–11–21
  4. By: Kene Boun My (BETA-Theme, Louis Pasteur University, Strasbourg (France)); François Cochard (Toulouse School of Economics, LERNA (France)); Anthony Ziegelmeyer (Max Planck Institute of Economics, Strategic Interaction Group, Jena (Germany))
    Abstract: Our objective in this paper is to assess the acceptability of the ambient tax. Concretely, we ask subjects to choose between (A) an ambient tax and (B) an individual tax system. In case (A), they actually participate in a game in which their payoff depends on all participants' decisions and on natural variability as would be the case in the real world if an ambient tax was implemented. In case (B) they simply earn a sure payoff, which is supposed to reflect their maximal profit under the individual tax system. We take the percentage of agents preferring the ambient tax to a given sure payoff level as an indicator of the acceptability of the ambient tax given this sure payoff level. Our experimental results mitigate the common belief that ambient taxes are totally unacceptable. If the "sure" alternative to the ambient tax policy is very costly for the polluters, for example because it involves high inspection costs, polluters might eventually prefer being liable to an ambient tax.
    Keywords: Nonpoint Source Pollution; Group Decision Making; Experiments; Acceptability of fiscal instruments.
    JEL: C92 H3 Q5
    Date: 2007–11–12
  5. By: Coleman, Stephen
    Abstract: This research note reports the results of a follow-up experiment conducted to validate an earlier experiment showing that if taxpayers overestimate the prevalence of tax evasion, their voluntary compliance can be increased by informing them about the true rate of cheating. The result confirms that tax compliance is influenced partly by social conformity with perceived social norms against cheating. The experiments were done by the Minnesota Department of Revenue in 1995 and 1996, but only the first experiment has been publicly reported to date (Coleman, 1996).
    Keywords: Tax compliance; experiment; social norms; social conformity
    JEL: C9 Z1 H2 H26
    Date: 2007–11
  6. By: Tarja Viitanen (Department of Economics, The University of Sheffield)
    Keywords: Social experimentation, vouchers, childcare use, labour force participation
    JEL: H42 J2 J13
    Date: 2007–08
  7. By: Judith Avrahami; Werner Güth (Max-Planck Institute of Economics, Strategic Interaction Group, Jena, Germany); Yaakov Kareev; Tobias Uske (Max-Planck Institute of Economics, Strategic Interaction Group, Jena, Germany)
    Abstract: When two or more agents compete for a bonus and the agents' productivity in each of several possible occurrences depends stochastically on (constant) effort, the number of times that are checked to assign the bonus affects the level of uncertainty in the selection process. Uncertainty, in turn, is expected to increase the efforts made by competing agents (Cowen and Glazer (1996), Dubey and Haimanko (2003), Dubey and Wu ( 2001)). Theoretical predictions were derived and experimental evidence collected for the case of two competing agents, with the bonus awarded to that agent who outperforms the other. Levels of uncertainty (sampling occasions of productions, 1 or 3), cost of production (high or low), cost symmetry (asymmetric or symmetric), and piece-rate reward were manipulated factorially to test the robustness of the effects of uncertainty. For control, a single-agent case was also theoretically analyzed and empirically tested. The results indicate that, for tournaments, greater uncertainty does indeed lead to greater than expected effort and lower unit variable costs.
    Keywords: Monitoring, Tournament, Incentives, Uncertainty, Stochastic Production Technology
    JEL: J33 M42 M52 M55
    Date: 2007–11–21
  8. By: Anat Bracha; Donald J Brown
    Date: 2007–11–15

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