nep-exp New Economics Papers
on Experimental Economics
Issue of 2007‒12‒19
three papers chosen by
Daniel Houser
George Mason University

  1. Do Equity Preferences Matter in Climate Negotiations? An Experimental Investigation By Dannenberg, Astrid; Sturm, Bodo; Vogt, Carsten
  2. Uniform vs. Discriminatory Auctions with Variable Supply - Experimental Evidence By Damian S. Damianov; Jörg Oechssler; Johannes Gerd Becker
  3. Imitation and the Evolution of Walrasian Behavior: Theoretically Fragile but Behaviorally Robust By Jose Apesteguia; Steffen Huck; Jörg Oechssler; Simon Weidenholzer

  1. By: Dannenberg, Astrid; Sturm, Bodo; Vogt, Carsten
    Abstract: This paper investigates in how far equity preferences may matter for climate negotiations. For this purposes we conducted a simple experiment with people who have been involved in international climate policy. The experiment, which was run via the Internet, consisted of two simple non-strategic games suited to measure the parameters of inequity aversion in a Fehr and Schmidt (1999) utility function. We find that our participants show aversion against advantageous as well as disadvantageous inequity to a considerable amount. Moreover, the degree of inequity aversion is higher compared to that of students in the similar study of Dannenberg et al. (2007). Regarding the geographical variety in our sample, we cannot confirm significant differences in the degree of inequity aversion between different regions in the world, which is in line with previous findings from the experimental literature. This finding lends support to the hypothesis that equity preferences are "hard-wired" and not much influenced by socio-economic or cultural circumstances.
    Keywords: individual preferences, inequity aversion, climate policy, experimental economics, public goods
    JEL: C91 C92 H41
    Date: 2007
  2. By: Damian S. Damianov (University of Texas-Pan American); Jörg Oechssler (University of Heidelberg, Department of Economics); Johannes Gerd Becker (ETH Zürich, Department of Economics)
    Abstract: In the variable supply auction considered here, the seller decides how many costumers with unit demand to serve after observing their bids. Bidders are uncertain about the seller's cost. We experimentally investigate whether a uniform or a discriminatory price auction is better for the seller in this setting. Exactly as predicted by theory, it turns out that the uniform price auction produces substantially higher bids, and consequently yields higher revenues and profits for the seller. Somewhat surprisingly but again predicted by theory, it also yields a higher number of transactions, which makes it the more efficient auction format.
    Keywords: auctions, experiment, discriminatory, uniform
    JEL: D44 C92
    Date: 2007–11
  3. By: Jose Apesteguia (Universitat Pompeu Fabra); Steffen Huck (University College London, Department of Economics); Jörg Oechssler (University of Heidelberg, Department of Economics); Simon Weidenholzer (University of Vienna, Department of Economics)
    Abstract: A well-known result by Vega-Redondo implies that in symmetric Cournot oligopoly, imitation leads to the Walrasian outcome where price equals marginal cost. In this paper we show that this result is not robust to the slightest asymmetry in fixed costs. Instead of obtaining the Walrasian outcome as unique prediction, every outcome where agents choose identical actions will be played some fraction of the time in the long run. We then conduct experiments to check this fragility. We obtain that, contrary to the theoretical prediction, the Walrasian outcome is still a good predictor of behavior.
    Keywords: Evolutionary game theory; Stochastic stability; Imita- tion; Cournot markets; Information; Experiments; Simulations
    JEL: C72 C91 C92 D43 L13
    Date: 2007–11

This nep-exp issue is ©2007 by Daniel Houser. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.