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on Experimental Economics |
| By: | Fehr, Ernst (University of Zurich); Leibbrandt, Andreas (University of Zurich) |
| Abstract: | This paper examines the role of other-regarding and time preferences for cooperation in the field. We study the preferences of fishermen whose main, and often only, source of income stems from using a common pool resource (CPR). The exploitation of a CPR involves a negative interpersonal and inter-temporal externality because individuals who exploit the CPR reduce the current and the future yield for both others and themselves. Accordingly, economic theory predicts that more cooperative and more patient individuals should be less likely to exploit the CPR. Our data supports this prediction because fishermen who exhibit a higher propensity for cooperation in a laboratory public goods experiment, and those who show more patience in a laboratory time preference experiment, exploit the fishing grounds less in their daily lives. Moreover, because the laboratory public goods game exhibits no inter-temporal spillovers, measured time preferences should not predict cooperative behavior in the laboratory. This prediction is also borne out by our data. Thus, laboratory preference measures are useful to capture important dimensions of field behavior. |
| Keywords: | cooperation, common pool resource, experiments, generalizability, methodology |
| JEL: | B4 C9 D8 O1 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3625&r=exp |
| By: | Fehr, Dietmar (Technical University of Berlin); Kübler, Dorothea (Technical University of Berlin); Danz, David N. (Technical University of Berlin) |
| Abstract: | We study beliefs and choices in a repeated normal-form game. In addition to a baseline treatment with common knowledge of the game structure and feedback about choices in the previous period, we run treatments (i) without feedback about previous play, (ii) with no information about the opponent’s payoffs and (iii) with random matching. Using Stahl and Wilson’s (1995) model of limited strategic reasoning, we classify behavior with regard to its strategic sophistication and consider its development over time. We use belief statements to check for the consistency of subjects’ actions with the stated beliefs as well as for the accuracy of their beliefs (relative to the opponent’s true choice). In the baseline treatment we observe more sophisticated play as well as more accurate beliefs and more best responses to beliefs over time. We isolate feedback as the main driving force of learning to play strategically and to form beliefs that accurately predict the behavior of the opponent. |
| Keywords: | beliefs, experiments, strategic uncertainty, learning |
| JEL: | C72 C92 D84 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3627&r=exp |
| By: | Werner Güth (Max Planck Institute of Economics, Jena, Strategic Interaction Group); Hartmut Kliemt (Frankfurt School of Finance and Management) |
| Abstract: | Relying on the specific example of ultimatum bargaining experiments this paper explores the possible role of empirical knowledge of behavioural "norm(ative) facts" within the search for an inter-personal (W)RE - (Wide) Reflective Equilibrium on normative issues. Assuming that pro-social behaviour "reveals" ethical orientations, it is argued that these "norm-facts" can and should be used along with stated preferences in justificatory arguments of normative ethics and economics of the "means to given ends" variety. |
| Keywords: | Meta-Ethics, Experimental Economics, Reflective Equilibrium |
| JEL: | D64 D7 K00 Z13 |
| Date: | 2008–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-062&r=exp |
| By: | Simon Gaechter (University of Nottingham); Daniele Nosenzo (University of Nottingham); Martin Sefton (University of Nottingham) |
| Abstract: | We investigate the effects of pay comparison information (i.e. information about what coworkers earn) and effort comparison information (information about how co-workers perform) in experimental firms composed of one employer and two employees. Exposure to pay comparison information in isolation from effort comparison information does not appear to affect reciprocity toward employers: in this case own wage is a powerful determinant of own effort, but co-worker wages have no effect. By contrast, we find that exposure to both pieces of social information systematically influences employees’ reciprocity. A generous wage offer is virtually ineffective if an employee is matched with a lazy co-worker who is also paid generously: in such circumstances the employee tends to expend low effort irrespective of her own wage. Reciprocity is more pronounced when the co-worker is hard-working, as effort is strongly and positively related to own wage in this case. Reciprocity is also pronounced when the employer pays unequal wages to the employees: in this case the co-worker’s effort decision is disregarded and effort decisions are again strongly and positively related to own wage. On average exposure to social information weakens reciprocity, though we find substantial heterogeneity in responses across individuals, and find that sometimes social information has beneficial effects. We suggest that group composition may be an important tool for harnessing the positive effects of social comparison processes. |
| Keywords: | Reciprocity, gift-exchange, social information, social comparisons, pay comparisons, peer effects |
| JEL: | A13 C92 J31 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:cdx:dpaper:2008-09&r=exp |
| By: | John Morgan (Haas School of Business, University of California-Berkeley); Henrik Orzen (School of Economics, University of Nottingham); Martin Sefton (School of Economics, University of Nottingham) |
| Abstract: | We report the results of laboratory experiments on rent-seeking contests with endogenous participation. Theory predicts that (a) contest entry and rent-seeking expenditures increase with the size of the prize; and (b) earnings are equalized between the contest and the outside option. While the directional predictions offered in (a) are supported in the data, the level predictions are not. Prediction (b) is not supported in the data: When the prize is large, contest participants earn more than the outside option. When the prize is small, contest participants earn less. Previous studies of gender and contest competition suggest that females should (a) not perform as well in the contest; and (b) enter at a lower rate. We find some support for (a) but not for (b). Women participate in the contest at the same rate as men. |
| Keywords: | Contests; Competition; Entry; Experiments |
| JEL: | C9 D4 D72 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:cdx:dpaper:2008-08&r=exp |
| By: | Werner Güth (Max Planck Institute of Economics, Jena, Strategic Interaction Group); Hartmut Kliemt (Frankfurt School of Finance and Management) |
| Abstract: | Though the social choice of social institutions or social results is impossible - there is, strictly speaking, no social choice - individual evaluations of social institutions or results trivially are possible. Such individual evaluations can be deemed liberal either because they emphasize political institutions that embody liberal values (political liberalism) or because individuals make up their mind in a specifically "liberal" way of forming ethical judgment (philosophical liberalism). Seen in this light the Paradox of Liberalism is of theoretical or philosophical interest but not a practical problem of political (institutional) liberalism. |
| Keywords: | Philosophical Liberalism, Political Liberalism, Public Choice, Social Choice |
| JEL: | B3 B52 D6 D7 D71 |
| Date: | 2008–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-061&r=exp |
| By: | Parimal Bag (National University of Singapore, Singapore.); Santanu Roy (Southern Methodist University, Dallas, Texas.) |
| Abstract: | Under incomplete information about (independent) private valuations of a public good, we establish sufficient conditions under which, despite the incentive to free ride on future contributors, the expected total amount of voluntary contributions is higher when agents contribute sequentially (observing prior contributions) rather than simultaneously. We establish this in a conventional framework with quasi-linear utility where agents care only about the total provision of the public good (rather than individual contribution levels) and there is no non-convexity in provision of the public good. We allow for arbitrary number of agents and fairly general distribution of types. |
| Keywords: | Contribution games, public good, incomplete information. |
| JEL: | D73 H41 L44 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:0805&r=exp |