nep-exp New Economics Papers
on Experimental Economics
Issue of 2008‒10‒07
nine papers chosen by
Daniel Houser
George Mason University

  1. How can a psychologist inform economics? The strange case of Sidney Siegel By Alessandro Innocenti
  2. Efficiency Gains from Team-Based Coordination – Large-Scale Experimental Evidence By Francesco Feri; Bernd Irlenbusch; Matthias Sutter
  3. Collusion in Auctions for Emission Permits: An Experimental Analysis By Burtraw, Dallas; Goeree, Jacob; Holt, Charles A.; Myers, Erica; Palmer, Karen; Shobe, William
  4. How do economists differ from others in distributive situations? By Astri Drange Hole
  5. Error Cascades in Observational Learning: An Experiment on the Chinos Game By Francesco Feri; Miguel A. Meléndez-Jiménez; Giovanni Ponti; Fernando Vega Redondo
  6. Individual behavior and group membership: Comment By Matthias Sutter
  7. Can Corruption Be Studied in the Lab? Comparing a Field and a Lab Experiment By Olivier Armantier; Amadou Boly
  8. The relevance of a rules-based maize marketing policy : an experimental case study of Zambia By Abbink, Klaus; Jayne, Thomas S.; Moller, Lars C.
  9. Shifting the Blame: On Delegation and Responsibility By Björn Bartling; Urs Fischbacher

  1. By: Alessandro Innocenti
    Abstract: Before Kahneman and Tversky showed how behavioural economics could bring psychology and economics into a unified framework, in the 1950s a social psychologist, Sidney Siegel, entered the realm of economics and laid the foundation of experimental economics. This paper gives an assessment of Siegel’s overall contribution and claims that Siegel was not only a pioneer of experimental economics but also of behavioural economics. Had his view on the integration of psychology and economics been more promptly received, it might have triggered a different and more successfully path to the injection of greater realism in economics. When Siegel died, his approach to integrate psychology and economics lost its main advocate. Although his legacy was paramount in the work of the Nobel Prize Vernon Smith, Siegel endorsed a quite different approach to how make interdisciplinary research effective.
    Keywords: economics, psychology, behavioural economics, bargaining theory, utility theory.
    JEL: B20 B30 C70
    Date: 2008–07
  2. By: Francesco Feri; Bernd Irlenbusch; Matthias Sutter
    Abstract: The need for efficient coordination is ubiquitous in organizations and industries. The literature on the determinants of efficient coordination has focused on individual decision-making so far. In reality, however, teams often have to coordinate with other teams. We present an experiment with 825 participants, using six different coordination games, where either individuals or teams interact with each other. We find that teams coordinate much more efficiently than individuals. This finding adds one important cornerstone to the recent literature on the conditions for successful coordination. We explain the differences between individuals and teams using the experience weighted attraction learning model.
    Keywords: Coordination games, Individual decision-making, Team decision-making, Experience-weighted attraction learning, Experiment
    JEL: C71 C91 C92
    Date: 2008–09
  3. By: Burtraw, Dallas (Resources for the Future); Goeree, Jacob; Holt, Charles A.; Myers, Erica; Palmer, Karen; Shobe, William
    Abstract: Environmental markets have several institutional features that provide a new context for the use of auctions and which have not been studied previously. This paper reports on laboratory experiments testing three auction forms -– uniform and discriminatory price sealed bid auctions and an ascending clock auction. We test the ability of subjects to tacitly or explicitly collude in order to maximize profits. Our main result is that the discriminatory and uniform price auctions produce greater revenues than the clock auction, both without and with explicit communication. The clock appears to be more subject to successful collusion because of its sequential structure and because it allows bidders to focus on one dimension of cooperation (quantity) rather than two (price and quantity).
    Keywords: auctions, collusion, experiments, carbon dioxide, greenhouse gases
    JEL: C92 D43 D44
    Date: 2008–09–15
  4. By: Astri Drange Hole
    Abstract: There are mainly two conjectures on why economists may behave differently than others in distributive situations: the selection hypothesis and the learning hypothesis. In this paper the “Are economists different?” question is addressed. Potential differences in three dimensions are studied: the weight people attach to fairness considerations, the prevalence of fairness ideals, and how people react to communication about fairness. A dictatorship game experiment with a production phase and a communication phase is run with first-year economics and engineering students. This experimental design is particularly suited for examining differences in all three dimensions. To the best of the author’s knowledge, no previous experimental study has been able to address this question as comprehensively as the current analysis.
    Keywords: experiment
    JEL: C91
    Date: 2008–09
  5. By: Francesco Feri; Miguel A. Meléndez-Jiménez; Giovanni Ponti; Fernando Vega Redondo
    Abstract: The paper reports an experimental study based on a variant of the popular Chinos game, which is used as a simple but paradigmatic instance of observational learning. There are three players, arranged in sequence, each of whom wins a fixed price if she manages to guess the total number of coins lying in everybody’s hands. Our evidence shows that, despite the remarkable frequency of equilibrium outcomes, deviations from optimal play are also significant. And when such deviations occur, we find that, for any given player position, the probability of a mistake is increasing in the probability of a mistake of her predecessors. This is what we call an error cascade, which we which we measure by way of two alternative models.
    Keywords: positional learning, error cascades
    JEL: C92 D8
    Date: 2008–09
  6. By: Matthias Sutter
    Abstract: Charness et al. (2007b) have shown that group membership has a strong effect on individual decisions in strategic games when group membership is salient through payoff commonality. In this comment I show that their findings also apply to non-strategic decisions, even when no outgroup exists, and I relate the effects of group membership on individual decisions to joint decision making in teams. I find in an investment experiment that individual decisions with salient group membership are largely the same as team decisions. This finding bridges the literature on team decision making and on group membership effects.
    Keywords: Individual Behavior, Group Membership, Team Decision Making, Experiment
    JEL: C91 C92 D71
    Date: 2008–09
  7. By: Olivier Armantier; Amadou Boly
    Abstract: This paper makes an attempt at testing the external validity of corruption experiments by moving from the lab in a developed country, to where it matters the most, the field in a developing country. In our experiment a candidate proposes a bribe to a grader in order to obtain a better grade. We find the direction and the magnitude of most treatment effects to be statistically indistinguishable between the lab and the field. In particular, increasing the graders’.wage reduces in both environments the probability to accept the bribe. Finally, we identify several micro-determinants of corruption (age, religiousness, ability). <P>Le présent article essaie de tester la validité externe des expériences sur la corruption en quittant le laboratoire dans un pays développé pour le terrain dans un pays en développement, où la corruption importe encore plus. Dans notre expérience, un candidat offre un pot-de-vin à un correcteur afin d’obtenir une meilleure note. Nous trouvons que la direction et la magnitude de la plupart des effets de traitement sont statistiquement indistinctibles entre le laboratoire et le terrain. En particulier, augmenter la rémunération des correcteurs réduit la probabilité d’accepter le pot-de-vin aussi bien en laboratoire que sur le terrain. Enfin, nous identifions plusieurs micro-déterminants de la corruption (âge, religiosité, habilité).
    Keywords: corruption, experimental economics, field experiments., corruption, économie expérimentale, expérience sur le terrain.
    JEL: C91 C93 D73 I20
    Date: 2008–09–01
  8. By: Abbink, Klaus; Jayne, Thomas S.; Moller, Lars C.
    Abstract: Strategic interaction between public and private actors is increasingly recognized as an important determinant of agricultural market performance in Africa and elsewhere. Trust and consultation tend to positively affect private activity while uncertainty of government behavior impedes it. This paper reports on a laboratory experiment based on a stylized model of the Zambian maize market. The experiment facilitates a comparison between discretionary interventionism and a rules-based policy in which the government pre-commits itself to a future course of action. A simple precommitment rule can, in theory, overcome the prevailing strategic dilemma by encouraging private sector participation. Although this result is also borne out in the economic experiment, the improvement in private sector activity is surprisingly small and not statistically significant due to irrationally cautious choices by experimental governments. Encouragingly, a rules-based policy promotes a much more stable market outcome, thereby substantially reducing the risk of severe food shortages. These results underscore the importance of predictable and transparent rules for the state's involvement in agricultural markets.
    Keywords: Markets and Market Access,Food&Beverage Industry,Public Sector Corruption&Anticorruption Measures,Food Security,Access to Markets
    Date: 2008–09–01
  9. By: Björn Bartling; Urs Fischbacher
    Abstract: To fully understand the motives for delegating a decision right, it is important to study responsibility attributions for outcomes of delegated decisions. We conducted an experiment in which subjects were able to delegate the choice between a fair or unfair allocation, and used a punishment option to elicit responsibility attributions. Our results show that, first, responsibility attribution can be effectively shifted and, second, this constitutes a powerful motive for the delegation of a decision right. Furthermore, we propose a formal measure of responsibility and show that this measure outperforms measures based on outcome or intention in predicting punishment behavior.
    Keywords: delegation, decision rights, moral responsibility, blame shifting
    Date: 2008

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