nep-exp New Economics Papers
on Experimental Economics
Issue of 2008‒12‒07
twelve papers chosen by
Daniel Houser
George Mason University

  1. Identifying Social Norms Using Coordination Games: Why Does Dictator Game Sharing Vary? By Krupka, Erin L.; Weber, Roberto A.
  2. An Experimental Study of Conventions and Norms By Francesco Guala; Luigi Mittone
  3. Lies in Disguise. An experimental study on cheating By Urs Fischbacher; Franziska Heusi
  4. Luck or Cheating? A Field Experiment on Honesty with Children By Alessandro Bucciol; Marco Piovesan
  5. Individual Expectations and Aggregate Behavior in Learning to Forecast Experiments By Cars Hommes; Thomas Lux
  6. Stated versus inferred beliefs: A methodological inquiry and experimental test By Rutstrom, E. Elizabet; Wilcox, Nathaniel
  7. Does monetary punishment crowd out pro-social motivation? The case of hospital bed-blocking By Tor Helge Holmås; Egil Kjerstad; Hilde Lurås; Odd Rune Straume
  8. Voting experiments: Bandwagon voting or false-consensus effect? By Ivo Bischoff; Henrik Egbert
  9. An Experimental Investigation of the Impact of Fat Taxes: Prices Effects, Food Stigma, and Information Effects on Economics Instruments to Improve Dietary Health By Cash, Sean E.; Lacanilao, Ryan; Adamowicz, Vic; Raine, Kim
  10. WTP vs. WTA: Christmas Presents and the Endowment Effect By Bauer, Thomas; Schmidt, Christoph M.
  11. Homo Reciprocans: Survey Evidence on Behavioural Outcomes By Dohmen Thomas; Falk Armin; Huffman David; Sunde Uwe
  12. Spurious Consensus and Opinion Revision: Why Might People Be More Confident in Their Less Accurate Judgments? By Ilan Yaniv; Shoham Choshen-Hillel; Maxim Milyavsky

  1. By: Krupka, Erin L. (IZA); Weber, Roberto A. (Carnegie Mellon University)
    Abstract: We explore the influence of social norms on behavior. To do so, we introduce a method for identifying norms, based on the property that social norms reflect social consensus regarding the appropriateness of different possible behaviors. We demonstrate that the norms we elicit, along with a simple model combining concern for norm-compliance with utility for money, predict changes in behavior across several variants of the dictator game in which behavior changes substantially following the introduction of minor contextual variations. Our findings indicate that people care not just about monetary payoffs but also care about the social appropriateness of any action they take. Our work also suggests that a social norm is not always a single action that should or should not be taken, but rather a profile of varying degrees of social appropriateness for different available actions.
    Keywords: norms, matching games, dictator games
    JEL: C91 C72
    Date: 2008–11
  2. By: Francesco Guala; Luigi Mittone
    Abstract: Although it is now recognized that norms play an important role in many economic decisions, compliance with conventions is generally considered to be driven by rational self-interest only. We report instead experimental data showing that (1) ‘external’ norms of fairness sustain social conventions that have emerged from repeated play of simple coordination games; and (2) with repetition such conventions acquire an ‘intrinsic’ normative power of their own. This creates pressure towards conformity, and patterns of regular behaviour that are far stronger and more stable than those that would be generated by mere self-interest and rationality.
    Date: 2008
  3. By: Urs Fischbacher; Franziska Heusi
    Abstract: In this paper we present a new design which allows us to draw inferences on the distribution of lying behavior among the population. Participants received a dice in order to determine their payoff anonymously. Whatever they reported to have rolled, they received as payoff. 39% of the subjects were honest and maximally 22% of them were lying completely. Interestingly we found subjects who lied but who did not maximize their income by doing so. Using additional experiments, we can show that a compelling explanation for this behavior is the desire to maintain a favorable self-concept, including honesty and non-greediness.
    Keywords: Lie detection, honesty, deception, experimental design
    Date: 2008
  4. By: Alessandro Bucciol (University of Amsterdam); Marco Piovesan (Department of Economics, University of Copenhagen)
    Abstract: We ran an experiment with children to study the development of honesty with age. We asked each child to toss a fair coin in private and to record the outcome (white or black) in a paper sheet. We rewarded only those who reported white. We found a fraction of reported whites signifi…cantly larger than 50%, uniformly across age groups. This suggests that some children cheat when cheating is profi…table and they are not observed. In a second treatment we told children not to cheat. This reminder reduced the probability of reporting white by 18% on average, and signifi…cantly more in girls.
    Keywords: honesty; children; fi…eld experiment
    JEL: C93 J13
    Date: 2008–11
  5. By: Cars Hommes; Thomas Lux
    Abstract: Models with heterogeneous interacting agents explain macro phenomena through interactions at the micro level. We propose genetic algorithms as a model for individual expectations to explain aggregate market phenomena. The model explains all stylized facts observed in aggregate price fluctuations and individual forecasting behaviour in recent learning to forecast laboratory experiments with human subjects (Hommes et al. 2007), simultaneously and across different treatments
    Keywords: Learning, heterogeneous expectations, genetic algorithms, experimental economics
    JEL: C91 C92 D83 D84 E3
    Date: 2008–11
  6. By: Rutstrom, E. Elizabet; Wilcox, Nathaniel
    Abstract: If asking subjects their beliefs during repeated game play changes the way those subjects play, using those stated beliefs to evaluate and compare theories of strategic behavior is problematic. We experimentally verify that belief elicitation can alter paths of play in a repeated asymmetric matching pennies game. In this setting, belief elicitation improves the goodness of fit of structural models of belief learning, and the prior beliefs implied by such structural models are both stronger and more realistic when beliefs are elicited than when they are not. These effects are, however, confined to the player type who sees a strong asymmetry between payoff possibilities for her two strategies in the game. We also find that “inferred beliefs” (beliefs estimated from past observed actions of opponents) can be better predictors of observed actions than the “stated beliefs” resulting from belief elicitation.
    Keywords: beliefs; stated beliefs; belief elicitation; inferred beliefs; estimated beliefs; belief updating; repeated games; experimental methods
    JEL: C92 D83 C25 C73
    Date: 2008–09
  7. By: Tor Helge Holmås (Health Economics Bergen (HEB), University of Bergen); Egil Kjerstad (Institute for Research in Economics and Business Administration (SNF) and Health Economics Bergen (HEB)); Hilde Lurås (Helse Øst Health Services Research Centre, Akershus University Hospital, Norway.); Odd Rune Straume (Universidade do Minho - NIPE)
    Abstract: We study whether the use of explicit monetary incentives might be counter-productive. In particular, we focus on the effect of fining owners of long-term care institutions who prolong length of stay at hospitals. We outline a simple theoretical model, based on motivational crowding theory, deriving the conditions for explicit monetary incentives to have potentially counterproductive effects. In the empirical part, we exploit a natural experiment involving changes in the catchments areas of two large Norwegian hospitals. We find that bed-blocking is reduced when transferring long-term care providers from a hospital using monetary fines to prevent bed-blocking to a hospital not relying on this incentive scheme, and vice versa. We interpret these results as examples of monetary incentives crowding out agents’ intrinsic motivation, leading to a reduction in effort.
    Keywords: Motivation crowding; Intrinsic motivation; Monetary punishment; Hospital bed blocking
    JEL: D64 I18 Z13
    Date: 2008
  8. By: Ivo Bischoff (Justus-Liebig-University Gießen, Department of Economics); Henrik Egbert (Justus-Liebig-University Gießen, Department of Economics)
    Abstract: In an experiment designed to test for expressive voting, Tyran (JPubEc 2004) found a strong positive correlation between the participants’ approval for a proposal to donate money for charity and their expected approval rate for fellow voters. This phenomenon can be due to bandwagon voting or a false consensus effect. The social science literature reports both effects for voting decisions. Replicating Tyran’s experiment and adding new treatments, we provide evidence for a false consensus effect but find no support for bandwagon voting.
    Keywords: voting, experiments, bandwagon voting, false consensus effect
    JEL: C90 D72
    Date: 2008
  9. By: Cash, Sean E.; Lacanilao, Ryan; Adamowicz, Vic; Raine, Kim
    Abstract: There is currently no published research on how food taxes may affect consumer behaviour when the imposition of the tax itself may be considered a source of consumer information. The work undertaken here seeks to address this gap in the literature by using experimental methods to enhance understanding on the joint effects of price changes induced by a fat tax and the stigma associated with the application of the tax. First, we conduct an interdisciplinary literature review (drawing from economics, psychology, and health promotion) and theoretical investigation of the impact of stigma on economic choice behaviours. We then employ Attribute-Based Stated Choice Methods (ABSCM) to elicit consumer response to fat tax scenarios that rely only on price changes, and to those that involve both price changes and stigma effects. The study is still ongoing, and will use a computer-assisted field data collection approach to collect data from participants at grocery stores and/or other food purchase venues. Econometric analysis of the resulting data will allow us to investigate the price response, stigma effect, and price-stigma interaction elicited by various taxation and labelling schemes. Preliminary results from pre-test samples are discussed here.
    Keywords: obesity, health policy, fat taxes, warning labels, choice experiments, Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, I18, Q18,
    Date: 2008–07
  10. By: Bauer, Thomas (RWI Essen); Schmidt, Christoph M. (RWI Essen)
    Abstract: Using data on the valuation of Christmas gifts received by students in different fields at a German university, we investigate whether the endowment effect differs between students of economics and other respondents and whether it varies with the market price of the object under consideration. Our estimation results suggest that economics students have both, a significant lower WTP and WTA, indicating that existing studies on the efficiency loss of holiday gifts and experimental studies on the endowment effect that rely on data from economics students may be biased. The result further indicates that the endowment effect is independent of the market price of the object.
    Keywords: loss aversion, endowment effect, Christmas presents, deadweight loss
    JEL: D01 D49 D61
    Date: 2008–11
  11. By: Dohmen Thomas; Falk Armin; Huffman David; Sunde Uwe (ROA rm)
    Abstract: This paper complements the experimental literature that has shown theimportance of reciprocity for behaviour in stylized labour markets or otherdecision settings. We use individual measures of reciprocal inclinations in alarge, representative survey, and relate reciprocity to real world labour marketbehaviour and life outcomes. We find that reciprocity matters, and we find thatthe way in which it matters is very much in line with the experimental evidence.In particular, positive reciprocity is associated with receiving higher wages andworking harder. Negatively reciprocal inclinations tend to reduce effort. Firmsdo not pay lower wages to individuals with strong negatively reciprocalinclinations. Instead, negative reciprocity increases the likelihood of beingunemployed. Looking at broader measures of success, in terms of number ofclose friends, and subjective well-being, we find that positively reciprocalinclination are associated with greater happiness and ability to sustain friendshiprelations, with the opposite being true for negative reciprocity.
    Keywords: education, training and the labour market;
    Date: 2008
  12. By: Ilan Yaniv; Shoham Choshen-Hillel; Maxim Milyavsky
    Abstract: In the interest of improving their decision-making, individuals revise their opinions on the basis of samples of opinions obtained from others. However, such a revision process may lead decision-makers to experience greater confidence in their less accurate judgments. We theorize that people tend to underestimate the informative value of independently drawn opinions, if these appear to conflict with one another, yet place some confidence even in the "spurious consensus" which may arise when opinions are sampled interdependently. The experimental task involved people’s revision of their opinions (caloric estimates of foods) on the basis of advice. The method of sampling the advisory opinions (independent or interdependent) was the main factor. The results reveal a dissociation between confidence and accuracy. A theoretical underlying mechanism is suggested whereby people attend to consensus (consistency) cues at the expense of information on interdependence. Implications for belief-updating and for individual and group decisions are discussed.
    Date: 2008–11

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