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on Experimental Economics |
| By: | Lisa R. Anderson (Department of Economics, College of William and Mary); Sarah L. Stafford (Department of Economics, College of William and Mary) |
| Abstract: | We include probabilistic announcements in a standard public goods experiment. Although the possibility of having decisions announced encourages subjects to contribute more to the group account, learning that some individuals are free-riding more than the average has a negative effect |
| Keywords: | Voluntary Contributions Mechanism, Public Goods, Announcement |
| JEL: | C91 H41 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:82&r=exp |
| By: | Waichmann, Israel; Requate, Tilman; Siang, Ch'ng Kean |
| Abstract: | We report results from a Cournot triopoly experiment with different subject pools: German students, Malaysian students, and Malaysian managers. While German students play Nash, we reject the hypothesis that both Malaysian students and managers select the Nash quantity. Moreover, Malaysian managers perform significantly less competitively than Malaysian students. Finally, the affect of gender is opposite for German and Malaysian subjects. |
| Keywords: | artefactual field experiment, subject pools, Cournot oligopoly, managers, non-cooperative behavior |
| JEL: | C72 C93 D21 D43 L13 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cauewp:7467&r=exp |
| By: | Jinyong Hahn (Department of Economics, UCLA); Keisuke Hirano (University of Arizona); Dean Karlan (Economic Growth Center, Yale University) |
| Abstract: | Many social experiments are run in multiple waves, or are replications of earlier social experiments. In principle, the sampling design can be modified in later stages or replications to allow for more efficient estimation of causal effects. We consider the design of a two-stage experiment for estimating an average treatment effect, when covariate information is available for experimental subjects. We use data from the first stage to choose a conditional treatment assignment rule for units in the second stage of the experiment. This amounts to choosing the propensity score, the conditional probability of treatment given covariates. We propose to select the propensity score to minimize the asymptotic variance bound for estimating the average treatment effect. Our procedure can be implemented simply using standard statistical software and has attractive large-sample properties. |
| Keywords: | experimental design, propensity score, efficiency bound |
| JEL: | C1 C14 C9 C93 C13 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:969&r=exp |
| By: | Benoît, Jean-Pierre; Dubra, Juan; Moore, Don |
| Abstract: | We conduct a proper test of the claim that people are overconfident, in the sense that they believe that they are better than others. The results of the experiment we present do not allow us to reject the hypotheses that the data has been generated by perfectly rational, unbiased, and appropriately confident agents. |
| Keywords: | Overconfidence; Better than Average; Experimental Economics; Irrationality; Signalling Models. |
| JEL: | D11 D12 D82 D83 |
| Date: | 2009–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13168&r=exp |
| By: | Nagore Iriberri; Pedro Rey-Biel |
| Abstract: | We use subjects’ actions in modified dictator games to perform a within-subject classification of individuals into four different types of interdependent preferences: Selfish, Social Welfare maximizers, Inequity Averse and Competitive. We elicit beliefs about other subjects’ actions in the same modified dictator games to test how much of the existent heterogeneity in others’ actions is known by subjects. We find that subjects with different interdependent preferences in fact have different beliefs about others’ actions. In particular, Selfish individuals cannot conceive others being non-Selfish while Social Welfare maximizers are closest to the actual distribution of others’ actions. We finally provide subjects with information on other subjects’ actions and re-classify individuals according to their (new) actions in the same modified dictator games. We find that social information does not affect Selfish individuals, but that individuals with interdependent preferences are more likely to change their behavior and tend to behave more selfishly. |
| Keywords: | Interdependent preferences, social welfare maximizing, inequity aversion, belief elicitation, social information, experiments, mixture-of-types models |
| JEL: | C72 C9 D81 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1137&r=exp |
| By: | Huber, Juergen (U of Innsbruck); Shubik, Martin (Yale U); Sunder, Shyam |
| Abstract: | In this experiment we examine the performance of three minimal strategic market games relative to theoretical predictions. These models of a closed exchange economy with monetary and financial structures have limited amounts of cash to facilitate transactions. Subsequent experiments will deal with credit limitations, banking and credit, the role of clearinghouses and the possibility for the universal issue of credit by individuals. In theory, with enough money the non-cooperative equilibria should converge to the respective competitive equilibria as the number of players increases. Since general equilibrium theory abstracts away from the market mechanism, it makes no predictions about how the paths of convergence to the CE may differ across market mechanisms. GE allows no role for money or credit. In contrast to most market experiments conducted in open or partial equilibrium settings, we report on closed settings that include feedbacks. Laboratory examination of the three market mechanisms reveals convergence to CE with increasing number of players. It also reveals significant differences in the convergence paths across the mechanisms, suggesting that to the extent deviations from CE are of interest (either because the number of players in the environment of substantive interest is small, or because disequilibrium behavior itself is of substantive interest), theoretical abstraction from the market mechanisms has been taken too far. For example, the oligopoly effect of feedback from buying a good that the player is endowed with is missed. Inclusion of mechanism differences into theory would help us understand markets better. |
| JEL: | C92 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:27&r=exp |
| By: | Schipper, Burkhard C. (U of California, Davis); Oechssler, Jorg (U of Heidelberg); Duersch, Peter |
| Abstract: | Internet experiments are a new and convenient way for reaching a large subject pool. Yet, providing incentives to subjects can be a tricky design issue. One cost effective and simple method is the publication of a high score (as in computer games). We test whether a high score provides adequate and non-distortionary incentives by comparing it to the usual performance based incentives. We find significant differences and conclude that high scores are not always appropriate as an incentive device. Performance based financial incentives seem to be required also in internet experiments. |
| JEL: | C72 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ucdeco:08-1&r=exp |
| By: | Pablo Brañas-Garza (Department of Economic Theory and Economic History, University of Granada.); Luis M. Miller (Centre for Experimental Social Sciences, Nuffield College, University of Oxford.) |
| Abstract: | In a series of recent papers, Ariel Rubinstein claims that the study of response time sheds light on the process of reasoning involved in classical economic decision problems. In particular, he considers that a distinction can be drawn between instinc- tive and cognitive reasoning. This paper complements and expands upon Rubinstein's study on time responses. We show that strategic risk is the key element in explaining differences in median response time in ultimatum behavior. |
| Keywords: | Economic experiments, Ultimatum game, Yes-or-No game, median response time. |
| JEL: | C91 |
| Date: | 2008–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:gra:wpaper:08/08&r=exp |
| By: | Pascaline Dupas |
| Abstract: | I use a randomized experiment to test whether information can change sexual behavior among teenagers in Kenya. Providing information on the relative risk of HIV infection by partner's age led to a 28% decrease in teen pregnancy, an objective proxy for the incidence of unprotected sex. Self-reported sexual behavior data suggests substitution away from older (riskier) partners and towards protected sex with same-age partners. In contrast, the national abstinence-only HIV education curriculum had no impact on teen pregnancy. These results suggest that teenagers are responsive to risk information but their sexual behavior is more elastic on the intensive than on the extensive margin. |
| JEL: | C93 I1 O12 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14707&r=exp |
| By: | Schipper, Burkhard (U of California, Davis) |
| Abstract: | Neuroeconomics focuses on brain imaging studies mapping neural responses to choice behavior. Economic theory is concerned with choice behavior but it is silent on neural activities. We present a game theoretic model in which players are endowed with an additional structure--a simple 'nervous system'--and interact repeatedly in changing games. The nervous system constrains information processing functions and behavioral functions. By reinterpreting results from evolutionary game theory (Germano, 2007), we suggest that nervous systems can develop to 'function well' in exogenously changing strategic environments. We present an example indicating that an analogous conclusion fails if players can influence endogenously their environment. |
| JEL: | C72 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ucdeco:08-4&r=exp |
| By: | Pfajfar, D.; Zakelj, B. (Tilburg University, Center for Economic Research) |
| Abstract: | Using laboratory experiments, we establish a number of stylized facts about the process of inflation expectation formation. Within a New Keynesian sticky price framework, we ask subjects to provide forecasts of inflation and their corresponding confidence bounds. We study individual responses and properties of the aggregate empirical distribution. Many subjects do not rely on a single model of expectation formation, but are rather switching between di¤erent models. About 40% of the subjects predominately use a rational rule when forecasting inflation and about 35% of agents simply extrapolate trend. Around 5% of subjects behave in an adaptive manner, while the remaining 20% behaves in accordance to adaptive learning and sticky information models. Furthermore, we find that subjects in only 60% of cases correctly perceive the underlying uncertainty in the economy when reporting confidence intervals. However, empirical analysis does not support a significant countercyclical behavior of individuals' confidence intervals. |
| Keywords: | Inflation Expectations;Experiments;New Keynesian Model;Adaptive Learning |
| JEL: | E37 C90 D80 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200907&r=exp |