nep-exp New Economics Papers
on Experimental Economics
Issue of 2009‒03‒07
seven papers chosen by
Daniel Houser
George Mason University

  1. Is the Hand of God Involved in Human Cooperation? An Experimental Examination of the Supernatural Punishment Theory By Ahmed, Ali; Salas, Osvaldo
  2. The Role of Role Uncertainty in Modified Dictator Games By Nagore Iriberri; Pedro Rey-Biel
  3. Reasons behind public goods provision By M. Raimondi
  4. The Economics of Credence Goods: On the Role of Liability, Verifiability, Reputation and Competition By Dulleck, Uwe; Rudolf, Kerschbamer; Matthias, Sutter
  5. Can Foreign Aid Buy Investment? Appropriation Through Conflict By David M. Bruner; Robert J. Oxoby
  6. Payment Choice, Image Motivation and Contributions to Charity By Adriaan R. Soetevent
  7. Winning Play in Spectrum Auctions By Jeremy Bulow; Jonathan Levin; Paul Milgrom

  1. By: Ahmed, Ali (Centre for Labour Market Policy Research (CAFO)); Salas, Osvaldo (Centre for Labour Market Policy Research (CAFO))
    Abstract: This paper examines the supernatural punishment theory. The theory postulates that religion increases cooperation because religious people fear the retributions that may follow if they do not follow the rules and norms provided by the religion. We report results for a public goods experiment conducted in India, Mexico, and Sweden. By asking participants whether they are religious or not, we study whether religiosity has an effect on voluntary cooperation in the public goods game. We found no significant behavioral differences between religious and nonreligious participants in the experiment.
    Keywords: Games; Punishment theory; Experiments; Behavioural Economics; Religion
    JEL: C71 C90 D01
    Date: 2008–03–10
  2. By: Nagore Iriberri; Pedro Rey-Biel
    Abstract: We compare behavior in modified dictator games with and without role uncertainty. Costly surplus creating actions are most frequent with role uncertainty while selfish behavior is most frequent without role uncertainty. A classification of subjects into four different types of preferences (Selfish, Social Welfare maximizing, Inequity Averse and Competitive) shows that role uncertainty overestimates (underestimates) the prevalence of Social Welfare maximizing (Selfish and Inequity Averse) preferences in the subject population. Our results have important methodological implications for experiments used to measure the prevalence of interdependent preferences.
    Keywords: Role uncertainty, role reversal, interdependent preferences, social welfare, maximizing, inequity aversion, mixture-of-types models, strategy method, experiments, LeeX
    JEL: C72 C91 D81
    Date: 2008–05
  3. By: M. Raimondi
    Abstract: In order to examine the role of non-economically measurable factors into the models of voluntary provision of public goods, Experimental Economics showed two systematic findings: (a) in early rounds of game, individual contributions are surprisingly high and increasing, but they tend to decrease progressively for all the agents and to reach a level of cooperation close to zero and (b) complete free riding is never observed. In explaining these evidences, experimental economists have pointed out the importance of factors such as kindness, confusion and strategic cooperation and most laboratory experiments have used clever designs to control for particular factors in order to isolate the effects of others. However, attempts to disentangle and measure the relevant variables of voluntary cooperation are partially and mainly realised comparing pairs of variables, which leaves one of the three hypotheses unexplained. In particular, there are at least two aspects left to be explained: (1) which has more influence in determining the level of contributions: kindness or confusion? (2) What is the role of strategic cooperation? Earlier experiments appear not able to include kindness, confusion and strategic cooperation in the same model and it seems to be very important to separate strategic cooperation from other altruistic motivations. In this work I aim at providing evidence on the way that kindness, confusion and strategic cooperation all affect contributions and to discuss new findings in the measurement and in the disentanglement of these variables made by using a new experimental design with the Voluntary Contribution Mechanism (VCM). I will adopt the same approach as Andreoni (1995), subtracting one component in each treatment and leaving other components as reasonable (and measurable) explanations for cooperation.
    Keywords: Experimental Economics; Social Dilemmas; Collective Action; Public Goods
    JEL: C92 D64 D80 H41
    Date: 2009
  4. By: Dulleck, Uwe (Queensland University of Technology); Rudolf, Kerschbamer (University of Innsbruck and CEPR); Matthias, Sutter (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Credence goods markets are characterized by asymmetric information between sellers and consumers that may give rise to inefficiencies, such as under- and overtreatment or market break-down. We study in a large experiment with 936 participants the determinants for efficiency in credence goods markets. While theory predicts that either liability or verifiability yields efficiency, we find that liability has a crucial, but verifiability only a minor effect. Allowing sellers to build up reputation has little influence, as predicted. Seller competition drives down prices and yields maximal trade, but does not lead to higher efficiency as long as liability is violated.<p>
    Keywords: Credence goods; Experiment; Liability; Verifiability; Reputation; Competition
    JEL: C72 C91 D40 D82
    Date: 2009–03–02
  5. By: David M. Bruner; Robert J. Oxoby
    Abstract: The failure of foreign aid to promote growth in the developing world has received significant attention as evidence suggests that foreign aid does not translate into investment. This research has demonstrated that poor institutions in these developing economies (particularly with respect to property rights) results in an inability to fully appropriate the return to one’s investment, thereby serving as a prominent disincentive to investment. This paper presents an experimental test of a a 2-player, one-shot game of conflict in which we vary the strength of property rights. Our results suggest that stronger property rights reduce conflict and increase investment. In addition, we test the conventional wisdom that technological progress can increase the effectiveness of aid in stimulating investment. Contrary to intuition, we find technological progress has practically no effect on investment and that this failure to stimulate investment is largely due to deficiencies in property right institutions. Key Words: Property Rights; Conflict; Investment; Foreign Aid; Experiments
    JEL: C72 C91 F35 O12 O43 P48
    Date: 2009
  6. By: Adriaan R. Soetevent (Faculty of Economics & Business, University of Amsterdam)
    Abstract: This study uses a door-to-door fundraising field experiment to examine the impact of different payment options on charitable giving. Households are randomly divided into three treatments, distinguished by the possibility for respondents to donate cash, by debit card, or both. I find that due to dwindling participation, revenues are significantly lower in the debit-only treatment than in the baseline cash-only treatment. In the combined treatment, the vast majority of donors uses cash, participation decreases and especially small donors drop out. This indicates that the option to donate electronically crowds out the image motivation of cash donations.
    Keywords: Payment choice; field experiment; image motivation
    JEL: C93 D64 H41 E42
    Date: 2009–02–19
  7. By: Jeremy Bulow; Jonathan Levin; Paul Milgrom
    Abstract: We describe factors that make bidding in large spectrum auctions complex -- including exposure and budget problems, the role of timing within an ascending auction, and the possibilities for price forecasting -- and how economic and game-theoretic analysis can assist bidders in overcoming these problems. We illustrate with the case of the FCC's Advanced Wireless Service auction, in which a new entrant, SpectrumCo, faced all these problems yet managed to purchase nationwide coverage at a discount of roughly a third relative to the prices paid by its incumbent competitors in the same auction, saving more than a billion dollars.
    JEL: C72 D44 L21
    Date: 2009–03

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