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on Experimental Economics |
| By: | Martin Dufwenberg; J. Todd Swarthout |
| Abstract: | Does playing a game in class improve students' ability to analyze the game using game theory? We report results from an experimental design which allows us to test a series of related hypotheses. We fail to find support for the conjectured learning-enhancing effects and discuss what lessons can be learned substantially and methodologically. |
| JEL: | A22 C70 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:exc:wpaper:2009-08&r=exp |
| By: | Siegfried Berninghaus; Werner Güth; M. Vittoria Levati; Jianying Qiu |
| Abstract: | In a duopoly market, aspiration levels express how much sellers want to earn given their expectations about the other’s behavior. We augment the sellers’ decision task by eliciting their profit aspiration. In a first experimental phase, whenever satisficing is not possible, sales choices, point beliefs, or aspiration levels have to be adapted. This allows us to investigate which of these three aspects individuals revise more often. In a second phase, testing the absorption of satisficing, participants are free to select non-satisficing sales profiles. The results reveal that most participants are satisficers who tend to adjust aspiration levels if they cannot be satisfied. |
| Keywords: | Satisficing behavior; Duopoly; Profit aspiration; Theory absorption |
| JEL: | C92 C72 D43 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2009-14&r=exp |
| By: | Jianying Qiu; Eva-Maria Steiger |
| Abstract: | Despite extensive studies, the nature of risk attitudes remains a vigorously discussed question in economics and psychology. In expected utility theory, attitudes towards risk originate from changes in marginal utility. Cumulative prospect theory (CPT) adds an additional dimension: the weighting of probabilities. By examining both dimensions, we strive to gain more insight on the relation between the curvature of utility function and probability weighting, and on possible relations to cognitive limitations. Our findings from a controlled laboratory experiment suggest that the two dimensions capture quite different characteristics. Though, most individuals exhibit concave utility and convex probability weighting, the two dimensions show no significant correlation. In addition, only probability weighting, not the curvature of utility function, is correlated with educational background and decision time, which suggests its relation to cognitive limitations. |
| Keywords: | Risk attitudes, cumulative prospect theory, experimental study |
| JEL: | C91 D81 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2009-11&r=exp |
| By: | Shirata, Yasuhiro |
| Abstract: | This paper studies how a matching rule affects the evolution of fairness in an ultimatum mini game. Gale et al. [1995] show that only selfish behaviour survives in the deterministic replicator dynamics under the random matching rule. In contrast, this paper shows that, under an assortative matching rule, the fair behaviour may survive at an asymptotically stable state. |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:econdp:2008-12&r=exp |
| By: | Tobias Bruenner; Rene Levinský; Jianying Qiu |
| Abstract: | In this paper we experimentally test skewness preferences at the individual level. Several prospects that can be ordered with respect to the third-degree stochastic dominance (3SD) criterion are ranked by the participants of the experiment. We find that the skewness of a distribution has a significant impact on the decisions. Yet, while skewness has an impact, its direction differs substantially across subjects: 39% of our subjects act in accordance with skewness seeking and 10% seem to avoid skewness. On the level of individual decisions we find that the variance of the prospects and subjects' experience increases the probability of choosing the lottery with greater skewness. |
| Keywords: | Skewness, Stochastic dominance, Decision-making under uncertainty |
| JEL: | D81 C91 G11 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2009-13&r=exp |