nep-exp New Economics Papers
on Experimental Economics
Issue of 2010‒07‒31
fourteen papers chosen by
Daniel Houser
George Mason University

  1. Immigrant Assimilation, Trust and Social Capital By Cox, James C.; Orman, Wafa Hakim
  2. Heterogeneous Productivity in Voluntary Public Good Provision: an Experimental Analysis By Gerlinde Fellner; Yoshio Iida; Sabine Kröger; Erika Seki
  3. E-nstructions: Using Electronic Instructions in Laboratory Experiments By Katrin Schmelz
  4. Learning, words and actions : experimental evidence on coordination-improving information By Nicolas Jacquemet; Adam Zylbersztejn
  5. Learning, words and actions : experimental evidence on coordination-improving information. By Nicolas Jacquemet; Adam Zylbersztejn
  6. Participatory Decision Making: A Field Experiment on Manipulating the Votes By Vreeland, James; Spada, Paolo
  7. Discrete Clock Auctions: An Experimental Study By Peter Cramton; Emel Filiz-Ozbay; Erkut Ozbay; Pacharasut Sujarittanonta
  8. Productivity in Contests: Organizational Culture and Personality Effects By Ola Andersson; Marieke Huysentruyt; Topi Miettinen; Ute Stephan
  9. Information, Uncertainty, and Subjective Entitlements in Bargaining By Karagözoglu, Emin; Riedl, Arno
  10. Disclosure, Trust and Persuasion in Insurance Markets By de Meza, David; Irlenbusch, Bernd; Reyniers, Diane
  11. On Blame-Freeness and Reciprocity: An Experimental Study By Mariana Blanco; Bogaçhan Çelen; Andrew Schotter
  12. The Relationship of Economic Theory to Experiments By David K Levine; Jie Zheng
  13. Augmenting short Cheap Talk scripts with a repeated Opt-Out Reminder in Choice Experiment surveys By Jacob Ladenburg; Søren Bøye Olsen
  14. Can cheap panel-based internet surveys substitute costly in-person interviews in CV surveys? By Lindhjem, Henrik; Navrud, Ståle

  1. By: Cox, James C. (Georgia State University); Orman, Wafa Hakim (University of Alabama in Huntsville)
    Abstract: Trust is a crucial component of social capital. We use an experimental moonlighting game with a representative sample of the U.S. population, oversampling immigrants, to study trust, positive, and negative reciprocity between first-generation immigrants and native-born Americans as a measure of immigrant assimilation. We also survey subjects in order to relate trusting and trustworthy behavior with demographic characteristics and traditional, survey-based measures of social capital. We find that immigrants are as trusting as native-born U.S. citizens when faced with another native-born citizen, but do not trust other immigrants. Immigrants appear to be less trustworthy overall but this finding disappears when we control for demographic variables and the amount sent by the first mover. The length of time an immigrant has been a naturalized U.S. citizen appears to increase trustworthiness but does not affect trusting behavior. Women and older people are less likely to trust, but no more or less trustworthy.
    Keywords: moonlighting game, trust, reciprocity, immigration, experiment
    JEL: C93 J61
    Date: 2010–07
  2. By: Gerlinde Fellner; Yoshio Iida; Sabine Kröger; Erika Seki
    Abstract: This article experimentally examines voluntary contributions when group members’ marginal returns to the public good vary. The experiment implements two marginal return types, low and high, and uses the information that members have about the heterogeneity to identify the applied contribution norm. We find that norms vary with the information environment. If agents are aware of the heterogeneity, contributions increase in general. However, high types contribute more than low types when contributions can be linked to the type of the donor but contribute less otherwise. Low types, on the other hand, contributes more than high types when group members are aware of the heterogeneity but contributions cannot be linked to types. Our results underline the importance of the information structure when persons with different abilities contribute to a joint project, as in the context of teamwork or charitable giving.
    Keywords: Public Goods, Voluntary contribution mechanism, Heterogeneity, Information, Norms
    JEL: C9 H41
    Date: 2010
  3. By: Katrin Schmelz (Max Planck Institute of Economics, Jena, IMPRS "Uncertainty")
    Abstract: E-nstructions facilitates the use of electronic instructions in computerized laboratory experiments. This tool has been primarily designed to be used in combination with z-Tree (Fischbacher, 2007), but it should work in combination with other experimental softwares which help developing and conducting experiments. This article provides a set of guidelines for the installation and the use of E-nstructions.
    Keywords: Experiments, Experimental software, instructions
    JEL: C91 C92
    Date: 2010–07–26
  4. By: Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Adam Zylbersztejn (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper reports experimental results from a one-shot game with two Nash equilibria: the first one is efficient, the second one relies on weakly dominated strategies. The experimental treatments consider three information-enhancing mechanisms in the game: simple repetition, cheap-talk messages and observation of past actions from the current interaction partner. Our experimental results show the use of dominated strategies is quite widespread. Any kind of information (through learning, words or actions) increases efficiency. As regards coordination, we find that good history performs better than good messages; but bad history performs worse than bad messages.
    Keywords: Coordination game, communication, cheap-talk, observation.
    Date: 2010–07
  5. By: Nicolas Jacquemet (Centre d'Economie de la Sorbonne - Paris School of Economics); Adam Zylbersztejn (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: This paper reports experimental results from a one-shot game with two Nash equilibria : the first one is efficient, the second one relies on weakly dominated strategies. The experimental treatments consider three information-enhancing mechanisms in the game : simple repetition, cheap-talk messages and observation of past actions from the current interaction partner. Our experimental results show the use of dominated strategies is quite widespread. Any kind of information (through learning, words or actions) increases efficiency. As regards coordination, we find that good history performs better than good messages ; but bad history performs worse than bad messages.
    Keywords: Coordination game, communication, cheap-talk, observation.
    JEL: C72 D83
    Date: 2010–07
  6. By: Vreeland, James; Spada, Paolo
    Abstract: Many believe that deliberative democracy, where individuals discuss alternatives before voting on them, should result in collectively superior outcomes because voters become better informed and decisions are justified using reason. These deliberations typically involve a moderator, however, whose role has been under-examined. We conduct a field experiment to test the effects moderators may have. Participants in a class of 107 students voted on options over their writing and exam requirements. Before voting, they participated in group discussions of about five people each with one moderator. Some (randomly assigned) moderators remained neutral throughout, while others made limited interventions, supporting a specific option. We find a substantial moderator effect. Our experiment is structured like deliberations used world-wide to make community decisions and thus should have some external validity. The results indicate that if organized interest groups had influence over moderators, they might be able to hijack a deliberative decision-making process.
    Keywords: deliberative democracy; participatory decision making; interest group; manipulation; moderators; facilitators
    JEL: D70 C93
    Date: 2010
  7. By: Peter Cramton (Economics Department, University of Maryland); Emel Filiz-Ozbay; Erkut Ozbay; Pacharasut Sujarittanonta
    Abstract: We analyze the implications of different pricing rules in discrete clock auctions. The two most common pricing rules are highest-rejected bid (HRB) and lowest-accepted bid (LAB). Under HRB, the winners pay the lowest price that clears the market; under LAB, the winners pay the highest price that clears the market. Both the HRB and LAB auctions maximize revenues and are fully efficient in our setting. Our experimental results indicate that the LAB auction achieves higher revenues. This also is the case in a version of the clock auction with provisional winners. This revenue result may explain the frequent use of LAB pricing. On the other hand, HRB is successful in eliciting true values of the bidders both theoretically and experimentally.
    Keywords: Auctions, clock auctions, spectrum auctions, experimental economics, behavioral economics, market design
    JEL: D44 C92 C78 L96
    Date: 2010
  8. By: Ola Andersson (Stockholm School of Economics); Marieke Huysentruyt (London School of Economics & SITE at Stockholm School of Economics); Topi Miettinen (Aalto University, School of Economics & SITE, Stockholm School of Economics); Ute Stephan (Catholic University of Leuven)
    Abstract: We study the interaction of organizational culture and personal prosocial orientation in team work where teams compete against each other. In a computerized lab experiment with minimal group design, we prime subjects to two alternative organizational cultures emphasizing either self-enhancement or self-trancendence. We find that effort is highest in self-trancendent teams and prosocially oriented subjects perform better than proself-oriented under that culture. In any other value-culture-mechanism constellation, performance is worse and/or prosocials and proselves do not dier in provided effort. These findings point out the importance of a "triple-fit" of preferences, organizational culture and incentive mechanism.
    Keywords: Tournaments, Organizational Culture, Personal Values, Teams, Economic Incentives
    JEL: C91 D23 J33 M52
    Date: 2010–07–26
  9. By: Karagözoglu, Emin (Maastricht University); Riedl, Arno (Maastricht University)
    Abstract: More often than not production processes are the joint endeavor of people having different abilities and productivities. Such production processes and the associated surplus production are often not fully transparent in the sense that the relative contributions of involved agents are blurred; either by lack of information about the actual performance of collaborators or because of random noise in the production process or both. These variables likely influence the surplus sharing negotiations following the production. By means of a laboratory experiment, we systematically investigate their role for the whole bargaining process from opening offers to (dis)agreements and find that uncertainties in surplus production and (even) a very coarse performance information lead to bargaining asymmetries. In addition, we find that bargainers' subjective entitlements are also influenced by performance information and the randomness inherent in the production process. These differences in subjective entitlements together with the differences in entitlements between better and worse performers influence the whole bargaining process and significantly contribute to the differences in bargaining outcomes.
    Keywords: bargaining, performance information, randomness in production process, entitlements, experiments
    JEL: C79 C92 D01 D29 D63 D89 M59
    Date: 2010–07
  10. By: de Meza, David (London School of Economics); Irlenbusch, Bernd (University of Cologne); Reyniers, Diane (London School of Economics)
    Abstract: This high-stakes experiment investigates the effect on buyers of mandatory disclosures concerning an insurance policy's value for money (the claims ratio) and the seller's commission. These information disclosures have virtually no effect despite most buyers claiming to value such information. Instead, our data reveal that whether the subject is generally trusting plays an important role. Trust is clearly associated with greater willingness to pay for insurance. Unlike in previous work, trust in our setting is not about obligations being fulfilled. The contract is complete, simple and the possibility of breach is negligible. However, as for much B2C insurance marketing, face-to-face selling plays a crucial role in our experimental design. Trusting buyers are more suggestible, so take advice more readily and buy more insurance, although they are no more risk averse than the uninsured. Moreover, trusting buyers feel less pressured by sellers, and are more confident in their decisions which suggests that they are easier to persuade. Therefore, in markets where persuasion is important, public policy designed to increase consumer information is likely to be ineffective.
    Keywords: insurance selling, trust, persuasion
    JEL: C91 G22 M30
    Date: 2010–07
  11. By: Mariana Blanco; Bogaçhan Çelen; Andrew Schotter
    Abstract: The theory of reciprocity is predicated on the assumption that people are willing to reward nice or kind acts and to punish unkind ones. This assumption raises the question as to how to define kindness. In this paper we offer a new definition of kindness that we call “blame-freeness.” Put most simply, blame-freeness states that in judging whether player i has been kind or unkind to player j in a social situation, player j would have to put himself in the strategic position of player i, while retaining his preferences, and ask if he would have acted in a manner that was worse than i did under identical circumstances. If j would have acted in a more unkind manner than i acted, then we say that j does not blame i for his behavior. If, however, j would have been nicer than i was, then we say that “j blames i” for his actions (i’s actions were blameworthy). We consider this notion a natural, intuitive and empirically relevant way to explain the motives of people engaged in reciprocal behavior. After developing the conceptual framework, we then test this concept in a laboratory experiment involving tournaments and find significant support for the theory.
    Date: 2010–06–27
  12. By: David K Levine; Jie Zheng
    Date: 2010–07–21
  13. By: Jacob Ladenburg (Danish Institute of Governmental Research); Søren Bøye Olsen (Institute of Food and Resource Economics, University of Copenhagen)
    Abstract: Hypothetical bias remains a major problem when valuing non-market goods with stated preference methods. Originally developed for Contingent Valuation studies, Cheap Talk has been found to effectively reduce hypothetical bias in some applications, though empirical results are ambiguous. We discuss reasons why Cheap Talk may fail to effectively remove hypothetical bias, especially in Choice Experiments. In this light, we suggest augmenting Cheap Talk in Choice Experiments with a so-called Opt-Out Reminder. Prior to each single choice set, the Opt-Out Reminder explicitly instructs respondents to choose the opt-out alternative if they find the experimentally designed alternatives too expensive. In an empirical Choice Experiment survey we find the Opt-Out Reminder to significantly reduce total WTP and to some extent also marginal WTP beyond the capability of the Cheap Talk applied without the Opt-Out Reminder. This suggests that rather than merely adopting the Cheap Talk practice directly from Contingent Valuation, it should be adapted to fit the potentially different decision processes and repeated choices structure of the Choice Experiment format. Our results further suggest that augmenting Cheap Talk with a dynamic Opt-Out Reminder can be an effective and promising improvement in the ongoing effort to remedy the particular types of hypothetical bias that potentially continue to invalidate Choice Experiment surveys.
    Keywords: Cheap talk, Opt-Out Reminder, Choice Experiments, hypothetical bias, stream re-establishment, opt-out effect
    JEL: C42 C93 Q24 Q26 Q51
    Date: 2010–07
  14. By: Lindhjem, Henrik; Navrud, Ståle
    Abstract: With the current growth in broadband penetration, Internet is likely to be the data collection mode of choice for stated preference research in the not so distant future. However, little is known about how this survey mode may influence data quality and welfare estimates. In a first controlled field experiment to date as part of a national contingent valuation (CV) survey estimating willingness to pay (WTP) for biodiversity protection plans, we assign two groups sampled from the same panel of respondents either to an Internet or in-person (in-house) interview mode. Our design is better able than previous studies to isolate measurement effects from sample composition effects. We find little evidence of social desirability bias in the in-person interview setting or satisficing (shortcutting the response process) in the Internet survey. The share of “don’t knows”, zeros and protest responses to the WTP question with a payment card is very similar between modes. Equality of mean WTP between samples cannot be rejected. Considering equivalence, we can reject that mean WTP from the in-person sample is more than 30% higher. Results are quite encouraging for the use of Internet in CV as stated preferences do not seem to be significantly different or biased compared to in-person interviews.
    Keywords: Internet; contingent valuation; interviews; survey mode; willingness to pay
    JEL: H41 Q51
    Date: 2010–07–09

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