nep-exp New Economics Papers
on Experimental Economics
Issue of 2011‒02‒05
ten papers chosen by
Daniel Houser
George Mason University

  1. Demand Shocks, Capacity Coordination and Industry Performance: Lessons from Economic Laboratory By Kyle Hampton; Katerina Sherstyuk
  2. To Give or Not To Give? Equity, Efficiency and Altruistic Behavior in a Survey-Based Experiment By Vittorio Pelligra; Luca Stanca
  3. Voluntary Contribution in the Field: An Experiment in the Indian Himalayas By Sujoy Chakravarty; Carine Sebi; E. Somanathan; E. Theophilus
  4. Accountability and the fairness bias in the context of joint production: Effects of bonuses and opportunities By Alice Becker
  5. Distributional Preferences and Competitive Behavior By Loukas Balafoutas; Rudolf Kerschbamer; Matthias Sutter
  6. Estimating risk attitudes in conventional and artefactual lab experiments By Drichoutis, Andreas; Koundouri, Phoebe
  7. Psychological Pressure in Competitive Environments: Evidence from A Randomized Natural Experiment: Comment By Francesco Feri; Alessandro Innocenti; Paolo Pin
  8. The Impact of ICT on Health Promotion: A Randomized Experiment with Diabetic Patients By Ana Balsa; Nestor Gandelman
  9. Carbon Emission Trading Scheme and the Aviation Sector: An experimental analysis on allocation of allowances By Anthony T H Chin; Zhang Peng
  10. Information Technology and Student Achievement: Evidence from a Randomized Experiment in Ecuador By Paul Carrillo; Mercedes Onofa; Juan Ponce

  1. By: Kyle Hampton (University of Alaska, Anchorage, Economics Department); Katerina Sherstyuk (University of Hawaii at Manoa, Economics Department)
    Abstract: Antitrust exemptions granted to businesses under extenuating circumstances are often justified by the argument that they benefit the public by helping producers adjust to otherwise difficult economic circumstances. Such exemptions may allow firms to coordinate their capacities, as was the case of post-September 11, 2001 antitrust immunity granted to Aloha and Hawaiian Airlines. We conduct economic laboratory experiments to determine the effects of explicit capacity coordination on oligopoly firms' abilities to adjust to negative demand shocks and on industry prices. The results suggest that capacity coordination speeds the adjustment process, but also has a clear pro-collusive effect on firm behavior.
    Keywords: economic experiments; demand shocks; capacity coordination; collusion
    JEL: C92 D44 L41
    Date: 2010–12–15
  2. By: Vittorio Pelligra; Luca Stanca
    Abstract: This paper presents the results of a survey-based experiment on the role of equity and efficiency for altruistic behavior. Using simple binary decisions for a representative pool of subjects, we find that both equity and efficiency are relevant for the decision to give. However, contrary to the findings in several laboratory experiments, our results indicate that equity plays a major role for altruistic behavior. Differ- ences in relative payoffs have a significant effect on the decision to give. When giving is not costly, more than half of the subjects prefer equal payoffs to a socially efficient but unequal allocation. When giving is Pareto-improving, half the subjects choose to sacrifice a higher payoff in order to avoid payoff inequality. We also find that preferences, as revealed by experimental choices, are largely consistent with re- ported pro-social activities, while only weakly related to self-reported well-being.
    Keywords: Altruism, Inequality-Aversion, SocialWelfare, Envy, Large-Scale Experiment
    JEL: D63 C78 C91
    Date: 2010–12
  3. By: Sujoy Chakravarty; Carine Sebi; E. Somanathan; E. Theophilus
    Abstract: The public goods problem (Hardin, The Tragedy of the Commons,1968), either viewed as a problem of extraction and optimal use of a resource, or that of shared contributions to the cost of a resource, has had a long history in the social sciences. Our experimental design, using methods in experimental economics, uses a standard Voluntary Contributions Mechanism (VCM) game with a moderately large group of ten and face-to-face communication between the participants. The subjects, who are villagers in the Gori-Ganga Basin of the Central Himalayas, are not re-matched every period. Our results are somewhat different from laboratory experiments using a similar design such as Isaac and Walker (1988a, 1988b). [Occasional paper 29].
    Keywords: communication, participants, VCM, economics, public goods problems, INDIAN HIMALAYAS, villagers, resource, gori-ganga, social sciences
    Date: 2011
  4. By: Alice Becker (Max Planck Institute of Economics, Jena)
    Abstract: According to the accountability principle a person's fair allocation takes into account the input-relevant variables she can influence, like effort, but not the variables she cannot influence, like a randomly assigned exogenous factor. This study is based on a real effort-task experiment, where the exogenous influence is twofold: it comes either as a production factor or as a bonus. We confirm that in a base treatment, i.e in absence of exogenous factors, subjects base their allocation decisions largely on effort. When exogenous differences are present behavior changes. Whereas bonuses are largely ignored and subjects still mostly base their decisions on effort, production factors render allocations more selfish. Furthermore, we study whether accountability holds for decisions over opportunities. We apply the so-called lottery-points-method, where a binary lottery in the last experimental stage allocates the whole amount to one of the workers. We find that subjects claim more for themselves when allocating opportunities in all treatments.
    Keywords: Distributive justice, real effort task, procedural fairness
    JEL: C72 C92
    Date: 2011–01–27
  5. By: Loukas Balafoutas; Rudolf Kerschbamer; Matthias Sutter
    Abstract: We study experimentally the relationship between distributional preferences and competitive behavior. We find that spiteful subjects react strongest to competitive pressure and win in a tournament significantly more often than efficiency-minded and inequality averse subjects. However, when given the choice between a tournament and a piece rate scheme, efficiency-minded subjects choose the tournament most often, while spiteful and inequality averse subjects avoid it. When controlling for distributional preferences, risk attitudes and past performance, the gender gap in the willingness to compete is no longer significant, indicating that gender-related variables explain why twice as many men as women self-select into competition.
    Keywords: Competition, distributional preferences, gender gap
    JEL: C91
    Date: 2011–04
  6. By: Drichoutis, Andreas; Koundouri, Phoebe
    Abstract: We elicit and compare risk preferences from student subjects and subjects drawn from the general population, using the multiple price list method devised by Holt and and Laury (2002). We find evidence suggesting that students have lower relative risk aversion than others.
    Keywords: Risk aversion; CRRA; expo-power; multiple price list
    JEL: D81 D01 C91
    Date: 2011–01
  7. By: Francesco Feri; Alessandro Innocenti; Paolo Pin
    Abstract: In contrast with Apesteguia and Palacios{Huerta (2009), we provide laboratory evidence that strictly competitive environments are characterized by a second-mover advantage. This finding is obtained in a setting, a free-throw shooting competition among pairs of professional basket players, which overcomes the major limitations of Apesteguia and Palacios-Huerta's randomized natural experiment.
    Keywords: second-mover advantage, competitive environments, psychological pressure, experiment.
    JEL: C93
    Date: 2011–03
  8. By: Ana Balsa; Nestor Gandelman
    Abstract: This paper summarizes randomized experiment to study the effects of an Internetbased intervention on type 2 diabetes patients in Montevideo, Uruguay. The intervention consisted of a specially designed website and an electronic social network where participants were able to navigate freely, download materials, and interact with other diabetics and with specialists. No significant impact was found on participants` knowledge, behavior, or health outcomes. It was also found that only a minority of patients logged on to the website, and most were only reached by email and mobile text (SMS). Participation in the website is correlated with patients` characteristics, such as gender, marital status, and education.
    Keywords: Randomized trial, Diabetes, Public health, Uruguay
    JEL: C93 I1 O31
    Date: 2010–12
  9. By: Anthony T H Chin (Department of Economics, National University of Singapore); Zhang Peng (Department of Economics, National University of Singapore)
    Abstract: The European Union has proposed a Directive to include aviation activities in the Emission Trading Scheme (ETS) in 2012. The allowance allocation method which will be put in place is relatively easy to implement with low administration cost. However, careful scrutiny suggests that the allocation method does not favor airlines with high energy efficiency. This study proposes an alternative allowance allocation method which is fairer in that it rewards energy efficient airlines. Further, the new method is easy to implement with low administrative cost. The Cournot model serves as the theoretical foundation upon which the experiments are designed to simulate the aviation industry under the ETS. The equilibrium is calculated for each allowance allocation method. Results from experiments suggest consistency with theoretical outcomes.
    Date: 2011–01
  10. By: Paul Carrillo; Mercedes Onofa; Juan Ponce
    Abstract: This paper studies the effects of information and communication technologies (ICT) in the school environment on educational achievement. To quantify these effects, the impact is evaluated of a project run by the municipality of Guayaquil, Ecuador, which provides computer-aided instruction in mathematics and language to students in primary schools. Using an experimental design, it is found that the program had a positive impact on mathematics test scores (about 0.30 of a standard deviation) and a negative but statistically insignificant effect on language test scores. The impact is heterogeneous and is much larger for those students at the top of the achievement distribution.
    Keywords: Information and communications technology, Education, Experimental design, Ecuador
    JEL: C93 I21
    Date: 2011–01

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