|
on Experimental Economics |
| By: | Ken-Ichi Shimomura (Research Institute for Economics and Business Administration, Kobe University); Takehiko Yamato (Department of Social Engineering, Graduate School of Decision Science and Technology, Tokyo Institute of Technology) |
| Abstract: | We study market exchange in the laboratory by a multiethnic experiment in Kenya. The subjects of our experiment are of three ethnicities, Kikuyu, Luo, and Kalenjin. Our model contains two types of consumers and two kinds of commodities, and three competitive equilibria exist. The two equilibria with the lowest, and highest relative prices are beneficial for one type of the consumers, and the intermediate price gives an equitable allocation. The tatonnement dynamics however predict that relative prices diverge from the intermediate equilibrium towards the lowest equilibrium or the highest equilibrium depending on initial prices. In order to examine how much effect the ethnicities of subjects have on the equilibrium selection, we conducted manual experiments of pit market trading with different combinations of ethnicities of subjects. Our result shows strong support for the convergence to the intermediate equilibrium when Kalenjin subjects participated, whereas no such data are obtained without them. In addition, the frequencies of transactions with Kalenjin subjects were significantly less than that with the other subjects only, and the less frequent transactions resulted in the more efficient outcomes of the experimental market. |
| Keywords: | Economic Experiment, Kenya, Pit Market, Perfect Competition, Multiple Equilibria |
| JEL: | C92 D51 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2011-10&r=exp |
| By: | Thomas Buser (University of Amsterdam); Noemi Peter (University of Amsterdam) |
| Abstract: | We examine how multitasking affects performance and check whether women are indeed better at multitasking. Subjects in our experiment perform two different tasks according to three treatments: one where they perform the tasks sequentially, one where they are forced to multitask, and one where they can freely organize their work. Subjects who are forced to multitask perform significantly worse than those forced to work sequentially. Surprisingly, subjects who can freely organize their own schedule also perform significantly worse. Finally, our results do not support the stereotype that women are better at multitasking. Women suffer as much as men when forced to multitask and are actually less inclined to multitask when being free to choose. |
| Keywords: | multitasking; productivity; gender; lab experiment |
| JEL: | C91 J16 J24 |
| Date: | 2011–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110044&r=exp |
| By: | von Gaudecker, Hans-Martin (University of Mannheim); van Soest, Arthur (Tilburg University); Wengström, Erik (University of Copenhagen) |
| Abstract: | An ever increasing number of experiments attempts to elicit risk preferences of a population of interest with the aim of calibrating parameters used in economic models. We are concerned with two types of selection effects, which may affect the external validity of standard experiments: Sampling from a narrowly defined population of students ("experimenter-induced selection") and self-selection of participants into the experiment. We find that both types of selection lead to a sample of experts: Participants perform significantly better than the general population, in the sense of fewer violations of revealed preference conditions. Self-selection within a broad population does not seem to matter for average preferences. In contrast, sampling from a student population leads to lower estimates of average risk aversion and loss aversion parameters. Furthermore, it dramatically reduces the amount of heterogeneity in all parameters. |
| Keywords: | risk aversion, loss aversion, internet surveys, laboratory experiments |
| JEL: | C90 D81 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5575&r=exp |
| By: | Fellner, Gerlinde (University of Vienna); Iida, Yoshio (Kyoto Sangyo University); Kröger, Sabine (Université Laval); Seki, Erika (University of Aberdeen) |
| 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. 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, contribute 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: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5556&r=exp |
| By: | Stoop, J.T.R. (Tilburg University) |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-4578462&r=exp |
| By: | Luke Lindsay |
| Abstract: | Many studies have found a gap between willingness-to-pay and willingness-to-accept that is inconsistent with standard theory. There is also evidence that the gap is eroded by experience gained in the laboratory and naturally occurring markets. This paper argues that the gap and the effects of experience are explained by a caution heuristic. This conjecture is tested in a repeated market experiment with symmetric and asymmetric information. The results support the conjecture: people do seem to use heuristics rather than reacting optimally and their behavior adjusts slowly when the environment changes. |
| Keywords: | WTA/WTP disparity, endowment effect, market experience, bounded rationality, asymmetric information |
| JEL: | D4 D81 D82 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:005&r=exp |
| By: | Thomas Buser (University of Amsterdam) |
| Abstract: | We examine whether social preferences are determined by hormones. We do this by investigating whether markers for the strength of prenatal testosterone exposure (finger length ratios) and current exposure to progesterone and oxytocin (the menstrual cycle) are correlated with choices in social preference games. We find that subjects with finger ratios indicating high prenatal testosterone exposure give less in the trust, ultimatum and public good games and return a smaller proportion in the trust game. The choices of female subjects vary over the menstrual cycle according to a pattern consistent with a positive impact of oxytocin on giving in the trust and ultimatum games and a positive impact of progesterone on altruism. We find no impact for subjects taking hormonal contraceptives. We conclude that both prenatal and current exposure to hormones play an important role in shaping social preferences. |
| Keywords: | social preferences; 2D:4D; testosterone; progesterone; oxytocin |
| JEL: | C91 D87 |
| Date: | 2011–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110046&r=exp |
| By: | Menno Middeldorp; Stephanie Rosenkranz |
| Abstract: | Central banks have become increasingly communicative. An important reason is that democratic societies expect more transparency from public institutions. Central bankers, based on empirical research, also believe that sharing information has economic benefits. Communication is seen as a way to improve the predictability of monetary policy, thereby lowering financial market volatility and contributing to a more stable economy. However, a potential side-effect of providing costless public information is that market participants may be less inclined to invest in private information. Theoretical results suggest that this can hamper the ability of markets to predict future monetary policy. We test this in a laboratory asset market. Crowding out of information acquisition does indeed take place, but only where it is most pronounced does the predictive ability of the market deteriorate. Notable features of the experiment include a complex setup based directly on the theoretical model and the calibration of experimental parameters using empirical measurements. |
| Keywords: | Banks and banking, Central ; Monetary policy ; Disclosure of information |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:487&r=exp |
| By: | Griffin, John (University of Notre Dame); Nickerson, David (University of Notre Dame); Wozniak, Abigail (University of Notre Dame) |
| Abstract: | The distinct historical and cultural experiences of American blacks and whites may influence whether members of those groups perceive a particular exchange as fair. We investigate racial differences in fairness standards using preferences for equal treatment in the ultimatum game, where responders choose to allow a proposed division of a monetary amount or to block it. Although previous research has studied group differences in the ultimatum game, no study has been able to examine these across races in America. We use a sample of over 1600 blacks and whites drawn from the universe of registered voters in three states and merged with information on neighborhood income and racial composition. We experimentally vary proposed divisions as well as the implied race of the ultimatum game proposer. We find no overall racial differences in acceptance rates or aversion to inequality. However, we uncover racial differences in ultimatum game behavior on other dimensions. Many of these are driven by the lowest income group in our sample, which represents the 10th percentile of the black income distribution. We also find that blacks are more sensitive to unfair proposals from other blacks. |
| Keywords: | racial differences, inequality aversion, ultimatum game, artefactual experiments |
| JEL: | J15 D63 C72 C91 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5569&r=exp |
| By: | Peter Katuscak |
| Abstract: | Economic theory presumes that individuals respond to true marginal prices when de- ciding on the amount of goods and services they buy and many other economic decisions. However, learning about these marginal prices is often costly in terms of search time, cog- nitive effort or monetary outlays. This is likely to be true of price changes in subscription plans. Consumers may therefore opt to be satisfied with only an approximate knowledge of the relevant marginal prices. This paper presents an experiment that studies repeated consumer purchase and price information updating and acquisition decisions when param- eters of the price schedule are serially correlated but unknown. Subjects have an option to acquire the pricing information at a cost, or otherwise just update their beliefs based on the observation of the total cost of purchase. We find the following: (1) conditional on information acquisition decisions, the model of Bayesian updating provides a good approx- imation for revealed mean beliefs about the per-unit price held by subjects who appear to understand the experiment and/or report their expected cost of purchase accurately; it is not a good approximation for other subjects; (2) the demand for information decreases with the cost of information, as expected; (3) controlling for Bayesian beliefs and cost of information, the demand for information does not vary with the length of the remaining time horizon in which the information can be used, contrary to the theoretical prediction; (4) large positive surprises in the cost of purchase in the most recent period increase infor- mation demand, whereas negative surprises decrease it, relative to the no-surprise baseline, which is contrary to the theoretical prediction. |
| Keywords: | price scheme; complexity; consumer decisions |
| JEL: | D12 D83 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp433&r=exp |