|
on Experimental Economics |
|
Issue of 2011‒04‒16
fourteen papers chosen by |
| By: | Eskil Ullberg (Interdisciplinary Center for Economic Science, George Mason University); |
| Abstract: | The question of how prices on patents rights should be determined in impersonal exchanges is examined in a laboratory environment. Dynamic gains from such organized trade with public prices are recorded. The experiment introduces a competitive market with impersonal exchange mechanisms and prices in the traditionally hierarchical and personal exchange of patents. A tradable linear contract (fixed fee plus royalty)is investigated with three mechanism designs for demand-side bidding and two levels of presumed legal validity of the underlying patent. A “trader” can split contracts useful for multiple “industries,” creating dynamic gains, potentially increasing the use of technology in the economic system. Previous research on licensing has mostly been limited to one-dimensional auction mechanisms or static environments. The results indicate that agents appear to price the blocking value in the fixed fee and the investment value, net what is paid in fixed, in the royalty component, supporting a proposed theory of prices. Risks are thereby shifted from the invention to the consumer by means of this producer market, increasing the incentives for investment in invention, potentially resulting in a more competitive technology being developed and a more efficient economic system. The results give indications on proper integration of information and rules for mechanisms for organized market on patents with transparent prices. It also shows that intermediaries (traders) are critical to achieve dynamic gains from the system as are high presumed validity of patents. |
| Keywords: | patents, trade, licensing, intellectual property, experiments |
| JEL: | D02 D23 L14 L24 O32 O34 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1017&r=exp |
| By: | Eskil Ullberg (Interdisciplinary Center for Economic Science, George Mason University); |
| Abstract: | The patent system makes organized markets in patents with transparent prices possible. Such prices are here investigated as “signals” for inventors and innovators alike ofv aluable “technology areas”, in an experimental study. They inform decisions of specialized “firms” on allocation of resources for invention given a search space of induced technology values. The traditional hierarchical model of coordinating invention and innovation in a vertically integrated firm is replaced by coordination of these activities among specialized firms through a market with prices. The experimental study builds on a study focusing on price mechanisms with exogenous technology values to a study of an economic environment with “endogenous” technology values. The results suggest that coordination clearly takes place but differs considerably between the institutions and patent validity tested (a 3 x 2 design). As with the price study, demand-side bidding in both dimensions of the linear contract appears to yield the broadest search scope, and thus the best chances for the allocation of resources for invention. Multiple end-states are observed, especially for institutions with less demand-side bidding, indicating imprecise price signals for institutions similar to today’s personal exchange. Coordination with prices appears to increase the dynamic gains of the patent system through price information to reduce or better inform about the risk in investments in new technology. |
| Keywords: | patents, trade, licensing, intellectual property, experiments |
| JEL: | D02 D23 L14 L24 O32 O34 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1018&r=exp |
| By: | Eskil Ullberg (Interdisciplinary Center for Economic Science, George Mason University); |
| Abstract: | We are well familiar with the economic analysis of a patent system in terms of a temporary monopoly on products, benefitting from marginal process inventions, formulated under conditions of certain future demands. This article develops an experimental and dynamic microeconomic model useful for studying the patent system as a trade system, where patented technology is exchanged in organized competitive markets, under uncertain future demands. An economic system design is developed to study transparent prices of patents, dynamic gains from using a patent in multiple industries and the coordination of invention, intermediary and innovation activities using a linear contract on patents (fixed fee plus royalty on revenues). A trader is introduced together with inventor and innovator agents in order to multiply the value (use) of the technology. Three mechanism designs and two levels of presumption of validity of the underlying patent right are proposed. The analysis differs from previous work on patents, trade andeconomics in that the focus is on the competitive pricing of the rights themselves, using demand side bidding. An informal theory is outlined to price the dual values of a patent (investing and blocking). Based on this proposition tentative hypothesis are outlined for two initial experiments using the outlined economic system design.Creation-Date: 2010-04 |
| Keywords: | patents, organized markets, trade, licensing, technology |
| JEL: | D02 D23 L14 L24 O32 O34 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1016&r=exp |
| By: | Douglas Davis; Edward S. Prescott; Oleg Korenok |
| Abstract: | We report results from an experiment that evaluates the consequences of having a socially motivated monitor use the market price of a bank's traded assets to decide whether or not to intervene in the bank's operations. Consistent with predictions of a recent theoretical paper by Bond, Goldstein, and Prescott (2009, "BGP"), we find that a possible value-increasing intervention weakens the informational efficiency of markets and that the monitor commits numerous intervention errors. Not anticipated by BGP, we find that a possible value-decreasing action also affects market performance. Further, in both cases the active monitor undermines allocative efficiency, particularly for market fundamentals close to the efficient intervention cutoff. |
| Keywords: | Financial institutions ; Financial markets |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:11-01&r=exp |
| By: | Cárdenas, Juan-Camilo Cárdenas (Universidad de los Andes); Dreber, Anna Dreber (Institute for Financial Research (SIFR)); von Essen, Emma (Dept. of Economics, Stockholm University); Ranehill, Eva (Stockholm School of Economics) |
| Abstract: | We compare how children aged 9-12 in Colombia and Sweden cooperate in a Prisoner’s Dilemma. We introduce a new measurement device for cooperation that can be easily understood by children. There is some evidence of more cooperation in Sweden than in Colombia. Girls in Colombia are less cooperative than boys, whereas our results indicate the opposite in Sweden. Girls are in general more cooperative with boys than with girls. Relating cooperation to competitiveness, this appears to be task and country dependent. |
| Keywords: | Cooperation; children; gender differences; experiment |
| JEL: | C91 J16 |
| Date: | 2011–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2011_0015&r=exp |
| By: | Dreber, Anna (Institute for Financial Research (SIFR), Stockholm); von Essen, Emma (Dept. of Economics, Stockholm University); Ranehill, Eva (Stockholm School of Economics) |
| Abstract: | We look at gender differences in preferences for altruism, risk and competition in math and word search among adolescents in Sweden. We find that girls are more altruistic and less risk taking than boys. We find no gender gap in performance change when comparing performance under non-competition with performance under competition. Boys and girls are equally likely to choose to compete in word search, but boys are significantly more likely to choose to compete in math. However, this gender gap diminishes and becomes non significant when we control for relative performance beliefs, indicating that some of the gender gap in our sample is not due to competition preferences per se. |
| Keywords: | Competitiveness; risk preferences; altruism; adolescents; gender differences; experiment |
| JEL: | C91 J16 |
| Date: | 2011–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2011_0014&r=exp |
| By: | Ximena Cadena; Antoinette Schoar; Alexandra Cristea; Héber M. Delgado-Medrano |
| Abstract: | In this paper we test whether procrastination and planning problems affect the performance, compensation and work satisfaction among employees. We conducted a randomized controlled experiment with a bank in Colombia to change the frequency and intensity with which employees received reminders about goal achievements. We also provided small in-kind prizes every week to remind employees of their goal achievement. Loan officers in the treatment group showed strong improvements in their goal achievements, better work load distribution, and higher monthly compensation (not including the value of the small prizes). The intervention also improved worker satisfaction and reduced stress levels, without affecting the quality of the loan officers’ portfolios. We show that including branch managers (the supervisors of the loan officers) in the intervention was central in achieving these results, since they played a key role in reinforcing the reminders and helping employees with planning problems. |
| JEL: | G21 J22 J33 L2 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16944&r=exp |
| By: | Lefèbvre, Mathieu (CREPP, Université de Liège); Pestieau, Pierre (CREPP, Université de Liège); Riedl, Arno (Maastricht University); Villeval, Marie Claire (CNRS, GATE) |
| Abstract: | In a series of experiments conducted in Belgium (Wallonia and Flanders), France and the Netherlands, we compare behavior regarding tax evasion and welfare dodging, with and without information about others' behavior. Subjects have to decide between a 'registered' income, the realization of which will be known to the tax authority for sure, and an 'unregistered' income that will only be known with some probability. This unregistered income comes from self-employment in the Tax treatment and from black labor supplementing some unemployment compensation in the Welfare treatment. Subjects have then to decide on whether reporting their income or not, knowing the risk of detection. The results show that (i) individuals evade more in the Welfare treatment than in the Tax treatment; (ii) many subjects choose an option that allows for tax evasion or welfare fraud but report their income honestly anyway; (iii) examples of low compliance tend to increase tax evasion while examples of high compliance exert no influence; (iv) tax evasion is more frequent in France and the Netherlands; Walloons evade taxes less than the Flemish. There is no cross-country difference in welfare dodging. |
| Keywords: | tax evasion, social fraud, social comparisons, cross-country comparisons, experiments |
| JEL: | H26 H31 I38 C91 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5609&r=exp |
| By: | Olga Bogach (Department of Economics, University of Hawaii at Manoa); Andreas Leibbrandt (Department of Economics, University of Chicago) |
| Abstract: | This paper uses an experimental approach to study whether nationality serves as a focal point. We let subjects from Japan, Korea, and China play stag-hunt coordination games in which we vary information about their partner. The results show that subjects are more likely to try to coordinate on the payoff-dominant equilibrium if the only piece of information they have about their partner is that they have the same nationality. However, if subjects receive additional information about their partner, subjects are not more likely to try to coordinate on the payoff dominant equilibrium. We also do not find that subjects are less likely to try to coordinate on the payoff-dominant equilibrium when their partner has a different nationality as compared to when the partner’s nationality is unknown. In addition, we observe that giving subjects information about their partner in general increases the risk of miscoordination. Thus, our findings suggest that nationality can serve as a coordination device but also that the scope of this device is limited. |
| Keywords: | Coordination, Focal points, Cultural economics, Inter-cultural lab experiments, In-group behavior. |
| JEL: | C91 C92 Z1 Z13 |
| Date: | 2011–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201104&r=exp |
| By: | Jeffrey V. Butler (Einaudi Institute for Economics and Finance (EIEF)); Luigi Guiso (European University Institute and EIEF); Tullio Jappelli (University of Naples Federico II, CSEF and CEPR) |
| Abstract: | Using information on a large sample of retail investors and experimental data we find that risk aversion and risk ambiguity are correlated: individuals who dislike risk also dislike ambiguity. We show that what links these traits is the way people handle decisions. Intuitive thinkers are less averse to risk and less averse to ambiguity than individuals who base their decisions on effortful reasoning. We confirm this finding in a series of experiments. One interpretation of our results is that the high-speed of intuitive thinking puts intuitive thinkers at a comparative advantage in situations involving high risk and ambiguity, making them less averse to both. Consistent with this view we show evidence from the field and from the lab that intuitive thinkers perform better than deliberative thinkers when making decisions in highly ambiguous and risky environments. We also find that attitudes toward risk and ambiguity are related to different individual characteristics and wealth. While the wealthy are less averse to risk, they dislike ambiguity more, a finding that has implications for financial puzzles. |
| Keywords: | Risk Aversion, Risk Ambiguity, Decision Theory, Dual Systems, Intuitive Thinking |
| JEL: | D81 D83 |
| Date: | 2011–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:282&r=exp |
| By: | Tremewan, James |
| Abstract: | This paper is an experimental study on the effect of group identity on the formation of coalitions and the resulting distribution of resources. After inducing group identity based on preferences over paintings, subjects play symmetric three-player _divide the dollar_ games with a majority rule decision process. The main finding is that where two players are from one group and one from the other, those in the minority earn significantly less than majority players. This is largely a result of a two-way split between majority players occurring more frequently, either because of the increased salience of this outcome, or a shift in social preferences. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1020&r=exp |
| By: | Kawata, Yukichika |
| Abstract: | Environmental economics postulates the assumption of homo economicus and presumes that externality occurs as a result of the rational economic activities of economic agents. This paper examines this assumption using an experimental economic approach in the context of regime shift, which has been receiving increasing attention. We observe that when externality does not exist, economic agents (subjects of experimemt) act economically rationally, but when externality exists, economic agents avoid the risk of a regime shift that would have negative consequences for others. Our results suggest that environmental economics may have to reconsider the assumption of homo economicus. |
| Keywords: | homo economicus; unboundedly rational economic agents; regime shift; experimental economics |
| JEL: | C90 D64 Q57 |
| Date: | 2011–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30016&r=exp |
| By: | Ralph-C Bayer (School of Economics, University of Adelaide) |
| Abstract: | We investigate experimentally if endogenous partnership formation can improve efficiency in social dilemma situations. Subjects play multiple two-player public goods games, where they can break up with their current partner after every fourth game. Subjects without a partner provide rankings of the available other singles regarding their preferred subject to be matched with. A stable marriage mechanism determines the new matches. We vary the information subjects have when they express their preferences for their future matches and also if staying in a partnership leads to a cost or a bonus. We find that endogenous group formation can increase efficiency. Both the provision of contribution history at the time of re-matching and bonuses for staying in a partnership have positive effects. At least one of the two positive factors has to be present for an efficiency improvement. The presence of both leads to the best results. |
| Keywords: | Social Dilemma, Endogenous Group Formation, Public Goods |
| JEL: | D83 H41 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2011-22&r=exp |
| By: | Henze, B.; Noussair, C.N.; Willems, Bert (Tilburg University, Center for Economic Research) |
| Abstract: | This paper reports the results of an experiment evaluating three regulatory schemes for network infrastructure, in terms of their ability to generate efficient levels of capacity investment. We compare the performance of (1) price cap regulation, (2) a regulatory holiday for new capacity, and (3) price cap regulation with long term contracts combined with a secondary market. We find that the price cap regulation outperforms the regulatory holiday as the latter creates an incentive to underinvest relative to optimal levels. Long term contracts also fail to improve on single price-cap regulation, and can provide more noisy signals about future demand and thus reduce investment. |
| Keywords: | Infrastructure Investment;Experiment;Price Cap;Regulatory Holiday |
| JEL: | C9 L51 L95 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011035&r=exp |