New Economics Papers
on Experimental Economics
Issue of 2011‒06‒04
eight papers chosen by

  1. More than outcomes: A cognitive dissonance-based explanation of other-regarding behavior By Astrid Matthey; Tobias Regner
  2. Teams or Tournaments? A Field Experiment on Cooperation and Competition in Academic Achievement By M. Bigoni; M. Fort; M. Nardotto; T. Reggiani
  3. Communication, commitment, and deception in social dilemmas: experimental evidence By G. Camera; M. Casari; M. Bigoni
  4. Transparency, Efficiency and the Distribution of Economic Welfare in Pass-Through Investment Trust Games By Thomas A. Rietz; Roman M. Sheremeta; Timothy W. Shields; Vernon L. Smith
  5. Social Influence and Household Decision-Making: A Behavioural Analysis of Housing Demand By Baddeley, M.
  6. Racial Differences in Inequality Aversion: Evidence from Real World Respondents in the Ultimatum Game By John D. Griffin; David Nickerson; Abigail K. Wozniak
  7. Group Decision-Making: An Economic Analysis of Social Influence and Individual Difference in Experimental Juries By Parkinson, S.; Baddeley, M.
  8. Do Natural Disasters Affect Trust/Trustworthiness? Evidence from the 2010 Chilean Earthquake By Fleming, David A; Chong, Alberto E.; Bejarano, Hernan D.

  1. By: Astrid Matthey (Max Planck Institute of Economics, Jena, Germany); Tobias Regner (Max Planck Institute of Economics, Jena, Germany)
    Abstract: Recent research has cast some doubt on the general validity of outcome-based models of social preferences. We develop a model based on cognitive dissonance that focuses on the importance of self-image. An experiment (a dictator game variant) tests the model. First, we find that subjects whose choices involve two psychologically inconsistent cognitions indeed report higher levels of experienced conflict and take more time for their decisions (our proxies for cognitive dissonance). Second, we find support for the main model components. An individual's self-image, the sensitivity to cognitive dissonance, and expected behavior of others have a positive effect on other-regarding behavior.
    Keywords: social preferences, other-regarding behavior, self-image, experiments,,cognitive dissonance, social norms, normative beliefs, expectations
    JEL: C72 C91 D80
    Date: 2011–05–27
  2. By: M. Bigoni; M. Fort; M. Nardotto; T. Reggiani
    Abstract: This paper assesses the effect of two stylized and antithetic non-monetary incentive schemes on students’ effort. We collect data from a field experiment where incentives are exogenously imposed, performance is monitored and individual characteristics are observed. Students are randomly assigned to a tournament scheme that fosters competition between coupled students, a cooperative scheme that promotes information sharing and collaboration between students and a control treatment in which students can neither compete, nor cooperate. In line with theoretical predictions, we find that competition induces higher effort with respect to cooperation and cooperation does not increase effort with respect to the baseline. However, this is true only for men, while women do not seem to react to non-monetary incentives.
    JEL: A22 C93 I20
    Date: 2011–05
  3. By: G. Camera; M. Casari; M. Bigoni
    Abstract: Social norms of cooperation are studied under several forms of communication. In an experiment, strangers could make public statements before playing a prisoner’s dilemma. The interaction was repeated indefinitely, which generated multiple equilibria. Communication could be used as a tool to either signal intentions to coordinate on Pareto-superior outcomes, to deceive others, or to credibly commit to actions. Some forms of communication did not promote the incidence of efficient Nash play, and sometimes reduced it. Surprisingly, cooperation suffered when subjects could publicly commit to actions.
    JEL: C70 C90 D80
    Date: 2011–05
  4. By: Thomas A. Rietz (Henry B. Tippie College of Business, University of Iowa); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University); Timothy W. Shields (Argyros School of Business and Economics, Chapman University); Vernon L. Smith (Economic Science Institute, Chapman University)
    Abstract: We design an experiment to examine welfare and behavior in a multi-level trust game representing a pass through investment in an intermediated market. In a repeated game, an Investor invests via an Intermediary who lends to a Borrower. A pre-experiment one-shot version of the game serves as a baseline and to type each subject. We alter the transparency of exchanges between non-adjacent parties. We find transparency of the exchanges between the investor and intermediary does not significantly affect welfare. However, transparency regarding exchanges between the intermediary and borrower promotes trust on the part of the investor, increasing welfare. Further, this has asymmetric effects: borrowers and intermediaries achieve greater welfare benefits than investors. We discuss implications for what specific aspects of financial market transparency may facilitate more efficiency.
    Keywords: financial intermediation, financial market transparency, pass through securities, multi-level trust games, experiments
    JEL: C72 C91 D72 G14 G21
    Date: 2011
  5. By: Baddeley, M.
    Abstract: Housing markets are subject to many interrelated sources of instability on both a microeconomic and macroeconomic scale. Housing decisions of different individuals will be interdependent, generating non-linearities, discontinuities and feedback effects. This paper focuses in on some behavioural factors that contribute to complexity in housing demand. In particular, the impact of herding and social influence is captured using a model incorporating the impact of social information on willingness to pay. This model is tested in an experimental context and this experimental evidence confirms first, that social information has a statistically significant impact and, second, this impact is determined by a person’s individual characteristics including gender and personality traits.
    JEL: D70 D83 D85 R21
    Date: 2011–01–31
  6. By: John D. Griffin; David Nickerson; Abigail K. Wozniak
    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 unequal divisions. However, we uncover racial differences in the response to pecuniary returns conditional on inequality of the division. This is driven by the lowest income group in our sample, which represents the 10th percentile of the black income distribution. The racial differences are robust across gender and age groups. We also find that blacks are more sensitive to unfair proposals from other blacks.
    JEL: J15
    Date: 2011–05
  7. By: Parkinson, S.; Baddeley, M.
    Abstract: In a jury decision-making, individuals must compromise in order to reach a group consensus. If individuals compromise for non-rational reasons, such as a preference for conformity or due to erroneous information, then the final decision of the group may be biased. This paper presents original experimental data which shows that groups do have a significant tendency to compromise in jury-like settings. Econometric evidence also shows that features of groups, including the generosity of the group overall, will dictate the extent of compromise. The data also reveal that individual traits such as gender and capacity for empathy are associated with the extent of compromise in a jury-type setting. The implications are that interactions between individual and group characteristics limit the objectivity of decision-making.
    JEL: C92 D72 D81
    Date: 2011–03–07
  8. By: Fleming, David A; Chong, Alberto E.; Bejarano, Hernan D.
    Abstract: A series of trust games were conducted in Chile to analyze whether the past 2010 earthquake affected trust and trustworthiness in rural communities. Results show that trust levels are invariant between villages affected by the earthquake and villages not affected by this shock (control group). However, we find statistical evidence that trustworthiness has diminished in areas affected by the earthquake. Results are relevant for policy regarding aid and recovery of communities affected by these types of disasters.
    Keywords: Trust games, natural disasters, trustworthiness, Community/Rural/Urban Development, International Development, C93, O13,
    Date: 2011

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