New Economics Papers
on Experimental Economics
Issue of 2011‒06‒18
seven papers chosen by

  1. Fairness and Cheating By Daniel Houser; Stefan Vetter; Joachim Winter
  2. A Field Study of Social Learning By Arthur Fishman; Uri Gneezy
  3. The coordination value of monetary exchange: Experimental evidence By G. Camera; M. Casari
  4. Accounting for real wealth in heterogeneous-endowment public good games By Nikolaos Georgantzís; Antonios Proestakis
  5. Size matters - when it comes to lies By Gerald Eisenkopf; Ruslan Gurtoviy; Verena Utikal
  6. Reputation and Mechanism Choice in Procurement Auctions – An Experiment By Jeanette Brosig; Timo Heinrich
  7. On the Nature of Reciprocity: Evidence from the Ultimatum Reciprocity Measure By Andreas Nicklisch; Irenaeus Wolff

  1. By: Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Stefan Vetter (University of Munich); Joachim Winter (University of Munich)
    Abstract: We present evidence from a laboratory experiment showing that individuals who believe they were treated unfairly in an interaction with another person are more likely to cheat in a subsequent unrelated game. Specifically, subjects first participated in a dictator game. They then flipped a coin in private and reported the outcome. Subjects could increase their total payoff by cheating, i.e., lying about the outcome of the coin toss. We found that subjects were more likely to cheat in reporting the outcome of the coin flip when: 1) they received either nothing or a very small transfer from the dictator; and 2) they claimed to have been treated unfairly.
    Keywords: cheating, fairness, experimental design
    JEL: C91 D63
    Date: 2011–01
  2. By: Arthur Fishman (Bar-Ilan University); Uri Gneezy (UC San Diego)
    Abstract: We present a field study of social learning. The setting is a pair of adjacent fast food restaurants serving very similar cuisine whose main clientele are the students at a nearby major university. We observed whether an uninformed customer's choice of restaurant depends on the relative queue lengths at the two restaurants. Observations were made at two separate observation periods, the start of the academic year, when a significant proportion of customers had little or no experience with either restaurant, and the middle of the year, when most customers already had previous experience with the restaurants. It is found, consistent with the social learning hypothesis, that relative queue length has a significant effect at the first period but not at the second.
    Date: 2011–05
  3. By: G. Camera; M. Casari
    Abstract: Under what conditions can cooperation be sustained in a network of strangers? Here we study the role of institutions and uncover a new behavioral foundation for the use of monetary systems. In an experiment, anonymous subjects could cooperate or defect in bilateral random encounters. This sequence of encounters was indefinite; hence multiple equilibria were possible, including full intertemporal cooperation supported by a social norm based on community punishment of defectors. We report that such social norm did not emerge. Instead, the availability of intrinsically worthless tokens favored the coordination on intertemporal cooperation in ways that networks of strangers were unable to achieve through social norms.
    JEL: C90 C70 D80
    Date: 2011–05
  4. By: Nikolaos Georgantzís (GLOBE & Department of Economics, University of Granada); Antonios Proestakis (GLOBE & Department of Economics, University of Granada)
    Abstract: Wealth heterogeneity infuences people's behavior in several socioeconomic environments, especially when groups consisting of "unequal" members have to take a collective action which affects all members equally or proportionally. After eliciting real out-of-lab wealth, we form 4-player groups playing an one-shot public good game with heterogeneous laboratory endowments. Endowing subjects according or against their real wealth gives rise to a series of interesting results. Endowment heterogeneity, lack of real relative wealth information and being "rich" both inside and outside the lab raise contributions. Finally, when eliciting subjects' beliefs, we find out that only relatively "poor" subjects expect others to contribute more than what they actually are prepared to do theirselves.
    Keywords: Public goods, experiment, endowment heterogeneity, real wealth
    Date: 2011–06–01
  5. By: Gerald Eisenkopf; Ruslan Gurtoviy; Verena Utikal
    Abstract: A small lie appears trivial but it obviously violates moral commandments. We analyze whether the preference for others’ truth telling is absolute or depends on the size of a lie. In a laboratory experiment we compare punishment for different sizes of lies controlling for the resulting economic harm. We find that people are sensitive to the size of a lie and that this behavioral pattern is driven by honest people. People who lie themselves punish softly in any context.
    Keywords: Lying, norm violation, punishment, experiment
    Date: 2011
  6. By: Jeanette Brosig; Timo Heinrich
    Abstract: We experimentally study the role of reputation in procurement using two common mechanisms: price-based and buyer-determined auctions. While buyers are bound to buy from the lowest bidder in price-based auctions, they can choose between bidders in buyer-determined auctions. Only in the latter buyers can consider the reputation of bidders. We find that bidders supply higher quality in buyer-determined auctions leading to higher market efficiencies in these auctions. Accordingly, buyers prefer the buyer-determined auction over the price-based auction, while only half of the bidders do so. A more detailed analysis of buyers’ and bidders’ behavior and profits provides insights into their mechanism choice.
    Keywords: Buyer-determined and price-based procurement; reputation information; auction choice; experimental economics
    JEL: D44 C91 C72
    Date: 2011–04
  7. By: Andreas Nicklisch; Irenaeus Wolff
    Abstract: We experimentally show that current models of reciprocity are in- complete in a systematic way using a new variant of the ultimatum game that provides second-movers with a marginal-cost-free punish- ment option. For a substantial proportion of the population, the de- gree of rst-mover unkindness determines the severity of punishment actions even when marginal costs are absent. The proportion of these subjects strongly depends on a treatment variation: higher xed costs of punishment lead to harsher responses. The fractions of purely self- ish and inequity-averse participants are small and stable. Among the variety of reciprocity models, only one accommodates (rather than predicts) parts of our ndings. The treatment e ect is unaccounted for. We discuss ways of incorporating our ndings into the existing models.
    Keywords: Distributional fairness, experiments, intention-based fair- ness, reciprocity, ultimatum bargaining
    Date: 2011

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