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on Experimental Economics |
| By: | Dirk Engelmann; Alistair Munro; Marieta Valente (NIMA, Universidade do Minho) |
| Abstract: | Ethical goods are increasingly available in markets for conventional goods giving pro-ethically motivated consumers a convenient option to contribute to public goods. In a previous experiment we explored the behavioural relevance of impure public goods in a within-subject setting and observed reduced aggregate pro-social behavior in the presence of impure goods that favor private consumption at the expense of public good provision. In this experiment, we implement a between-subject design to test the behavioural relevance of impure public goods with only a token contribution to a public good cause. From a theoretical perspective, assuming people demand private and public characteristics regardless of how they are provided, we would expect no behavioural relevance of the presence of impure public goods. However, this experiment establishes that pro-social behaviour defined as contributing to a public good, is negatively affected by impure goods with token contributions, in comparison to when they are absent. Furthermore, if the token impure good is mandatory instead of optional the negative effect on pro-social behaviour seems to be offset. The results from this experiment suggest impure public goods are not behaviourally irrelevant, can decrease pro-social behaviour but their optional or mandatory nature can have different behavioural consequences. |
| Keywords: | Experimental Economics, impure public goods, ethical goods, pro-social behaviour, social norms, experimental dictator games |
| JEL: | C91 D64 H41 Q59 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:nim:nimawp:45/2011&r=exp |
| By: | Nejat Anbarci; Nick Feltovich |
| Abstract: | We use a human–subjects experiment to investigate how bargaining outcomes are affected by changes in bargainers’disagreement payoffs. Subjects bargain against changing opponents, with an asymmetric disagreement outcome that varies over plays of the game. Both bargaining parties are informed of both disagreement payoffs (and the cake size) prior to bargaining. We find that bargaining outcomes do vary with the disagreement outcome, but subjects severely under–react to changes in their own disagreement payoff and to changes in the opponent’s disagreement payoff, relative to the risk–neutral prediction. This effect is observed in a standard Nash demand game and a related unstructured bargaining game, and for two different cake sizes varying by a factor of four. We show theoretically that standard models of expected utility maximisation are unable to account for this under–responsiveness – even when risk aversion is introduced. We also show that other–regarding preferences can explain our main results. |
| Keywords: | Nash demand game, unstructured bargaining, disagreement, experiment, risk aversion, social preference, other–regarding behaviour, bargaining power. |
| JEL: | C78 C72 D81 D74 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2011-36&r=exp |
| By: | Nejat Anbarci; Nick Feltovich |
| Abstract: | We use a laboratory experiment to study bargaining in the presence of random arbitration. Two players make simultaneous demands; if compatible, each receives the amount demanded as in the standard Nash demand game. If bargainers’ demands are incompatible, then rather than bargainers receiving their disagreement payoffs with certainty, they receive them only with exogenous probability 1−q. With probability q, there is random arbitration instead, with one bargainer randomly selected to receive his/her demand and the other bargainer receiving the remainder. The bargaining set is asymmetric, with one bargainer favoured over the other. We set disagreement payoffs to zero, and vary q over several values ranging from zero to one. Our main experimental results support the directional predictions of standard game theory (though the success of its point predictions is mixed). In the spirit of typical results for conventional arbitration, we observe a strong chilling effect on bargaining for values of q near one, with extreme demands and low agreement rates in these treatments. For the most part, increases in q reinforce the built-in asymmetry of the game, further benefiting the favoured player at the expense of the unfavoured player. The effects we find are non-uniform in q: over some fairly large ranges, increases in q have minimal effect on bargaining outcomes, but for other values of q, a small additional increase in q leads to sharp changes in results. |
| Keywords: | Nash demand game, random arbitration, chilling effect, equilibrium selection,experiment. |
| JEL: | C78 D74 C72 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2011-35&r=exp |
| By: | Riedl, Arno (Maastricht University); Rohde, Ingrid M.T. (Istanbul Bilgi University); Strobel, Martin (Maastricht University) |
| Abstract: | Existing experimental research on behavior in weakest-link games shows overwhelmingly the inability of people to coordinate on the efficient equilibrium, especially in larger groups. We hypothesize that people are able to coordinate on efficient outcomes, provided they have sufficient freedom to choose their interaction neighborhood. We conduct experiments with medium sized and large groups and show that neighborhood choice indeed leads to coordination on the fully efficient equilibrium, irrespective if group size. This leads to substantial welfare effects. Achieved welfare is between 40 and 60 percent higher in games with neighborhood choice than without neighborhood choice. We identify exclusion as the simple but very effective mechanism underlying this result. In early rounds, high performers exclude low performers who in consequence 'learn' to become high performers. |
| Keywords: | efficient coordination, weakest-link, minimum effort, neighborhood choice, experiment |
| JEL: | C72 C92 D02 D03 D85 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6223&r=exp |
| By: | Cabrales, Antonio; Nagel, Rosemarie; Rodríguez Mora, José V. |
| Abstract: | We perform an experiment which provides a laboratory replica of some important features of the welfare state. In the experiment, all individuals in a group decide whether to make a costly effort, which produces a random (independent) outcome for each one of them. The group members then vote on whether to redistribute the resulting and commonly known total sum of earnings equally amongst themselves. This game has two equilibria, if played once. In one of them, all players make effort and there is little redistribution. In the other one, there is no effort and nothing |
| Keywords: | Redistribution; Political equilibrium; Voting; Multiple equilibria; Experiments; |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ner:carlos:info:hdl:10016/12890&r=exp |
| By: | Eriksson, Stefan (Uppsala University); Rooth, Dan-Olof (Linnaeus University) |
| Abstract: | In this paper, we use unique data from a field experiment in the Swedish labor market to investigate how past and contemporary unemployment affect a young worker's probability of being invited to a job interview. In contrast to studies using registry/survey data, we have complete control over the information available to the employers and there is no scope for unobserved heterogeneity. We find no evidence that recruiting employers use information about past unemployment to sort workers, but some evidence that they use contemporary unemployment to sort workers. The fact that employers do not seem to use past unemployment as a sorting criterion suggests that the scarring effects of unemployment may not be as severe as has been indicated by previous studies. |
| Keywords: | scarring, unemployment, field experiment |
| JEL: | J64 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6235&r=exp |
| By: | Kato, Takao (Colgate University); Shu, Pian (MIT) |
| Abstract: | Using data on team assignment and weekly output for all weavers in an urban Chinese textile firm between April 2003 and March 2004, this paper studies a) how randomly assigned teammates affect an individual worker's behavior under a tournament-style incentive scheme, and b) how such effects interact with exogenously formed social networks in the manufacturing workplace. First, we find that a worker's performance improves when the average ability of her teammates increases. Second, we exploit the exogenous variations in workers' origins in the presence of the well-documented social divide between urban resident workers and rural migrant workers in large urban Chinese firms, and show that the coworker effects are only present if the teammates are of a different origin. In other words, workers do not act on pecuniary incentives to outperform teammates who are from the same social network. Our results point to the important role of group identities in overcoming self-interests and facilitating altruistic behavior. |
| Keywords: | coworker effects in the workplace, social networks, intergroup competition |
| JEL: | M5 J24 L2 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6219&r=exp |
| By: | Lindhjem, Henrik; Navrud, Stale |
| Abstract: | Internet is quickly becoming the survey mode of choice for stated preference (SP) surveys in environmental economics. However, this choice is being made with relatively little consideration of its potential influence on survey results. This paper reviews the theory and emerging evidence of mode effects in the survey methodology and SP literatures, summarizes the findings, and points out implications for Internet SP practice and research. The SP studies that compare Internet with other modes do generally not find substantial difference. The majority of welfare estimates are equal; or somewhat lower for the Internet surveys. Further, there is no clear evidence of substantially lower quality or validity of Internet responses. However, the degree of experimental control is often low in comparative studies across survey modes, and they often confound measurement and sample composition effects. Internet offers a huge potential for experimentation and innovation in SP research, but when used to derive reliable welfare estimates for policy assessment, issues like representation and nonresponse bias for different Internet panels should receive more attention. |
| Keywords: | Internet; survey mode; contingent valuation; stated preferences |
| JEL: | H41 Q51 |
| Date: | 2011–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35633&r=exp |