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on Experimental Economics |
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Issue of 2012‒05‒02
eight papers chosen by |
| By: | Joy A. Buchanan (Interdisciplinary Center for Economic Science, George Mason University); Bart J. Wilson (Economic Science Institute, Chapman University) |
| Abstract: | We conduct a laboratory experiment to explore whether the protection of intellectual property (IP) incentivizes people to create non-rivalrous knowledge goods, foregoing the production of other rivalrous goods. In the contrasting treatment with no IP protection, participants are free to resell and remake non-rivalrous knowledge goods originally created by others. We find that creators reap substantial profits when IP is protected and that rampant pirating is not uncommon when there is no IP protection. But most importantly, we find that IP protection in and of itself is neither necessary nor sufficient for generating wealth from the discovery of knowledge goods. |
| Keywords: | intellectual property, experimental economics |
| JEL: | C92 D89 K39 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:12-09&r=exp |
| By: | Marimo, Pricilla; Kaplan, Todd R; Mylne, Ken; Sharpe, Martin |
| Abstract: | Experimental economics methods were used to assess public understanding of information in weather forecasts and test whether the participants were able to make better decisions using the probabilistic information presented in table or bar graph formats than if they are presented with a deterministic forecast. We asked undergraduate students from the University of Exeter to choose the most probable temperature outcome between a set of “lotteries” based on the temperature up to five days ahead. If they choose a true statement, participants were rewarded with a cash reward. Results indicate that on average participants provided with uncertainty information make better decisions than those without. Statistical analysis indicates a possible learning effect as the experiment progressed. Furthermore, participants who were shown the graph with uncertainty information took on average less response time compared to those who were shown a table with uncertainty information. |
| Keywords: | experimental economics; uncertainty; decision making; bar graph; table |
| JEL: | D81 D83 C91 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38287&r=exp |
| By: | Morone, Andrea; Morone, Piergiuseppe |
| Abstract: | In this paper we analyse the empirical performance of several preference functionals using individual and group data. Our investigation aims to address two fundamental questions that have, until now, not been addressed in literature. Specifically, we intend to assess if there exists a risky choice theory that statistically fits group decisions significantly better than alternative theories, and if there are significant differences between individual and group choices. Experimental findings reported in this paper provide answers to both questions showing that when risky choices are undertaken by small groups (dyads in our case), disappointment aversion outperforms several alternative preference functionals, including expected utility. Since expected utility typically emerged as the dominant model in individual risky choices, this finding suggests that differences between individual and group choices exist, showing that the preference aggregation process drives out EU. |
| Keywords: | group decision; expected utility; risk and uncertainty |
| JEL: | D70 D81 C92 C91 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38198&r=exp |
| By: | Andrea Morone (Department of Economics, Universitat Jaume I; Department of Economics, University of Bari); Piergiuseppe Morone (Department of Economics, Universitat Jaume I; Department of Economics, University of Foggia) |
| Abstract: | This paper provides an experimental test of the traveller's dilemma using individual and group data. Our investigation aims to address three fundamental research questions, which can be summarised as follows: (i) claims are affected by the size of the penalty/reward; (ii) individual decisions differ significantly from group decisions; (iii) individual claims are affected by the induction of a focal point a là Schelling. Experimental findings reported in this paper provide answers to each of these questions showing that: (i) although the size of the penalty/reward did not affect subject choices in the first-period, it played a key role in determining subjects' behaviour in the repeated game; (ii) overall, groups behave more rationally, in the sense that they were always closer to the Nash equilibrium; iii) the reference point did not encourage coordination around the Pareto optimal choice.trading.Length: 19 pages |
| Keywords: | traveller's dilemma, focal point, individual and group decision. |
| JEL: | C91 C92 D81 D70 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2012/09&r=exp |
| By: | Gill, David; Prowse, Victoria |
| Abstract: | In this paper we investigate how cognitive ability influences behavior, success and the evolution of play towards Nash equilibrium in repeated strategic interactions. We study behavior in a p-beauty contest experiment and find striking differences according to cognitive ability: more cognitively able subjects choose numbers closer to equilibrium, converge more frequently to equilibrium play and earn more even as behavior approaches the equilibrium prediction. To understand better how subjects with different cognitive abilities learn differently, we estimate a structural model of learning based on level-k reasoning. We find a systematic positive relationship between cognitive ability and levels; furthermore, the average level of more cognitively able subjects responds positively to the cognitive ability of their opponents, while the average level of less cognitively able subjects does not respond at all. Our results suggest that, in strategic environments, higher cognitive ability translates into better analytic reasoning and a better ‘theory of mind’ |
| Keywords: | Cognitive ability; Bounded rationality; Learning; Convergence; Level-k; Nonequilibrium behavior; Beauty contest; Repeated games; Structural modeling; Theory of mind; Intelligence; Raven test |
| JEL: | D83 C73 C91 |
| Date: | 2012–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38317&r=exp |
| By: | Gill, David; Prowse, Victoria |
| Abstract: | In a real effort experiment with repeated competition we find striking differences in how the work effort of men and women responds to previous wins and losses. For women losing per se is detrimental to productivity, but for men a loss impacts negatively on productivity only when the prize at stake is big enough. Responses to luck are more persistent and explain more of the variation in behavior for women, and account for about half of the gender performance gap in our experiment. Our findings shed new light on why women may be less inclined to pursue competition-intensive careers. |
| Keywords: | Real effort experiment; Gender differences; Gender gap; Competition aversion; Tournament; Luck; Win; Loss; Competitive outcomes |
| JEL: | J33 C91 J16 |
| Date: | 2012–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38220&r=exp |
| By: | Michal Bauer (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Julie Chytilová (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Barbara Pertold-Gebicka (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | Other-regarding preferences are important for establishing and maintaining cooperative outcomes. In this paper, we study how formation of other-regarding preferences during childhood is affected by parental background. Our subjects, aged 4-12 years, are classified into other-regarding types based on simple binary choice dictator games. The main finding is that children of parents with low education are more spiteful, more selfish and less altruistic. This link is robust to controlling for a rich set of child characteristics and class fixed effects. The parental effects stand out against the overall development of preferences, as we find children to become less spiteful and more altruistic with increasing age. Our findings, complemented by an analysis of the World Values Survey data, suggest that low socio-economic status affects parental effort invested in instilling other-regarding preferences into children, making them less likely to acquire cooperative types of preferences. |
| Keywords: | other-regarding preferences, altruism, spite, children, family background, field experiment |
| JEL: | C93 D03 D64 I24 |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2012_10&r=exp |
| By: | Damien Besancenot (CEPN - Centre d'Economie de l'Université Paris Nord - Université Paris XIII - Paris Nord - CNRS : UMR7234); Delphine Dubart (ESSEC Business School - ESSEC Business School); Radu Vranceanu (Economics Department - ESSEC Business School) |
| Abstract: | Humans can lie strategically in order to leverage on their negotiation power. For instance, governments can claim that a "scapegoat" third party is responsible for reforms that impose higher costs on citizens, in order to make the pill sweeter. This paper analyzes such communication strategy within a variant of the ultimatum game. The first player gets an endowment, and the second player can impose a tax on it. The former can reject the allocation submitted by the tax-setter. A third party is then allowed to levy its own tax, and its intake is private information to the tax-setter. In a frameless experiment, 65% of the subjects in the tax-setter role overstate the tax levied by the third party in order to manipulate taxpayer's expectations and submit less advantageous offers; on average, for every additional currency unit of lie, measured by the gap between the claimed and the actual tax, they would reduce their offer by 0.43 currency units. |
| Keywords: | Ultimatum game ; Taxation ; Lies ; Deception ; Asymmetric information |
| Date: | 2012–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00690409&r=exp |