New Economics Papers
on Experimental Economics
Issue of 2013‒10‒05
fourteen papers chosen by

  1. Voice Effects on Attitudes towards an Impartial Decision Maker: Experimental Evidence By Marco Kleine; Pascal Langenbach; Lilia Zhurakhovska
  2. Intuition and Reasoning in Choosing Ambiguous and Risky Lotteries By Ralf Bergheim; Michael W.M. Roos
  3. Directed Giving: Evidence from an Inter-Household Transfer Experiment By Batista, Catia; Silverman, Dan; Yang, Dean
  4. Unstructured Bargaining over an Endogenously Produced Surplus and Fairness Ideals – An Experiment By Andreas Orland; Michael W.M. Roos
  5. I Did it Your Way. An Experimental Investigation of Peer Effects in Investment Choices By Alexia Delfino; Luigi Marengo; Matteo Ploner
  6. Improving Educational Quality through Enhancing Community Participation: Results from a Randomized Field Experiment in Indonesia. By Menno Pradhan; Daniel Suryadarma; Amanda Beatty; Maisy Wong; Arya Gaduh; Armida Alisjahbana; Rima Prama Artha
  7. Pirates in the lab. Using incentivized choice experiments to explore preference for (un)authorized content. By Piotr Ćwiakowski; Marek Giergiczny; Michał Krawczyk
  8. Increasing Organ Donation via Changes in the Default Choice or Allocation Rule By Danyang Li; Zackary Hawley; Kurt Schnier
  9. A technical note on the precise timing of behavioral events in economic experiments By Pandelis Perakakis; José Vicente Guinot; Alfonso Conde; Tarek Jaber-López; Aurora García-Gallego; Nikolaos Georgantzis
  10. Tacit Coordination in Games with Third-Party Externalities By James Bland; Nikos Nikiforakis
  11. Expectations and Monetary Policy: Experimental Evidence By Oleksiy Kryvtsov; Luba Petersen
  12. Country Differences in Ultimatum Wage Bargaining with a Real Task: Evidence from Greece, Spain and the UK By Aurora García-Gallego; Nikolaos Georgantzís; Ainhoa Jaramillo-Gutiérrez
  13. Self-Serving Use of Equity Rules in Bargaining with Asymmetric Outside Options By Hennig-Schmidt, Heike; Irlenbusch, Bernd; Rilke, Rainer Michael; Walkowitz, Gari
  14. Why is online piracy ethically different from theft? A vignette experiment. By Wojciech Hardy; Michał Krawczyk; Joanna Tyrowicz

  1. By: Marco Kleine (Max Planck Institute for Research on Collective Goods, Bonn); Pascal Langenbach (Max Planck Institute for Research on Collective Goods, Bonn); Lilia Zhurakhovska (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: The opportunity to voice one’s opinion about a decision is a fundamental aspect of procedural fairness and applies to a large variety of economic interactions. Voice may influence decision makers, but at the same time it shapes behavior of those who can voice their opinion. We study the latter effect in a laboratory experiment. More precisely, we analyze the impact of voicing one’s opinion in a decision making process on people’s attitude towards an impartial decision maker whose judgment is not biased by any personal stake. The attitude is measured by generosity towards the decision maker in a dictator game that follows the decision making process. We show that voice procedures substantially improve the attitude towards the decision maker: average transfers are 90% higher in voice treatments than in baseline. And importantly, these positive voice effects in terms of higher transfers occur irrespectively of the decision made by the decision maker. Hence, subjects seem to derive utility merely from stating their opinion rather than from influencing the decision in their favor. In that regard, our results are in contrast to previous findings from settings with self-interested decision makers (e.g., principal-agent relationships), in which voice fosters positive reciprocal behavior for favorable outcomes, as well as negative reciprocal behavior for unfavorable outcomes.
    Keywords: fairness, Communication, voice, procedure, impartial decision maker, participative decision making, laboratory experiment
    JEL: D63 K23 D23 K40 C91 D03
    Date: 2013–07
  2. By: Ralf Bergheim; Michael W.M. Roos
    Abstract: This paper focuses on information acquisition and individual decision making in ambiguous situations and presents a novel experimental design which may help to tackle open questions from a fresh perspective. Instead of giving subjects the choice between risky and ambiguous Ellsberg urns, we let them choose between a safe option and a risky lottery, whose risk is a priori unknown to subjects. By acquiring information about the probability distribution of the lottery’s payoffs, subjects can reduce or even eliminate the ambiguity and turn the decision situation into one of risk. Under the assumption that an ambiguity averse subject should reduce ambiguity within a decision process we predicted that these subjects would request more information. Moreover, we investigate whether the relation between attitudes towards risk and ambiguity is linked to intuitive and deliberate thinking. Based on a detailed analysis of subjects’ information acquisition and decision processes we do not find that those subjects showing ambiguity aversion in an urn experiment based on Halevy (2007) significantly reduce the ambiguity more than others. More intuitive subjects acquire less information and are more likely to avoid the risky lottery. Intuition seems to be negatively correlated with risk aversion, but not with ambiguity aversion. Moreover, we find a positive correlation between risk and ambiguity aversion.
    Keywords: Ambiguity aversion; risk aversion; uncertainty; experiment; decision making; binary system of thinking
    JEL: C91 D03 D81
    Date: 2013–09
  3. By: Batista, Catia (Universidade Nova de Lisboa); Silverman, Dan (Arizona State University); Yang, Dean (University of Michigan)
    Abstract: We investigate the determinants of giving in a lab-in-the-field experiment with large stakes. Study participants in urban Mozambique play dictator games where their counterpart is the closest person to them outside their household. Dictators share more with counterparts when they have the option of giving in kind (in the form of goods), compared to giving that must be in cash. Qualitative post-experiment responses suggest that this effect is driven by a desire to control how recipients use gifted resources. Standard economic determinants such as the rate of return to giving and the size of the endowment also affect giving, but the effects of even large changes in these determinants are significantly smaller than the effect of the in-kind option. Our results support theories of giving where the utility of givers depends on the composition (not just the level) of gift-recipient expenditures, and givers thus seek control over transferred resources.
    Keywords: sharing, altruism, giving, dictator game, inter-household transfers, Mozambique
    JEL: C92 C93 D01 D03 D64 O17
    Date: 2013–09
  4. By: Andreas Orland; Michael W.M. Roos
    Abstract: Fairness considerations are important determinants of behavior in unstructured bargaining situations with equal bargaining power. If the surplus over which the bargaining takes place was created by separate, individual efforts, several entitlement-related fairness ideals might be relevant. In our experiment we first elicit subjects’ fairness ideals using a questionnaire. In the following production phase each player generates output by luck, individual effort and talent. We analyze whether the elicited fairness ideals guide subjects’ behavior in the subsequent bargaining in which the joint output is distributed among two individuals. We find that bargaining claims deviate significantly from the elicited fairness ideals and are strongly related to performance if one individual had produced more than the partner. These findings contrast the previous literature on fairness ideals and enrich the findings on self-serving fairness.
    Keywords: Fairness; unstructured bargaining; self-serving fairness; opportunism
    JEL: C91 D39 D63
    Date: 2013–08
  5. By: Alexia Delfino; Luigi Marengo; Matteo Ploner
    Abstract: We experimentally investigate imitation in investment choices and focus on cognitive aspects of decision making. At this aim, we manipulate three main dimensions of choice: time pressure, normative content of social information, and uncertainty of the investment. We document the existence of imitation, with stronger social effects among those who discover to be less cautious than their peers. In line with our hypotheses, a piece of information which is more representative of average group behavior induces stronger imitation. Furthermore, higher time pressure fosters imitation. In contrast to our hypotheses, imitation is weaker for uncertain investments than for risky investments.
    Keywords: Peer effects, Investment Decisions, Bounded Rationality, Experiments
    Date: 2013
  6. By: Menno Pradhan; Daniel Suryadarma; Amanda Beatty; Maisy Wong; Arya Gaduh; Armida Alisjahbana; Rima Prama Artha
    Keywords: Educational Quality, Indonesia, Randomized Field Experiment
    JEL: F Z
    Date: 2013–10–01
  7. By: Piotr Ćwiakowski (Faculty of Economic Sciences, University of Warsaw); Marek Giergiczny (Faculty of Economic Sciences, University of Warsaw); Michał Krawczyk (Faculty of Economic Sciences, University of Warsaw)
    Abstract: We report a laboratory experiment aimed at investigating factors affecting choice between different versions of a full-length movie. In particular, we estimate the willingness to pay for a legal, rather than pirated copy and compare it to the impact of such characteristics as picture quality or delay in delivery. We find a modest but highly significant preference for the authorized version. By conducting otherwise identical choice experiments both with and without actual experiential and monetary consequences, we conclude that the method does not seem to suffer from hypothetical bias. We also find that when the proceeds from legal sale are transferred to a good cause, willingness to pay for the unauthorized copy is reduced.
    Keywords: digital piracy, choice experiments
    JEL: D01 D12 C91
    Date: 2013
  8. By: Danyang Li (Experimental Economics Center and Department of Economics, Georgia State University); Zackary Hawley (Department of Economics, Texas Christian University); Kurt Schnier (Experimental Economics Center and Department of Economics, Georgia State University)
    Abstract: This research utilizes a laboratory experiment to evaluate the effectiveness of alternative public policies targeted at increasing the rate of deceased donor organ donation. The experiment includes treatments across different default choices and organ allocation rules inspired by the donor registration systems applied in different countries. Our results indicate that the opt-out with priority rule system generates the largest increase in organ donation relative to an opt-in only program. However, sizeable gains are achievable using either a priority rule or opt-out program separately, with the opt-out rule generating approximately 80% of the benefits achieved under a priority rule program.
    Keywords: Health, Organ Donation, Laboratory Experiment, Government Policy, Public Health
    JEL: C91 I10 I18
    Date: 2013–03
  9. By: Pandelis Perakakis (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); José Vicente Guinot (Laboratorio de Economía Experimental (LEE), Universitat Jaume I, Castellón, Spain); Alfonso Conde (Laboratorio de Economía Experimental (LEE), Universitat Jaume I, Castellón, Spain); Tarek Jaber-López (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); Aurora García-Gallego (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); Nikolaos Georgantzis (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain)
    Abstract: The increasing use of physiological recordings in experimental economics requires a precise timing of interesting events, such as the presentation of a set of choices, the decision-making moment and the reception of feedback through the display of a decision outcome. In this note we provide a simple, accurate and inexpensive solution based on the use of external photo-sensors that detect changes in light intensity on the participants’ screens occurring in synchrony with experimental events. This system ensures an accurate communication between standard programs broadly used to run behavioral economic experiments, such as z-Tree, and biosignal acquisition systems recording physiological variables, such as skin conductance, heart rate and electroencephalogram. An example is briefly discussed, offering specific guidelines for the application of this methodology in economic contexts with strategic interaction.
    Keywords: Economic experiments, timing of events, psychophysiology, physioeconomics
    JEL: C90 C99 C88 B41
    Date: 2013
  10. By: James Bland (Department of Economics, Purdue University); Nikos Nikiforakis (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: When agents face coordination problems their choices often impose externalities on third parties. We investigate whether such externalities can affect equilibrium selection in a series of one-shot coordination games varying the size and the sign of the externality. We fi?nd that third-party externalities have a limited effect on decisions. A large majority of participants in the experiment are willing to take an action that increases their income slightly, even if doing so causes substantial inequalities and reductions in overall efficiency. Individuals revealed to be other-regarding in a non-strategic allocation task often behave as-if sel?fish when trying to coordinate.
    Keywords: social preferences, efficiency, externalities, tacit coordination, equilibrium selection, efficiency.
    JEL: D63 D01 D62 C90 D03
    Date: 2013–10
  11. By: Oleksiy Kryvtsov (Bank of Canada); Luba Petersen (Simon Fraser University)
    Abstract: The effectiveness of monetary policy depends, to a large extent, on market expectations of its future actions. In a standard New Keynesian business cycle model with rational expectations, systematic monetary policy reduces the variance of inflation and output gap by at least two-thirds. These stabilization benefits can be substantially smaller if expectations are non-rational. We design an economic experiment that identifies the contribution of expectations to macroeconomic stabilization achieved by systematic monetary policy. We find that, despite some non-rational component in expectations formed by experiment participants, monetary policy is quite potent in providing stabilization, reducing roughly a half of macroeconomic variance.te potent in providing stabilization, reducing roughly a half of macroeconomic variance.
    Keywords: Expectations, Monetary Policy, Inflation, Laboratory Experiment, Experimental Macroeconomics
    JEL: C9 D84 E3 E52
    Date: 2013–09
  12. By: Aurora García-Gallego (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); Nikolaos Georgantzís (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); Ainhoa Jaramillo-Gutiérrez (LEE-Department of Economics, Universitat Jaume I-Castellón, ERICES-University of Valencia, Spain)
    Abstract: We study ultimatum bargaining over the wage that should be paid in order to have a subject perform a given real task. Our results are obtained from experiments run in Greece, Spain and the UK. We find significantly higher wage offers and lower acceptance probabilities in the UK than in the other two countries. Interestingly, the combination of these two effects leads to higher wages in the British pool, without reducing market efficiency as compared to Spain and Greece. Country differences in both employer and employee behavior have a clear gender component.
    Keywords: ultimatum bargaining, real task, country differences
    JEL: C91 D03 J16 J31
    Date: 2013
  13. By: Hennig-Schmidt, Heike (University of Bonn); Irlenbusch, Bernd (University of Cologne); Rilke, Rainer Michael (University of Cologne); Walkowitz, Gari (University of Cologne)
    Abstract: We experimentally investigate multiple notions of equity in ultimatum bargaining with asymmetric outside options. Building on the generalized equity principle formulated by Selten (1978), we derive three different equity rules that can explain 43% of all offers. Our within-subject design further allows us to show that proposers use different equity rules and apply them in a self-serving manner. They tend to follow the rules that suggest the highest payoff for them. Responders exhibit a similar pattern of behavior. Combined, these tendencies lead to high inefficiencies due to frequent rejections.
    Keywords: Outside Options, Equity Principle, Ultimatum Game
    JEL: C71 C72 C78 C91 D63
    Date: 2013–09
  14. By: Wojciech Hardy (Faculty of Economic Sciences, University of Warsaw); Michał Krawczyk (Faculty of Economic Sciences, University of Warsaw); Joanna Tyrowicz (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland)
    Abstract: This study employs a vignette experiment to inquire, which features of online “piracy†make it ethically discernible from a traditional theft. This question is pertinent since the social norm concerning traditional theft is starkly different from the evidence on ethical evaluation of online “piracyâ€. We specifically distinguish between contextual features of theft, such as for example the physical loss of an item, breach of protection, availability of alternatives, emotional proximity to the victim of theft, etc. We find that some of these dimensions have more weight in ethical judgment, but there are no clear differences between online and traditional theft which could explain discrepancy in the frequency of commitment.
    Keywords: vignette experiment, illegal downloading, digital piracy, illegal download, downloading behaviour, P2P network
    JEL: A13 C93 D12
    Date: 2013

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