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on Experimental Economics |
| By: | Zacharias Maniadis (School of Social Sciences, University of Southampton); Fabio Tufano (School of Economics, University of Nottingham); John A List (School of Economics, University of Chicago) |
| Abstract: | Some researchers have argued that anchoring in economic valuations casts doubt on the assumption of consistent and stable preferences. We present new evidence that questions the robustness of certain anchoring results. We then present a theoretical framework that provides insights into why we should be cautious of initial empirical findings in general. The model importantly highlights that the rate of false positives depends not only on the observed significance level, but also on statistical power, research priors, and the number of scholars exploring the question. Importantly, a few independent replications dramatically increase the chances that a given original finding is true. |
| Keywords: | Anchoring, Methodology, Replication, Willingness to Accept, Experiment |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2013-07&r=exp |
| By: | Aurélie Bonein (CREM UMR CNRS 6211, University of Rennes 1, France); Laurent Denant-Boèmont (CREM UMR CNRS 6211, University of Rennes 1, France) |
| Abstract: | This paper focuses on the relationship between individual self-control and peer pressure. To this end, we implement a laboratory experiment that proceeds in two parts. The first part involves an individual real-effort task in which subjects may commit themselves to achieve a certain level of performance while being tempted by an alternative recreational activity. The second part consists of bargaining in a power-to-take game in which previously earned revenues are at stake. Experimental treatments represent variations in the available information given to peers regarding previous individual behavior. The results show that many subjects commit them-selves strongly and that future revelation of commitment decisions induces subjects to increase the credible components of commitment decisions. Past individual be-haviors also play a role in bargaining behavior: (i) partners who have committed themselves benefit from both lower take and destruction rates, and (ii) partners who have succumbed to temptation suffer from both higher take and destruction rates. |
| Keywords: | Self-control, temptation, commitment, willpower, laboratory experiment, peer pressure |
| JEL: | C91 C92 D63 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201328&r=exp |
| By: | Tuomas Kosonen; Olli Ropponen |
| Abstract: | It is challenging to distinguish the role of information in tax compliance from other factors affecting it. This paper utilizes a novel natural field experiment design to study the issue. In the experiment firms reporting their VAT were sent a letter asking them questions about their attitude towards the tax authority. The introductions to the questions provided candid information about VAT rules for a randomized treatment group, while a randomized control group was only asked questions without additional information. We observe the effects of the treatments directly from firm-level tax records. Providing information did reduce the noncompliance in tax reporting, which indicates that there were unintentional errors. The experimental design also allows us to study whether the difficulty and novelty of the tax code plays any role in tax compliance. The results indicate that tax reporting changes when new and easy information is provided. |
| Keywords: | tax compliance, information, field experiment |
| JEL: | C93 H26 H25 |
| Date: | 2013–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:48&r=exp |
| By: | Brice Corgnet (Argyros School of Business and Economics, Chapman University); Roberto Hernán-González (Universidad de Granada); Eric Schniter (Economic Science Institute, Chapman University) |
| Abstract: | On-the-job leisure is a pervasive feature of the modern workplace. We studied its impact on work performance in a laboratory experiment by either allowing or restricting Internet access. We used a 2×2 experimental design in which subjects completing real-effort work tasks could earn cash according to either individual- or team-production incentive schemes. Under team pay, production levels were significantly lower when Internet browsing was available than when it was not. Under individual pay, however, no differences in production levels were observed between the treatment in which Internet was available and the treatment in which it was not. In line with standard incentive theory, individual pay outperformed team pay across all periods of the experiment when Internet browsing was available. This was not the case, however, when Internet browsing was unavailable. These results demonstrate that the integration of on-the-job leisure activities into an experimental labor design is crucial for uncovering incentive effects. |
| Keywords: | Incentive, Free riding, Internet access, Experimental method |
| JEL: | C92 D23 M52 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:13-22&r=exp |
| By: | Boschini, Anne (Dept. of Economics, Stockholm University); Muren, Astri (Dept. of Economics, Stockholm University); Persson, Mats (Institute for International Economic Studies, Stockholm University) |
| Abstract: | People cooperate more in one-shot interactions than can be explained by standard textbook preferences. We discuss a set of non-standard preferences that can accommodate such behavior. They are social, in the sense of incorporating the payoffs of other persons; they are also norm-based, in the sense of taking into account the behavior of other persons. We show theoretically that, with such preferences, a Nash equilibrium with a strictly positive cooperation rate can exist. We use experimental data on within-subject decisions to show that such preferences are empirically plausible. The data show that, in addition to the well-known types (egoist, altruist, reciprocator), there is an important group: the social egoist. Such individuals care for people who have cooperated, but ignore people who have broken the implicit cooperation norm in society. The social egoists, who turn out to be different from “conditional cooperators”, account for one third of the observations in our experiment. |
| Keywords: | social norms; prisoner’s dilemma; hawk-dove game; egoism; altruism; reciprocity; conditional cooperation |
| JEL: | C91 D03 D64 |
| Date: | 2013–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2013_0014&r=exp |
| By: | Robert Shupp (Department of Agricultural, Food and Resource Economics, Michigan State University); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University); David Schmidt (Federal Trade Commission, Bureau of Economics); James Walker (Indiana University, Department of Economics) |
| Abstract: | Many resource allocation contests have the property that individuals undertake costly actions to appropriate a potentially divisible resource. We design an experiment to compare individuals’ decisions across three resource allocation contests which are isomorphic under riskneutrality. The results indicate that in aggregate the single-prize contest generates lower expenditures than either the proportional-prize or the multi-prize contest. Interestingly, while the aggregate results indicate similar behavior in the proportional-prize and multi-prize contests, individual level analysis indicates that the behavior in the single-prize contest is more similar to the behavior in the multi-prize contest than in the proportional-prize contest. We also elicit preferences toward risk, ambiguity and losses, and find that while such preferences cannot explain individual behavior in the proportional-prize contest, preferences with regard to losses are predictive of behavior in both the single-prize and multiple-prize contests. Therefore, it appears that loss aversion is correlated with behavior in the single-prize and multi-prize contests where losses are likely to occur, but not in the proportional-prize contest where losses are unlikely. |
| Keywords: | contest, rent-seeking, experiments, risk aversion, game theory |
| JEL: | C72 C92 D72 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:13-23&r=exp |
| By: | Jeroen Nieboer (School of Economics, University of Nottingham) |
| Abstract: | Using an experiment with incentivized decisions of groups in the economics laboratory, I investigate the effect of group diversity on group risk taking. I measure econometrically the effects of various aspects of subjects’ diversity: nationality, language, university degree and gender. I find that group decisions, when taken during face-to-face discussions between group members, replicate the pattern of previous studies with the same experimental task in that they lead to significantly higher risk taking by groups as compared to individuals. Furthermore, the only dimension of diversity with an effect on risk taking is gender: risk taking is increasing in the number of male group members. Keywords: experiments, choice under risk, groups, teams, diversity |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2013-06&r=exp |
| By: | Giacomo Degli Antoni (University of Parma, Department of Law) |
| Abstract: | Experimental evidence shows that people tend to be more cooperative with persons belonging to their own group than with others. Strangely enough, this literature largely fails to consider a type of group pervasive in modern societies: colleagues belonging to the same productive organization. This is particularly curious if one considers the importance of cooperation among colleagues for the economic performance of organizations. This paper carries out an original experimental analysis which compares the level of cooperation of social cooperative workers when they are paired with colleagues and with people from the general population. In contrast with the literature on in-group favoritism, we find that workers trust their colleagues less and cooperate less with them than they do with people from the general public, even though, in absolute terms, the level of cooperation is quite high also among colleagues. By analyzing first- and second-order beliefs, we show that the difference in cooperation is partly mediated by expectations concerning the counterpart's behavior, since workers expect their colleagues to be less cooperative than members of the general public. However, the analysis reveals that also other motivations count, such as other-regarding preferences and warm glow. |
| Keywords: | social cooperatives, field experiment, social dilemmas, in-group favoritism, trust, beliefs |
| JEL: | C72 C93 L31 P13 Z13 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ent:wpaper:wp50&r=exp |
| By: | Herbst, Luisa; Konrad, Kai A.; Morath, Florian |
| Abstract: | We study endogenous group formation in tournaments employing experimental three-player contests. We find that players in endogenously formed alliances cope better with the moral hazard problem in groups than players who are forced into an alliance. Also, players who are committed to expending effort above average choose to stand alone. If these players are forced to play in an alliance, they invest even more, whereas their co-players choose lower effort. Anticipation of this exploitation may explain their preference to stand alone. |
| Keywords: | Endogenous group formation; contest; conflict; alliance; experiment; moral hazard problem; free-riding; in-group favoritism |
| JEL: | D72 D74 |
| Date: | 2013–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:419&r=exp |
| By: | Eric Schniter (Economic Science Institute, Chapman University); Roman M. Sheremeta (Department of Economics, Weatherhead School of Management, Case Western Reserve University and the Economic Science Institute); Timothy W. Shields (Argyros School of Business and Economics, Chapman University) |
| Abstract: | Many economic interactions are characterized by “all or nothing” action spaces that may limit a demonstrable index of trust and, therefore, the propensity to reciprocate. In two experimental trust games, the action space governing investments was manipulated to examine the effects on investments and reciprocity. In the continuous game the investor could invest any amount between $0 and $10, while in the binary game the investor could invest either $0 or $10. In both games, the trustee received the tripled investment and then could return any amount back to the investor. Investors invested significantly more in the binary game than in the continuous game. However, higher investments in the binary game did not lead to more reciprocity. To the contrary, conditional on investment of $10, on average trustees returned significantly less in the binary game than in the continuous game. |
| Keywords: | trust game, signaling, demonstrable index of trust, reciprocity, experiments |
| JEL: | C72 C91 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:13-24&r=exp |
| By: | Riedl A.M.; Smeets P.M.A. (GSBE) |
| Abstract: | This paper explores whether social preferences influence portfolio choices of retail investors. We use administrative investor trading records which we link to decisions of the same investors in experiments with real money at stake. We show that social preferences rather than return expectations or risk perceptions are the main driver of investments in socially responsible SRI mutual funds. Social preferences are only associated with investments in SRI funds without tax benefits, but are unrelated to investments in SRI funds with tax incentives. This illustrates that tax incentives change the clientele of mutual funds and that tax incentives crowd out the intrinsic motivations of investors with strong social preferences. Our results also show that prosocial behavior in one domain experiment is correlated with prosocial behavior in another domain investments, which adds to the discussion on the usefulness of experiments in finance. |
| Keywords: | Altruism; Philanthropy; Portfolio Choice; Investment Decisions; Public Goods; |
| JEL: | G11 D64 H41 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013051&r=exp |
| By: | James Alm; Kim M. Bloomquist; Michael McKee |
| Abstract: | In this paper, we argue that individuals are affected in their compliance behavior by the behavior of their “neighbors”, or those about whom they may have information, whom they may know, or with whom they may interact on a regular basis. Individuals seem more likely to file and to report their taxes when they believe that other individuals are also filing and reporting their taxes; conversely, when individuals believe that others are cheating on their taxes, they may well become cheaters themselves. We use experimental methods to test the role of such information about peer effects on compliance behavior. In one setting, we inform individuals about the frequency that their neighbors submit a tax return. In a second setting, we inform them about the number of their neighbors who are audited, together with the penalties that they pay. In both cases, we examine the impact of information on filing behavior and also on subsequent reporting behavior. We find that providing information on whether one’s neighbors are filing returns and/or reporting income has a statistically significant and economically large impact on individual filing and reporting decisions. However, this “neighbor” information does not always improve compliance, depending on the exact content of the information. Key Words: Tax evasion; Tax compliance; Behavioral economics; Experimental economics |
| JEL: | H26 C91 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:13-22&r=exp |
| By: | Riedl A.M.; Wölbert E.M. (GSBE) |
| Abstract: | To accurately predict behavior economists need reliable measures of individual time preferences and attitudes toward risk and typically need to assume stability of these characteristics over time and across decision domains. We test the reliability of two choice tasks for eliciting discount rates, risk aversion, and probability weighting and assess the stability of these characteristics over timeand across situations. We find high reliability and that individual characteristics are remarkably stable over time. The estimated parameters correlate well with self-reported decisions in financial domains, but are largely uncorrelated with decisions in other important life domains involving intertemporal trade-offs and risk. |
| Keywords: | Methodological Issues: General; Design of Experiments: Laboratory, Individual; Behavioral Economics: Underlying Principles; Information, Knowledge, and Uncertainty: General; Intertemporal Choice and Growth: General; |
| JEL: | C18 C91 D03 D80 D90 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013041&r=exp |
| By: | Vieider, Ferdinand M.; Cingl, Lubomír; Martinsson, Peter; Stojic, Hrvoje |
| Abstract: | Prospect theory (PT) is the dominant descriptive theory of decision making under risk today. For the modeling of choices, PT relies on a psychologically founded separation of risk attitudes into attitudes towards outcomes, captured in a value function; and attitudes towards probabilities, captured in a probability weighting function. However, while it is theoretically sound, it is unclear whether this clear separation is reflected in actual choices. To test this, we designed two experiments. In the first experiment, we elicit the value and probability weighting functions both under known and unknown probabilities. The results support PT and show that the value function is unaffected by the nature of the probabilities, which only affects probability weighting. More in general, this finding supports theories that represent ambiguity attitudes through probability transformations rather than utility transformations. In the second experiment, we examine the effects of an increase in stakes on risk attitudes. We find that the stake increase is not reflected in the value function, but rather in the weighting function, thus contradicting PT's prediction. -- |
| Keywords: | prospect theory,value functions,probability weighting,risk attitudes,ambiguity aversion,modeling of preferences |
| JEL: | C91 D03 D81 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbrad:spii2013401&r=exp |
| By: | David Johnson (University of Calgary); John Ryan |
| Abstract: | In this paper, we examine how interrogators can get potential sources to provide information which entails defecting from their group. In our experiment, subjects are faced with an interrogator either using coercive techniques or offering rewards. We argue that coercion and reward affect individuals who are “conditional defectors†differently. These individuals will defect only when they can justify that selfish action as either fair or truth telling. For subjects who possess the information the interrogator desires, these conditional defectors will provide that information in both treatments because they are simply telling the truth. For ignorant subjects, conditional defectors provide bad information under coercion because honestly stating ignorance leads to unequal outcomes. In the reward treatment, truthfully saying “I don’t know†leads to a more equal outcome. This means that interrogators receive more information under coercion, but that information is of lower quality. |
| Keywords: | Group Identity, Punishment, Rewards, Information Gathering |
| JEL: | C91 D03 D02 L38 |
| Date: | 2013–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:clg:wpaper:2013-23&r=exp |
| By: | Grolleau , Gilles G. (LAMETA, UMR 1135 and LESSAC); Sutan, Angela (LESSAC); Vranceanu, Radu (ESSEC Business School and THEMA) |
| Abstract: | We investigate the dynamics of cooperation in public good games when contributions to the public good are immediately redistributed across contributors (intra-temporal transfers) and when contributions to the public good by the current group are transferred over time to a future group (inter-temporal transfers). We show that people are more cooperative in inter-temporal contexts than in intra-temporal contexts. We also find that subjects invest more on average in public goods when they know in advance their inheritance from the past. |
| Keywords: | Public goods; Voluntary contribution mechanism; Inter-temporal vs intra-temporal transfers; Sustainable development |
| JEL: | C72 C92 H41 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-13013&r=exp |
| By: | Christian A. Vossler; Michael McKee |
| Abstract: | As policy makers recognize the complexity of the tax system can result in some “evasion” being due to errors, there has been increasing focus on the role of taxpayer services as a tool in the enforcement regime. Such programs can improve the image of the tax agency but the critical issue is the effect on tax reporting. While the earlier focus has been on tax evasion, tax overreporting is also an issue since it leads to inefficient resource allocation. Thus, the present paper focusses on the effectiveness of taxpayer service programs in enhancing tax reporting. Data are collected on tax reporting decisions via laboratory experiments designed to implement the tax reporting task. To investigate the effects of taxpayer services, we “complicate” these compliance decisions of subjects, and then provide “services” from the “tax administration” that allow subjects to compute more easily their tax liabilities. Briefly, we find that our subjects are less likely to file when tax liability is uncertain but the provision of information offsets this effect; it appears that simply providing the service, even an imperfect service, increases the propensity to file and the accuracy of the filing. Key Words: tax information services; tax reporting; behavioral economics; experimental economics |
| JEL: | H2 H26 C91 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:13-24&r=exp |
| By: | David McEvoy; Michael Jones; Michael McKee; John Talberth |
| Abstract: | Non-industrial private forestland owners (NIPFs) manage the majority of US forestland. But land use conversion is highest amongst this group, in part due to the relative paucity of income earned from active forest management relative to sale of land to developers. Cooperative forest management agreements can help reduce this differential, but participation remains low. If structured well, these agreements can provide opportunities for long term payments from sales of timber and ecosystem services at levels sufficient to reduce the temptation to convert. In this paper we investigate various means of encouraging meaningful participation in cooperative agreements for forests that emphasize conservation. We report on the results obtained through a series of laboratory market experiments in which the participants play the role of NIPFs and make resource allocation decisions facing real financial incentives. Our results shed light on the relative factors that affect the success of these agreements. In particular, we find that when agreements include contribution thresholds (with money back guarantees) coupled with relatively long contract lengths, groups are able to preserve a significant fraction of forested lands through conservation agreements. Key Words: conservation agreement, participation, economic laboratory experiment |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:13-23&r=exp |
| By: | Esterling, Kevin M. (University of CA, Riverside); Fung, Archon (Harvard University); Lee, Taeku (University of CA, Berkeley) |
| Abstract: | This paper evaluates the dynamics of small group persuasion within a large scale randomized deliberative experiment, in particular whether persuasion in this context is driven by the ideological composition of small groups, to which participants were randomly assigned. In these discussions focusing on U.S. fiscal policy, ideological persuasion occurs but does not tend to be polarizing, a result that is inconsistent with the "law" of group polarization identified in small group research. In addition, the results demonstrate the presence of persuasion that is net of ideological considerations, a residual form of preference change that we label "deliberative persuasion." The direction and magnitude of deliberative persuasion are each associated with participants' perceptions of the informativeness of the discussion, but not with the civility or the enjoyableness of the discussion. In addition, informativeness is most closely associated with deliberative persuasion for liberals who come to agree with conservative policies, for conservatives who come to agree with liberal policies, and equally associated for both liberals and conservatives on items that are orthogonal to ideology. The results show that small group dynamics depend heavily on the context in which discussion occurs; that much of the small group experimental work pays little to no attention to this context; and that deliberative institutions are likely to ameliorate many of the pathologies that are often attributed to small group discussion. |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp13-036&r=exp |
| By: | Olivier Bochet; Jeremy Laurent-Lucchetti; Justin Leroux; Bernard Sinclair-Desgagné |
| Abstract: | It is commonly found that uncertainty helps discipline economic agents in strategic contexts. Using a stochastic variant of the Nash Demand Game, we show that the presence of uncertainty may have a dramatically opposite effect. Cautious (efficient) and dangerous (inefficient) equilibria may co-exist regardless of agents’ risk preferences. We report experimental evidence on these predictions. We find that a risk-taking society may emerge from the decentralized actions of risk-averse individuals. Subjects predominantly play symmetric dangerous equilibria, even when all agents are risk averse. An important driver for this result is the pessimistic beliefs of subjects regarding others’ claims. |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:gen:geneem:13101&r=exp |
| By: | Tausch F.; Cettolin E. (GSBE) |
| Abstract: | Risk sharing arrangements diminish individuals vulnerability to probabilistic events that negatively affect their financial situation. This is because risk sharing implies redistribution, as lucky individuals support the unlucky ones. We hypothesize that responsibility for risky choices decreases individuals willingness to share risk by dampening redistribution motives, and investigate this conjecture with a laboratory experiment. Responsibility is created by allowing participants to choose between two different risky lotteries before they decide how much risk they share with a randomly matched partner. Risk sharing is then compared to a treatment where risk exposure is randomly assigned. We find that average risk sharing does not depend on whether individuals can control their risk exposure. However, we observe that when individuals are responsible for their risk exposure, risk sharing decisions are systematically conditioned on the risk exposure of the sharing partner, whereas this is not the case when risk exposure is random. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umagsb:2013045&r=exp |
| By: | Bailey, Michael (Georgetown University); Hopkins, Daniel J. (Georgetown University); Rogers, Todd (Harvard University) |
| Abstract: | Can randomized experiments at the individual level help assess the persuasive effects of campaign tactics? In the contemporary U.S., vote choice is not observable, so one promising research design involves randomizing appeals and then using a survey to measure vote intentions. Here, we analyze one such field experiment conducted during the 2008 presidential election in which 56,000 registered voters were assigned to persuasion in person, by phone, and/or by mail. Persuasive appeals by canvassers had two unintended consequences. First, they reduced responsiveness to the follow-up survey, lowering the response rate sharply among infrequent voters. Second, various statistical methods to address the resulting biases converge on a counterintuitive conclusion: the persuasive canvassing reduced candidate support. Our results allow us to rule out even small effects in the intended direction and illustrate the backlash that attempts at inter-personal persuasion can engender. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp13-034&r=exp |
| By: | David Johnson (University of Calgary); David Cooper |
| Abstract: | Many incentive plans are inherently ambiguous, lacking an explicit mapping between performance and compensation. Using an online labor market, Amazon Mechanical Turk, we study the effect of ambiguity on willingness to accept contracts to do a real-effort task as well as completion and performance of this task. Ambiguity about the relationship between performance and compensation affects the willingness of individuals to accept contracts and the likelihood of quitting before completion, but not performance. These effects are non-monotonic in the level of ambiguity. Information about ability at the task reduces willingness to accept and increases quitting, but does not affect performance. |
| Keywords: | ambiguity, incentives, performance pay, quitting, online experiment |
| JEL: | C99 D81 J33 |
| Date: | 2013–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:clg:wpaper:2013-27&r=exp |
| By: | Lorenzo Moreno; Suzanne Felt-Lisk; Stacy Dale |
| Keywords: | Health, Financial , Electronic, Records, Experiment |
| JEL: | I |
| Date: | 2013–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:7911&r=exp |
| By: | Daniele Nosenzo (School of Economics, University of Nottingham); Simone Quercia (School of Economics, University of Nottingham); Martin Sefton (School of Economics, University of Nottingham) |
| Abstract: | We study the effect of group size on cooperation in voluntary contribution mechanism games. As in previous experiments, we study four- and eight-person groups in high and low marginal per capita return (MPCR) conditions. We find a positive effect of group size in the low MPCR condition, as in previous experiments. However, in the high MPCR condition we observe a negative group size effect. We extend the design to investigate two- and three-person groups in the high MPCR condition, and find that cooperation is highest of all in two-person groups. The findings in the high MPCR condition are consistent with those from n-person prisoner’s dilemma and oligopoly experiments that suggest it is more difficult to sustain cooperation in larger groups. The findings from the low MPCR condition suggest that this effect can be overridden. In particular, when cooperation is low other factors, such as considerations of the social benefits of contributing (which increase with group size), may dominate any negative group size effect. |
| Keywords: | voluntary contribution mechanism, cooperation, group size |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2013-05&r=exp |
| By: | David Johnson (University of Calgary); Brent Davis |
| Abstract: | Within social situations free-riding individuals can be informally punished through social ostracism; ostracized group members are removed from the social aspect of the group but are still formally members. In this study we examine the effectiveness of non-monetary social ostracism as a punishment for low contributions to a public account. Social ostracism may occur in the workplace where workers produce a public good amongst their inputs. Since these workers are all of the same rank, no worker has the ability to punish free riding behavior. Yet, the group as a whole has the ability to punish free-riding group members through various social mechanisms (e.g. name calling, ostracism, etc). We find social ostracism helps maintain cooperation but only after prior experience with a VCM without possible social punishment. |
| Keywords: | Public good, Exclusion, Ostracism, Cooperation |
| JEL: | C92 H41 D23 |
| Date: | 2013–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:clg:wpaper:2013-22&r=exp |
| By: | Abigail Barr (School of Economics, University of Nottingham); Truman Packard (World Bank); Danila Serra (School of Economics, Florida State University) |
| Abstract: | It has been argued that accountability is a public good that only citizens can provide. Governments can put institutions in place that allow citizens to hold public servants to account, but citizens must participate in those institutions if accountability is to be achieved. Thus, citizens face a social dilemma – participate in holding public servants to account at a cost in terms of time and effort or free ride, i.e. do not participate, while benefiting from the efforts of those who do. If this characterization of accountability is valid, we would expect more cooperatively inclined citizens to participate in accountability institutions, while the less cooperatively inclined do not. We test the validity of this characterization by investigating the correlation between individual behavior in a simple public goods game and their participation in local and national accountability institutions in Albania. We study a nationally representative sample of 1800 adults with children in primary school. We find significant correlations between cooperativeness and participation in school accountability institutions and national elections, both at the individual level and the district level. These correlations are robust to the introduction of many controls in the analysis and, in the case of national elections, to the use of official election turn-out statistics in place of self-reported turn-out. |
| Keywords: | accountability; participation; elections; collective action; public good game |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2013-08&r=exp |
| By: | Laurent Denant-Boèmont (CREM UMR CNRS 6211, University of Rennes 1, France); Enrico Diecidue (INSEAD, Fontainebleau, France); Olivier L'Haridon (CREM UMR CNRS 6211 and GREGHEC, University of Rennes 1, France) |
| Abstract: | We present new evidence from the lab on the outcomes resulting from collective and individual decisions over time. We combined static and longitudinal methods to test four conditions on individual and collective time preferences: impatience, stationarity, age independence, and dynamic consistency. The collective decision process was designed to favor coordination through initial communication over voting intentions. Our main results are the following. First, individuals were impatient and deviated from consistent behavior. On the other hand, groups made patient and highly consistent decisions. Our voting mechanism helped the groups to converge and make stable and dynamically consistent decisions. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201329&r=exp |
| By: | Matteo Bassi (Università di Napoli Federico II and CSEF); Marco Pagnozzi (Università di Napoli Federico II and CSEF); Salvatore Piccolo (Università Cattolica delSacro Cuore di Milano and CSEF) |
| Abstract: | Motivated by the recent experimental evidence on altruistic behavior, we study a simple principal-agent model where each player cares about other players’ utility, and may reciprocate their attitude towards him. We show that, relative to the selfish benchmark, efficiency improves when players are altruistic. Nevertheless, in contrast to what may be expected, an increase in the degree of the agent’s altruism as well as a more reciprocal behavior by players has ambiguous effects on efficiency. We also consider the effects of the presence of spiteful players and discuss how monetary transfers between players depend on their degrees of altruism and spitefulness. |
| Keywords: | Adverse selection, altruism, reciprocity, optimal contracting |
| JEL: | D64 D86 |
| Date: | 2013–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:342&r=exp |
| By: | Ke, Changxia; Konrad, Kai A.; Morath, Florian |
| Abstract: | Victorious alliances often fight about the spoils of war. This paper presents an experiment on the determinants of whether alliances break up and fight internally after having defeated a joint enemy. First, if peaceful sharing yields an asymmetric rent distribution, this increases the likelihood of fighting. In turn, anticipation of the higher likelihood of internal fight reduces the alliance’s ability to succeed against the outside enemy. Second, the option to make non-binding declarations on non-aggression in the relationship between alliance members does not make peaceful settlement within the alliance more likely. Third, higher differences in the alliance players’ contributions to alliance effort lead to more internal conflict and more intense fighting. |
| Keywords: | Conflict; Contest; Alliance; Endogenous internal conflict; Hold-up problem; Non-aggression pact; Experiment |
| JEL: | D72 D74 |
| Date: | 2013–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:420&r=exp |