nep-exp New Economics Papers
on Experimental Economics
Issue of 2014‒09‒25
seven papers chosen by

  1. Strategic signaling or emotional sanctioning? An experimental study of ex post communication in a repeated public goods game By Adam Zylbersztejn
  2. Designing Experiments to Measure Spillover Effects By Sarah Baird; Aislinn Bohren; Berk Ozler; Craig McIntosh
  3. That's how we roll: an experiment on rollover risk By Ciril Bosch-Rosa; ; Melanie;
  4. What is trustworthiness and what drives it? By James C. Cox; Rudolf Kerschbamer; Daniel Neururer
  5. Reciprocity in the labour market: experimental evidence By Annarita COLASANTE; Alberto RUSSO
  6. Measuring the willingness-to-pay for others' consumption: an application to joint decisions of children By Sabrina BRUYNEEL; Laurens CHERCHYE; Sam COSAERT; Bram DE ROCK; Siegfried DEWITTE
  7. Cooperation and Institution in Games By Okada, Akira

  1. By: Adam Zylbersztejn (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: Several experimental studies show that ex post communication promotes generosity in situations where individual incentives contradict with common interest, like the provision of public goods. The root underlying the effect of this institution, especially in a repeated interaction, is nonetheless still obscure. This study provides a novel empirical testbed for two mechanisms by which ex post communication may affect behavior in repeated interactions : one is related to strategic signaling, the other involves emotions induces by others' opinions. The main findings are as follows. First, the presence of ex post communication (conducted through the attribution of costless disapproval points) fosters pro-social behavior and reduces free-riding. Second, I find systematic evidence that subjects tend to use ex post communication as a signaling device, whilst no evidence in favor of the emotion-based hypothesis. A possible interpretation of this phenomenon is that ex post messages are used to announce future sanctions for free-riding.
    Keywords: Public goods game; voluntary contribution mechanism; ex post communication
    Date: 2013–02
  2. By: Sarah Baird (Department of Economics/Institute for International Economic Policy, George Washington University); Aislinn Bohren (University of Pennsylvania); Berk Ozler (World Bank and University of Otago); Craig McIntosh (University of California, San Diego)
    Abstract: This paper formalizes the design of experiments intended speciï¬cally to study spillover effects. . By ï¬rst randomizing the intensity of treatment within clusters and then randomly assigning individual treatment conditional on this cluster-level intensity, a novel set of treatment effects can be identiï¬ed. We develop a formal framework for consistent estimation of these effects, and provide explicit expressions for power. We show that the power to detect average treatment effects declines precisely with the quantity that identiï¬es the novel treatment effects. A demonstration of the technique is provided using a cash transfer program in Malawi.
    Keywords: Experimental Design, Networks, Cash Transfers
    JEL: C93 O22 I25
    Date: 2014–11
  3. By: Ciril Bosch-Rosa; ; Melanie;
    Abstract: There is consensus that the recent nancial crisis revolved around a crash of the short-term credit market. Yet there is no agreement around the necessary policies to prevent another credit freeze. In this experiment we test the eects that contract length (i.e. maturity mismatch) has on the market-wide supply of short-term credit. Our main result is that, while credit markets with shorter maturities are less prone to freezes, the optimal policy should be state-dependent, favoring long contracts and lower maturity mismatch when the economy is in good shape, and allowing for short-term contracts when the economy is in a recession. We also report the possibility of credit runs on rms with strong fundamentals, something that cannot be observed in the canonical static models of nancial panics. Finally, we show that our experimental design produces rich learning dynamics, with a text-book bubble and crash pattern in the market for short-term credit.
    Keywords: Experiment, Financial Crisis, Continuous Time, ABCP
    JEL: C92 C91 G01 G21
    Date: 2014–09
  4. By: James C. Cox; Rudolf Kerschbamer; Daniel Neururer
    Abstract: This paper reports the results of experiments designed to isolate the impact of various combinations of the following motives on trustworthiness: (i) unconditional other-regarding preferences - like altruism, inequality aversion, quasi-maximin, etc.; (ii) deal-responsiveness - reacting to actions that allow for a mutual improvement by adopting behavior that implies a mutual improvement; (iii) gift-responsiveness - reacting to choices that allow the trustee to obtain an improvement by adopting actions that benefit the trustor; and (iv) vulnerability-responsiveness - reacting to the vulnerability of the trustor by adopting actions that do not hurt the trustor. Our results indicate that - besides unconditional other-regarding preferences - vulnerability-responsiveness is an important determinant of trustworthiness even in cases where the vulnerability of the trustor does not come together with a gift to the trustee. Motivated by our empirical findings we provide formal definitions of trust and trustworthiness based on revealed willingness to accept vulnerability and the response to it.
    Keywords: trustworthiness, trust, trust game, investment game, deal-responsiveness, gift-responsiveness, vulnerability-responsiveness, generosity, reciprocity
    JEL: C70 C91 D63 D64
    Date: 2014–09
  5. By: Annarita COLASANTE (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Alberto RUSSO (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)
    Abstract: In this paper we focus on the impact of involuntary unemployment on wage formation using experimental evidence. We use the well-known Gift Exchange Game to analyze players' interaction in a simplified job market. The aim of this paper is twofold: on the one hand, we are interested in analyzing the relation between involuntary unemployment and wages; on the other hand, we aim at understanding whether the interaction between employers and employees could be affected by reciprocity. Our results show that unemployment has a negative impact on wages. Moreover, there is a positive correlation between wage and effort.
    Keywords: Gift Exchange, Reciprocity, Unemployment
    JEL: C91 E24 J28 J30
    Date: 2014–08
  6. By: Sabrina BRUYNEEL; Laurens CHERCHYE; Sam COSAERT; Bram DE ROCK; Siegfried DEWITTE
    Abstract: We propose a method to quantify the willingness-to-pay for the consumption of others in group decisions. Our method is based on revealed preference theory. It measures willingness-to-pay for others' consumption by evaluating positive consumption externalities in monetary terms. Within the framework of cooperative (i.e. Pareto efficient) consumption behavior, we introduce a selfishness parameter that defines a continuum of models that are characterized by varying degrees of consumption externalities. We use our method to analyze decisions made by dyads of children in an experimental consumption setting. We find that children's consumption decisions are systematically characterized by externalities (i.e. non-selfish). But we also observe that there is substantial heterogeneity across children, which we can relate to differences in age, gender and degree of friendship between dyad members.
    Date: 2014–07
  7. By: Okada, Akira
    Abstract: Based on recent developments in non-cooperative coalitional bargaining theory, I review game theoretical analyses of cooperation and institution. The first part presents basic results of the random-proposer model and applies them to the problem of involuntary unemployment in a labor market. Extensions to cooperative games with externality and incomplete information are discussed. The second part considers enforceability of an agreement as an institutional foundation of cooperation. I re-examine the contractarian approach to the problem of cooperation under the view that individuals may voluntarily create an enforcement institution.
    JEL: C71 C72 C78 D02
    Date: 2014–09

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