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on Experimental Economics |
| By: | Chen, Daniel L.; Schonger, Martin |
| Abstract: | Ambiguity aversion has been used to explain a wide range of phenomena in law and policy: incomplete contracts, stock market volatility, abstention from voting, and why prosecutors offer and defendants accept harsh plea bargains. This paper presents evidence problematizing the experimental basis for ambiguity aversion. Ambiguity aversion is the interpretation of the experimental finding (Ellsberg paradox) that most subjects violate probabilistic sophistication: They prefer betting on events whose probabilities are known (objective) to betting on events whose probabilities are unknown to them (subjective). However in typical experiments these unknown probabilities are known and often determined by the experimenter. Thus the typical Ellsberg experiment is a situation of asymmetric information. People may try to avoid situations where they are the less informed party in an asymmetric situation setting. Indeed doing so is often normatively appropriate. Thus avoidance of situations of informational asymmetry is a potential confound in typical Ellsberg experiments. Paying to avoid information asymmetry in an Ellsberg experiment would constitute the misapplication of a heuristic to the unfamiliar experimental situation. To eliminate this confound, this paper proposes a new source of ambiguity: participant generated ambiguity. Instead of the experimenter filling an Ellsberg urn, the opaque Ellsberg urn is filled by the other subjects in a laboratory session. We find that eliminating asymmetric information while leaving ambiguity in place, makes subjects more than willing to choose the ambiguous bet rather than the objective one. This is despite the fact that choosing the objective bet is costless. These results have fundamental implications for individual decision making and for the empirical predictions of theoretical models incorporating Knightian uncertainty. |
| Keywords: | uncertainty aversion, probabilistic sophistication, sources of ambiguity, Ellsberg paradox |
| JEL: | C91 D81 G11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tse:iastwp:31023&r=exp |
| By: | Broockman, David E. (Stanford University); Kalla, Joshua L. (University of CA, Berkeley); Sekhon, Jasjeet S. (University of CA, Berkeley) |
| Abstract: | Social scientists increasingly wish to use field experiments to test theories. However, common experimental designs for studying the effects of treatments delivered in the field on individuals' attitudes are infeasible for most researchers and vulnerable to bias. We detail an alternative field experiment design exploiting a placebo control and multiple waves of panel surveys delivered online with multiple measures of outcomes. This design can make persuasion field experiments feasible by decreasing costs (often by nearly two orders of magnitude), allows experiments to test additional theories, and facilitates the evaluation of design assumptions. We then report an original application study, a field experiment implementing the design to evaluate a persuasive canvass targeting abortion attitudes. This study estimated a precise zero, suggesting the design can successfully evade social desirability bias. We conclude by discussing potential limitations and extensions. |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3402&r=exp |
| By: | Maria De Paola; Francesca Gioia; Vincenzo Scoppa (Dipartimento di Economia, Statistica e Finanza, Università della Calabria) |
| Abstract: | We investigate whether and how social ties affect performance in teams by implementing a field experiment in which a sample of undergraduate students are randomly assigned to either teams composed by friends or teams composed by individuals not linked by friendship relationships. Students undertake an intermediate exam divided into two parts: one graded on the basis of individual performance and the other graded on the basis of the team performance. We find that students assigned to socially connected teams perform significantly better than control students in both the team part and the individual part of the exam, suggesting that social ties are relevant both for solving free-riding problems and for inducing knowledge spillovers among teammates. The positive effect of friendship in teams persists over time and treated students have a better performance also in a second test evaluated exclusively on the basis of their individual performance. |
| Keywords: | Free-Riding, Knowledge Spillover, Social Ties, Randomized Field Experiment |
| JEL: | J33 J24 D82 D86 L14 C93 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201609&r=exp |
| By: | Zaunbrecher, Henrik (General Economics 1 (Micro)); Riedl, Arno (General Economics 1 (Micro)) |
| Abstract: | Social identity has been shown to successfully enhance cooperation and effort in cooperation and coordination games. Little is known about the causal effect of social identity on the propensity to engage in group conflict. In this paper we explore theoretically and experimentally whether social identity increases investments in group contests. We show theoretically that increased social identity with the own group implies higher investments in Tullock contests. Empirically we find that induced social identity does increase group closeness but does not increase conflict investments. |
| Keywords: | social identity, group, contest, experiment |
| JEL: | C92 D03 D71 D74 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2016024&r=exp |
| By: | Laurent Denant-Boemont (CREM - Centre de Recherche en Economie et Management - UR1 - Université de Rennes 1 - Université de Caen Basse-Normandie - CNRS - Centre National de la Recherche Scientifique); Enrico Diecidue (INSEAD - INSEAD); Olivier L'Haridon (CREM - Centre de Recherche en Economie et Management - UR1 - Université de Rennes 1 - Université de Caen Basse-Normandie - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We present experimental evidence regarding individual and group decisions over time. Static and longitudinal methods are combined to test four conditions on time preferences: impatience, stationarity, age independence, and dynamic consistency. Decision making in groups should favor coordination via communication about voting intentions. We find that individuals are neither patient nor consistent, that groups are both patient and highly consistent, and that information exchange between participants helps groups converge to stable decisions. Finally we provide additional evidence showing that our results are driven by the specific role of groups and not by either repeated choices or individual preferences when choosing for other subjects. |
| Keywords: | Time Preferences,Dynamic Consistency,present-bias,Group Decisions |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01306949&r=exp |
| By: | Giacomo Degli Antoni (University of Parma, Department of Law); Marco Faillo (University of Trento); Lorenzo Sacconi (University of Trento); Pedro Francés-Gomez (University of Granada) |
| Abstract: | Drawing on the theoretical and experimental literature on distributive justice, we put some assumptions of the contractarian argument to an empirical test by means of an experiment which investigates the influence that explicit agreement under the veil of ignorance may have on individuals' conception of justice and its implementation in a context of the production and distribution of a common output. One crucial characteristic of our experiment is that subjects are assigned unequal endowments for which they are not responsible; the assignment is random. At the same time, their work naturally generates unequal levels of earnings. Do the subjects involved in this interaction distinguish between the two types of inequality? Do they try to reduce the arbitrary one, while accepting the one generated through effort? Do they elaborate other distributive criteria? Does their choice ex-ante, when they are behind the veil, differ from their choice ex-post once the veil has been lifted and they know the outcome of the production phase? The main result is that the agreement under a veil of ignorance induces subjects to accept a liberal egalitarian division rule not only in the ex-ante agreement, but also in the actual implementation of the pie division, even if this contradicts their self-interest and some common economic assumptions about reciprocal expectations of rationality. In addition, our results show that deliberating through open discussion increases the level of ex-post compliance. |
| Keywords: | Trust; Distributive justice, social contract, fairness, dictator game, contractarian business ethics |
| JEL: | C72 C91 D02 D63 |
| URL: | http://d.repec.org/n?u=RePEc:ent:wpaper:wp60&r=exp |
| By: | Nobuyuki Hanaki (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Nicolas Jacquemet (PSE - Paris School of Economics); Stéphane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales - Université Paul Cézanne - Aix-Marseille 3 - Université de la Méditerranée - Aix-Marseille 2 - CNRS - Centre National de la Recherche Scientifique); Adam Zylbersztejn (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - UCBL - Université Claude Bernard Lyon 1 - UL2 - Université Lumière - Lyon 2 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - ENS Lyon - École normale supérieure - Lyon) |
| Abstract: | Dominance solvability is one of the most straightforward solution concepts in game theory. It is based on two principles: dominance (according to which players always use their dominant strategy) and iterated dominance (according to which players always act as if others apply the principle of dominance). However, existing experimental evidence questions the empirical accuracy of dominance solvability. In this study, we study the relationships between the key facets of dominance solvability and two cognitive skills, cognitive reection and uid intelligence. We provide evidence that the behaviors in accordance with dominance and one-step iterated dominance are both predicted by one's uid intelligence rather than cognitive reection. Individual cognitive skills, however, only explain a small fraction of the observed failure of dominance solvability. The accuracy of theoretical predictions on strategic decision making thus not only depends on individual cognitive characteristics, but also, perhaps more importantly, on the decision making environment itself. |
| Keywords: | Raven's test,experiment,Dominance solvability,cognitive skills,CRT |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01359231&r=exp |
| By: | Adena, Maja; Huck, Steffen |
| Abstract: | While increasingly popular in many domains crowdfunding remains largely un-derresearched and little is known about the best way to encourage participation. In a field experiment we vary suggested amounts and test different wordings for a campaign to finance a club good - an institute's summer party with free food, drinks, and music. We find that higher suggestions shift the median and the mode of gifts from €5 to €10 at a similar response rate. We also find evidence in favor of a "donation" frame that generates higher income than a "contribution" frame. |
| Keywords: | crowdfunding,field experiment |
| JEL: | C93 D64 D12 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2016308&r=exp |
| By: | Francesco Bogliacino; Laura Jiménez; Daniel Reyes |
| Abstract: | In this work, we test the hypothesis that the Colombian system of socio-economic stratification, which ranks dwellings from one to six to calculate utility (public services) rates, may be discriminatory and increase segregation. A field experiment with around 1000 participants from Bogota is carried out. The design includes a combination of a trust game and a dictator game. Results exclude the presence of pure preferences for discrimination, yet confirm that low strata are associated with stereotypes of low trustworthiness. We also observe significant pro-social behaviour in the low income population, and, most strikingly, we do not observe any difference in trustworthiness according to income level. |
| Keywords: | segregation; discrimination; statistical discrimination; stereotypes; trust |
| JEL: | C93 H24 J15 |
| Date: | 2016–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:col:000178:015112&r=exp |
| By: | Philippe Fauquet-Alekhine; Anne Boucherand |
| Abstract: | Analysis of work activities in nuclear industry has highlighted a new psycho-cognitive phenomenon: the structuring effect of tools (SET) sometimes leading to unexpected operating deviations; the subject is unable to perform a task concerning object A using or adapting a tool designed and presented to perform the same task concerning object B when object A is expected by the subject. Conditions to isolate and identify the SET were determined and reproduced in experiments for further analysis. Students and seven professional categories of adults (N = 77) were involved in three experimental conditions (control group, group with prior warning, group with final control) while individually performing a task with similar characteristics compared to real operating conditions and under moderate time-pressure. The results were: (1) highest performance with prior warning and (2) demonstration that academic and professional training favor the SET. After discussing different cognitive processes potentially related to the SET, we described (3) the psycho-cognitive process underlying the SET: Initial Goal Fixedness (IGF), a combination of the anchoring of the initial goal of the activity with a focus on the features of the initial goal favored by an Einstellung effect. This suggested coping with the negative effect of the SET by impeding the IGF rather than trying to increase the subjects’ awareness at the expense of their health. Extensions to other high-risk industries were discussed. |
| Keywords: | Performance; fixedness; attentional control; flexibility |
| JEL: | R14 J01 |
| Date: | 2015–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:65269&r=exp |
| By: | Nobuyuki Hanaki (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Nicolas Jacquemet (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Stéphane Luchini (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales - Université Paul Cézanne - Aix-Marseille 3 - Université de la Méditerranée - Aix-Marseille 2 - CNRS - Centre National de la Recherche Scientifique); Adam Zylbersztejn (GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | How is one's cognitive ability related to the way one responds to strategic uncertainty? We address this question by conducting a set of experiments in simple 2 × 2 dominance solvable coordination games. Our experiments involve two main treatments: one in which two human subjects interact, and another in which one human subject interacts with a computer program whose behavior is known. By making the behavior of the computer perfectly predictable, the latter treatment eliminates strategic uncertainty. We find that subjects with higher cognitive ability are more sensitive to strategic uncertainty than those with lower cognitive ability. |
| Keywords: | Strategic uncertainty,Bounded rationality,Robot,Experiment |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01261036&r=exp |
| By: | Horton, John J. (New York University); Zeckhauser, Richard J. (Harvard University) |
| Abstract: | Workers respond to the output choices of their peers. What explains this well documented phenomenon of peer effects? Do workers value equity, fear punishment from equity-minded peers, or does output from peers teach them about employers' expectations? We test these alternative explanations in a series of field experiments. We find clear evidence of peer effects, as have others. Workers raise their own output when exposed to high-output peers. They also punish low-output peers, even when that low output has no effect on them. They may be embracing and enforcing the employer's expectations. (Exposure to employer-provided work samples influences output much the same as exposure to peer-provided work.) However, even when employer expectations are clearly stated, workers increase output beyond those expectations when exposed to workers producing above expectations. Overall, the evidence is strongly consistent with the notion that peer effects are mediated by workers' sense of fairness related to relative effort. |
| JEL: | J01 J24 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:16-027&r=exp |
| By: | Beshears, John (Harvard University); Choi, James J. (Yale University); Harris, Christopher (Cambridge University); Laibson, David (Harvard University); Madrian, Brigitte C. (Harvard University); Sakong, Jung (University of Chicago) |
| Abstract: | If individuals have self-control problems, they may take up commitment contracts that restrict their spending. We experimentally investigate how contract design affects the demand for commitment contracts. Each participant divides money between a liquid account, which permits unrestricted withdrawals, and a commitment account with withdrawal restrictions that are randomized across participants. When the two accounts pay the same interest rate, the most illiquid commitment account attracts more money than any of the other commitment accounts. We show theoretically that this pattern is consistent with the presence of sophisticated present-biased agents, who prefer more illiquid commitment accounts even if they are subject to uninsurable marginal utility shocks drawn from a broad class of distributions. When the commitment account pays a higher interest rate than the liquid account, the relationship between illiquidity and deposits is flat, suggesting that agents without present bias and/or naive present biased agents are also present in our sample. |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:15-048&r=exp |
| By: | Tangian, Andranik S. |
| Abstract: | Since voters are often swayed more by the personal image of politicians than by party manifestos, they may cast votes that are in opposition to their policy preferences. This results in the election of representatives who do not correspond exactly to the voters' own views. An alternative voting procedure to avoid this type of election failure is proposed in [Tangian 2016a, Tangian 2016b]. It is based on the approach implemented in internet voting advice applications, like the German Wahl-O-Mat, which asks the user a number of questions on topical policy issues; the computer program, drawing on all the parties' answers, finds for the user the best-matching party, the second-best-matching party, etc. Under the proposed alternative election method, the voters cast no direct votes. Rather, they are asked about their preferences on the policy issues as declared in the party manifestos (Introduce nationwide minimum wage? Yes/No; Introduce a speed limit on the motorways? Yes/No, etc.), which reveals the balance of public opinion on each issue. These embedded referenda measure the degree to which the parties' policies match the preferences of the electorate. The parliament seats are then distributed among the parties in proportion to their indices of popularity (the average percentage of the population represented on all the issues) and universality (frequency in representing a majority). This paper reports on an experimental application of this method during the election of the Karlsruhe Institute of Technology Student Parliament on July 4-8, 2016. The experiment shows that the alternative election method can increase the representativeness of the Student Parliament. We also discuss some traits and bottlenecks of the method that should be taken into account when preparing elections. |
| Keywords: | policy representation,representative democracy,direct democracy,elections,coalitions,theory of voting |
| JEL: | D71 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitwps:93&r=exp |
| By: | Lukas Menkhoff; Sahre Sakha |
| Abstract: | We compare seven established risk elicitation methods and investigate how they robustly explain eleven kinds of risky behavior with 760 individuals. Risk measures are positively correlated; however, their performance in explaining behavior is heterogeneous and, therefore, difficult to assess ex ante. To close this knowledge gap, greater diversification across risk measures is helpful. We do, indeed, find that performance increases considerably if single-item risk measures are combined to form multiple-item risk measures. They tend to improve results the more single-item measures they contain and if these single-item risk measures have different framings. Interestingly, survey items perform as well as incentivized experimental items in explaining risky behavior. |
| Keywords: | Risk, experiments, household survey, testing methods, contexts |
| JEL: | D81 C93 O12 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1608&r=exp |
| By: | M. Caridad Araujo; Mariano Bosch; Norbert Schady |
| Abstract: | Many poor households in developing countries are liquidity-constrained. As a result, they may under-invest in the human capital of their children. We provide new evidence on the long-term (10-year) effects of cash transfers using data from Ecuador. Our analysis is based on two separate sources of data and two identification strategies. First, we extend the results from an experiment that randomly assigned children under the age of 6 years to “early” or “late” treatment groups. Although the early treatment group received twice as much in transfers, we find no difference between children in the two groups on performance on a large number of tests. Second, we use a regression discontinuity design exploiting the fact that a “poverty index” was used to determine eligibility for transfers. We focus on children who were just-eligible and just-ineligible for transfers when they were in late childhood, and compare their school attainment and work status 10 years later. Transfers increased secondary school completion, but the effects are small, between 1 and 2 percentage points from a counterfactual school completion rate of 75 percent. We conclude that any effect of cash transfers on the inter-generational transmission of poverty in Ecuador is likely to be modest. |
| JEL: | I3 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22670&r=exp |
| By: | Krzysztof Kontek; Michael Birnbaum |
| Abstract: | This paper presents the results of two experiments that exhibit monotonicity violations: some lotteries with three equally likely outcomes are valued more than a superior two-outcome lottery, while others are valued less than an inferior two-outcome lottery. Moreover the experimental data provide compelling evidence that lottery valuation strongly depends on the value(s) of the middle outcome(s). This contradicts the claim of Cumulative Prospect Theory (CPT) that middle outcomes are assigned lower weights than the extreme ones. Both effects can be observed in the case of four-outcome lotteries. The patterns are persistent for various payoff schedules, and have been observed for subjects from both Poland and California. Incorporating the median outcome value into any modeling of risky decision-making enables these effects to be explained. This paper demonstrates that a simple weighted Expected Utility - Median model describes data involving two- three-, and four-outcome lotteries more accurately than CPT. Moreover, it offers an alternative explanation of ''overweighting'' of small probabilities, and ''underweighting'' of large ones – phenomena postulated by CPT. |
| Keywords: | decision – making under risk, monotonicity violations, Expected Utility Theory (EUT), Cumulative Prospect Theory, median |
| JEL: | D81 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:sgh:kaewps:2016016&r=exp |
| By: | Alger, Ingela; Weibull, Jörgen |
| Abstract: | Since the publication of Adam Smithís Wealth of Nations, it has been customary among economists to presume that economic agents are purely selfinterested. However, research in experimental and behavioral economics has shown that human motivation is more complex and that observed behavior is often better explained by additional motivational factors such as a concern for fairness, social welfare etc. As a complement to that body of work we have carried out theoretical investigations into the evolutionary foundations of human motivation (Alger and Weibull 2013, 2016). We found that natural selection, in starkly simpliÖed but mathematically well-structured environments, favors preferences that combine self-interest with morality. Roughly speaking, the moral component evaluates oneís own action in terms of what would happen, if, hypothetically, this action were adopted by others. Such moral preferences have important implications for economic behavior. They motivate individuals to contribute to public goods, to give fair o§ers when they could get away with cheap o§ers, and to contribute to social institutions and act in environmentally friendly ways even if their individual impact is negligible. |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:31011&r=exp |
| By: | Alger, Ingela; Weibull, Jörgen |
| Abstract: | Since the publication of Adam Smithís Wealth of Nations, it has been customary among economists to presume that economic agents are purely selfinterested. However, research in experimental and behavioral economics has shown that human motivation is more complex and that observed behavior is often better explained by additional motivational factors such as a concern for fairness, social welfare etc. As a complement to that body of work we have carried out theoretical investigations into the evolutionary foundations of human motivation (Alger and Weibull 2013, 2016). We found that natural selection, in starkly simpliÖed but mathematically well-structured environments, favors preferences that combine self-interest with morality. Roughly speaking, the moral component evaluates oneís own action in terms of what would happen, if, hypothetically, this action were adopted by others. Such moral preferences have important implications for economic behavior. They motivate individuals to contribute to public goods, to give fair o§ers when they could get away with cheap o§ers, and to contribute to social institutions and act in environmentally friendly ways even if their individual impact is negligible. |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:tse:iastwp:31010&r=exp |
| By: | Friedman, Jeffrey A. (Dartmouth College); Lerner, Jennifer S. (Harvard University); Zeckhauser, Richard (Harvard University) |
| Abstract: | National security is one of many fields where public officials offer imprecise probability assessments when evaluating high-stakes decisions. This practice is often justified with arguments about how quantifying subjective judgments would bias analysts and decision makers toward overconfident action. We translate these arguments into testable hypotheses, and evaluate their validity through survey experiments involving national security professionals. Results reveal that when decision makers receive numerals (as opposed to words) for probability assessments, they are less likely to support risky actions and more receptive to gathering additional information, disconfirming the idea of a bias toward action. Yet when respondents generate probabilities themselves, using numbers (as opposed to words) magnifies overconfidence, especially among low-performing assessors. These results hone directions for research among both proponents and skeptics of quantifying probability estimates in national security and other fields. Given that uncertainty surrounds virtually all intelligence reports, military plans, and national security decisions, understanding how national security officials form and interpret probability assessments has wide-ranging implications for theory and practice. |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:16-016&r=exp |
| By: | Athey, Susan (Stanford University); Calvano, Emilio (Bologna University); Jha, Saumitra (Stanford University) |
| Abstract: | We analyze the classic problem of sustaining trust when cheating and leaving trading partners is easy, and outside enforcement is difficult. We construct equilibria where individuals are loyal to smaller groups--communities--that allow repeated interaction. Hierarchies provide incentives for loyalty and allow individuals to trust agents to extent that the agents are actually trustworthy. We contrast these with other plausible institutions for engendering loyalty that require inefficient withholding of trust to support group norms, and are not robust to coalitional deviations. In communities whose members randomly match, we show that social mobility within hierarchies falls as temptations to cheat rise. In communities where individuals can concentrate their trading with pre-selected members, hierarchies where senior members are favored for trade sustain trust even in the presence of proximate nonhierarchical communities. We link these results to the emergence of trust in new market environments and early human societies. |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3467&r=exp |