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on Cognitive and Behavioural Economics |
| By: | Giovanna Devetag; Andreas Ortmann |
| Abstract: | Coordination games with Pareto-ranked equilibria have attracted major theoretical attention over the past two decades. Two early path-breaking sets of experimental studies were widely interpreted as suggesting that coordination failure is a common phenomenon in the laboratory. We identify the major determinants that seem to affect the incidence, and/or emergence, of coordination failure in the lab and review critically the existing experimental studies on coordination games with Pareto-ranked equilibria since that early evidence emerged. We conclude that coordination failure is likely to be the exception rather than the rule, both in the lab and outside of it. |
| Keywords: | coordination games, Pareto-ranked equilibria, payoff-asymmetric equilibria, staghunt games, optimization incentives, robustness, coordination, coordination failure |
| JEL: | C72 C92 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:0605&r=cbe |
| By: | John Bone; John D Hey; John Suckling |
| Abstract: | This paper identifies, and tests experimentally, a prediction of Nash Bargaining Theory that may appear counterintuitive. The context is a simple bargaining problem in which two players have to agree a choice from three alternatives. One alternative favours one player and a second favours the other. The third is an apparently reasonable compromise, but is in fact precluded as an agreed choice by the axioms of Nash Bargaining Theory. Experimental results show that agreement on this third alternative occurs rather often. So the axiomatic Nash theory is not well-supported by our evidence. Our subjects' behaviour could be interpreted as the paying of an irrationally (according to the Nash theory) high price in order to reach a compromise agreement. |
| Keywords: | Experiments, Nash Bargaining Theory |
| JEL: | C78 C92 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:06/18&r=cbe |
| By: | Ortona, Guido; Ottone, Stefania; Ponzano, Ferruccio; Scacciati, Francesco |
| Abstract: | The paper illustrates the results of some experiments aiming to test the effect of taxation on the effort. Differently from previous experiments (Levy-Garboua et al., Sutter and Weck-Hannemann, Swenson), in our research the revenue of taxation is not depleted but employed, more realistically, to finance welfare provisions. The result is no more a reduction of effort, as in previous experiments, but a slight increase. This behavior is coherent with a theoretical model suggested by Bird in 2001. |
| JEL: | D31 H23 H53 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucapdv:71&r=cbe |
| By: | John Duffy; Tatiana Kornienko |
| Abstract: | We explore whether natural human competitiveness can be exploited to stimulate charitable giving in a controlled laboratory experiment involving three different treatments of a sequential \"dictator game\". Without disclosing the actual amounts given and kept, in each period players are publicly ranked -- by the amount they give away, by the amount they keep for themselves, or spuriously. Our results are generally supportive of the hypothesis that competitive urges can encourage or frustrate charitable behavior, depending on the competitive frame. We find some support for an alternative hypothesis that relative concerns are due to information-gathering rather than competition. |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:275&r=cbe |
| By: | John Duffy; Jack Ochs |
| Abstract: | We report results from an experiment that examines play in an indefinitely repeated, 2-player Prisoner’s Dilemma game. Each experimental session involves N subjects and a sequence of indefinitely repeated games. The main treatment consists of whether agents are matched in fixed pairings or matched randomly in each indefinitely repeated game. Within the random matching treatment, we vary the information that players have about their opponents. Contrary to a theoretical possibility suggested by Kandori (1992), a cooperative norm does not emerge in the treatments where players are matched randomly. On the other hand, in the fixed pairings treatment, the evidence suggests that a cooperative norm does emerge as players gain more experience. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:274&r=cbe |
| By: | Lise Vesterlund; John Duffy; Jack Ochs |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:267&r=cbe |
| By: | Lise Vesterlund; Laurent Muller; Martin Sefton; Richard Steinberg |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:264&r=cbe |
| By: | Andreas Blume; Andreas Ortmann |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:197&r=cbe |
| By: | John K. Stranlund (Department of Resource Economics, University of Massachusetts Amherst); Yakov Ben-Haim (Mechanical Engineering Technion, Israel Institute of Technology) |
| Abstract: | Conventional wisdom among environmental economists is that the relative slopes of the marginal social benefit and marginal social cost functions determine whether a price-based or quantity-based environmental regulation leads to higher expected social welfare. We revisit the choice between price-based vs. quantity-based environmental regulation under Knightian uncertainty; that is, when uncertainty cannot be modeled with known probability distributions. Under these circumstances, the policy objective cannot be to maximize the expected net benefits of emissions control. Instead, we evaluate an emissions tax and an aggregate abatement standard in terms of maximizing the range of uncertainty under which the welfare loss from error in the estimates of the marginal benefits and costs of emissions control can be limited. The main result of our work is that the same criterion involving the relative slopes of the marginal benefit and cost functions determines whether price-based or quantity-based control is more robust to unstructured uncertainty. Hence, not only does the relative slopes criterion lead to the policy that maximizes the expected net benefits of control under structured uncertainty, it also leads to the policy that maximizes robustness to unstructured uncertainty. |
| Keywords: | emissions control, environmental regulation, info-gap, Knightian uncertainty, robustness, satisficing |
| JEL: | D81 L51 Q58 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:dre:wpaper:2006-1&r=cbe |
| By: | Lise Vesterlund; Bill Harbaugh; Kate Krause |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:268&r=cbe |
| By: | Drew Fudenberg; David K Levine |
| Date: | 2006–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:784828000000000683&r=cbe |
| By: | Vincent P. Crawford |
| Date: | 2006–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:321307000000000462&r=cbe |
| By: | Amelie Constant; Liliya Gataullina; Klaus F. Zimmermann; Laura Zimmermann |
| Abstract: | The paper explores the evolution of ethnic identities of two important and distinct immigrant religious groups. Using data from Germany, a large European country with many immigrants, we study the adaptation processes of Muslims and Christians. Individual data on language, culture, societal interactions, history of migration and ethnic self-identification are used to compose linear measures of the process of cultural adaptation. Two-dimensional variants measure integration, assimilation, separation and marginalization. Christians adapt more easily to the German society than Muslims. Immigrants with schooling in the home country and with older age at entry as well as female Muslims remain stronger attached to the country of origin. Female Muslims integrate and assimilate less and separate more than Muslim men, while there is no difference between male and female Christians. Christians who were young at entry are best integrated or assimilated, exhibiting lower separation and marginalization in the later years, while for Muslims a similar pattern is observed only for assimilation and separation. Christian immigrants with college or higher education in the home country integrate well, but Muslims do not. For both religious groups, school education in the home country leads to slower assimilation and causes more separation than no education at home. While school education has no impact on integration efforts for Muslim, it affects similar attempts of Christians negatively. |
| Keywords: | Ethnicity, ethnic identity, religion, migrant assimilation, migrant integration, ethnic exclusion |
| JEL: | F22 J15 J16 Z10 Z12 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp628&r=cbe |
| By: | Gelkha Buitrago; Werner Güth; M. Vittoria Levati |
| Abstract: | A novel two-person "charity game" is used to experimentally investigate whether anticipation of help crowds out incentives to work, and therefore impulses to help. We distinguish two treatments differing in whether the causes of neediness are verifiable or not. Helping behavior does not vary significantly between treatments, but is positively correlated with dictator giving, suggesting idiosyncratic attitudes to help. Needy subjects are unaffected by anticipated help, but react optimally to chance. |
| Keywords: | Experiments, Helping, Responsibility, Imperfect information |
| JEL: | C72 C92 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:esi:discus:2006-24&r=cbe |
| By: | Dennis Dittrich; Martin Kocher |
| Abstract: | We present an experimental test of a shirking model where monitoring intensity is endogenous and effort a continuous variable. Wage level, monitoring intensity and consequently the desired enforceable effort level are jointly determined by the maximization problem of the firm. As a result, monitoring and pay should be complements. In our experiment, between and within treatment variation is qualitatively in line with the normative predictions of the model under selfishness assumptions. Yet, we also find evidence for reciprocal behavior. The data analysis shows, however, that it does not pay for the employer to rely on the reciprocity of employees. |
| Keywords: | incentive contracts, supervision, efficiency wages, experiment, incomplete contracts, reciprocity |
| JEL: | C91 J31 J41 |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:esi:discus:2006-23&r=cbe |
| By: | Ulrich Witt |
| Abstract: | Evolutionary economics is a paradigm for explaining the transformation of the economy. To achieve its goal, it needs being founded on a proper theory of economic behavior. The paper discusses these foundations. It is argued that the historical malleability of economic behavior is based on the interactions between innate behavior dispositions and adaptation mechanisms on the one hand and the limited, and always selective, cognitive and observational learning that contributes to an ever more extended and differentiated action knowledge. The implications of this interpretation are outlined in an exemplary fashion for the case of the evolution and growth of consumption. Length 29 pages |
| Date: | 2006–10 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2006-13&r=cbe |