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on Evolutionary Economics |
| By: | Gächter, Simon (University of Nottingham); Nosenzo, Daniele (University of Nottingham); Sefton, Martin (University of Nottingham) |
| Abstract: | We compare social preference and social norm based explanations for peer effects in a three-person gift-exchange game experiment. In the experiment a principal pays a wage to each of two agents, who then make effort choices sequentially. In our baseline treatment we observe that the second agent's effort is influenced by the effort choice of the first agent, even though there are no material spillovers between agents. This peer effect is predicted by a model of distributional social preferences (Fehr-Schmidt, 1999). As we show from a norms-elicitation experiment, it is also consistent with social norms compliance. A conditional logit investigation of the explanatory power of payoff inequality and elicited norms finds that the second agent's effort can be best explained by the social preferences model. In further treatments with modified games we find that the presence/strength of peer effects changes as predicted by the social preferences model. As with the baseline treatment, a conditional logit analysis favors an explanation based on social preferences, rather than social norms following for these treatments. Our results suggest that, in our context, the social preferences model provides a parsimonious explanation for the observed peer effect. |
| Keywords: | peer effects, social influence, gift-exchange, experiment, social preferences, inequity aversion, measuring social norms |
| JEL: | A13 C92 D03 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6345&r=evo |
| By: | Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); Natalia Montinari (Max Planck Institute for Economics); Marco Piovesan (Harvard Business School) |
| Abstract: | Substantial research with adult populations has found that selfish impulses are less likely to be pursued when decisions are publicly observable. To the best of our knowledge, however, this behavioral regularity has not been systematically explored as potential solution to social dilemmas. This paper takes a step in that direction. We report data on the self-control decisions of children aged 6 to 11 who participated in games that require one to resist a selfish impulse for several minutes in order to benefit others. In one condition children make decisions in public view of the group of other participants, while in another they can make decisions either publicly or privately. In both conditions, we allow the group size to vary. We find that children aged 9 and higher are better able to resist selfish impulses in public environments. Younger children, however, display no such effect. Further, we find self-control substantially impacted by group size. When decisions are public, larger groups lead to better self-control, while in the private condition the opposite holds. Our findings suggest that announcing decisions publicly and to large groups may be part of a solution to some social dilemmas. In addition, the fact that public decision-making promotes pro-social behavior only in older children suggests this positive effect may stem from a desire to avoid shame. Length: 28 |
| Keywords: | Experimental Economics |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:gms:wpaper:1034&r=evo |
| By: | Andrweas Leibbrandt (Department of Economics, Monash University, Australia); Abhijit Ramalingam (School of Economics and Centre for Behavioural and Experimental Social Science, and University of East Anglia, Norwich, United Kingdom); Lauri Sääksvuori (Strategic Interaction Group, Max Planck Institute of Economics, Jena, Germany); James M. Walker (Department of Economics and Workshop in Political Theory and Policy Analysis, Indiana University, United States) |
| Abstract: | Abundant evidence suggests that high levels of contributions to public goods can be sustained through self-governed monitoring and sanctions. This experimental study investigates the effectiveness of decentralized sanctioning institutions where punishment opportunities are restricted to agents who are linked through alternative punishment networks. We find that the structure of the punishment network significantly impacts contributions to the public good, but not overall efficiencies. Contributions collapse over decision rounds in groups with limited punishment opportunities, even if the absolute punishment capacity corresponds to the complete punishment network where all agents are allowed to punish each other. However, after allowing for the costs of sanctions, efficiencies are similar across the different networks that allow for punishment and the no-punishment network. |
| Keywords: | public goods experiment, punishment, cooperation, networks |
| JEL: | C92 D01 D03 H41 |
| Date: | 2012–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-004&r=evo |
| By: | Anthony Ziegelmeyer (Max Planck Institute of Economics, Jena); Christoph March (Paris School of Economics); Sebastian Krügel (Max Planck Institute of Economics, Jena, IMPRS "Uncertainty") |
| Abstract: | Weizsäcker (2010) estimates the payoff of actions to test rational expectations and to measure the success of social learning in information cascade experiments. He concludes that participants perform poorly when learning from others and that rational expectations are violated. We show that his estimated payoffs rely on estimates of the publicly known prior and signal qualities which may lead the formulated test of rational expectations to generate false positives. We rely on the true values of the prior and signal qualities to estimate the payoff of actions. We confirm that the rational expectations hypothesis is rejected, but we measure a much larger success of social learning. |
| Keywords: | Information Cascades, Laboratory Experiments, Quantal Response Equilibrium |
| JEL: | C92 D82 |
| Date: | 2012–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-006&r=evo |
| By: | Giuseppe Ciccarone; Enrico Marchetti |
| Abstract: | We add some elements of prospect theory to an analytically tractable version of Lucas’s “islands†model and show that the inclusion of reference dependence, declining sensitivity and loss aversion into the agents’ utility function leads to three main results. First, the equilibrium labor supply and the natural level of output are negatively affected by the presence of behavioral elements, whereas the cyclical response of output to a monetary shock remains unaltered. Second, the expected utility of a representative agent is generally lower than that obtained when loss aversion is absent. Third, the presence of loss aversion eliminates the paradoxical increase in expected utility that may be generated, in the standard model, by an increase in monetary policy uncertainty. |
| Keywords: | Prospect Theory, Behavioral economics, Signal extraction. |
| JEL: | E32 E52 D81 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:sap:wpaper:wp148&r=evo |
| By: | Strasser, Sebastian |
| Date: | 2012–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:dissen:13990&r=evo |