|
on Experimental Economics |
| By: | David L. Dickinson |
| Abstract: | The author conducts experiments examining fairness preferences (Andreoni and Miller, 2002) and compares cash versus extra credit points as the reward medium. Additionally, he explores the role that classroom experiment timing—over the course of a semester—can have on outcomes. The results show that subjects are just as rational, if not more so, when the motivation is class points rather than cash. Also, preference classifications show that subjects are significantly more likely to be Selfish (and less likely to be Utilitarian) when the experiment is conducted early in the academic semester. One possible explanation is that is that the ultimate value of an extra credit point is more uncertain early in the semester, thus leading risk-averse students to make more selfish experiment allocations. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:06-12&r=exp |
| By: | Olivier Armantier; Nicolas Treich |
| Abstract: | We conduct an experiment to test whether probability misperception may be a possible alternative to risk aversion to explain overbidding in independent first-price private-values auctions. The experimental outcomes indicate that subjects underestimate their probability of winning the auction, and indeed overbid. Yet, when provided with feed-back on the precision of their predictions, subjects learn first to predict their probability of winning correctly, and second to curb-down significantly overbidding. The structural estimation of different behavioral models suggests that i) subjects are heterogenous with respect to risk preferences and probability perceptions, ii) subjects tend to best-respond to their stated beliefs, and iii) although necessary to explain fully behavior, risk aversion appears to play a lesser role than previously believed. Finally, our experimental findings are shown to be consistent with a standard theoretical auction model combining risk aversion and misperception of probabilities. <P>Nous menons une expérience pour évaluer si le fait qu'un sujet évalue mal ses probabilités de gagner peut être une hypothèse alternative à l’aversion au risque pour expliquer les surenchères lors d'enchères indépendantes privées au premier prix. Les résultats expérimentaux montrent, en effet, que les sujets sous-estiment leurs probabilités de gagner l'enchère et ont tendance à surenchérir. Cependant, lorsqu'on leur présente plus de précisions sur leurs prédictions, les sujets apprennent d'abord à prédire correctement leurs probabilités de gagner, puis à limiter considérablement la surenchère. L'estimation de différents modèles du comportement suggère que i) les sujets sont hétérogènes par rapport à leurs préférences du risque et leurs perceptions des probabilités, ii) les sujets choisissent leur meilleure réponse conditionnellement aux croyances qu’ils révèlent, et iii) bien que nécessaire pour expliquer pleinement le comportement des sujets, l'aversion au risque semble jouer un rôle moins important que prévu. Finalement, nos résultats expérimentaux sont consistants avec un modèle théorique d'enchères standard qui combine l'aversion au risque et la mauvaise perception des probabilités. |
| Keywords: | auctions, misperception of probabilities, overbidding, risk-aversion, aversion au risque, enchères, mauvaise perception des probabilités, surenchère |
| JEL: | C70 C92 D44 D81 |
| Date: | 2006–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2006s-15&r=exp |
| By: | Olivier Armantier |
| Abstract: | The influence of relative wealth on fairness considerations is analyzed in an ultimatum game experiment in which participants receive large and widely unequal initial endowments. Subjects initially demonstrate a concern for fairness. With time however, behavior becomes at odds with both subgame perfection and fairness. Evidence of learning is detected for both proposers and receivers in the estimation of a structural reinforcement learning model. The estimation results suggest that, guided by foregone best responses and an acquired sense of deservingness, rich subjects become more selfish, while poor subjects, influenced only by their own experience, learn to tolerate this behavior. <P>L’influence de la richesse relative sur les préoccupations d’équité est analysée dans un jeu de l’ultimatum dans lequel les participants reçoivent d’importantes dotations initiales largement inégales. Au départ, les sujets démontrent un soucis d’équité. Cependant, avec le temps, leur comportement s’éloigne de la perfection en sous-jeux ainsi que de l’équité. L’estimation d’un modèle structurel d’apprentissage par renforcement montre des signes d’apprentissage autant chez les sujets qui proposent que chez les receveurs. Les résultats de l’estimation suggèrent que, lorsque guidés par les meilleures réponses possibles et par un sens acquis de ce qui leur est dû, les sujets riches deviennent plus égoïstes, alors que les sujets pauvres, influencés uniquement par leur expérience personnelle, apprennent à tolérer ce comportement. |
| Keywords: | experimental economics, fairness, learning, ultimatum game, apprentissage, économie expérimentale, équité, jeu de l’ultimatum |
| JEL: | C91 C78 C13 C78 C13 C78 C13 C15 |
| Date: | 2006–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2006s-13&r=exp |
| By: | James Habyarimana (Georgetown University and IZA Bonn); Macartan Humphreys (Columbia University); Daniel N. Posner (University of California, Los Angeles); Jeremy Weinstein (Stanford University) |
| Abstract: | A large and growing literature links high levels of ethnic diversity to low levels of public goods provision. Yet while the empirical connection between ethnic heterogeneity and the underprovision of public goods is widely accepted, there is little consensus on the specific mechanisms through which this relationship operates. To gain analytic leverage on the question of why ethnicity matters, we identify three families of mechanisms – what we term preference, technology, and strategy mechanisms. Our empirical strategy is to identify and run a series of experimental games that permit us to examine these mechanisms in isolation and then to compare the importance of ethnicity in each. Results from experimental games conducted with a random sample of 300 subjects in Kampala’s slums reveal that successful collective action among homogenous ethnic communities in urban Uganda is attributable to the existence of norms and institutions that facilitate the sanctioning of non-contributors. We find no evidence for a commonality of tastes within ethnic groups, for greater degrees of altruism toward co-ethnics, or for an impact of shared ethnicity on the productivity of teams. |
| Keywords: | ethnic diversity, collective action, public goods, field experiments |
| JEL: | D71 H41 J15 O10 Z13 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2272&r=exp |
| By: | Jim Engle-Warnick; Andreas Leibbrandt |
| Abstract: | We alter who gets the last word on the outcome in three different types of trust games: the first mover, the second mover, or, a committee comprised of first and second movers. The committee functions in a manner similar to a peer review process, in which experienced subjects pass judgment on the outcome reached by a different pair of subjects. Surprisingly, giving the first mover the last word benefits the second mover. Letting the committee decide increases the first mover’s trust. And first and second movers pass different types of judgments when they act as a committee. <P>Au cours de trois jeux de confiance différents, nous alternons la personne qui aura le dernier mot sur le résultat : le premier joueur, le deuxième joueur, ou un comité (à qui revient la décision) composé du premier et du second joueur. Ce comité fonctionne de manière similaire à la révision conventionnelle par les pairs, où des joueurs expérimentés passent un jugement sur les résultats préalablement réalisés par deux joueurs différents. Étonnamment, donner le dernier mot au premier joueur donne l’avantage au deuxième joueur. D’autre part, laisser le comité prendre la décision augmente la confiance du premier joueur. Finalement, les premiers et seconds joueurs passent différents types de jugements lorsqu’ils font partie d’un comité. |
| Keywords: | experimental economics, peer review, social norm, social preferences, third-party punishment, trust, confiance, économie expérimentale, normes sociales, préférences sociales, révision par les pairs, sanctions par une tierce personne |
| JEL: | C92 |
| Date: | 2006–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2006s-12&r=exp |
| By: | John Hey; Julia Knoll |
| Abstract: | We report on a simple experiment which enables us to infer how far people plan ahead when taking decisions in a dynamic risky context. Usually economic theory assumes that people plan right to the end of the planning horizon. We find that this is true for a little over half of the subjects in the experiment, while a little under one half seem not to plan ahead at all. |
| Keywords: | Planning, dominance, myopia, naivety, sophistication |
| JEL: | D80 C80 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:06/17&r=exp |
| By: | Thomas Dohmen (IZA Bonn); Armin Falk (IZA Bonn and University of Bonn); David Huffman (IZA Bonn); Uwe Sunde (IZA Bonn and University of Bonn) |
| Abstract: | Prominent economic theories have emphasized the role of commonly held perceptions and expectations for determining macroeconomic outcomes. A key empirical question is how such collectively held beliefs are formed. We use the FIFA World Cup 2006 as a natural experiment. We provide direct evidence that seemingly irrelevant events (the outcomes of soccer matches) can systematically affect individual perceptions about economic prospects, both on a personal and economy-wide level. |
| Keywords: | expectation formation, sunspots, soccer world cup, macroeconomic outcomes, psychology |
| JEL: | D8 D0 E0 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2275&r=exp |