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on Experimental Economics |
| By: | Alpizar, Francisco (Environment for Development Center, Tropical Agricultural and Higher Education Center (CATIE)); Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | We investigate the role of anonymity, reciprocity, and conformity for voluntary contributions, based on a natural field experiment conducted at a national park in Costa Rica. Contributions made in public in front of the solicitor are 25% higher than contributions made in private. Giving subjects a small gift before requesting a contribution increases the likelihood of a positive contribution. At the same time, the conditional contribution decreases. The total effect of giving a gift is positive but small, and taking the cost of the gift into account, it is far from profitable. When the subjects are told that the typical contribution of others is $2 (a small contribution), the probability of a contribution increases and the conditional contribution decreases, compared with providing no reference information. Providing a high reference level ($10) increases the conditional contributions. Overall, the total effects have the expected signs, although the magnitudes are smaller than what one might have expected based on existing evidence from laboratory experiments. <p> |
| Keywords: | Voluntary contributions; anonymity; reciprocity; conformity; natural field experiment |
| JEL: | C93 Q50 |
| Date: | 2007–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0245&r=exp |
| By: | Giovanna Devetag; Andreas Ortmann |
| Abstract: | Are communication failures common? We revisit a classic example of experimental coordination failure and explore, in a 2x2 design, the effects of deviation costs and loss avoidance. Our results suggest how to engineer coordination successes in the laboratory, and possibly in the wild. |
| Keywords: | coordination games, Pareto-ranked equilibria, payoff-asymmetric equilibria, optimization incentives, robustness, coordination failure |
| JEL: | C72 C92 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpce:0703&r=exp |
| By: | Huck, Steffen; Ruchala, Gabriele K.; Tyran, Jean-Robert |
| Abstract: | We experimentally examine the effects of flexible and fixed prices in markets for experience goods in which demand is driven by trust. With flexible prices, we observe low prices and high quality in competitive (oligopolistic) markets, and high prices coupled with low quality in non-competitive (monopolistic) markets. We then introduce a regulated intermediate price above the oligopoly price and below the monopoly price. The effect in monopolies is more or less in line with standard intuition. As price falls volume increases and so does quality, such that overall efficiency is raised by 50%. However, quite in contrast to standard intuition, we also observe an efficiency rise in response to regulation in oligopolies. Both, transaction volume and traded quality are, in fact, maximal in regulated oligopolies. |
| Keywords: | experience goods; markets; moral hazard; price competition; reputation; Trust |
| JEL: | C72 C90 D40 D80 L10 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6135&r=exp |
| By: | Janet Currie; Henry S. Farber |
| URL: | http://d.repec.org/n?u=RePEc:pri:indrel:295&r=exp |
| By: | Cantillon, Estelle; Pesendorfer, Martin |
| Abstract: | This paper considers the problem of identification and estimation in the first-price multi-unit auction. It is motivated by the auctions of bus routes held in London where bidders submit bids on combinations of routes as well as on individual routes. We show that submitting a combination bid lower than the sum of the bids on the constituent routes does not require cost synergies and can instead serve as a tool to leverage market power across the different routes. As a result, the welfare consequences of allowing combination bidding in the first price auction are ambiguous, and depend on the importance of the cost synergies. We provide conditions for non-parametric identification of the multidimensional private information in the multi-unit first price auction and derive partial identification results when they are not satisfied. We propose an estimation method consisting of two stages: In the first stage, the distribution of bids is estimated parametrically. In the second stage, the (set of) costs and distribution(s) of costs consistent with the observed behavior are inferred based on the first order conditions for optimally chosen bids. We apply the estimation method to data from the London bus routes market. We quantify the magnitude of cost synergies and assess possible efficiency losses arising in this market. |
| Keywords: | combinatorial auction; empirical; multi-unit auction; procurement |
| JEL: | D44 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6083&r=exp |