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on Experimental Economics |
| By: | Douglas D. Davis (Department of Economics, VCU School of Business); Korenok Oleg (Department of Economics, VCU School of Business); Robert Reilly (Department of Economics, VCU School of Business) |
| Abstract: | This paper reports an experiment conducted to examine tacit collusion in posted offer markets. In addition to a baseline treatment, we study a ‘forecasting’ treatment, which allows an improved identification of intended signals, and a ‘types’ treatment, which examines pricing outcomes among cohorts of homogeneously ‘cooperative’ or ‘competitive’ subjects. Results indicate that while signals tend to affect subsequent pricing decisions, signaling does not affect long term transaction prices. On the other hand ‘types’ are stable across sessions and powerfully affect results. Markets comprised of ‘cooperative’ types tend to generate persistently higher transaction prices than do markets comprised of ‘competitive’ types. |
| Keywords: | Experiments, Tacit Collusion, Price Signaling, Types |
| JEL: | C9 L11 L13 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:vcu:wpaper:0702&r=exp |
| By: | Vincent P. Crawford; Nagore Iriberri |
| Date: | 2007–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:321307000000000861&r=exp |
| By: | Martin G. Kocher; Todd L. Cherry; Stephan Kroll; Robert J. Netzer; Matthias Sutter |
| Abstract: | We show in a public goods experiment on three continents that conditional cooperation is a universal behavioral regularity. Yet, the number of conditional cooperators and the extent of conditional cooperation are much higher in the U.S.A. than anywhere else. |
| Keywords: | conditional cooperation, public goods, experiment |
| JEL: | C72 C91 H41 |
| URL: | http://d.repec.org/n?u=RePEc:inn:wpaper:2007-02&r=exp |
| By: | Martin Beckenkamp (Max Planck Institute for Research on Collective Goods, Bonn); Heike Hennig-Schmidt (Laboratory for Experimental Economics, University of Bonn); Frank P. Maier-Rigaud (Laboratory for Experimental Economics, University of Bonn, Max Planck Institute for Research on Collective Goods) |
| Abstract: | We experimentally study the effect of asymmetry on cooperation in a 40 period prisoner's dilemma game in fixed partner design. We distinguish between a high and low payoff symmetric prisoner's dilemma and an asymmetric game combined out of both symmetric ones. Asymmetry significantly decreases cooperation, as low-type players are more likely to defect after mutual cooperation while high-type players initiate cooperation more often than the former. Asymmetry also has a significant negative effect on the stability of cooperation rendering long sequences of mutual cooperation extremely rare. |
| Keywords: | Symmetry, Asymmetry, Prisoner's Dilemma, Experiments |
| JEL: | C81 D70 C91 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2006_25&r=exp |
| By: | Spiliopoulos, Leonidas |
| Abstract: | This paper addresses the question of strategic change in humans’ be- havior conditional on opponents’ play. In order to implement this e |
| Keywords: | learning; artifical intelligence; mixed strategy; game theory; repeated games; behavioral game theory; ewa; reinforcement learning; fictitious play; simulations; experimental economics; computational economics; non-cooperative games |
| JEL: | C91 C72 C73 |
| Date: | 2007–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2178&r=exp |
| By: | Spiliopoulos, Leonidas |
| Abstract: | The purpose of this paper is to reexamine the seminal belief elicitation experiment by Nyarko & Schotter (2002) under the prism of pattern recog- nition. Instead of modeling elicited beliefs by a simple weighted fictitious play model this paper proposes a generalized variant of fictitious play that is able to detect two period patterns in opponents’ behavior. Evidence is presented that these generalized pattern detection models provide a better fit than standard weighted fictitious play player. Heterogeneity amongst individuals was found as to the complexity of patterns that were detected and utilized in belief formation - a large percentage of players demon- strated the ability to detect two-period patterns in opponents’ play. For players using a variant of the weighted ficititious play belief formation rule without pattern detection it was found that the memory decay parameter was not significantly di |
| Keywords: | learning; game theory; behavioral game theory; fictitious play; repeated games; mixed strategy; non-cooperative games; pattern recognition; pattern detection; experimental economics; beliefs; belief elicitation; strategic |
| JEL: | C63 C72 C73 |
| Date: | 2007–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2179&r=exp |
| By: | Antoni Bosch-Domènech; Rosemarie Nagel; Juan Vicente Sánchez-Andrés; Jaume Morera |
| Abstract: | Patients with stage-I (very mild and mild) Alzheimer’s disease were asked to participate in a Dictator Game, a type of game in which a subject has to decide how to allocate a certain amount of money between himself and another person. The game enables the experimenter to examine the influence of social norms and social preferences on the decision-making process. When the results of treatments involving Alzheimer’s disease patients were compared with those of identical treatments involving patients with mild cognitive impairment or healthy control subjects, with similar ages and social backgrounds, no statistically significant difference was found. This finding suggests that stage-I Alzheimer’s disease patients may be as capable of making decisions involving social norms and preferences as other individuals of their age. Whatever brain structures are affected by the disease, they do not appear to influence, at this early stage, the neural basis for cooperation-enhancing social interactions. |
| Keywords: | Alzheimer patients, social behavior, dictator games |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1020&r=exp |
| By: | Karlan, Dean S.; Zinman, Jonathan |
| Abstract: | Information asymmetries are important in theory but difficult to identify in practice. We estimate the presence and importance of adverse selection and moral hazard in a consumer credit market using a new field experiment methodology. We randomized 58,000 direct mail offers issued by a major South African lender along three dimensions: 1) an initial "offer interest rate" featured on a direct mail solicitation; 2) a "contract interest rate" that was revealed only after a borrower agreed to the initial offer rate; and 3) a dynamic repayment incentive that extended preferential pricing on future loans to borrowers who remained in good standing. These three randomizations, combined with complete knowledge of the Lender's information set, permit identification of specific types of private information problems. Our setup distinguishes adverse selection from moral hazard effects on repayment, and thereby generates unique evidence on the existence and magnitudes of specific credit market frictions. We find evidence of moral hazard and weaker evidence for adverse selection. A rough calibration suggests that perhaps 7% to 16% of default is due to asymmetric information problems. Asymmetric information may help explain the prevalence of credit constraints even in a market that specializes in financing high-risk borrowers at very high rates. |
| Keywords: | adverse selection; credit markets; development finance; field experiment; Information asymmetries; microfinance; moral hazard |
| JEL: | C9 D8 G2 G3 O1 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6182&r=exp |