Experimental economics - volume I: economic decisions
However, men tend to state bigger lies than women, and state the largest lies when paired with a woman. On average, men make higher offers than women, and also have lower acceptance rates, particularly when they are paired with women. This paper introduces a new instrument to elicit individual willingness to compete WTC. Experimental data corroborate the standard result according to which the average WTC of men is higher than the average WTC of women.
This paper reports results from a three-player variant of the ultimatum game in which the Proposer can delegate to a third party his decision regarding how to share his endowment with a Responder with a standard veto right. In this uncertain attribution setting, the Proposer can send an unverifiable message declaring his delegation strategy.
In This Article
In our sample, the recourse to false delegation is significant, and a significant number of potential Delegates accept serving in the scapegoat role. Responders tend to more readily accept poor offers in a setup that permits lying about delegation; the acceptance rate of the poor offer is the highest when Delegates can refuse the scapegoat role.
Keywords: Delegation of responsibility; Uncertain attribution; Communications strategy; Ultimatum game; Dishonesty. We introduce a dynamic public goods game, where an individual's investment in the public good at a given round provides benefits to other individuals in the next round, and the individual himself benefits from investments in the public good made by his current group members in the previous round.
Subjects turn out to be more generous in this inter-temporal context, than in a standard public goods experiment where contributions and transfers are exchanged at the same period. Furthermore, when known, benefits from the past investment are positively related to the individual's current investment in the public good. Keywords : Dynamic public goods; Inter-temporal transfers; Voluntary contribution mechanism; Contribution vs.
Abstract: This paper builds an experiment to investigate whether asking people to state how much they will donate to a charity to pledge can increase their actual donation. We study different types of pledges, namely private, public and irrevocable ones, which differ in individual cost of not keeping a promise.
Public pledges appear to be associated to lower donation levels. Irrevocable pledges ensure an amount of donations equal to donations in absence of pledges. Moreover, a significant number of individuals keep their promises, in presence of either private or public pledges. A higher risk attached to the endowment increases donations. Schedule of the game. Photos from the MSc Session. This paper investigates this relationship using data collected in and from an original business game developed at the ESSEC Business School. Company boards are simulated by groups of five students selected at random.
We manipulate the gender composition to allow for all possible gender combinations. All-women groups are associated with poorer economic performance compared with other groups mixed-gender and all-men. This is explained to a large extent by the differences between groups in the average tolerance to risk, which increases with the number of men in each group, all-men groups having the highest tolerance to risk. However, when controlling for average tolerance to risk, the performance advantage of all-men groups disappears and mixed-gender groups with a majority of women present the best economic performance.
In the contemporary financially globalized world, illiquidity turned out to be a major factor of instability. In this paper we report on players' behavior in a coordination game with imperfect information, designed with the aim of bringing additional insights on the illiquidity risk, and its interaction with insolvency.
Early History of Experimental Economics
There is a risky individual's investment project that can be implemented only if a critical number of investors agree to participate. Results of this elementary experiment confirm the insidious nature of the illiquidity risk: as long a first illiquidity default does not occur, investors do not seem able to fully internalize it.
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After several defaults, agents coordinate on a default probability above which they refuse to participate to the market. This default probability is not zero, as it could be in a perfect information set-up with multiple equilibria, but is lower than without the coordination constraint. Keywords: Coordination game, Illiquidity vs. Managerial and Decision Economics Experimental instructions.
A lengthy and critical review of Thurstone's experiment was given by W.
Allen Wallis and Milton Friedman , particularly pp. One of their lines of criticism was that the experiment involved ill specified and hypothetical choices. They summarized their position as follows Wallis and Friedman, pp. Furthermore, "For a satisfactory experiment it is essential that the subject give actual reactions to actual stimuli Questionnaires or other devices based on conjectural responses to hypothetical stimuli do not satisfy this requirement. The responses are valueless because the subject cannot know how he would react.
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Rousseas and Hart reported a subsequent experiment on indifference curves designed in reply to Wallis and Friedman and as a followup to Thurstone. They constructed what they viewed as a more concrete and realistic choice situation by having subjects choose from different possible breakfast menus, with each potential breakfast consisting of a specified number of eggs and strips of bacon. In this experiment individual subjects made only a single choice repeated subsequently a month later and also were asked to state their ideal combination of bacon and eggs.
While this had the advantage of avoiding the artificiality of having subjects make many choices of the same type, it left Rousseas and Hart with the problem of trying to combine individual choice data collected from multiple individuals. They adopted the approach of seeing whether choices made by individuals with similar ideal combinations could be pieced together to form consistent indifference curves. Although they pronounced themselves satisfied with the results, we will see that the practice of testing theories of individual choice by combining data from groups of subjects was regarded as questionable by subsequent experimenters.
To put subsequent experiments in perspective, however, it is important to note that was the year in which von Neumann and Morgenstern's Theory of Games and Economic Behavior appeared. This presented and brought to wide attention both a more powerful theory of individual choice and a new theory of interactive behavior, and both had a profound influence not only on economic theory but also on experimental economics.
Of these, the most closely connected to that of Thurstone is the experiment of Mosteller and Nogee , who essentially sought to test expected utility theory in much the same spirit that Thurstone had examined ordinal utility theory. Mosteller and Nogee were also well aware of the Friedman- Wallis critique of Thurstone's experiment. However, much more is now known about various systematic violations of expected utility theory that can be observed in the laboratory. Perhaps the most famous is the "Allais paradox. Allais asked subjects to make two hypothetical choices. The first choice was between alternatives A and B defined Allais , p.
Note that not all of the individual choice experiments motivated by von Neumann-Morgenstern expected utility theory depended upon the novel parts of that theory. For example, May reported that it was possible to elicit intransitive preferences in choices involving no uncertainty. His results thus show a violation of even ordinal utility theory, and his experiment could in principle have been conducted as a test of the earlier theory.
However as has often seemed to be the case since , the further development of the theory may have clarified the role that experiments could play.
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