In experimental economics there is a norm against using deception. But precisely what constitutes deception is unclear. While there is a consensus view that providing false information is not permitted, there are also “gray areas” with respect to practices that omit information or are misleading without an explicit lie being told. In this paper, we report the results of a large survey among experimental economists and students concerning various specific gray areas. We find that there is substantial heterogeneity across respondent choices. The data indicate a perception that costs and benefits matter, so that such practices might in fact be appropriate when the topic is important and there is no other way to gather data. Compared to researchers, students have different attitudes about some of the methods in the specific scenarios that we ask about. Few students express awareness of the no-deception policy at their schools. We also briefly discuss some potential alternatives to “gray-area” deception, primarily based on suggestions offered by respondents.

Decision makers in positions of power often make unobserved choices under risk and uncertainty. In many cases, they face a trade-off between maximizing their own payoff and those of other individuals. What inferences are made in such instances about their choices when only outcomes are observable? We conduct two experiments that investigate whether outcomes are attributed to luck or choices. Decision makers choose between two investment options, where the more costly option has a higher chance of delivering a good outcome (that is, a higher payoff) for the group. We show that attribution biases exist in the evaluation of good outcomes. On average, good outcomes of decision makers are attributed more to luck as compared to bad outcomes. This asymmetry implies that decision makers get too little credit for their successes. The biases are exhibited by those individuals who make or would make the less prosocial choice for the group as decision makers, suggesting that a consensus effect may be shaping both the belief formation and updating processes.

An inequality game is an asymmetric 2 × 2 coordination game in which player 1 earns a substantially higher payoff than player 2 except in the inefficient Nash equilibrium (NE). The two players may have either common or conflicting interests over the two NE. This paper studies a redistribution scheme which allows the players to voluntarily transfer their payoffs after the play of an inequality game. We find that the redistribution scheme induces positive transfer from player 1 to player 2 in both common- and conflicting- interest games, and is particularly effective in increasing efficient coordination and reducing coordination failures in conflicting-interest games. We explain these findings by considering reciprocity by player 1 in response to the sacrifice made by player 2 in achieving efficient coordination in conflicting-interest games.

Li (Am Econ Rev 107(11):3257–3287, 2017) introduces a theoretical notion of obviousness of a dominant strategy, to be used as a refinement in mechanism design. This notion is supported by experimental evidence that bidding is closer to dominance in the dynamic ascending-clock auction than the static second-price auction (private values), noting that dominance is theoretically obvious in the former but not the latter. We replicate his experimental study and add three intermediate auction formats that decompose the designs’ differences to quantify the cumulative effects of (1) simply seeing an ascending-price clock (after bid submission), (2) bidding dynamically on the clock, and (3) getting (theoretically irrelevant) drop-out information about other bidders. The theory predicts dominance to become obvious through (2), dynamic bidding. We find no significant behavioral effect of (2), however, while the feedback effects (1) and (3) are highly significant. We conclude that behavioral differences between second-price and ascending-clock auctions offer rather limited support for the theory of obviousness and that framing has surprisingly large potential in mechanism design.

We examine the effectiveness of accountability systems that rely on patient reporting in Kenyan health clinics. Patients and health care providers from public and private health clinics participate in a lab-in-the field experiment focusing on the relationship of trust between patient and provider. Patients decide whether to trust providers, providers have discretion over their reciprocity, and patients can complain. We compare the effectiveness of: (1) a client reporting system where patients’ complaints are disclosed to the providers’ professional peers, possibly leading to non-monetary penalties, (2) a system where complaints lead to monetary penalties, and (3) a system that, like a standard complaint box, attaches no tangible consequences to complaints. Overall, our findings suggest that citizen reporting systems that leverage peer pressure and reputational concerns can improve service delivery.

The Stochastic Becker-DeGroot-Marschak (SBDM) mechanism is a theoretically elegant way of eliciting incentive-compatible beliefs under a variety of risk preferences. However, the mechanism is complex and there is concern that some participants may misunderstand its incentive properties. We use a two-part design to evaluate the relationship between participants’ probabilistic reasoning skills, task complexity, and belief elicitation. We first identify participants whose decision-making is consistent and inconsistent with probabilistic reasoning using a task in which non-Bayesian modes of decision-making lead to violations of stochastic dominance. We then elicit participants’ beliefs in both easy and hard decision problems. Relative to Introspection, there is less variation in belief errors between easy and hard problems in the SBDM mechanism. However, there is a greater difference in belief errors between consistent and inconsistent participants. These results suggest that while the SBDM mechanism encourages individuals to think more carefully about beliefs, it is more sensitive to heterogeneity in probabilistic reasoning. In a follow-up experiment, we also identify participants with high and low fluid intelligence with a Raven task, and high and low proclivities for cognitive effort using an extended Cognitive Reflection Test. Although performance on these tasks strongly predict errors in both the SBDM mechanism and Introspection, there is no significant interaction effect between the elicitation mechanism and either ability or effort. Our results suggest that mechanism complexity is an important consideration when using elicitation mechanisms, and that participants’ probabilistic reasoning is an important consideration when interpreting elicited beliefs.

Intertemporal choices are affected by both discount rate and utility curvature. We investigate how the two aspects of time preference are affected by the size of the total budget using an intertemporal allocation task. At the aggregate level as well as at the individual level, we find magnitude effects both on the discount rate and on intertemporal substitutability (i.e., utility curvature). Individuals are more patient when dealing with larger budgets and also regard larger budgets to be more fungible. The latter effect suggests that the degree of asset integration is increasing in the stake.

Corporate boards, experts panels, parliaments, cabinets, and even nations all take important decisions as a group. Selecting an efficient decision rule to aggregate individual opinions is paramount to the decision quality of these groups. In our experiment we measure revealed preferences over and efficiency of several important decision rules. Our results show that: (1) the efficiency of the theoretically optimal rule is not as robust as simple majority voting, and efficiency rankings in the lab can differ from theory; (2) participation constraints often hinder implementation of more efficient mechanisms; (3) these constraints are relaxed if the less efficient mechanism is risky; (4) participation preferences appear to be driven by realized rather than theoretic payoffs of the decision rules. These findings highlight the difficulty of relying on theory alone to predict what mechanism is better and acceptable to the participants in practice.

We examine strategic sophistication using eight two-person 3 × 3 one-shot games. To facilitate strategic thinking, we design a ‘structured’ environment where subjects first assign subjective values to the payoff pairs and state their beliefs about their counterparts’ probable strategies, before selecting their own strategies in light of those deliberations. Our results show that a majority of strategy choices are inconsistent with the equilibrium prediction, and that only just over half of strategy choices constitute best responses to subjects’ stated beliefs. Allowing for other-regarding considerations increases best responding significantly, but the increase is rather small. We further compare patterns of strategies with those made in an ‘unstructured’ environment in which subjects are not specifically directed to think strategically. Our data suggest that structuring the pre-decision deliberation process does not affect strategic sophistication.

We conduct a laboratory experiment to investigate how different deliberative structures of varying inclusiveness affect collective decisions in the presence of economic conflict. An electorate consists of two groups, one informed and one uninformed about an uncertain state of the economy. This state affects payoffs differently for the two groups. We study three deliberative structures that vary in how the uninformed are included in pre-vote communication. Compared with a setting without any communication, we find that communication in all three deliberation treatments leads to more frequent votes for the efficient policies. The most inclusive deliberative structure motivates more truthfulness, more trust, more cooperativeness (i.e. refraining from protest votes), and more votes for the efficient policies, than the least inclusive structure. However, comparison among the deliberation treatments reveals that the most inclusive deliberative structure is not the one that generates the highest degree of truthfulness. The dynamics of communication lead to a general deterioration of truth-telling and cooperativeness, reinforced by the use of disrespectful and uncooperative language.

Are there positive or negative externalities in knowledge production? We analyze whether current contributions to knowledge production increase or decrease the future growth of knowledge. To assess this, we use a randomized field experiment that added content to some pages in Wikipedia while leaving similar pages unchanged. We compare subsequent content growth over the next 4 years between the treatment and control groups. Our estimates allow us to rule out effects on 4-year growth of content length larger than twelve percent. We can also rule out effects on 4-year growth of content quality larger than four points, which is less than one-fifth of the size of the treatment itself. The treatment increased editing activity in the first 2 years, but most of these edits only modified the text added by the treatment. Our results have implications for information seeding and incentivizing contributions. They imply that additional content may inspire future contributions in the short- and medium-term but do not generate large externalities in the long term.

An influential result in the literature on charitable giving is that matching subsidies dominate rebate subsidies in raising funds. We investigate whether this result extends to “unit donation” schemes, a popular alternative form of soliciting donations. There, the donors’ choices are over the number of units of a charitable good to fund at a given unit price, rather than the amount of money to give. Comparing matches and rebates as well as simple discounts on the unit price, we find no evidence of dominance in our online experiment: the three subsidy types are equally effective overall. At a more disaggregated level, rebates lead to a higher likelihood of giving, while matching and discount subsidies lead to larger donations by donors. This suggests that charities using a unit donation scheme enjoy additional degrees of freedom in choosing a subsidy type. Rebates merit additional consideration if the primary goal is to attract donors.