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We report results from a replication of Solnick (Econ Inq 39(2):189, 2001), which finds using an ultimatum game that, in relation to males, more is demanded from female proposers and less is offered to female responders. We conduct Solnick’s (2001) game using participants from a large US university and a large Chinese university. We find little evidence of gender differences across proposer and responder decisions in both locations.
We investigate the effectiveness of two leadership institutions in each of two games: a weakest link and a linear public good game. An “Exemplar” leader is a first mover who commits to a level of contribution; a “Manager” is a first mover who makes cheap talk suggestions to the team members. Our results show that both leadership institutions reduce coordination failures as compared to a simultaneous move, baseline scenario with no leader. Although the Manager treatment seems to be slightly more effective at the outset, both leadership institutions significantly and equally improve contributions in the coordination game over time. According to our results none of the leadership institutions seem effective in the linear public good game. This may be due to the fact that our marginal per capita return is rather large, keeping the contribution levels high regardless of the treatment. Subjects who choose to free ride continue to do so with or without leaders, and subjects who choose to be cooperative do not become discouraged by others’ lack of cooperation. These results both replicate earlier findings and allow direct comparison across similar games.
Most large real-world organizations contain multiple smaller groups, such as working groups within firms. However, can this sort of nested groups be used to alleviate coordination failures in the larger group? We report on a multi-player Stag Hunt experiment wherein we hierarchically structure a large group into mutually exclusive small groups. We offer varying incentive payments if efficient coordination is achieved at a large or small group level. The novelty of our design is that we hold the total payment size constant between treatments. In our nested incentive treatment, we reduce the reward for achieving large-group coordination by a small amount and reallocate the same amount to successful small-group coordination. The results reveal that incentive reallocations privileging small groups facilitate efficient large-group coordination in the nested group structure.
Expectations-based reference dependence has been shown to be important across a variety of contexts in Psychology and Economics. Do expectations play a role in moral judgment? The higher our beliefs are relative to an outcome, do we punish more harshly? This paper reports a series of experiments investigating the hypothesis that expectations as reference points per se affect punishment. The experimental design varies the expectation the Punisher holds just before she learns what actually occurred. In tandem with the manipulation, expectations are shown to vary significantly and substantially. However, punishment does not respond to these exogenous changes in expectations. After 17 sessions, 295 Punishers, and six experimental setups, expectations are shown not to affect punishment in any systematic way.
This paper investigates the effectiveness of peer punishment in non-linear social dilemmas and replicates Cason and Gangadharan (Exp Econ 18:66–88, 2015). The contribution of this replication is that cooperation is quantified across payoff equivalent, strategically symmetric public good and common pool resource experiments. Results suggest that the cooperation-inducing effect of peer punishment is statistically equivalent across conditions. Despite this increase in cooperation, earnings are significantly lower than in the absence of punishment. Institutional features which improve the effectiveness of peer punishment in linear public good experiments may, similarly, make self-governance possible in more complex social dilemmas.
This paper empirically compares the use of straightforward verses more complex methods to estimate public goods game data. Five different estimation methods were compared holding the dependent and explanatory variables constant. The models were evaluated using a large out-of-sample cross-country public goods game data set. The ordered probit and tobit random-effects models yielded lower p values compared to more straightforward models: ordinary least squares, fixed and random effects. However, the more complex models also had a greater predictive bias. The straightforward models performed better than expected. Despite their limitations, they produced unbiased predictions for both the in-sample and out-of-sample data.
Janssen et al. (Exp Econ 14:547–566, 2014) studied an asymmetric, finitely repeated common-pool resource dilemma with free-form communication in which subjects made decisions about investments in an infrastructure, and about extraction from a resource made available by this infrastructure. They found that infrastructure provision and joint payoffs converged to high levels because structurally advantaged head-enders tend to behave fairly by restricting themselves voluntarily at the extraction stage, and structurally disadvantaged “tail-enders” reciprocate by investing. This paper reports a fully independent, pre-registered, double-blind replication attempt conducted in a different lab, that also supplies elevated statistical power and adheres to the highest principles of scientific transparency and openness. We find that the key results of Janssen et al. not only re-appear qualitatively but are quantitatively and statistically strengthened. The conclusions drawn from the results are therefore robust, and the basic design can be confidently used for follow-up research.
We report a laboratory experiment that investigates the impact of passive participation on bubble formation in asset markets with inexperienced and experienced traders. Some treatments employ pre-market training in which each participant is ‘matched’ with a trader from a different prior market and observes all trading details but does not directly participate in trading. We find that passive participation, similar to direct experience, significantly reduces mispricing in subsequent markets. This finding suggests that observation of prices is a key mechanism through which experience mitigates bubbles. We also vary whether transaction prices are displayed in a column of text or in a graphical display, and find that among inexperienced and once-experienced traders, markets with the tabular display result in bubbles that are greater in amplitude relative to markets with the graphical display.
We join a growing body of literature suggesting that the languages people speak influence their decision-making. We tested whether dropping the first-person pronoun “I” affects pro-social behavior in a dictator game-like setting. To this end, we conducted an online randomized, incentivized experiment with a socially representative sample of 2000 Japanese respondents. We provide compelling causal evidence that pronoun dropping reduces pro-sociality. Given that our results provide little empirical support for previous research findings linking first-person pronoun use and lower pro-sociality, we prescribe caution in using languages as a proxy for culture in several cross-country empirical studies in economics.
A number of recent papers have looked at framing effects in linear public good games. In this comment, I argue that, within this literature, the distinction between give-take and positive–negative framing effects has become blurred, and that this is a barrier towards understanding the experimental evidence on framing effects. To make these points, I first illustrate that frames can differ along both an externality and choice dimension. I then argue that the existing evidence is consistent with a strong positive–negative framing effect but no give-take framing effect on average contributions.
This paper examines cooperation and punishment in a public goods game in Istanbul. Unlike prior within-subject designs, we use a between-subject design with separate no-punishment and punishment conditions. This approach reveals that punishment significantly increases contributions, demonstrating the detrimental effect of having prior experience without sanctions. We highlight two critical factors—heterogeneous initial contributions across groups and how subjects update their contributions based on prior contributions and received punishment. An agent-based model verifies that the interaction between these two factors leads to a strong persistence of contributions over time. Analysis of related data from comparable cities shows similar patterns, suggesting our findings likely generalize if using a between-subject design. We conclude that overlooking within-group heterogeneity biases cross-society comparisons and subsequent policy implications.
We use an experiment to evaluate the effects of participatory management on firm performance. Participants are randomly assigned roles as managers or workers in firms that generate output via real effort. To identify the causal effect of participation on effort, workers are exogenously assigned to one of the two treatments: one in which the manager implements a compensation scheme unilaterally or another in which the manager cedes control over compensation to the workers who vote to implement a scheme. We find that output is between seven and twelve percentage points higher in participatory firms.
Experiments in economics usually provide subjects with starting capital to be used in the experiment. This practice could affect decisions as there is no risk of loss. This phenomenon is known as the house-money effect. In a repeated public goods game, we test for house-money effects by paying subjects in advance an amount they could lose in the experiment. We do not find evidence of a house-money effect over time.
Evidence shows that the willingness of individuals to avenge punishment inflicted upon them for transgressions they committed constitutes a significant obstacle toward upholding social norms and cooperation. The drivers of this behavior, however, are not well understood. We hypothesize that ulterior motive attribution—the tendency to assign ulterior motives to punishers for their actions—increases the likelihood of counter-punishment. We exogenously manipulate the ability to attribute ulterior motives to punishers by having the punisher be either an unaffected third party or a second party who, as the victim of a transgression, may be driven to punish by a desire to take revenge. We show that survey respondents consider second-party punishment to be substantially more likely to be driven by ulterior motives than an identical, payoff-equalizing punishment meted out by a third party. In line with our hypothesis, we find that second-party punishment is 66.3% more likely to trigger counter-punishment than third-party punishment in a lab experiment. The loss in earnings due to counter-punishment is 64.6% higher for second-party punishers than third-party punishers, all else equal.
Our research addresses the effect of shared vs. mixed group identities in an information cascade game. We vary whether subjects always choose after a decision maker who shares the same identity or after a decision maker with a different identity. We find that subjects’ inclination to follow their predecessor is stronger in groups uniquely consisting of ingroup members compared to mixed groups. We relate this result to recent social cognition research.
Experimental asset markets with a constant fundamental value () have grown in importance in recent years. A methodological examination of the robustness of experimental results in such a setting which has been shown to produce bubbles, however, is lacking. In a laboratory experiment with 280 subjects, we investigate whether specific design features are sufficient to influence experimental results. In detail, we (1) vary the visual representation of the price chart, and (2) provide subjects with full information about the FV process. We find overvaluation and bubble formation to be reduced when trading prices are displayed at the upper end of the price chart. Surprisingly, we do not find any effects when subjects have full information about the FV process.
Models of multilateral bargaining predict that agents would vote solely based on the share they are offered and that their vote is determined by whether that share is at least as high as the continuation value (CV) of the game. The standard experiment investigating behavior in multilateral bargaining is not well designed to determine if that is the case. Our experiment makes three changes to the typical design: it introduces substantial variation in the CV (using a within-subjects design and varying the discount factor), it generates variability in offers using computer-generated offers while retaining the equilibrium of the original game, and it uses belief elicitation. These changes allow us to consider whether behavioral voting rules that are independent of the CV or factors besides one’s own share are important to voting decisions. We find that the main determinant of votes is the share one is offered, but that when offers are believed to come from another participant, a proposal is less likely to be approved if the proposer tries to take a lot for himself. Nonetheless, the equilibrium voting rule, which is based on the CV of the game organizes choices better than behavioral rules that are independent of the CV.
We exhibit a mechanism by which two parties leverage their social relationship to ratchet up the rents they collect from a third party residual claimant. Specifically, in a laboratory environment, we study a novel three-person insider game in which ‘insiders’ decide how to distribute profits among themselves and an ‘outsider’ who is the residual claimant. We find that the distribution of payments is largely determined by an informal quid pro quo among the two decision makers at the expense of the outsider. We then manipulate pay transparency and the competition to keep interaction partners, thereby improving the strategic position of one insider. Pay transparency increases the profit share that goes to rent seekers. In addition, rent extraction from the third party persists when competition for interaction partners is introduced. As a result, we find that payments both affect and reflect the influence of social relationships.
We investigate experimentally the impact of continuous time on a four-player Hotelling location game. The static pure strategy Nash equilibrium (NE) consists of firms paired-up at the first and third quartiles of the linear city. In a repeated simultaneous move (discrete time) treatment, we largely replicate previous findings in which subjects fail to converge to the NE. However, in asynchronous move (continuous time) treatments we see clear convergence towards the NE.
We examine the effects of endogenizing contribution productivity in a repeated public good game. In our experimental treatment, subjects collectively decide (by voting) how much to invest in augmenting the technology for producing the public good, and subsequently make individual voluntary contributions to provision. In the control, contribution productivity is exogenous. Contributions in the two treatments are similar.