This paper experimentally investigates individual information acquisition and decisions in ambiguous situations in which the degree of ambiguity can endogenously and individually be decreased by the subjects. In particular, I analyze how risk aversion, ambiguity attitude and personality traits are related to an individual’s information acquisition prior to a decision and to the decision itself based on this information. I focus on urn decisions and conduct treatments that consider the loss and gain domain separately and that vary the amount of available information and the probabilistic structure.
|Keywords:||Ambiguity aversion; risk aversion; experiment; decision making; information acquisition; personality traits|
|JEL:||C91 D03 D81|
|By:||Sean P. Hargreaves Heap (University of East Anglia)
Abhijit Ramalingam (University of East Anglia)
Siddharth Ramalingam (Cambridge Associates)
Brock V. Stoddard (Indiana University)
At least since Adam Smith, economists have recognized the beneficial effects of competition in markets. The possible positive influence of competition between teams on the free rider problem within teams is a more recent discovery. It is important because the free rider problem exists to some degree in most teams and because many outcomes in economic and social life depend on competition between teams. However, teams are rarely endowed equally and we do not know much about how such inequality affects the influence of competition on free riding. We address this question with an experiment. It is important not only because of the connections sketched above, but also because this is an overlooked aspect of how inequality impacts on society. We find that there is less free riding within teams when there is competition, that this is robust to moderate degrees of inequality but disappears when inequality is high.
Threshold Level Public Goods Provision with Multiple Units: Experimental Effects of Disaggregated Groups with Rebates
|By:||Liu, Pengfei (University of Connecticut)
Swallow, Stephen K. (University of Connecticut)
Anderson, Christopher M. (University of Washington)
We introduce two institutions that provide multiple public good units, assuming that a market-maker has the ability to establish groups of contributors. We set up a public good experiment where either all N individuals form one group to provide two units, or divide the N participants into two groups, and each group provides one unit separately, with all individuals benefiting for any unit(s) provided. Our results show that, under certain circumstances, the latter approach provides more of both units, and it encourages more contribution on average. We also explore the performance of two rebate rules under the two grouping approaches.
|Keywords:||Experimental economics, Grouping approach, Provision point mechanism, Rebate, Environmental economics, Ecosystem Service Markets|