Communication and voting in heterogeneous committees: An experimental study

Date: 2016-03
By: Mark T. Le Quement (University of Bonn)
Isabel Marcin (Max Planck Institute for Research on Collective Goods)
We study experimentally the effectiveness of communication in common value committees exhibiting publicly known heterogeneous biases. We test models assuming respectively self-interested and strategic-, joint payoff-maximizing- and cognitively heterogeneous agents. These predict varying degrees of strategic communication. We use a 2 x 2 design varying the information protocol (communication vs exogenous public signals) and the group composition (heterogeneous vs homogeneous). Results are only consistent with the third model. Roughly 80% of (heuristic) subjects truth-tell and vote with the majority of announced signals. Remaining (sophisticated) agents lie strategically and approximately apply their optimal decision rule.
Keywords: Committees, Voting, Information Aggregation, Cheap Talk, Experiment
JEL: C92 D72 D82 D83

Tell Me How to Rule: Leadership, Delegation, and Voice in Cooperation

Date: 2016
By: Marco Faillo
Federico Fornasari
Luigi Mittone
Following some recent studies, we experimentally test the effect of intra-group leadership in a public good experiment. Specifically, individuals taking part in our experiment are randomly assigned either the role of leader or the role of follower. Leaders take part in a public good game, aware of the fact that every decision they make directly affects their followers. In this sense, our experimental setting combines the dimension of leadership in cooperation with the one of delegated agents. In our experiment, we find that leadership produces two main effects: subjects contribute more, and tend to punish more frequently. In spite of the presence of higher contributions, we observe lower payoffs; these are caused by an aggressive behavior that push leaders to mane an undue use of punishment. Allowing one-sided communication between followers and leaders provide a different effect: communication reduces decision makers’ aggressiveness, leading to lower contributions and punishment, but better results in terms of final payoffs. The same welfare can be reached when leadership is not implemented at all; this suggests that the presence of a dictatorial leader in public goods with punishment can be beneficial only when there is communication.
Keywords: Voluntary contribution experiment, Leadership, Punishment
JEL: C72 C92 H41 O12

Where Do Social Preferences Come From?

Date: 2015-08
By: Chaning Jang (Department of Psychology, Princeton University)
John Lynham (Department of Economics & UHERO, University of Hawaii at Manoa; Center for Ocean Solutions, Stanford University)
Where do preferences for fairness come from? We use a unique field setting to test for a spillover of sharing norms from the workplace to a laboratory experiment. Fishermen working in teams receive random income shocks (catching fish) that they must regularly divide among themselves. We demonstrate a clear correlation between sharing norms in the field and sharing norms in the lab. Furthermore, the spillover effect is stronger for fishermen who have been exposed to a sharing norm for longer, suggesting that our findings are not driven by selection effects. Our results are consistent with the hypothesis that work environments shape social preferences.
Keywords: ultimatum game; social preferences; fairness; workplace spillovers
JEL: Q2 C9 C7 B4 D1

On Behavioral Macroeconomics, Globalization, and Economic Growth

Date: 2015-06-18
By: Rosas-Martinez, Victor H.
We assess theoretically the effect of forming a free trade union on the total production of a nation, where such effects are caused by the absorption of technologies. A popular metaphor describes the people as crabs in a bucket because when one crab tries to scape, the others pull it down avoiding a possible way out for all of them. Given this knowledge, posteriorly and independently of the income inequality levels, we extend our analyses to consider the effect of envy in a macroeconomic level on the total production, and draw the implications which this phenomenon has on the formation of free trade unions. We make strategic policy recommendations to allow the achievement of a globalization that benefits each member nation, where we show that the great trade union might have to start with gradual and charitable subregional agreements.
Keywords: International Trade; Technological Absorption; Behavioral Macroeconomics; Economic Growth; Trade Policy
JEL: O11 O24