Does Experience Affect Fairness and Reciprocity in Lab Experiments?

Date: 2016-07
By: Tiziana Medda (University of Cagliari)
Vittorio Pelligra (University of Cagliari)
Tommaso Reggiani (LUMSA University)
One of the most common criticisms about the external validity of lab experiments in economics concerns the representativeness of participants usually considered in these studies. The ever-increasing number of experiments and the prevalent location of research centers in university campuses produced a peculiar category of subjects: Students with high level of laboratory experience built through repeated participations in experimental sessions. We investigate whether the experience accumulated in this way biases subjects’ behaviour in a set of simple games widely used to study social preferences (Dictator Game, Ultimatum Game, Trust Game, and Prisoner’s Dilemma Game). Our main finding shows that subjects with a high level of experience in lab experiments do not behave in a significantly different way from novices.
Keywords: Experimental Methodology, External Validity, Experience, Lab Experiment
JEL: D03 D83 C91 C92

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

Going Green : Framing Effects in a Dynamic Coordination Game

Date: 2015
By: Gerlagh, Reyer (Tilburg University, Center For Economic Research)
van der Heijden, Eline (Tilburg University, Center For Economic Research)
We experimentally study decision-making in a novel dynamic coordination game. The game captures features of a transition between externality networks. Groups consisting of three subjects start in a stable benchmark equilibrium with network externality. Over seven rounds, they can transit to an alternative stable equilibrium based on the other network. The alternative network has higher payoffs, but the transition is slow and costly. Coordination is required to implement the transition while minimizing costs.<br/>In the experiment, the game is repeated five times, which enables groups to learn to coordinate over time. We compare a neutral language treatment with a ‘green framing’ treatment, in which meaningful context is added to the instructions. We find the green framing to significantly increase the number of profitable transitions, but also to inhibit the learning from past experiences, and thus it reduces coherence of strategies. Consequently, payoffs in both treatments are similar even though the green framing results in twice as many transitions.<br/>In the context of environmental policy, the experiment suggests general support for ‘going green’, but we also find evidence for anchoring of beliefs by green framing; proponents and opponents stick to their initial strategies.
Keywords: cost of transition; lab experiment; dynamic stag hunt game; framing
JEL: C73 C92 O44

Expert Information and Majority Decisions

==notes by yinung==
又出現有關 group decision 的研究:
* 專家意見的影響 (在人數多的委員會不佳)
Date: 2015-09-23
By: Kohei Kawamura
Vasileios Vlaseros
This paper shows theoretically and experimentally that hearing expert opinions can be a double-edged sword for collective decision making. We present a majoritarian voting game of common interest where committee members receive not only private information, but also expert information that is more accurate than private information and observed by all members. In theory, there are Bayesian Nash equilibria where the committee members’ voting strategy incorporates both types of information and access to expert information enhances the efficiency of the majority decision. However, there is also a class of potentially inefficient equilibria where a supermajority always follow expert information and the majority decision does not aggregate private information. In the laboratory, the majority decisions and the subjects’ voting behaviour were largely consistent with those in the class of inefficient equilibria. We found a large efficiency loss due to the presence of expert information especially when the committee size was large. We suggest that it may be desirable for expert information to be revealed only to a subset of committee members.
Keywords: committee decision making, voting experiment, expert information, strategic voting
JEL: C92 D72 D82

Trading in Networks: a Classroom Experiment

==noted by yinung==
分組, 在圈形的網路 topoloty 中, 隨機選兩組進行貿易, 但 transport 經過各組 node 時要付費
  • S. Choi, A. Galeotti, S. Goyal.Trading in networks: theory and experiments, -Cambridge-INET Working Paper, 2014
  • M. Kosfeld. Economic Networks in the Laboratory: A Survey, Institute for Empirical Research
    in Economics, University of Zurich, 2015.
Date: 2015-10
By: Paul Johnson (Department of Economics and Public Policy, University of Alaska Anchorage)
Qiujie Zheng (Department of Economics and Public Policy, University of Alaska Anchorage)
This paper describes a classroom experiment that demonstrates coordination and competition between traders in a network. Students test theoretical predictions concerning the emergence of equilibrium and the division of surplus between buyers and sellers. The experiment is appropriate for use in teaching intermediate microeconomics, industrial organization, transportation economics and game theory.
Keywords: Experimental Economics, Classroom Experiment, Trading in Networks
JEL: A22 B21 C92

An Experimental Study of Uncertainty in Coordination Games

Date: 2015-09-23
By: Ioannou, Christos A.
Makris, Miltiadis
Global games and Poisson games have been proposed to address equilibrium indeterminacy in Coordination games. The former assume that agents face idiosyncratic uncertainty about economic fundamentals to capture disperse information, whereas the latter model the number of actual players as a Poisson random variable to capture population uncertainty in large games. Given that their predictions differ, it is imperative to understand which type of uncertainty drives empirical behavior in macroeconomic environments with strategic complementarities. Recent experimental literature finds mixed results on whether subjects’ behavior is similar in Global and Common Knowledge Coordination games, and hence on whether idiosyncratic uncertainty about economic fundamentals is an important determinant of subjects’ behavior. Poisson Coordination games have not been investigated experimentally. We fill this gap. Our findings suggest that uncertainty about the number of actual players may influence subjects’ behavior. Crucially, such behavior is consistent with the theoretical prediction of Poisson Coordination games.

An Experimental Study of Voting with Costly Delay

Date: 2015-09
By: Kwiek, Maksymilian (University of Southampton)
Marreiros, Helia (University of Southampton)
Vlassopoulos, Michael (University of Southampton)
A conclave is a voting mechanism in which a committee selects an alternative by voting until a sufficient supermajority is reached. We study experimentally welfare properties of simple three-voter conclaves with privately known preferences over two outcomes and waiting costs. The resulting game is a form of multiplayer war of attrition. Our key finding is that, consistent with theoretical predictions, when voters are ex ante heterogeneous in terms of the intensity of their preferences the conclave leads to efficiency gains relative to simple majority voting. We also compare welfare properties of a static versus a dynamic version of a conclave. When social cost of waiting is taken into account, the dynamic conclave is superior in terms of welfare than its static version.
Keywords: voting, supermajority, intensity of preferences, war of attrition
JEL: C78 C92 D72 D74

Communication and Coordination in a Two-Stage Game

Date: 2015
By: Tjaša Bjedov (Université de Lyon, F-69007, France; CNRS, GATE Lyon St Etienne, 93, Chemin des Mouilles, F-69130, Ecully, France; University of Fribourg, Bd de Pérolles 90 CH-1700 Fribourg, Switzerland)
Thierry Madiès (University of Fribourg, Bd de Pérolles 90 CH-1700 Fribourg, Switzerland)
Marie Claire Villeval (Université de Lyon, F-69007, France; CNRS, GATE Lyon St Etienne, 93, Chemin des Mouilles, F-69130, Ecully, France)
We study the impact of communication on behavior in a two-stage coordination game with asymmetric payoffs. We test experimentally whether individuals can avoid a head-to-head confrontation by means of coordinated strategies. In particular we analyze whether and how quickly a conflict-avoidance take-turn strategy can emerge. First, our results show that players learn to solve the conflict by choosing opposite options at both stages of the game. Second, many adopt a take-turn strategy to sustain coordination over time and alleviate the inequality induced by the asymmetry of payoffs. Third, communication increases the likelihood of conflict resolution even when a single pair member has the right to communicate.
Keywords: Coordination, communication, turn taking, conflict, experiment
JEL: C91 D74 L15 H71

Authority and Centrality: Power and Cooperation in Social Dilemma Networks

Date: 2015-03
By: Ramalingam, Abhijit
Rojo Arjona, David
Schram, Arthur
Van Leeuwen, Boris
We investigate the effects of power on cooperation in repeated social dilemma settings. Groups of five players play either multi-player trust games or VCM-games on a fixed network. Power stems from having the authority to allocate funds raised through voluntary contributions by all members and/or from having a pivotal position in the network (centrality). We compare environments with and without ostracism by allowing players in some treatments to exclude others from further participation in the network. Our results show that power matters but that its effects hinge strongly on the type involved. Reminiscent of the literature on leadership, players with authority often act more cooperatively than those without such power. Nevertheless, when possible, they are quickly ostracized from the group. Thus, this kind of power is not tolerated by the powerless. In stark contrast, centrality leads to less cooperative behavior and this free riding is not punished; conditional on cooperativeness, players with power from centrality are less likely to be ostracized than those without. Hence, not only is this type of power tolerated, but so is the free riding it leads to.
Keywords: power, cooperation, networks, public goods
JEL: C91 D02 D03 H41