The experimental ‘learning-to-forecast’ literature finds that subjects use simple linear backward-looking models when forecasting in environments with little to no inout the economic framework. We study the formation of expectations in a laboratory economy of monopolistic firms and labour unions with almost complete knowledge of the model. We observe simple backward-looking rules, but also a considerable share of model-based expectations using information on the economic structure. At least for some subjects, expectations are informed by theory. As in the previous literature, we find individual prediction rules to be heterogeneous.
==noted by yinung==
生產落後期的例子: 挖礦 => 金屬生產
… An important aspect of mining is the lag between the time the decision to increase or decrease production
is made and the time the decision actually takes effect in the market. It takes several years for a planned new mine to start producing, …
Numerical Examples 1. l=落後期變長>=4, 價格波動變成發散
Numerical Examples 2. m=預期價格期數變長, 價格波動變成愈穩定
註: m =0 是典型 cobweb 理論, 即只用當期價格, 預測下一期價格
Numerical Examples 3. c= s/d =供給彈性/需求彈性, c 供需彈性比愈大, 價格波動愈不穩定
The classical cobweb theorem is extended to include production lags and price forecasts. Price forecasting based on a longer period has a stabilizing effect on prices. Longer production lags do not necessarily lead to unstable prices; very long lags lead to cycles of constant amplitude. The classical cobweb requires elasticity of demand to be greater than that of supply; this is not necessarily the case in a more general setting. Random shocks are also considered.
* Chiarella (1988)studies a system where expected prices follow adaptive expectations, when the demand curve is linear, while the supply curve is non-linear…[The] paper shows that the system is either (1) stable, (2) unstable but cyclical, or (3) chaotic.
* Chiarella and He (2004). That paper studies the cobweb model from a slightly different point of view (in particular, the supply curve is a specific S-shaped function),
MelÃ©ndez-JimÃ©nez, Miguel A
|Keywords:||Social and Behavioral Sciences|
We study behavior and equilibrium selection in network games. We conduct a series of experiments (with 580 participants) in which actions are either strategic substitutes or strategic complements, and participants have either complete or incomplete information about the structure of a random network. In our initial set of experiments on 5-person networks, we find a great deal of qualitative and quantitative support for the theoretical predictions of the Galeotti, Goyal, Jackson, Vega-Redondo, and Yariv (2010) model. The degree of equilibrium play is striking, in particular with incomplete information. There are intriguing patterns in our data, such as a taste for positive payoffs (but also security) when this supports the choice of one of the potential equilibria in a complete-information setting. To shed further light on the underpinnings of behavior and equilibrium selection in the laboratory, we study three more 5-person networks and test robustness by conducting sessions with three 20-person networks. Overall, we see strong evidence that choices and the equilibrium played depend on one’s degree and the connectivity of the network, and suggestive evidence that choices also depend on the clustering in the network.
JEL Codes: C71, C91, D03, D85
Keywords: Random networks; Incomplete information; Connectivity; Clustering; Strategic substitutes; Strategic complements; Experiment
|By:||Zacharias Maniadis (School of Social Sciences, University of Southampton)
Fabio Tufano (School of Economics, University of Nottingham)
John A List (School of Economics, University of Chicago)
Some researchers have argued that anchoring in economic valuations casts doubt on the assumption of consistent and stable preferences. We present new evidence that questions the robustness of certain anchoring results. We then present a theoretical framework that provides insights into why we should be cautious of initial empirical findings in general. The model importantly highlights that the rate of false positives depends not only on the observed significance level, but also on statistical power, research priors, and the number of scholars exploring the question. Importantly, a few independent replications dramatically increase the chances that a given original finding is true.
|Keywords:||Anchoring, Methodology, Replication, Willingness to Accept, Experiment|
|By:||Daniele Nosenzo (School of Economics, University of Nottingham)
Simone Quercia (School of Economics, University of Nottingham)
Martin Sefton (School of Economics, University of Nottingham)
We study the effect of group size on cooperation in voluntary contribution mechanism games. As in previous experiments, we study four- and eight-person groups in high and low marginal per capita return (MPCR) conditions. We find a positive effect of group size in the low MPCR condition, as in previous experiments. However, in the high MPCR condition we observe a negative group size effect. We extend the design to investigate two- and three-person groups in the high MPCR condition, and find that cooperation is highest of all in two-person groups. The findings in the high MPCR condition are consistent with those from n-person prisoner’s dilemma and oligopoly experiments that suggest it is more difficult to sustain cooperation in larger groups. The findings from the low MPCR condition suggest that this effect can be overridden. In particular, when cooperation is low other factors, such as considerations of the social benefits of contributing (which increase with group size), may dominate any negative group size effect.
|Keywords:||voluntary contribution mechanism, cooperation, group size|
Among residents of an informal housing area in Cairo, we examine how dictator giving varies by the social distance between subjects – friend versus stranger – and by the anonymity of the dictator. While giving to strangers is high under anonymity, we find – consistent with Leider et al. (2009) – that (i) a decrease in social distance increases giving, (ii) giving to a stranger and to a friend is positively correlated, and (iii) more altruistic dictators increase their giving less under non-anonymity than less altruistic dictators. However, friends are not alike in their altruistic preferences, suggesting that an individual’s intrinsic preferences may not necessarily be shaped by his (or her) peers. Instead, reciprocal motives seem important, indicating that social relationships may be valued differently when individuals are financially dependent on them. —
|Keywords:||giving,reciprocity,social distance,networks, sorting|
|JEL:||C93 D64 L14 O12|
Backward induction is a widely accepted principle for predicting behavior in sequential games. In the classic example of the “centipede game,” however, players frequently violate this principle. An alternative is a “dynamic level-k” model, where players choose a rule from a rule hierarchy. The rule hierarchy is iteratively defined such that the level-k rule is a best response to the level-(k-1) rule, and the level-∞ rule corresponds to backward induction. Players choose rules based on their best guesses of others’ rules and use historical plays to improve their guesses. The model captures two systematic violations of backward induction in centipede games, limited induction and repetition unraveling. Because the dynamic level-k model always converges to backward induction over repetition, the former can be considered to be a tracing procedure for the latter. We also examine the generalizability of the dynamic level-k model by applying it to explain systematic violations of backward induction in sequential bargaining games. We show that the same model is capable of capturing these violations in two separate bargaining experiments.
- Camerer, C. and Ho, T-H “Behavioral Game Theory Experiments and Modeling," In Handbook of Game Theory, Forthcoming. PDF File provided by berkeley
- Ho, T-H. “Individual Learning in Games," Blume, L. and Durlauf, S. (eds.) The New Palgrave Dictionary of Economics: Design of Experiments and Behavioral Economics, Palgrave Macmillian, 2008. PDF File
- Camerer, C. Ho, T-H. and Chong,J-K. “Models of Thinking, Learning, and Teaching in Games," The American Economic Review Papers and Proceedings, 93: 2 (2003), 192-195. PDF File
- Camerer, C., Ho, T-H, and Chong, J-K. “Behavioral Game Theory: Thinking, Learning and Teaching," Paper Presented at the Nobel Prize Symposium (Dec 2001). PDF File
- 這篇和選美賽局 beauty contest 有關
Ho, T-H., Camerer, C., and Weigelt, K., “Iterated Dominance and Iterated Best Response in Experimental P-Beauty Contests," The American Economic Review, 88 (1998), 947-969. PDF File
- Ho, T-H. and Weigelt, K., “Task Complexity, Equilibrium Selection, and Learning: An Experimental Study," Management Science, 42 (1996), 659-679. PDF File
- Ho, T-H. and K. Weigelt, “Trust Building Among Strangers," Management Science , 51: 4, pp. 1-12, 2005. [Lead Article] [Finalist, John D. C. Little Best Paper Award]. PDF File
|By:||Doh-Shin Jeon (Toulouse School of Economics)
Yassine Lefouili (Toulouse School of Economics)
We study bilateral cross-licensing agreements among N(> 2) firms that engage in competition after the licensing phase. It is shown that the most collusive cross-licensing royalty, i.e. the one that allows the industry to achieve the monopoly profit, is sustainable as the outcome of bilaterally efficient agreements. When the terms of the agreements are not observable to third parties, the monopoly royalty is the unique symmetric bilaterally efficient royalty. However, when the terms of the agreements are public, the most competitive royalty (i.e. zero) can also be bilaterally efficient. Policy implications regarding the antitrust treatment of cross-licensing agreements are derived from these results.
|Keywords:||Cross-Licensing, Collusion, Antitrust and Intellectual Property|
|JEL:||L44 O33 O34|
|By:||James Bland (Department of Economics, Purdue University)
Nikos Nikiforakis (Max Planck Institute for Research on Collective Goods, Bonn)
When agents face coordination problems their choices often impose externalities on third parties. We investigate whether such externalities can affect equilibrium selection in a series of one-shot coordination games varying the size and the sign of the externality. We find that third-party externalities have a limited effect on decisions. A large majority of participants in the experiment are willing to take an action that increases their income slightly, even if doing so causes substantial inequalities and reductions in overall efficiency. Individuals revealed to be other-regarding in a non-strategic allocation task often behave as-if selfish when trying to coordinate.
|Keywords:||social preferences, efficiency, externalities, tacit coordination, equilibrium selection, efficiency.|
|JEL:||D63 D01 D62 C90 D03|