Altruistic and risk preference of individuals and groups

Date: 2016-10
By: Yoshio Kamijo (School of Economics and Management, Kochi University of Technology)
Teruyuki Tamura (School of Economics and Management, Kochi University of Technology)
This study examines whether attitudes toward risk and altruism are affected by being in a group or being alone. Subjects in our experiment were requested only to show their faces to other members without any further communication, differing from previous studies. In experiments of both anonymous investments and donations, we found that subjects who made decisions in a group offered significantly lower amounts than individuals who made decisions alone, even controlling for individuals’ risk and altruistic preferences. Our results indicate that people are more risk averse and self-interested when they are in a group.
Keywords: Group decision, Altruism, Decision under risk
JEL: C91 C92 D81

Are dyads conditionally cooperative? Evidence from a public goods experiment

Date: 2016-10
By: Morone, Andrea
Temerario, Tiziana
We analysed dyads strategies in one-shot public goods game. By means of a laboratory experiment, using a variant of the strategy-method, we found that more than one third of the dyads are conditional cooperators, whereas 18% can be categorised as free riders.
Keywords: Voluntary contributions; Conditional cooperation; Free riding; Strategy-method; Experiments;
JEL: C91 C92 H41

Some Strategic Aspects of Private Information: An Experimental Study

Date: 2016-04-20
By: Andrés Salamanca Lugo (TSE – Toulouse School of Economics – Toulouse School of Economics)
Olga Manrique Chaparro (Universidad Nacional de Colombia [Bogotá])
In this paper we experimentally analyze the use of private information in a class of zero-sum repeated games with incomplete information on one side and perfect monitoring. We analyze whether the information disclosure by the informed players, and its use by the uninformed players, matches the theoretical predictions. We consider two games that differ according to the amount of information that the informed player should optimally disclose: in the first game, the informed player should entirely conceal his information. In contrast, in the second game the informed player should fully disclose his information. We find that the flow of information is higher than predicted in the first game and lower than predicted in the second game. However, the use of information is strictly higher in the second game than in the first one. Uninformed subjects tend not to use the revealed information in the first game, and seem to misinterpret the revealed information in the second game.
Keywords: Repeated games,incomplete information,experiments

Centrality measures in networks based on nodes attributes, long-range interactions and group influence

Date: 2016-10
By: F. Aleskerov
N. Meshcheryakova
S. Shvydun
We propose a new method for assessing agents influence in network structures, which takes into consideration nodes attributes, individual and group influences of nodes, and the intensity of interactions. This approach helps us to identify both explicit and hidden central elements which cannot be detected by classical centrality measures or other indices.

Collective Commitment

Date: 2016-07
By: Christian Roessler
Sandro Shelegia
Bruno Strulovici
We consider collective decisions made by agents whose preferences and power depend on past events and decisions. Faced with an inecient equilibrium and an opportunity to commit to a policy, can the agents reach an agreement on such a policy? We provide a consistency condition linking power structures in the dynamic setting and at the commitment stage. When the condition holds, commitment has no value: any agreement that may be reached at the outset coincides with the equilibrium without commitment. When the condition fails, as in the case of time-inconsistent preferences, commitment can improve outcomes. We discuss several applications.
JEL: D70 H41 C70

Participation in Massive Open Online Courses: The Effect of Learner Motivation and Engagement on Achievement

Date: 2016
By: Semenova Tatiana (National Research University Higher School of Economics)
Massive open online courses (MOOCs) are a relatively new format of distance education which has become popular among students, faculties, employees and others. Regardless of the fact that MOOCs are a widespread phenomenon, they face some challenges including high dropout rates, low levels of student-teacher interaction, low representation of poor and less educated learners, issues with data processing and data analysis for creating predictive models. In our study, we look more closely at the last issue, while creating a model describing the relationship between the motivation, engagement, and achievement of MOOC participants. We use a database which consists of trace data and survey data from students of 20 online courses launched on the Coursera platform in 2014–2015 at the Higher School of Economics. Our research shows that for modelling the relationship between factors and achievement of MOOC students, it is necessary to transform the interval dependent variable into an ordinal one. To evaluate the relationship between motivation, engagement, and achievement, we used mediation analysis with ordinal logistic regression. The research shows that academic motivation of MOOC learners has an indirect effect on their achievement. The level of engagement acts as a mediator of this relationship. At the same time, intrinsic motivation plays an alternative role in the MOOC format compared to a traditional course format. Intrinsic motivation decreases the likelihood of getting a higher score from the second week of the course.
Keywords: MOOC, Coursera, motivation, intrinsic motivation, engagement, achievement
JEL: I21 I29

Endogenous Market Formation and Monetary Trade: an Experiment

Date: 2016-08
By: Avi Weiss (Bar-Ilan University)
Gabriele Camera
Dror Goldberg
The theory of money typically ignores the fact that the mode of market interaction arises endogenously, and simply assumes a decentralized, bilateral exchange process. However, endogenizing the organization of trade is critical for understanding the conditions that lend themselves to the development of money as a mode of exchange. To study this, we develop a “travelling game” to study the spontaneous emergence of different systems of exchange theoretically and experimentally. Players located on separate “islands” can either stay and trade on their island, or pay a cost to trade elsewhere. Earnings rise with the frequency of trade but fall with the frequency of travel. Decentralized and centralized markets can both emerge in equilibrium. The latter maximize consumption frequencies and are socially efficient; the former minimize travel cost and require the use of a medium of exchange. In the laboratory, a centralized market more frequently emerges when subjects perform diversified economic tasks, and when they interact in large groups and cannot be sure whether they will meet the same counterpart in later periods. The experiment shows that to understand the emergence of monetary systems it is important to amend the theory of money such that the market structure is endogenized.
Keywords: endogenous institutions, macroeconomic experiments, matching, coordination, markets, money.

Monetization Strategies for Internet Companies

Date: 2016
By: Voigt, Sebastian
Many Internet service companies such as providers of two-sided markets, social networks, or online games rely on the social interaction between their user base and thus capitalize from positive network effects. For such companies, a common strategy is to offer (basic) services for free (and thereby abolish entry barrier of a one-off or recurring price) and to charge their users for premium services. Companies such as eBay, PayPal, LinkedIn, or Skype added paid services to their originally free business models, either via subscriptions, PAYG, or direct sales of virtual items. Their strategy how to make money and whom to bill however differs widely. In the Internet business, ‘monetization’ has become a frequently used buzzword for all aspects of a company’s revenue strategy which includes the decision who should be billed (e.g., for a two-sided market: seller vs. buyer vs. advertisers only), with which price model (e.g., mandatory subscription vs. optional subscriptions vs. selling virtual currency or items) and price level (e.g., differentiated between user groups), and – in case of a freemium strategy – how a new (free) user can be converted most efficiently into a paying and remunerative customer (e.g., via effective CRM measures). The overarching objective of all monetization measures is to maximize the company’s revenue and/or profit. The field of monetization offers a wide field of research opportunities. Four of these are covered in this dissertation: The Name-your-own-price model, users’ spending behavior in virtual communities, the monetization of network effects in social networks, and the legal boundaries of social network usage. As a result, this dissertation solves a series of questions currently being worked on by practitioners and uses a wide range of methods from various disciplines such as economic, psychological, and game theory.

Reimbursing Consumers’ Switching Costs in Network Industries

Date: 2016-09
By: Jiawei Chen (Department of Economics, University of California, Irvine, 3151 Social Science Plaza, Irvine, CA 92697, USA)
Michael Sacks (Department of Economics, West Virginia University, 1601 University Ave., PO Box 6025, Morgantown, WV 26506-6025, USA)
This paper investigates firms’ decisions to reimburse consumers’ switching costs in network industries. Prior literature finds that switching costs incentivize firms to harvest their locked-in consumers rather than price aggressively for market dominance, resulting in a lower market concentration. Using a dynamic duopoly model, we show that this result is reversed if firms have the option to reimburse consumers’ switching costs. In that case the larger firm offers a bigger reimbursement to switching consumers than the smaller firm does, as an additional instrument to propel itself to market dominance. Consequently, an increase in switching cost increases market concentration. Compared to the case without reimbursements, allowing firms the option to reimburse results in greater consumer welfare despite having a much higher market concentration. Consumers’ benefits from a larger network and switching cost reimbursement outweigh the higher price charged by a dominant firm.
Keywords: network goods, price discrimination, reimbursement, switching costs
JEL: L11 L13
By yinung Posted in network 已加上的標籤

Effectiveness of Paid Search Advertising: Experimental Evidence

Date: 2016-10
By: Weijia (Daisy) Dai (Lehigh University)
Michael Luca (Harvard Business School, Negotiation, Organizations & Markets Unit)
Paid search has become an increasingly common form of advertising, comprising about half of all online advertising expenditures. To shed light on the effectiveness of paid search, we design and analyze a large-scale field experiment on the review platform The experiment consists of roughly 18,000 restaurants and 24 million advertising exposures – randomly assigning paid search advertising packages to more than 7,000 restaurants for a three-month period, with randomization done at the restaurant level to assess the overall impact of advertisements. We find that advertising increases a restaurant’s Yelp page views by 25% on average. Advertising also increases the number of purchase intentions – including getting directions, browsing the restaurant’s website, and calling the restaurant – by 18%, 9%, and 13% respectively, and raises the number of reviews by 5%, suggesting that advertising also affects the number of restaurant-goers. All advertising effects drop to zero immediately after the advertising period. A back of the envelope calculation suggests that advertising would produce a positive return on average for restaurants in our sample.