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

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

Strategic Behavior and Social Outcomes in a Bottleneck Queue: Experimental Evidence

Date: 2014-08-13
By: Breinbjerg, Jesper (Department of Business and Economics)
Sebald, Alexander (Department of Economics)
Østerdal, Lars Peter (Department of Business and Economics)
We consider a class of three-player queuing games where players independently choose when to arrive at a bottleneck facility that serves only one at a time. Players are impatient for service but cannot arrive before the facility opens and they dislike time spent in queue. We derive the equilibrium arrivals under the first-in-first-out (FIFO), last-in-first-out (LIFO), and service-in-random-order (SIRO) queue disciplines and compare these equilibrium predictions to outcomes from a laboratory experiment. LIFO provides higher equilibrium welfare than FIFO and SIRO since the players arrive such that lower congestion is induced. Experimental evidence confirms that employing different queue disciplines indeed affects the strategic behavior of players and thereby the level of congestion. The experimental participants do not, however, behave as prescribed by the equilibrium predictions. They obtain significantly higher welfare than prescribed by equilibrium under all queue disciplines. Our results moreover suggest that people perceive LIFO as the most unfair of the three disciplines although the theoretical results suggest that it is welfare optimal.
Keywords: Queue disciplines; congestion; equilibrium; experiments; fairness
JEL: C72 D62 D63 R41

Market experience is a reference point in judgments of fairness

Date: 2013-07
By: Holger Herz
Dmitry Taubinsky
People’s desire for fair transactions can play an important role in negotiations, organizations, and markets. In this paper, we show that markets can also shape what people consider to be a fair transaction. We propose a simple and generally-applicable model of path-dependent fairness preferences, in which past experiences shape preferences, and we experimentally test the model’s predictions. We find that previous exposure to competitive pressure substantially and persistently reduces subjects’ fairness concerns, making them more likely to accept low offers. Consistent with our theory, we also find that past experience has little effect on subjects’ inclinations to treat others unfairly.
Keywords: Social preferences, reference points, fairness, bargaining
JEL: C78