Understanding the Nature of Cooperation Variability

Date: 2013-03-19
By: Fosgaard, Toke (Department of Food and Resource Economics, University of Copenhagen)
Hansen , Lars Gårn (Department of Food and Resource Economics, University of Copenhagen)
Wengström, Erik (Department of Economics, Lund University)
URL: http://d.repec.org/n?u=RePEc:hhs:lunewp:2013_006&r=net
We investigate framing effects in a large-scale public good experiment. We measure indicators of explanations previously proposed in the literature, which when combined with the large sample, enable us to estimate a structural model of framing effects. The model captures potential causal effects and the behavioral heterogeneity of cooperation variability. We find that framing only has a small effect on the average level of cooperation but a substantial effect on behavioral heterogeneity and we show that this can be explained almost exclusively by a corresponding change in the heterogeneity of beliefs about other subjects’ behavior. Preferences are on the other hand stable between frames.
Keywords: Framing; Public Goods; Internet Experiment; Simulation
JEL: C13

A Testable Theory of Imperfect Perception

A Testable Theory of Imperfect Perception

Date: 2011-06
By: Andrew Caplin
Daniel Martin
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:17163&r=net
We introduce a rational choice theory that allows for many forms of imperfect perception, including failures of memory, selective attention, and adherence to simplifying rules of thumb. Despite its generality, the theory has strong, simple, and intuitive implications for standard choice data and for more enriched choice data. The central assumption is rational expectations: decision makers understand the relationship between their perceptions, however limited they may be, and the (stochastic) consequences of their available choices. Our theory separately identifies two distinct “framing" effects: standard effects involving the layout of the prizes (e.g. order in a list) and novel effects relating to the information content of the environment (e.g. how likely is the first in the list to be the best). Simple experimental tests both affirm the basic model and confirm the existence of information-based framing effects.
JEL: D01