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Full-Text Articles in Other Economics

Coordination And Evolutionary Dynamics: When Are Evolutionary Models Reliable?, Daniel Graydon Stephenson Oct 2018

Coordination And Evolutionary Dynamics: When Are Evolutionary Models Reliable?, Daniel Graydon Stephenson

ESI Publications

This study reports a continuous-time experimental test of evolutionary models in coordinated attacker–defender games. It implements three experimental treatment conditions: one with strong coordination incentives, one with weak coordination incentives, and one with zero coordination incentives. Each treatment exhibits identical equilibrium predictions but distinct evolutionary predictions. Observed behavior was tightly clustered around equilibrium under both the zero coordination treatment and the weak coordination treatment but widely dispersed from equilibrium under the strong coordination treatment. This result was anticipated by explicitly dynamic models but not by conventional stability criteria. In contrast to the widely maintained assumption of sign-preservation, subjects frequently ...


Experimental Research On Contests, Roman M. Sheremeta Oct 2018

Experimental Research On Contests, Roman M. Sheremeta

ESI Working Papers

Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants’ efforts are significantly higher than predicted by the standard Nash equilibrium. Despite overbidding, most comparative static predictions, such as the incentive effect, the size effect, the discouragement effect and others are supported in the laboratory. In addition, experimental studies examine various contest structures, including dynamic contests (such as multi-stage races, wars of attrition, tug-of-wars), multi-dimensional contests (such as Colonel Blotto games), and contests between groups. This article provides a short review ...


Indefinitely Repeated Contests: An Experimental Study, Philip Brookins, Dmitry Ryvkin, Andrew Smyth Feb 2018

Indefinitely Repeated Contests: An Experimental Study, Philip Brookins, Dmitry Ryvkin, Andrew Smyth

ESI Working Papers

We experimentally explore indefinitely repeated contests. Theory predicts more cooperation, in the form of lower expenditures, in indefinitely repeated contests with a longer expected time horizon, yet our data do not support this prediction. Theory also predicts more cooperation in indefinitely repeated contests compared to finitely repeated contests of the same expected length, but we find no significant difference empirically. When controlling for risk and gender, we actually find significantly higher long-run expenditure in some indefinite contests relative to finite contests. Finally, theory predicts no difference in cooperation across indefinitely repeated winner-take-all and proportional-prize contests. We find significantly less cooperation ...


Trust In Humans And Robots: Economically Similar But Emotionally Different, Eric Schniter, Timothy W. Shields, Daniel Sznycer Jan 2018

Trust In Humans And Robots: Economically Similar But Emotionally Different, Eric Schniter, Timothy W. Shields, Daniel Sznycer

ESI Working Papers

Trust-based interactions with robots are increasingly common in the marketplace, workplace, on the road, and in the home. However, a looming concern is that people may not trust robots as they do humans. While trust in fellow humans has been studied extensively, little is known about how people extend trust to robots. Here we compare trust-based investments and emotions from across three nearly identical economic games: human-human trust games, human-robot trust games, and human-robot trust games where the robot decision impacts another human. Robots in our experiment mimic humans: they are programmed to make reciprocity decisions based on previously observed ...


Loss Aversion And The Quantity-Quality Tradeoff, Jared Rubin, Anya Samek, Roman M. Sheremeta Aug 2017

Loss Aversion And The Quantity-Quality Tradeoff, Jared Rubin, Anya Samek, Roman M. Sheremeta

ESI Working Papers

Firms face an optimization problem that requires a maximal quantity output given a quality constraint. But how do firms incentivize quantity and quality to meet these dual goals, and what role do behavioral factors, such as loss aversion, play in the tradeoffs workers face? We address these questions with a theoretical model and an experiment in which participants are paid for both quantity and quality of a real effort task. Consistent with basic economic theory, higher quality incentives encourage participants to shift their attention from quantity to quality. However, we also find that loss averse participants shift their attention from ...


Deception And Reception: The Behavior Of Information Providers And Users, Roman M. Sheremeta, Timothy W. Shields Mar 2017

Deception And Reception: The Behavior Of Information Providers And Users, Roman M. Sheremeta, Timothy W. Shields

ESI Working Papers

We investigate the behavior of information providers (underwriters) and users (investors) in a controlled laboratory experiment where underwriters have incentives to deceive and investors have incentives to avoid deception. Participants play simultaneously as underwriters and investors in one-shot information transmission games. The results of our experiment show a significant proportion of both deceptive and non-deceptive underwriters. Despite the presence of deceptive underwriters, investors are receptive to underwriters’ reports, gleaning information content, albeit overly optimistic. Within our sample, deception by underwriters and reception by investors are the most profitable strategies. Moreover, participants who send deceptive reports to investors, but at the ...


Angels And Demons: Using Behavioral Types In A Real-Effort Moral Dilemma To Identify Expert Traits, Hernan Bejerano, Ellen P. Green, Stephen Rassenti Oct 2016

Angels And Demons: Using Behavioral Types In A Real-Effort Moral Dilemma To Identify Expert Traits, Hernan Bejerano, Ellen P. Green, Stephen Rassenti

ESI Publications

In this article, we explore how independently reported measures of subjects' cognitive capabilities, preferences, and sociodemographic characteristics relate to their behavior in a real-effort moral dilemma experiment. To do this, we use a unique dataset, the Chapman Preferences and Characteristics Instrument Set (CPCIS), which contains over 30 standardized measures of preferences and characteristics. We find that simple correlation analysis provides an incomplete picture of how individual measures relate to behavior. In contrast, clustering subjects into groups based on observed behavior in the real-effort task reveals important systematic differences in individual characteristics across groups. However, while we find more differences, these ...


Focality And Asymmetry In Multi-Battle Contests, Subhashish M. Chowdhury, Dan Kovenock, David Rojo Arjona, Nathaniel Wilcox Aug 2016

Focality And Asymmetry In Multi-Battle Contests, Subhashish M. Chowdhury, Dan Kovenock, David Rojo Arjona, Nathaniel Wilcox

ESI Working Papers

This article examines behavior in two-person constant-sum Colonel Blotto games in which each player maximizes the expected total value of the battlefields won. A lottery contest success function is employed in each battlefield. Recent experimental research on such games provides only partial support for Nash equilibrium behavior. We hypothesize that the salience of battlefields affects strategic behavior (the salient target hypothesis). We present a controlled test of this hypothesis – against Nash predictions – when the sources of salience come from certain asymmetries in either battlefield values or labels (as in Schelling (1960)). In both cases, subjects over-allocate the resource to the ...


Dynamic Behavior And Player Types In Majoritarian Multi-Battle Contests, Alan Gelder, Dan Kovenock May 2016

Dynamic Behavior And Player Types In Majoritarian Multi-Battle Contests, Alan Gelder, Dan Kovenock

ESI Working Papers

In a dynamic contest where it is costly to compete, a player who is behind must decide whether to surrender or to keep fighting in the face of bleak odds. We experimentally examine the game theoretic prediction of last stand behavior in a multi-battle contest with a winning prize and losing penalty, as well as the contrasting prediction of surrendering in the corresponding contest with no penalty. We find varied evidence in support of these hypotheses in the aggregated data, but more conclusive evidence when scrutinizing individual player behavior. Players’ realized strategies tend to conform to one of several “types ...


Status And The Demand For Visible Goods: Experimental Evidence On Conspicuous Consumption, David Clingingsmith, Roman M. Sheremeta Jan 2015

Status And The Demand For Visible Goods: Experimental Evidence On Conspicuous Consumption, David Clingingsmith, Roman M. Sheremeta

ESI Working Papers

Some economists argue that consumption of publicly visible goods is driven by social status. Making a causal inference about this claim is difficult with observational data. We conduct an experiment in which we vary both whether a purchase of a physical product is publicly visible or kept private and whether the income used for purchase is linked to social status or randomly assigned. Making consumption choices visible leads to a large increase in demand when income is linked to status, but not otherwise. We investigate the characteristics that mediate this effect and estimate its impact on welfare.


Predictable And Predictive Emotions: Explaining Cheap Signals And Trust Re-Extension, Eric Schniter, Roman M. Sheremeta Jan 2014

Predictable And Predictive Emotions: Explaining Cheap Signals And Trust Re-Extension, Eric Schniter, Roman M. Sheremeta

ESI Publications

Despite normative predictions from economics and biology, unrelated strangers will often develop the trust necessary to reap gains from one-shot economic exchange opportunities. This appears to be especially true when declared intentions and emotions can be cheaply communicated. Perhaps even more puzzling to economists and biologists is the observation that anonymous and unrelated individuals, known to have breached trust, often make effective use of cheap signals, such as promises and apologies, to encourage trust re-extension. We used a pair of trust games with one-way communication and an emotion survey to investigate the role of emotions in regulating the propensity to ...


Recalibrational Emotions And The Regulation Of Trust-Based Behaviors, Eric Schniter, Timothy W. Shields Jan 2013

Recalibrational Emotions And The Regulation Of Trust-Based Behaviors, Eric Schniter, Timothy W. Shields

ESI Working Papers

Though individuals differ in the degree to which they are predisposed to trust or act trustworthy, we theorize that trust-based behaviors are universally determined by the calibration of conflicting short- and long-sighted behavior regulation programs, and that these programs are calibrated by emotions experienced personally and interpersonally. In this chapter we review both the main-stream and evolutionary theories of emotions that philosophers, psychologists, and behavioral economists have based their work on and which can inform our understanding of trust-based behavior regulation. The standard paradigm for understanding emotions is based on mapping their positive and negative affect valence. While Valence Models ...


Cheap Talk With Two Audiences: An Experiment, Mikhail Drugov, Roberto Hérnan-Gonzalez, Praveen Kujal, Marta Troya Martinez Jan 2013

Cheap Talk With Two Audiences: An Experiment, Mikhail Drugov, Roberto Hérnan-Gonzalez, Praveen Kujal, Marta Troya Martinez

ESI Working Papers

In this paper we experimentally test strategic information transmission between one informed and two uninformed agents in a cheap-talk game. We find evidence of the "disciplining" effect of public communication as compared to private; however, it is much weaker than predicted by the theory. Adding a second receiver naturally increases the complexity of strategic thinking when communication is public. Using the level-k model, we exploit the within subject design to show how individuals decrease their level-k in public communication. Surprisingly, we find that individuals become more sophisticated when they communicate privately with two receivers rather than one.


Do Liars Believe? Beliefs And Other-Regarding Preferences In Sender-Receiver Games, Roman M. Sheremeta, Timothy W. Shields Jan 2012

Do Liars Believe? Beliefs And Other-Regarding Preferences In Sender-Receiver Games, Roman M. Sheremeta, Timothy W. Shields

ESI Working Papers

We examine subjects‟ behavior in sender-receiver games where there are gains from trade and alignment of interests in one of the two states. We elicit subjects‟ beliefs, risk and other-regarding preferences. Our design also allows us to examine the behavior of subjects in both roles, to determine whether the behavior in one role is the best response to the subject‟s own behavior in the other role. The results of the experiment indicate that 60 percent of senders adopt deceptive strategies by sending favorable message when the true state of the nature is unfavorable. Nevertheless, 67 percent of receivers invest ...


Alternative Rebate Rules In The Provision Of A Threshold Public Good: An Experimental Investigation, Melanie Marks, Rachel Croson Feb 1998

Alternative Rebate Rules In The Provision Of A Threshold Public Good: An Experimental Investigation, Melanie Marks, Rachel Croson

Operations, Information and Decisions Papers

This study reports the effects of rebate rules on voluntary contributions to a threshold public good. Rebate rules specify how excess contributions, over the threshold amount are distributed. We examine three rebate rules experimentally: a no rebate policy where excess contributions are discarded, a proportional rebate policy where excess contributions are rebated proportionally to an individual's contribution, and a utilization rebate policy where excess contributions provide some continuous public good. Significantly more Nash equilibrium outcomes are observed under the no rebate treatment than under either of the other two. Interestingly, the variance of contributions differs significantly between rebate treatments.


Information In Ultimatum Games: An Experimental Study, Rachel Croson Aug 1996

Information In Ultimatum Games: An Experimental Study, Rachel Croson

Operations, Information and Decisions Papers

This study reports on an experiment using variations of the ultimatum game. The experiment controls the amount and type of information known to the responder in the game. In two treatments, she knows both the absolute (money) and relative (fairness) payoffs from an offer. In the other two, she knows either only the absolute or only the relative payoffs. The predictions of four models for these treatments are tested: subgame-perfection, Bolton's comparative equilibrium, Ochs and Roth's absolute threshold, and Ochs and Roth's percentage threshold hypothesis.