Buying a pig in a poke: An experimental study of unconditional veto power

We study an ultimatum experiment in which the responder does not know the offer when accepting or rejecting. Unconditional veto power leads to acceptances, although proposers are significantly greedier than in standard ultimatum games, and this is anticipated by responders. We also elicit responders’ willingness to pay for (un)conditional veto power. The bids reveal a large endowment effect.     

Identifying Preferences for Conditional Cooperation Using Individual Beliefs

The relationship between contributions and elicited beliefs in a repeated two-person public good experiment is modeled with the help of a parsimounious random-utility function that allows for conditionally cooperative, opportunistic, and altruistic patterns of behavior. Under standard assumptions, a latent-class mixed logit specification with three sub-populations is shown to capture well heterogeneity in individual contribution levels over time, while also accomodating for different degrees of heteroscedasticity. The estimation results are consistent with the conjecture that the majority of players in public goods games are strongly conditional cooperators, with smaller fractions of the population leaning to opportunistic or altruistic behavior.     

Friedman, Harsanyi, Rawls, Boulding – or somebody else? An experimental investigation of distributive justice

This paper investigates distributive justice using a fourfold experimental design: The ignorance and the risk scenarios are combined with the self-concern and the umpire modes. We study behavioral switches between self-concern and umpire mode and investigate the goodness of ten standards of behavior. In the ignorance scenario, subjects became, on average, less inequality-averse as umpires. A within-subjects analysis shows that about one half became less inequality-averse, one quarter became more inequality-averse and one quarter remained unchanged as umpires. In the risk scenario, subjects became on average more inequality-averse in their umpire roles. A within-subjects analysis shows that about half became more inequality-averse, one quarter became less inequality-averse, and one quarter remained unchanged as umpires. As to the standards of behavior, several prominent ones (leximin, leximax, Gini, Cobb-Douglas) were not supported, while expected utility, Boulding’s hypothesis, the entropy social welfare function, and randomization preference enjoyed impressive acceptance. For the risk scenario, the tax standard of behavior joins the favorite standards of behavior.Financial Support of the European Commission under TMR Contract No. ERBFMRXCT98-0248 is gratefully acknowledged. We are indebted to Serge-Christophe Kolm, Alf Erling Risa, Peter Zweifel, two anonymous referees and an editor of Social Choice and Welfare for helpful comments. We thank Marc Paolella for improving our English writing style. The usual disclaimer applies. The experimental data can be obtained from the authors (e-mail: traub@bwl.uni-kiel.de).     

Experience in public goods experiments

Theory and Decision - Using information on students’ past participation in economic experiments, we analyze whether behavior in public goods games is affected by experience (participation in...     

Use of data on planned contributions and stated beliefs in the measurement of social preferences

In a series of one-shot linear public goods game, we ask subjects to report their contributions, their contribution plans for the next period, and their first-order beliefs about their present and future partner. We estimate subjects’ preferences from plan data by a finite mixture approach and compare the results with those obtained from contribution data. Controlling for beliefs, which incorporate the information about the others’ decisions, we are able to show that plans convey accurate information about subjects’ preferences and, consequently, are good predictors of their future behavior.     

Satisficing in strategic environments: A theoretical approach and experimental evidence

The satisficing approach is generalized and applied to finite n-person games. We formally define the concept of satisficing and propose a theory that allows satisficing players to make “optimal” decisions without being equipped with any prior. We also review some experiments on strategic games illustrating and partly supporting our theoretical approach.     

Paternalism with hindsight: do protégés react consequentialistically to paternalism?

We investigate experimentally whether the protégés’ reaction to paternalism depends on the consequences of the paternalistic action to their well-being. Thus, our research is concerned with the perception of paternalism by those who are directly affected by it, rather than with the justifiability of paternalism from an ethical perspective. We find that the protégés punish a paternalist restricting their freedom of choice. Yet, this negative reaction is not based on principled grounds because, with the wisdom of hindsight, the protégés punish the paternalist only if the restriction makes them worse off. Conversely, if the restriction makes them better off, the protégés on average do not punish and, sometimes, they even reward the paternalist. This suggests that the protégés take predominantly a consequentialist stand on paternalism. In addition, a regression analysis reveals that our main finding is not altered when we control for the intentions (malevolent vs. benevolent) that the protégés attribute to the paternalist.     

An experimental study of the generosity game

We study ultimatum and dictator variants of the generosity game. In this game, the first mover chooses the amount of money to be distributed between the players within a given interval, knowing that her own share is fixed. Thus, the first mover is not confronted with the typical trade-off between her own and the other’s payoff. For each variant of the game, we study three treatments that vary the range of potential pie sizes so as to assess the influence of these changes on the first movers’ generosity. We find that removing the trade-off inspires significant generosity, which is not always affected by the second mover’s veto power. Moreover, the manipulation of the choice set indicates that choices are influenced by the available alternatives.     

Context and interpretation in laboratory experiments: The case of reciprocity

The existing literature acknowledges that a mismatch between the experimenter’s and the subjects’ models of an experimental task can adversely affect the interpretation of data from laboratory experiments. We primarily focus on experiments designed to test a hypothesis by comparing behavior across two or more games and highlight the drawbacks of using a between-subjects design or a within subjects design. An alternative design for laboratory experiments is proposed which may alleviate this concern especially in studies of social preferences. We argue that the proposed design does not introduce any conceptual problems in addition to those that are already present in the between and within subjects designs and may alleviate some of the problems inherent to these designs in certain cases. We also use the proposed design to answer some questions that have attracted continued attention in the literature on social preferences in general and reciprocity in particular.     

On the relation between impulses to help and causes of neediness: An experimental study

A novel two-person “charity game”, related to the “Samaritan’s Dilemma” [Buchanan, J.M., 1975. The samaritan’s dilemma. In: Phelps, E.S. (Ed.), Altruism, Morality and Economic Theory. Russel Sage Foundation, New York, pp. 71–85], is used to experimentally investigate the relation between helpers’ behavior and poor recipients’ reaction to aid. We distinguish two treatments differing in whether the causes of neediness are verifiable or not. Helping behavior does not vary significantly between treatments, but is positively correlated with dictator giving, suggesting idiosyncratic attitudes to help. Needy subjects are unaffected by anticipated help, but react optimally to chance.