Essays in behavioral economics
Lappalainen, Olli (2019-02-15)
Essays in behavioral economics
(15.02.2019)
Turun yliopisto. Turun kauppakorkeakoulu
Julkaisun pysyvä osoite on:
https://urn.fi/URN:ISBN:978-951-29-7563-1
https://urn.fi/URN:ISBN:978-951-29-7563-1
Tiivistelmä
The collection of essays included herein studies different forms of reciprocal behavior, voluntary contributions towards a public project, and price setting and trading behavior in monopolistic asset markets.
In paper 1, we examine reciprocity in an experiment using a sequential dictator game where the first round recipient becomes the second round dictator. We separate between three types of reciprocity: Direct reciprocity occurs when the second round dictator responses directly to the first round dictator. A second round dictator shows indirect reciprocity when she has not taken part in the first round play, but yet reacts to it when deciding how much to allocate to the first round dictator. In generalized reciprocity, the second round dictator has possibly received allocation in the first round but responses to someone else than the first round dictator. Our results show evidence of strong reciprocity in all three cases, in particular direct and generalized reciprocity are equally intense.
In paper 2, we examine the effect of distributional and reciprocal motivation on the behavior. We conduct an experiment with a two round dictator game. In our baseline treatment, the first round game is a standard dictator game. In the second round, we introduce a third player who will decide how to allocate her endowment and the endowments of the first round players between these three players. We also run a treatment in which the first round allocation is replaced by a random division. In both treatments, on the average, the second round dictators redistributed one half of the first round endowment to themselves, keeping almost two thirds of the total endowment. We find that intentions matter in the case of extremely unfair first round allocation.
In paper 3, I study experimentally a voluntary contribution game in which returns from the private project have diminishing marginal benefits and the contributions to the joint project exhibit pairwise strategic complementarities. As a control I use a public good game with an identical private production, but standard public good aggregation. A significant over-contribution is observed in both settings when the group size is 5, but it is much higher under the complementary technology, and drops drastically when the group size is reduced.
In paper 4, we study the price setting behavior of monopolist sellers and bids made by buyers. The buyers receive private information about the fundamental value of an asset and make a bid for it in an exogenously and randomly determined order. We find that the sellers failed to update their prices both upwards and downward after receiving new information. This sluggish updating strategy turned out beneficial, as theoretically optimal higher prices assuming common knowledge of rationality among traders trades would have led to fewer trades, and the higher price would not have been enough to offset the losses incurred from trades forfeited.
In paper 1, we examine reciprocity in an experiment using a sequential dictator game where the first round recipient becomes the second round dictator. We separate between three types of reciprocity: Direct reciprocity occurs when the second round dictator responses directly to the first round dictator. A second round dictator shows indirect reciprocity when she has not taken part in the first round play, but yet reacts to it when deciding how much to allocate to the first round dictator. In generalized reciprocity, the second round dictator has possibly received allocation in the first round but responses to someone else than the first round dictator. Our results show evidence of strong reciprocity in all three cases, in particular direct and generalized reciprocity are equally intense.
In paper 2, we examine the effect of distributional and reciprocal motivation on the behavior. We conduct an experiment with a two round dictator game. In our baseline treatment, the first round game is a standard dictator game. In the second round, we introduce a third player who will decide how to allocate her endowment and the endowments of the first round players between these three players. We also run a treatment in which the first round allocation is replaced by a random division. In both treatments, on the average, the second round dictators redistributed one half of the first round endowment to themselves, keeping almost two thirds of the total endowment. We find that intentions matter in the case of extremely unfair first round allocation.
In paper 3, I study experimentally a voluntary contribution game in which returns from the private project have diminishing marginal benefits and the contributions to the joint project exhibit pairwise strategic complementarities. As a control I use a public good game with an identical private production, but standard public good aggregation. A significant over-contribution is observed in both settings when the group size is 5, but it is much higher under the complementary technology, and drops drastically when the group size is reduced.
In paper 4, we study the price setting behavior of monopolist sellers and bids made by buyers. The buyers receive private information about the fundamental value of an asset and make a bid for it in an exogenously and randomly determined order. We find that the sellers failed to update their prices both upwards and downward after receiving new information. This sluggish updating strategy turned out beneficial, as theoretically optimal higher prices assuming common knowledge of rationality among traders trades would have led to fewer trades, and the higher price would not have been enough to offset the losses incurred from trades forfeited.
Kokoelmat
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