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Articles 1 - 30 of 279
Full-Text Articles in Social and Behavioral Sciences
Cooperation In Temporary Partnerships, Gabriele Camera, Alessandro Gioffré
Cooperation In Temporary Partnerships, Gabriele Camera, Alessandro Gioffré
ESI Working Papers
The literature on cooperation in infinitely repeated Prisoner’s Dilemmas covers the extreme opposites of the matching spectrum: partners, a player’s opponent never changes, and strangers, a player’s opponent randomly changes in every period. Here, we extend the analysis to settings where the opponent changes, but not in every period. In these temporary partnerships, players can deter some deviations by directly sanctioning their partner. Hence, relaxing the extreme assumption of one-period matchings can support some cooperation also off equilibrium because a class of strategies emerges that are less extreme than the typical “grim” strategy. We establish conditions supporting full …
Who Helps Tsimane Children And Adults?, Eric Schniter, Daniel K. Cummings, Paul L. Hooper, Maguin Gutierrez Cayuba, Jonathan Stieglitz, Benjamin C. Trumble, Hillard S. Kaplan, Michael D. Gurven
Who Helps Tsimane Children And Adults?, Eric Schniter, Daniel K. Cummings, Paul L. Hooper, Maguin Gutierrez Cayuba, Jonathan Stieglitz, Benjamin C. Trumble, Hillard S. Kaplan, Michael D. Gurven
ESI Working Papers
We consider several forms of helping behavior among Tsimane Amerindians of Bolivia, including provision of shelter, childcare, food, sickcare, loans, advice, and cultural influence. While kin selection theory is traditionally invoked to explain nepotistic nurturing of youngsters by closely related kin, much less attention has been given to understanding the help provided to children and adults by individuals without close genetic relatedness. To explain who provides the various forms of help that we consider, we evaluate support for several predictions derived from kin selection theory: that helpers are most often closely related and from an older generation, provide more help …
Ambiguity And Ambiguity Attitudes Across Auctions, Cary Deck, Paan Jindapon, Tigran Melkonyan, Mark Schneider
Ambiguity And Ambiguity Attitudes Across Auctions, Cary Deck, Paan Jindapon, Tigran Melkonyan, Mark Schneider
ESI Working Papers
Studies of ambiguity perceptions and attitudes are moving beyond the Ellsberg urn to examine people’s responses to ambiguity in naturally occurring events, games, and financial markets. In this study, we measure ambiguity perceptions and attitudes for market prices and allocations in four classical auction formats (first-price and second-price sealed bid auctions, English and Dutch clock auctions). We find ambiguity attitudes, representing individual preferences, are stable across auctions. However, the perceived ambiguity surrounding auction prices is lowest for English clock auctions which are obviously strategyproof (OSP), followed by second-price auctions which are strategyproof (SP), followed by a tie between first-price and …
Cognitive Abilities And Individual Earnings In Hybrid Continuous Double Auctions, Yan Peng, Jason Shachat, Lijia Wei, S. Sarah Zhang
Cognitive Abilities And Individual Earnings In Hybrid Continuous Double Auctions, Yan Peng, Jason Shachat, Lijia Wei, S. Sarah Zhang
ESI Working Papers
We study the influence of cognitive abilities, in particular reaction time, trader intuition (Theory of Mind), and cognitive reflection abilities, on human participants’ individual earnings when competing alongside algorithmic traders in continuous double auctions. In balanced markets, where each human trader has an algorithmic trader clone with the same valuations or costs, faster human reaction time significantly improves trading performance, while Theory of Mind can be detrimental to human trading performance, particularly for sellers. For unbalanced markets with humans and algorithmic traders on opposite sides of the market, the effects of cognitive abilities depend on trader role as well as …
One-Half Heuristic In Overconfidence Research, Vojtěch Zíka
One-Half Heuristic In Overconfidence Research, Vojtěch Zíka
ESI Working Papers
This laboratory experiment (N=120) explored the possibility that overconfidence research concerning overestimation and overplacement may be affected by the one-half heuristic, a tendency of individuals to estimate quantities with unknown distributions at half of the maximum value. The data from multiple rounds of the computerized hand game Rock–Paper–Scissors provide convincing evidence that half of the maximum is the most popular estimate and that manipulating the game’s average score can affect the direction and magnitude of estimation, averaging, and placement levels. The resulting methodological proposal is that the score participants estimate should have an expected value equal to half of the …
How Does Passive Investing Effect The Informational Efficiency Of Prices?, Brice Corgnet, Mark Desantis, Yan Peng, David Porter, Jason Shachat
How Does Passive Investing Effect The Informational Efficiency Of Prices?, Brice Corgnet, Mark Desantis, Yan Peng, David Porter, Jason Shachat
ESI Working Papers
We investigate the causal effects of passive investing on informational efficiency and market quality metrics by developing a novel laboratory experiment that introduces Index trackers with exogenous passive investment flows. We find that, while improving liquidity, Index tracking hurts informational efficiency, confirming our main hypothesis. Furthermore, we observe violations of the law of one price, leading to widespread and persistent arbitrage opportunities. Additionally, our research uncovers that Active traders, particularly those with private information about asset values and high cognitive ability, reap benefits from the introduction of Index tracking.
Representation And Bracketing In Repeated Games, Mouli Modak
Representation And Bracketing In Repeated Games, Mouli Modak
ESI Working Papers
In this experimental paper, the author investigates the framing effect of different representations of multiple strategic settings or games on a player’s strategic behavior. Two representations of the same environment are employed, wherein a player engages in two infinitely repeated prisoner’s dilemma games. In the first representation (termed Split), the stage games are shown separately. In contrast, the second representation (termed Linked) displays a combined stage game. The choice bracketing, distinguishing between Narrow and Broad bracketing, is considered a potential cause behind any disparity in behavior between the two representations. The Split representation does not necessitate broad bracketing, whereas the …
How Personalized Networks Can Limit Free Riding: A Multi-Group Version Of The Public Goods Game, Aaron S. Berman, Laurence R. Iannaccone, Mouli Modak
How Personalized Networks Can Limit Free Riding: A Multi-Group Version Of The Public Goods Game, Aaron S. Berman, Laurence R. Iannaccone, Mouli Modak
ESI Working Papers
People belong to many different groups, and few belong to the same network of groups. Moreover, people routinely reduce their involvement in dysfunctional groups while increasing involvement in those they find more attractive. The net effect can be an increase in overall cooperation and the partial isolation of free-riders, even if free-riders are never punished, excluded, or recognized. We formalize and test this conjecture with an agent-based social simulation and a multi-good extension of the standard repeated public goods game. Our initial results from three treatments suggest that the multi-group setting indeed raises overall cooperation and dampens the impact of …
Personal Lies, Gary Charness, Ismael Rodriguez-Lara
Personal Lies, Gary Charness, Ismael Rodriguez-Lara
ESI Working Papers
Using the mind game, we provide experimental evidence that people are more likely to lie when they disclose non-personal information (e.g., reporting a number they thought of) compared with personal information (e.g., reporting the last digit of their birth year). Our findings suggest that the type of information is an important factor for lying behavior.
Financial Contagion And Financial Lockdowns, Gabriele Camera, Alessandro Gioffré
Financial Contagion And Financial Lockdowns, Gabriele Camera, Alessandro Gioffré
ESI Working Papers
Extreme financial shocks often elicit extraordinary policy interventions that preclude financial activity on a large scale, for example as the 1933 U.S. “bank holiday.” We study these interventions using a random matching framework where the financial contagion process is explicit and the diffusion of the initial shock can be analytically characterized. The study suggests that there is scope for forced closures of individual firms or even economy-wide financial lockdowns only when firms are financially vulnerable and policy institutions are not well-functioning. Here, ordinary policy alone cannot prevent or sufficiently mitigate contagion, while complementing it with a lockdown or individual closures …
Evolution Of Primate Vocal Repertoires: Vocalization Systems As Embodied Capital For Mediating Within-Group Conflict, Eric Schniter, Mateo Peñaherrera-Aguirre
Evolution Of Primate Vocal Repertoires: Vocalization Systems As Embodied Capital For Mediating Within-Group Conflict, Eric Schniter, Mateo Peñaherrera-Aguirre
ESI Working Papers
Phylogenetic studies of communication help us understand evolutionary changes that led to human language – a form of primate communication, extraordinarily complex in terms of its varied vocalizations. Here we describe the macro-evolutionary role of life history traits on primate vocalization systems, informing our understanding of the relationships between social complexity and primate vocal repertoire size. We reviewed the primatological literature and collected information on the vocal repertoire size, social conflict, group size, endocranial volume, and maximum longevity of 42 non-human primate species. We conducted a set of analyses to examine the role of these factors on the macroevolution of …
Human-Robot Interactions: Insights From Experimental And Evolutionary Social Sciences, Eric Schniter
Human-Robot Interactions: Insights From Experimental And Evolutionary Social Sciences, Eric Schniter
ESI Working Papers
"Experimental research in the realm of human-robot interactions has focused on the behavioral and psychological influences affecting human interaction and cooperation with robots. A robot is loosely defined as a device designed to perform agentic tasks autonomously or under remote control, often replicating or assisting human actions. Robots can vary widely in form, ranging from simple assembly line machines performing repetitive actions to advanced systems with no moving parts but with artificial intelligence (AI) capable of learning, problem-solving, communicating, and adapting to diverse environments and human interactions. Applications of experimental human-robot interaction research include the design, development, and implementation of …
Enlightenment Ideals And Belief In Progress In The Run-Up To The Industrial Revolution: A Textual Analysis, Ali Almelhem, Murat Iyigun, Austin Kennedy, Jared Rubin
Enlightenment Ideals And Belief In Progress In The Run-Up To The Industrial Revolution: A Textual Analysis, Ali Almelhem, Murat Iyigun, Austin Kennedy, Jared Rubin
ESI Working Papers
Using textual analysis of 173,031 works printed in England between 1500 and 1900, we test whether British culture evolved to manifest a heightened belief in progress associated with science and industry. Our analysis yields three main findings. First, there was a separation in the language of science and religion beginning in the 17th century. Second, scientific volumes became more progress-oriented during the Enlightenment. Third, industrial works—especially those at the science-political economy nexus—were more progress-oriented beginning in the 17th century. It was therefore the more pragmatic, industrial works which reflected the cultural values cited as important for Britain’s takeoff.
Suggested Versus Extended Gifts: How Alternative Market Institutions Mitigate Moral Hazard, Daniel Houser, Jason Shachat, Weiwei Zheng
Suggested Versus Extended Gifts: How Alternative Market Institutions Mitigate Moral Hazard, Daniel Houser, Jason Shachat, Weiwei Zheng
ESI Working Papers
Gift exchange can partially mitigate supply-side moral hazard, even in anonymous market interactions. In a market where quality is not fully contractable, the amount that a price exceeds the market-clearing price for the lowest quality is a gift from the buyer. We show that the gift formation process, inextricably linked with a market institution’s price formation process, greatly influences the size and effectiveness of the gift. When the market institution dictates that prices are formed by bids posted by buyers, the gift is extended to the seller. When the market institution dictates that prices are formed by offers posted by …
Match Stability With A Costly And Flexible Number Of Positions, James Gilmore, David Porter
Match Stability With A Costly And Flexible Number Of Positions, James Gilmore, David Porter
ESI Working Papers
One of the primary objectives of two-sided matching systems is to facilitate the pairing of two groups of agents in a manner that eliminates any incentive for pair deviation. Such challenges are quite prevalent and can have significant and long-lasting ramifications for participants, including students applying to colleges. While much of the existing research in this field addresses the problem using fixed quotas, real-world applications, like college admissions, demonstrate that this is not always applicable. We introduce the concept of slot stability, recognizing the potential motivation for organizations to modify their quotas after the matching process. We propose two algorithms …
Religion And Growth, Sascha O. Becker, Jared Rubin, Ludger Woessmann
Religion And Growth, Sascha O. Becker, Jared Rubin, Ludger Woessmann
ESI Working Papers
We use the elements of a macroeconomic production function—physical capital, human capital, labor, and technology—together with standard growth models to frame the role of religion in economic growth. Unifying a growing literature, we argue that religion can enhance or impinge upon economic growth through all four elements because it shapes individual preferences, societal norms, and institutions. Religion affects physical capital accumulation by influencing thrift and financial development. It affects human capital through both religious and secular education. It affects population and labor by influencing work effort, fertility, and the demographic transition. And it affects total factor productivity by constraining or …
Group Identity And The Formation Of Conditional Social Preferences Among Chinese Youth, Timo Heinrich, Jason Shachat, Qinjuan Wan
Group Identity And The Formation Of Conditional Social Preferences Among Chinese Youth, Timo Heinrich, Jason Shachat, Qinjuan Wan
ESI Working Papers
Con icts between local and migrant populations have been ubiquitous in modern China. We examine the potential for longer-term amelioration of this conflict through successive generations and intergroup contact within integrated schooling. We adopt the perspective that in- and out-group biased behaviour structurally arises from group conditional social preferences. We assess the group-conditional social preferences of local and migrant children in a second-tier Chinese city, Xiamen, and the extent these preferences correlate with those of their parents. We find that local students have a greater likelihood of Egalitarian preferences and a lower likelihood of Generous preferences when allocating with locals …
Discrete Rule Learning In First Price Auctions, Jason Shachat, Lijia Wei
Discrete Rule Learning In First Price Auctions, Jason Shachat, Lijia Wei
ESI Working Papers
We present a hidden Markov model of discrete strategic heterogeneity and learning in first price independent private values auctions. The model includes three latent bidding rules: constant absolute mark-up, constant percentage mark-up, and strategic best response. Rule switching probabilities depend upon a bidder's past auction outcomes and a myopic reinforcement learning dynamic. We apply this model to a new experiment that varies the number of bidders and the auction frame between forward and reverse. We find the proportion of bidders following constant absolute mark-up increases with experience, and is higher when the number of bidders is large. The primary driver …
Endogenous Political Legitimacy: The Tudor Roots Of England’S Constitutional Governance, Avner Greif, Jared Rubin
Endogenous Political Legitimacy: The Tudor Roots Of England’S Constitutional Governance, Avner Greif, Jared Rubin
ESI Working Papers
This paper highlights the importance of endogenous changes in the foundations of legitimacy for political regimes. It focuses on the central role of legitimacy changes in the rise of constitutional monarchy in England. It first defines legitimacy and briefly elaborates a theoretical framework enabling a historical study of this unobservable variable. It proceeds to substantiate that the low-legitimacy, post-Reformation Tudor monarchs of the 16th century promoted Parliament to enhance their legitimacy, thereby changing the legislative process from the “Crown and Parliament” to the “Crown in Parliament” that still prevails in England.
Deciding For Others: Local Public Good Contributions With Intermediaries, Andrej Angelovski, Praveen Kujal, Christos Mavridis
Deciding For Others: Local Public Good Contributions With Intermediaries, Andrej Angelovski, Praveen Kujal, Christos Mavridis
ESI Working Papers
Given the prevalence of local public goods, whose broader use is often limited by distance and borders, we propose a potential solution to the free-riding problem by having each participant/beneficiary delegate the public good contribution decision to a non-local intermediary who neither puts in own endowment into the public good nor benefits from it. Intermediaries make decisions under two compensation mechanisms where the incentives for the intermediary are either non-aligned (fixed) or aligned (variable) with those of the beneficiary. We find that the use of intermediaries, regardless of whether their compensation is aligned or not with that of the beneficiary, …
Choice Flexibility And Long-Run Cooperation, Gabriele Camera, Jaehong Kim, David Rojo Arjona
Choice Flexibility And Long-Run Cooperation, Gabriele Camera, Jaehong Kim, David Rojo Arjona
ESI Working Papers
Understanding how incentives and institutions help scaling up cooperation is important, especially when strategic uncertainty is considerable. Evidence suggests that this is challenging even when full cooperation is theoretically sustainable thanks to indefinite repetition. In a controlled social dilemma experiment, we show that adding partial cooperation choices to the usual binary choice environment can raise cooperation and efficiency. Under suitable incentives, partial cooperation choices enable individuals to cheaply signal their desire to cooperate, reducing strategic uncertainty. The insight is that richer choice sets can form the basis of a language meaningful for coordinating on cooperation.
Failed Secular Revolutions: Religious Belief, Competition, And Extremism, Jean-Paul Carvalho, Jared Rubin, Michael Sacks
Failed Secular Revolutions: Religious Belief, Competition, And Extremism, Jean-Paul Carvalho, Jared Rubin, Michael Sacks
ESI Working Papers
All advanced economies have undergone secular revolutions in which religious belief and institutions have been subordinated to secular forms of authority. There are, however, numerous examples of failed secular transitions. To understand these failures, we present a religious club model with endogenous entry and cultural transmission of religious beliefs. A spike in the demand for religious belief, due for example to a negative economic shock, induces a new and more extreme organization to enter the religious market and exploit the dissatisfaction of highly religious types with the religious incumbent. The eect is larger where institutional secularization is more advanced, for …
Competing Social Influence In Contested Diffusion: Luther, Erasmus And The Spread Of The Protestant Reformation, Sascha O. Becker, Steven Pfaff, Yuan Hsiao, Jared Rubin
Competing Social Influence In Contested Diffusion: Luther, Erasmus And The Spread Of The Protestant Reformation, Sascha O. Becker, Steven Pfaff, Yuan Hsiao, Jared Rubin
ESI Working Papers
The spread of radical institutional change does not often result from one-sided pro-innovation influence; countervailing influence networks in support of the status quo can suppress adoption. We develop a model of multiple and competing network diffusion. To apply the contested-diffusion model to real data, we look at the contest between Martin Luther and Desiderius Erasmus, the two most influential intellectuals of early 16th-century Central Europe. Whereas Luther championed a radical reform of the Western Church that broke with Rome, Erasmus opposed him, stressing the unity of the Church. In the early phase of the Reformation, these two figures utilized influence …
An Experimental Test Of Algorithmic Dismissals, Brice Corgnet
An Experimental Test Of Algorithmic Dismissals, Brice Corgnet
ESI Working Papers
We design a laboratory experiment in which a human or an algorithm decides which of two workers to dismiss. The algorithm automatically dismisses the least productive worker whereas human bosses have full discretion over their decisions. Using performance metrics and questionnaires, we find that fired workers react more negatively to human than to algorithmic decisions in a broad range of tasks. We show that spitefulness exacerbated this negative reaction. Our findings suggest algorithms could help tame negative reactions to dismissals.
A Classical Model Of Speculative Asset Price Dynamics, Sabiou M. Inoua, Vernon L. Smith
A Classical Model Of Speculative Asset Price Dynamics, Sabiou M. Inoua, Vernon L. Smith
ESI Working Papers
In retrospect, the experimental findings on competitive market behavior called for a revival of the old, classical, view of competition as a collective higgling and bargaining process (as opposed to price-taking behaviors) founded on reservation prices (in place of the utility function). In this paper, we specialize the classical methodology to deal with speculation, an important impediment to price stability. The model involves typical features of a field or lab asset market setup and lends itself to an experimental test of its specific predictions; here we use the model to explain three general stylized facts, well established both empirically and …
Better-Than-Chance Prediction Of Cooperative Behaviour From First And Second Impressions, Eric Schniter, Timothy W. Shields
Better-Than-Chance Prediction Of Cooperative Behaviour From First And Second Impressions, Eric Schniter, Timothy W. Shields
ESI Working Papers
Could cooperation among strangers be facilitated by adaptations that use sparse information to accurately predict cooperative behaviour? We hypothesize that predictions are influenced by beliefs, descriptions, appearance, and behavioural history available for first and second impressions. We also hypothesize that predictions improve when more information is available. We conducted a two-part study. First, we recorded thin-slice videos of university students just before their choices in a repeated Prisoner’s Dilemma with matched partners. Second, a worldwide sample of raters evaluated each player using either videos, photos, only gender labels, or neither images nor labels. Raters guessed players’ first-round Prisoner’s Dilemma choices …
Contingent Payments In Procurement Interactions - Experimental Evidence, Matthew J. Walker, Jason Shachat, Lijia Wei
Contingent Payments In Procurement Interactions - Experimental Evidence, Matthew J. Walker, Jason Shachat, Lijia Wei
ESI Working Papers
A primary objective of creating competition among suppliers is the procurement of higher quality goods and services at lower prices. When procuring non-standard goods, it is often difficult to write a complete specification of desired quality in the contract. Thus, payments to suppliers cannot be perfectly conditioned on the quality provided. We propose a correlated contingent payment contract to mitigate the supplier moral hazard problem while retaining competitive supplier selection based on price. We treat the probability of implementing contingent payments as probabilistic. The selected supplier’s payment is, according to a fixed probability, either the amount of their bid or …
Litigation With Negative Expected Value Suits: An Experimental Analysis, Cary Deck, Paul Pecorino, Michael Solomon
Litigation With Negative Expected Value Suits: An Experimental Analysis, Cary Deck, Paul Pecorino, Michael Solomon
ESI Working Papers
The existence of lawsuits providing plaintiffs a negative expected value (NEV) at trial has important theoretical implications for signaling models of litigation. The signaling equilibrium possible absent NEV suits breaks down with NEV suits because plaintiffs do not have a credible threat to proceed to trial undermining the ability to signal type. Using a laboratory experiment, we analyze behavior with and without the possibility of NEV suits. Absent NEV suits, behavior largely follows predicted patterns. However, the possibility of NEV suits does not cause the signaling equilibrium to unravel and does not cause the dispute rate to increase. Plaintiffs only …
Inequality As A Barrier To Economic Integration? An Experiment, Gabriele Camera, Lukas Hohl, Rolf Weder
Inequality As A Barrier To Economic Integration? An Experiment, Gabriele Camera, Lukas Hohl, Rolf Weder
ESI Working Papers
International economic theory suggests that people should embrace economic integration because it promises large gains. But policy reversals such as Brexit indicate a desire for economic disintegration. Here we report results of an experiment of how size and cross-country distribution of gains from integration influence individuals’ inclination to cooperate to reap its intended benefits and to embrace or reject integration. The design considers an indefinitely repeated helping game with multiple equilibria and strategic uncertainty. The data reveal that inequality of potential gains neither affected behavior nor reduced support for economic integration. However, integration may lead to disappointing, unequally distributed welfare …
Information Aggregation With Heterogeneous Traders, Cary Deck, Tae In Jun, Laura Razzolini, Tavoy Reid
Information Aggregation With Heterogeneous Traders, Cary Deck, Tae In Jun, Laura Razzolini, Tavoy Reid
ESI Working Papers
The efficient market hypothesis predicts that asset prices reflect all available information. A seminal experiment reported that contingent claim markets could yield market outcomes consistent with information aggregation when traders hold heterogeneous state-contingent values. However, a recent experiment found the rational expectation model outperformed the prior information and maxi-min models in contingent claim markets when traders hold homogeneous values despite the no trade equilibrium in that setting. But that same study failed to replicate the original result calling into question when, if ever, prices reliably reflect the aggregate information of traders with heterogeneous values. In this paper, we show contingent …