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Articles 31 - 45 of 45
Full-Text Articles in Economic Theory
Asymmetric And Endogenous Within-Group Communication In Competitive Coordination Games, Timothy N. Cason, Roman Sheremeta, Jingjing Zhang
Asymmetric And Endogenous Within-Group Communication In Competitive Coordination Games, Timothy N. Cason, Roman Sheremeta, Jingjing Zhang
ESI Working Papers
Within-group communication in competitive coordination games has been shown to increase competition between groups and lower efficiency. This study further explores potentially harmful effects of communication, by addressing the questions of (i) asymmetric communication and (ii) the endogenous emergence of communication. Our theoretical analysis provides testable hypotheses regarding the effect of communication on competitive behavior and efficiency. We test these predictions using a laboratory experiment. The experiment shows that although asymmetric communication is not as harmful as symmetric communication, it leads to more aggressive competition and lower efficiency relative to the case when neither group can communicate. Moreover, groups vote …
Selective Recognition: How To Recognize Donors To Increase Charitable Giving, Anya Samek, Roman Sheremeta
Selective Recognition: How To Recognize Donors To Increase Charitable Giving, Anya Samek, Roman Sheremeta
ESI Working Papers
Recognizing donors by revealing their identities is important for increasing charitable giving. We conducted a field experiment to examine how different recognition methods impact giving, and found that all forms of recognition that we examined had a positive impact on increasing donations, whereby recognizing only highest donors (positive recognition) and recognizing only lowest donors (negative recognition) had the most pronounced effect. We argue that selective recognition (both positive and negative) creates tournament-like incentives. Recognizing the highest donors activates the desire to seek a positive prize of prestige, thus increasing the proportion of donors who contribute large amounts. Recognizing the lowest …
A Survey Of Experimental Research On Contests, All-Pay Auctions And Tournaments, Emmanuel Dechenaux, Dan Kovenock, Roman M. Sheremeta
A Survey Of Experimental Research On Contests, All-Pay Auctions And Tournaments, Emmanuel Dechenaux, Dan Kovenock, Roman M. Sheremeta
Economics Faculty Articles and Research
Many economic, political and social environments can be described as contests in which agents exert costly effort while competing over the distribution of a scarce resource. These environments have been studied using Tullock contests, all-pay auctions and rank-order tournaments. This survey provides a comprehensive review of experimental research on these three canonical contests. First, we review studies investigating the basic structure of contests, including the number of players and prizes, spillovers and externalities, heterogeneity, risk and incomplete information. Second, we discuss dynamic contests and multi-battle contests. Then we review studies examining sabotage, feedback, bias, collusion, alliances, group contests and gender, …
Effort And Performance: What Distinguishes Interacting And Noninteracting Groups From Individuals?, Tibor Besedeš, Cary Deck, Sarah Quintanar, Sudipta Sarangi
Effort And Performance: What Distinguishes Interacting And Noninteracting Groups From Individuals?, Tibor Besedeš, Cary Deck, Sarah Quintanar, Sudipta Sarangi
Economics Faculty Articles and Research
We study how group membership affects behavior both when group members can and cannot interact with each other. Our goal is to isolate the contrasting forces that spring from group membership: a free-riding incentive leading to reduced effort and a sense of social responsibility that increases effort. In an environment with varying task difficulty and individual decision making as the benchmark, we show that the free-riding effect is stronger. Group members significantly reduce their effort in situations where they share the outcome but are unable to communicate. When group members share outcomes and can interact, they outperform groups without conmmnication …
Double Bubbles In Assets Markets With Multiple Generations, Cary Deck, David Porter, Vernon L. Smith
Double Bubbles In Assets Markets With Multiple Generations, Cary Deck, David Porter, Vernon L. Smith
ESI Publications
We construct an asset market in a finite horizon overlapping-generations environment. Subjects are tested for comprehension of their fundamental value exchange environment and then reminded during each of 25 periods of the environment's declining new value. We observe price bubbles forming when new generations enter the market with additional liquidity and bursting as old generations exit the market and withdrawing cash. The entry and exit of traders in the market creates an M shaped double bubble price path over the life of the traded asset. This finding is significant in documenting that bubbles can reoccur within one extended trading horizon …
Money Is More Than Memory, Maria Bigoni, Gabriele Camera, Marco Casari
Money Is More Than Memory, Maria Bigoni, Gabriele Camera, Marco Casari
ESI Working Papers
Impersonal exchange is the hallmark of an advanced society. One key institution for impersonal exchange is money, which economic theory considers just a primitive arrangement for monitoring past conduct in society. If so, then a public record of past actions—or memory—supersedes the function performed by money. This intriguing theoretical postulate remains untested. In an experiment, we show that the suggested functional equality between money and memory does not translate into an empirical equivalence. Monetary systems perform a richer set of functions than just revealing past behaviors, which proves to be crucial in promoting large-scale cooperation.
People Do Not Discount Heavily In Strategic Settings, But They Believe Others Do, Cary Deck, Salar Jahedi
People Do Not Discount Heavily In Strategic Settings, But They Believe Others Do, Cary Deck, Salar Jahedi
ESI Working Papers
Several studies have shown that people greatly discount future bene ts and costs. However, most of the direct laboratory evidence of this phenomenon has focused on individual choice experiments. This paper investigates the degree to which the timing of payments a ects behavior in four commonly studies strategic settings: a Prisoner's Dilemma game, a Stag-Hunt game, a First Price Auction and a Second Price Auction. In all four settings, a two week delay in payo s has a comparable e ect to a 20% reduc- tion in current payo s. A follow-up study suggests that it is an individual's strategic …
Single- And Double-Elimination All-Pay Tournaments, Cary Deck, Erik O. Kimbrough
Single- And Double-Elimination All-Pay Tournaments, Cary Deck, Erik O. Kimbrough
ESI Working Papers
Tournaments consisting of iterative matches are a common mechanism for determining how to allocate a prize. While participants are focused on their own outcomes, tournament organizers often have objectives such as maximizing the total investment or effort by the participants over the course of the tournament. For this reason it is important for organizers to understand the behavioral as well as the theoretical properties of different tournament structures. Given that laboratory experiments have consistently found high levels of overbidding in contests, one might suspect that double-elimination tournaments would generate substantially more total investment than single-elimination tournaments despite the two types …
When Parity Promotes Peace: Resolving Conflict Between Asymmetric Agents, Erik O. Kimbrough, Roman M. Sheremeta, Timothy W. Shields
When Parity Promotes Peace: Resolving Conflict Between Asymmetric Agents, Erik O. Kimbrough, Roman M. Sheremeta, Timothy W. Shields
ESI Working Papers
Due to the high costs of conflict both in theory and practice, we examine and experimentally test the conditions under which conflict between asymmetric agents can be resolved. We model conflict as a two-agent rent-seeking contest for an indivisible prize. Before conflict arises, both agents may agree to allocate the prize by fair coin flip to avoid the costs of conflict. The model predicts that “parity promotes peace”: in the pure-strategy equilibrium, agents with relatively symmetric conflict capabilities agree to resolve the conflict by using a random device; however, with sufficiently asymmetric capabilities, conflicts are unavoidable because the stronger agent …
Commitment Problems In Conflict Resolution, Erik O. Kimbrough, Jared Rubin, Roman M. Sheremeta, Timothy W. Shields
Commitment Problems In Conflict Resolution, Erik O. Kimbrough, Jared Rubin, Roman M. Sheremeta, Timothy W. Shields
ESI Working Papers
Commitment problems are inherent to non-binding conflict resolution mechanisms, since an unsatisfied party can ignore the resolution and initiate conflict. We provide experimental evidence suggesting that even in the absence of binding contractual agreements individuals often avoid conflict by committing to the outcome of a conflict resolution mechanism. Commitment problems are mitigated to a greater extent for groups who opt-in to the conflict resolution mechanism, but only when opting-in is costly. Although conflict rates are higher when opting-in is costly than when it is free or exogenously imposed, commitment problems are greatly reduced amongst those groups who choose to opt-in.
Building And Rebuilding Trust With Promises And Apologies, Eric Schniter, Roman M. Sheremeta, Daniel Sznycer
Building And Rebuilding Trust With Promises And Apologies, Eric Schniter, Roman M. Sheremeta, Daniel Sznycer
ESI Working Papers
Using trust games, we study how promises and messages are used to build new trust where it did not previously exist and to rebuild damaged trust. In these games, trustees made non-binding promises of investment-contingent returns, then investors decided whether to invest, and finally trustees decided how much to return. After an unexpected second game was announced, but before it commenced, trustees could send a one-way message. This design allowed us to observe the endogenous emergence and natural distribution of trust-relevant behaviors and focus on naturally occurring remedial strategies used by promise-breakers and distrusted trustees, their effects on investors, and …
Transparency, Efficiency And The Distribution Of Economic Welfare In Pass-Through Investment Trust Games, Thomas A. Rietz, Roman M. Sheremeta, Timothy W. Shields, Vernon Smith
Transparency, Efficiency And The Distribution Of Economic Welfare In Pass-Through Investment Trust Games, Thomas A. Rietz, Roman M. Sheremeta, Timothy W. Shields, Vernon Smith
ESI Working Papers
We design an experiment to examine welfare and behavior in a multi-level trust game representing a pass through investment in an intermediated market. In a repeated game, an Investor invests via an Intermediary who lends to a Borrower. A pre-experiment one-shot version of the game serves as a baseline and to type each subject. We alter the transparency of exchanges between non-adjacent parties. We find transparency of the exchanges between the investor and intermediary does not significantly affect welfare. However, transparency regarding exchanges between the intermediary and borrower promotes trust on the part of the investor, increasing welfare. Further, this …
Fight Or Flight? Defending Against Sequential Attacks In The Game Of Siege, Cary Deck, Roman M. Sheremeta
Fight Or Flight? Defending Against Sequential Attacks In The Game Of Siege, Cary Deck, Roman M. Sheremeta
ESI Working Papers
This paper examines theory and behavior in a two-player game of siege, sequential attack and defense. The attacker’s objective is to successfully win at least one battle while the defender’s objective is to win every battle. Theoretically, the defender either folds immediately or, if his valuation is sufficiently high and the number of battles is sufficiently small, then he has a constant incentive to fight in each battle. Attackers respond to defense with diminishing assaults over time. Consistent with theoretical predictions, our experimental results indicate that the probability of successful defense increases in the defenders valuation and it decreases in …
Price Increasing Competition? Experimental Evidence, Cary Deck, Jingping Gu
Price Increasing Competition? Experimental Evidence, Cary Deck, Jingping Gu
ESI Working Papers
Economic intuition suggests that increased competition generates lower prices. However, recent theoretical work shows that a monopolist may charge a lower price than a firm facing a competitor selling a differentiated product. The direction of the price change when competition is introduced is dependent upon the joint distribution of buyer values for the two products. We explore this relationship using controlled laboratory experiments. Our results indicate that the distribution of buyer values does affect prices in a manner consistent with the theoretical predictions, although price increasing competition is rare due in part to overly intense competition regardless of the distribution …
The Attack And Defense Of Weakest-Link Networks, Dan Kovenock, Brian Roberson, Roman M. Sheremeta
The Attack And Defense Of Weakest-Link Networks, Dan Kovenock, Brian Roberson, Roman M. Sheremeta
ESI Working Papers
This paper experimentally examines behavior in a two-player game of attack and defense of a weakest-link network of targets, in which the attacker‟s objective is to successfully attack at least one target and the defender‟s objective is diametrically opposed. We apply two benchmark contest success functions (CSFs): the auction CSF and the lottery CSF. Consistent with the theoretical prediction, under the auction CSF, attackers utilize a stochastic “guerilla warfare” strategy — in which a single random target is attacked — more than 80% of the time. Under the lottery CSF, attackers utilize the stochastic guerilla warfare strategy almost 45% of …