47 research outputs found

    Cooperation Spillovers in Coordination Games

    Get PDF
    Motivated by problems of coordination failure observed in weak-link games, we experimentally investigate behavioral spillovers for order-statistic coordination games. Subjects play the minimum- and median-effort coordination games simultaneously and sequentially. The results show the precedent for cooperative behavior spills over from the median game to the minimum game when the games are played sequentially. Moreover, spillover occurs even when group composition changes, although the effect is not as strong. We also find that the precedent for uncooperative behavior does not spill over from the minimum game to the median game. These findings suggest guidelines for increasing cooperative behavior within organizations.coordination, order-statistic games, experiments, cooperation, minimum game, behavioral spillover

    Is Underconfidence Favored over Overconfidence? An Experiment on the Perception of a Biased Self-Assessment

    Get PDF
    This paper reports findings of a laboratory experiment, which explores how elfassessment regarding the own relative performance is perceived by others. In particular, I investigate whether overconfident subjects or underconfident subjects are considered as more likable by others, and who of the two is expected to achieve a higher performance in a real effort task. I observe that underconfidence beats overconfidence in both respects. Underconfident subjects are rewarded significantly more often than overconfident subjects, and are significantly more often expected to win the competitive real-effort task. It seems as if subjects being less convinced of their performance are taken as more congenial and are expected to be more ambitious to improve, whereas overconfident subjects are rather expected to rest on their high beliefs. While subjects do not anticipate the stronger performance signal of underconfidence, they anticipate its higher sympathy value. The comparison to a non-strategic setting shows that men strategically deflate their self-assessment to be rewarded by others. Women, in contrast, either do not deflate their self-assessment or do so even in non-strategic situations, a behavior that might be driven by nonmonetary image concerns of women

    Simultaneous Decision-Making in Competitive and Cooperative Environments

    Get PDF
    MWe experimentally investigate simultaneous decision-making in two contrasting environments: a competitive environment (a contest) and a cooperative environment (a voluntary contribution mechanism). We find that the cooperative nature of the voluntary contribution mechanism spills over to the contest, decreasing sub-optimal overbidding in the contest. However, contributions to the public good are not affected by simultaneous participation in the contest. There is a significant negative correlation between decisions made in competitive and cooperative environments, i.e. more cooperative subjects tend to be less competitive and vice versa. This correlation can be rationalized by heterogeneous social preferences towards inequality but not by bounded rationality theory.cooperation, competition, public goods, contests, experiments, behavioral spillover

    Fairness and Contract Design

    Get PDF
    We show experimentally that fairness concerns may have a decisive impact on the actual and optimal choice of contracts in a moral hazard context. Bonus contracts that offer a voluntary and unenforceable bonus for satisfactory performance provide powerful incentives and are superior to explicit incentive contracts when there are some fair-minded players. But trust contracts that pay a generous wage upfront are less efficient than incentive contracts. The principals understand this and predominantly choose the bonus contracts. Our results are consistent with recently developed theories of fairness, which offer important new insights into the interaction of contract choices, fairness and incentives

    Carrot or Stick? Group Selection and the Evolution of Reciprocal Preferences

    Get PDF
    This paper studies the evolution of both characteristics of reciprocity - the willingness to reward friendly behavior and the willingness to punish hostile behavior. Firstly, preferences for rewarding as well as preferences for punishing can survive evolution provided individuals interact within separated groups. This holds even with randomly formed groups and even when individual preferences are unobservable. Secondly, preferences for rewarding survive only in coexistence with self-interested preferences. But preferences for punishing tend either to vanish or to dominate the population entirely. Finally, the evolution of preferences for rewarding and the evolution of preferences for punishing influence each other decisively. The existence of rewarders enhances the evolutionary success of punishers, but punishers crowd out rewarders

    Understanding reciprocity

    Get PDF
    This paper surveys the evolutionary game theoretic literature on reciprocity in human interactions, dealing both with long-term relationships and with sporadic interactions. Four basic themes, repetition, commitment, assortation, and parochialism, appear repeatedly throughout the literature. Repetition can give rise to the evolution of behavior that exhibits reciprocity-like features but a vast array of other behaviors are also stable. In sporadic interactions, reciprocity can be stable if the propensity to punish selfish actions can induce opportunists to cooperate, if reciprocators themselves behave opportunistically when they expect others to do so, or if matching is sufficiently assortative.Reciprocity, Evolution, Assortation, Commitment, Parochialism

    Fairness and Contract Design

    Get PDF
    We show experimentally that fairness concerns may have a decisive impact on the actual and optimal choice of contracts in a moral hazard context. Bonus contracts that offer a voluntary and unenforceable bonus for satisfactory performance provide powerful incentives and are superior to explicit incentive contracts when there are some fair-minded players. But trust contracts that pay a generous wage upfront are less efficient than incentive contracts. The principals understand this and predominantly choose the bonus contracts. Our results are consistent with recently developed theories of fairness, which offer important new insights into the interaction of contract choices, fairness and incentives.Moral Hazard; Incentives; Bonus Contract; Trust Contract; Fairness; Inequity Aversion

    Carrot or Stick? Group Selection and the Evolution of Reciprocal Preferences

    Get PDF
    This paper studies the evolution of both characteristics of reciprocity - the willingness to reward friendly behavior and the willingness to punish hostile behavior. Firstly, preferences for rewarding as well as preferences for punishing can survive evolution provided individuals interact within separated groups. This holds even with randomly formed groups and even when individual preferences are unobservable. Secondly, preferences for rewarding survive only in coexistence with self-interested preferences. But preferences for punishing tend either to vanish or to dominate the population entirely. Finally, the evolution of preferences for rewarding and the evolution of preferences for punishing influence each other decisively. The existence of rewarders enhances the evolutionary success of punishers, but punishers crowd out rewarders.Reciprocity ; Evolution of Preferences ; Group Selection ; Coevolution ; Fairness

    Evolution of Theories of Mind

    Get PDF
    This paper studies the evolution of peoples' models of how other people think -- their theories of mind. First, this is formalized within the level-k model, which postulates a hierarchy of types, such that type k plays a k times iterated best response to the uniform distribution. It is found that, under plausible conditions, lower types co-exist with higher types. The results are extended to a model of learning, in which type k plays a k times iterated best response the average of past play. The results are also extended to the cognitive hierarchy model, and to the introduction of a type that plays a Nash equilibrium.Theory of Mind; Evolution; Learning; Level-k; Fictitious Play; Cognitive Hierarchy
    corecore