3,866 research outputs found

    The limit to behavioral inertia and the power of default in voluntary contribution games

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    It is well documented that people are reluctant to switch from a default option. We experimentally test the robustness of this behavioral inertia in a collective decision-making setting by varying the default option type and the decision-making environment. We examine the impacts of automatic-participation and no-participation default options on subjects’ participation in a public goods provision and their contributions. Two variants of public goods game are employed: the linear and the threshold public goods games. The study shows the evidence of partial stickiness rather than complete stickiness of default options as indicated in empirical studies. Our experimental results square with the evidence of behavioral inertia only when the automatic-participation default is used. This default boosts contributions in the linear public goods game but not in the threshold public goods game. The evidence of partial stickiness is robust to the variation of the game employed, but the effect on contribution is sensitive to it

    One Step at a Time: Does Gradualism Build Coordination?

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    We study how gradualism -- increasing required levels (“thresholds”) of contributions slowly over time rather than requiring a high level of contribution immediately -- affects individuals’ decisions to contribute to a public project. Using a laboratory binary choice minimum-effort coordination game, we randomly assign participants to three treatments: starting and continuing at a high threshold, starting at a low threshold but jumping to a high threshold after a few periods, and starting at a low threshold and gradually increasing the threshold over time (the “gradualism” treatment). We find that individuals coordinate most successfully at the high threshold in the gradualism treatment relative to the other two groups. We propose a theory based on belief updating to explain why gradualism works. We also discuss alternative explanations such as reinforcement learning, conditional cooperation, inertia, preference for consistency, and limited attention. Our findings point to a simple, voluntary mechanism to promote successful coordination when the capacity to impose sanctions is limited.Gradualism; Coordination; Cooperation; Public Goods; Belief-based Learning; Laboratory Experiment

    Information defaults in repeated public good provision

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    We present an experiment that models a repeated public good provision setting where the policy maker or manager does not have perfect control over information flows. Rather, information seeking can be affected by changing the information default as well as the price of information. The default is one either with or without information about others' contributions, and having information comes with a positive, zero or negative financial incentive. When information comes without a financial incentive or even is financially beneficial, almost all subjects choose to have the information, but around a third have the information even when this is costly. Moreover, a default of not having information about the others' contributions leads to a slower unravelling of cooperation, independent of the financial incentives of having information. This slower unravelling is explained by the beliefs about others' contributions in these treatments. A secondary informational default effect appears to take place. When the default is no information, subjects do not seek information more often but, conditional on financial incentives, they tend to believe that more other subjects seek information

    Interdependent Decisionmaking, Game Theory and Conformity

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    Information defaults in repeated public good provision

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    We present an experiment that models a repeated public good provision setting where the policy maker or manager does not have perfect control over information flows. Rather, information seeking can be affected by changing the information default as well as the price of information. The default is one either with or without information about others’ contributions, and having information comes with a positive, zero or negative financial incentive. When information comes without a financial incentive or even is financially beneficial, almost all subjects choose to have the information, but around a third have the information even when this is costly. Moreover, a default of not having information about the others’ contributions leads to a slower unravelling of cooperation, independent of the financial incentives of having information. This slower unravelling is explained by the beliefs about others’ contributions in these treatments. A secondary informational default effect appears to take place. When the default is no information, subjects do not seek information more often but, conditional on financial incentives, they tend to believe that more other subjects seek information

    Understanding the power-law nature of participation in community sports organizations

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    The improvement of living standards and awareness of chronic diseases have increased the importance of community sports organizations in promoting the physical activity levels of the public. However, limited understanding of human behavior in this context often leads to suboptimal resource utilization. In this study, we analyzed the participation behavior of 2,956 members with a time span of 6 years in a community sports organization. Our study reveals that, at the population level, the participation frequency in activities adheres to a power-law distribution. To understand the underlying mechanisms driving crowd participation, we introduce a novel behavioral model called HFBI (Habit-Formation and Behavioral Inertia), demonstrating a robust fit to the observed power-law distribution. The habit formation mechanism indicates that individuals who are more engaged are more likely to maintain participation, while the behavioral inertia mechanism suggests that individuals' willingness to participate in activities diminishes with their absences from activities. At the individual level, our analysis reveals a burst-quiet participation pattern, with bursts often commencing with incentive activities. We also find a power-law distribution in the intervals between individual participations. Our research offers valuable insights into the complex dynamics of human participation in community sports activity and provides a theoretical foundation to inform intervention design. Furthermore, the flexibility of our model enables its application to other data exhibiting power-law properties, broadening its potential impact beyond the realm of community sports

    Salience in decision-making: a neuroeconomic analysis

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    Attention and the closely related concept of salience play an important role in the complex process of human decision-making. In 2012, Bordalo et al. (2012a) proposed a theory on human decision-making that is based on salience. They suggest that salience differences within a decision problem may explain many decision biases. Concerning decisions under risk, Bordalo and colleagues developed a formula to calculate salience differences that are shaped by bottom-up processes. These salience differences have been experimentally investigated. Reaction times in a dot-probe task served as indicator of attentional biases. Data revealed a significant salience effect after a lottery exposure duration of 150 ms. This supports the salience concept proposed by Bordalo et al. (2012a) and suggests an early attentional orienting towards salient payoffs. In order to further differentiate attentional processes involved in the salience effect EEG has been recorded. Different ERP-components may indicate attentional biases at different stages of attentional processing and give a hint at more detailed reasons behind the salience effect. All investigated components, namely, P1, N1, P3a and P3b, showed no significant salience differences. Part III presents a further experiment that was devoted to nudges. These interventions often work by altering the salience within a decision problem or by directing the attention to the decision task itself. Since these interventions influence decisions at least partly on an unconscious level, nudges are subject to criticism. The experiment aimed at investigating the effect of transparent information accompanying the nudges on their efficacy. In line with previous research adding information on the nudge itself, on its purpose and the combination of both had no significant effect on the efficacy of the nudge, even though this additional information again alters salience ratios within the decision problem

    Essays on Economic Laboratory and Field Experiments

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    Essays on Economic Laboratory and Field Experiments. This PhD Thesis contains five articles. The core of every article is an economic experiment. The object of every article is to analyze economic behavior in differnet settings

    Accounting for Uncertainty Affecting Technical Change in an Economic-Climate Model

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    The key role of technological change in the decline of energy and carbon intensities of aggregate economic activities is widely recognized. This has focused attention on the issue of developing endogenous models for the evolution of technological change. With a few exceptions this is done using a deterministic framework, even though technological change is a dynamic process which is uncertain by nature. Indeed, the two main vectors through which technological change may be conceptualized, learning through R&D investments and learning-by-doing, both evolve and cumulate in a stochastic manner. How misleading are climate strategies designed without accounting for such uncertainty? The main idea underlying the present piece of research is to assess and discuss the effect of endogenizing this uncertainty on optimal R&D investment trajectories and carbon emission abatement strategies. In order to do so, we use an implicit stochastic programming version of the FEEM-RICE model, first described in Bosetti, Carraro and Galeotti, (2005). The comparative advantage of taking a stochastic programming approach is estimated using as benchmarks the expected-value approach and the worst-case scenario approach. It appears that, accounting for uncertainty and irreversibility would affect both the optimal level of investment in R&D –which should be higher– and emission reductions –which should be contained in the early periods. Indeed, waiting and investing in R&D appears to be the most cost-effective hedging strategy.Stochastic Programming, Uncertainty and Learning, Endogenous Technical Change
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