Conditional cooperation and voluntary contributions to a public good

We explore facets of conditional cooperation in a public goods game. First, we replicate the Fischbacher, Gächter and Fehr (2001) result that the majority of subjects in public goods experiments are conditional cooperators. Next, given that the majority of subjects in our study are conditional cooperators, we look at what happens when subjects are given additional information about the presence of conditional cooperators in the group. We find that such information about the presence of conditional cooperators leads to an increase in contributions overall. However this increase in contributions is most pronounced for the conditional cooperators.Conditional Co-operation

Gender Differences in Trust and Reciprocity

We use the investment game introduced by Berg, Dickhaut and McCabe (1995) to explore gender differences in trust and reciprocity. In doing so we replicate and extend the results first reported by Croson and Buchan (1999). We find that men exhibit greater trust than women do while women show higher levels of reciprocity. Trusting behavior is driven strongly by expectations of reciprocation. We posit that the lower levels of trust exhibited by women may be attributed to a higher degree of risk aversion.Gender Differences, Trust, Reciprocity, Risk Aversion, Experiments

An Experimental Analysis of Group Size and Risk Sharing

We study the relationship between group size and the extent of risk sharing in an insurance game played over a number of periods with random idiosyncratic and aggregate shocks to income in each period. Risk sharing is attained via agents that receive a high endowment in one period making unilateral transfers to agents that receive a low endowment in that period. The complete risk sharing allocation is for all agents to place their endowments in a common pool, which is then shared equally among members of the group in every period. Theoretically, the larger the group size, the smaller the per capita dispersion in consumption and greater is the potential value of insurance. Field evidence however suggests that smaller groups do better than larger groups as far as risk sharing is concerned. Results from our experiments show that the extent of mutual insurance is significantly higher in smaller groups, though contributions to the pool are never close to what complete risk sharing requires.Reciprocity, Risk Sharing, Group Size, Experiments.

A Dynamic Analysis of the Evolution of Conventions in a Public Goods Experiment with Intergenerational Advice

In this paper we analyse contributions to a public good within an inter-generational framework where at the end of each session one generation of subjects leave advice for the succeeding generation via free form messages. Such advice can be private (advice left by one player in generation t is given only to her immediate successor in generation t+1) or public (advice left by players of generation t is made available to all members of generation t+1). We adopt a novel approach to analysing the data by estimating a panel regression model that enables us to understand the dynamics of the process better and to highlight the learning that occurs over time. Our estimation results show that contributions in any period depend crucially on (1) contributions in the previous period and (2) on the group average in the previous period - more specifically whether a subject’s own contribution in the previous period fell above or below the group average. We find that in the public advice treatment when a subject’s contribution fell below the group average in the previous period there is a tendency on the part of that subject to increase contributions in the next period. This is evidence that the public advice treatment leads to the creation of virtuous norms that help sustain high cooperation and mitigate problems of free riding over time.Voluntary contributions mechanism, Public goods, Experiments, Panel Data, Generations

Learning in Tournaments with Inter-Generational Advice

We study learning in a simulated tournament using an inter-generational framework. Here a group of subjects are recruited into the lab and play the stage game for 10 rounds. After his participation is over, each player is replaced by another player, his laboratory descendant, who then plays the game for another 10 rounds as a member of a fresh group of subjects. A particular player in generation t+1 can (1) see the history of choices by his generation t predecessor and (2) receive advice from that predecessor via free-form messages that generation t players leave for their generation t+1 successors. We find that the presence of advice makes a difference in that the experimental groups who get advice perform better – their decisions are closer to the Nash equilibrium – compared to a control group of subjects that plays the game with no recourse to such advice.Advice

Communication, Advice and Beliefs in an Experimental Public Goods Game

We study the efficacy of horizontal versus vertical social learning processes in a public goods game. In one treatment, subjects about to play the game can make nonbinding common knowledge announcements about their intentions while, in another, subjects do not communicate directly with group members but receive common knowledge advice from the previous generation of players. A third treatment has subjects play with neither communication nor advice. We find that groups that engage in peer communication achieve much lower levels of contribution to the public good than do groups that receive advice. We attribute this finding in part to the fact that some subjects in the communication treatment opted to make no announcement during the communication phase of play.Voluntary contributions mechanism, Advice, Communication, Beliefs, Experiments.

Common and almost common knowledge of credible assignments in a coordination game

We build on Van Huyck, Gillette and Battalio (1992) and examine the efficacy of credible assignments in a stag-hunt type coordination game with two Pareto-ranked equilibria, one payoff dominant and the other risk dominant. The majority of our subjects fail to coordinate to the payoff dominant outcome when no assignment is made. However, the majority of them always coordinate to the payoff dominant outcome when an assignment is made. This happens regardless of whether the assignment is “almost common knowledge†or “common knowledgeâ€.Coordination

Subject Pool Effects in a Corruption Experiment: A Comparison of Indonesian Public Servants and Indonesian Students

We report results from a corruption experiment with Indonesian public servants and Indonesian students. Our results suggest that although both subject pools show a high level of concern with the extent of corruption in Indonesia, the Indonesian public servant subjects have a significantly lower tolerance of corruption than the Indonesian students. We find no evidence that this is due to a selection effect. The reasons given by the public servants for either engaging in or not engaging in corruption suggest that the differences in behavior across the subject pools are driven by their different real life experiences. For example, when abstaining from corruption public servants more often cite the need to reduce the social costs of corruption as a reason for their actions, and when engaging in corruption they cite low government salaries or a belief that corruption is a necessary evil in the current environment. In contrast, students give more simplistic moral reasons. We conclude by arguing that experiments such as the one considered in this paper can be used to measure forward-looking attitudinal change in society and that results obtained from different subject pools can complement each other in the determination of such attitudinal changes.Corruption, Experiments, Subject Pool Effects

Gender and Corruption: Insights from an Experimental Analysis

In recent years, a substantial body of work has emerged in the social sciences exploring differences in the behavior of men and women in various contexts. This paper contributes to this literature by investigating gender differences in attitudes towards corruption. It departs from the previous literature on gender and corruption by using experimental methodology. Attitudes towards corruption play a critical role in the persistence of corruption. Based on experimental data collected in Australia (Melbourne), India (Delhi), Indonesia (Jakarta) and Singapore, we show that while women in Australia are less tolerant of corruption than men in Australia, there are no significant gender differences in attitudes towards corruption in India, Indonesia and Singapore. Hence, our findings suggest that the gender differences found in the previous studies may not be nearly as universal as stated and may be more culture-specific. We also explore behavioral differences by gender across countries and find that there are larger variations in women’s attitudes towards corruption than in men’s across the countries in our sample.Gender, Corruption, Experiments, Punishment, Multicultural Analysis

Dynamic Analysis of the Evolution of Conventions in a Public Goods Experiment with Intergenerational Advice

In this paper we analyse contributions to a public good within an inter-generational framework where at the end of each session one generation of subjects leave advice for the succeeding generation via free form messages. Such advice can be private (advice left by one player in generation t is given only to her immediate successor in generation t + 1 ) or public (advice left by players of generation t is made available to all members of generation t + 1 ). We estimate a panel regression model that enables us to understand the dynamics of the process better and to highlight the learning that occurs over time. Our estimation results show that contributions in any period depend crucially on contributions in the previous period and on the group average in the previous period - more specifically whether a subject's own contribution in the previous period fell above or below the group average. We find that in the public advice treatment when a subject's contribution fell below the group average in the previous period there is a tendency on the part of that subject to increase contributions in the next period