Evidence of homo economicus? Findings from experiment on evolutionary prisoners' dilemma game

This paper aims to analyze subjects’ behavior in an experiment on evolutionary process of prisoners’ dilemma game. The experiment has been designed by using sixteen one-shot prisoners’ dilemma games with payoffs perturbation and random matching players under perfect information. The subjects of the experiment were students and staff in Universitas Gadjah Mada, Indonesia. In contrast to previous studies, for instance Selten and Stoecker’s (1986) Cooper’s, et.al (1991, 1996), the majority of the subjects in this experiment tend to choose Nash equilibrium strategy consistently from the first game. The result showed that the proportion of the Nash equilibrium outcome was consistently in the range of 85%-88%, whereas the tacit cooperation or Pareto optimum outcome was about 1%-2%. There were evidence that payoffs perturbation influences players’ decision. In contrast to the previous studies above, the results from this study revealed that the vast majority of the subjects tend to choose the dominant strategy as prescribed in Game Theory.Prisoners' dilemma, experiment, random-matching players, payoffs perturbation, framing effect

THE IMPACT OF WORLD OIL PRICES TO INDONESIA’S MACROECONOMY: CRISIS AND AFTER CRISIS

Penelitian ini bertujuan untuk menganalisis dampak kenaikan harga minyak dunia terhadap kinerja makroekonomi Indonesia. Kinerja makroekonomi Indonesia diindikasikan oleh Gross Domestic Product (GDP) riil, inflasi, tingkat suku bunga, dan defisit anggaran pemerintah. Tingkat inflasi dicerminkan oleh Indeks Harga Konsumen (IHK). Data yang digunakan dalam kajian empiris ini adalah data sekunder runtut waktu kuartalan dari tahun 1997.I sampai 2006.III atau 39 pengamatan yang diperoleh dari berbagai penerbitan. Alat analisis yang digunakan adalah model Structural Vector Autoregression (SVAR) dengan penekanan pada analisis impulse response.Hasil estimasi model Structural Vector Autoregression (SVAR) yang ditunjukkan oleh analisis impulse response. Impulse Response Function (IRF) memberi informasi bahwa dengan asumsi Indonesia merupakan negara pengimpor minyak (net importer country) diperoleh hasil bahwa GDP riil memberikan respon negatif terhadap shock kenaikan harga minyak. Inflasi, tingkat suku bunga, dan defisit anggaran pemerintah memberikan respon positif terhadap shock kenaikan harga minyak, dan juga memberikan respon negatif terhadap shock makroekonomi. Dalam studi ini, shock makroekonomiadalah shock terhadap GDP.Kata Kunci: shock harga minyak , kinerja makroekonomi Indonesia, model SVAR, impulse respons

ANALISIS PENGARUH PERUBAHAN SPREAD SUKU BUNGA TERHADAP KINERJA MAKROEKONOMI INDONESIA PERIODE 1993:I – 2005: II Pendekatan Jalur Kredit dan SVAR

This research is intended to analyze the influence of the change of interest rate spread to macroeconomic performance in Indonesia. The interest rate spread includes of Fed rate, Germany rate, and China rate. The realization of banking restructuring, which emphasized on program of credit restructuring as result from presence of currency crisis and banking crisis, is held with considered on condition of Indonesian’s macroeconomic. Finally, this research will effected on activity of real sector. In this research, macroeconomic condition is indicated by real Gross Domestic Product (GDP), real credit behavior, real exchange rate, and also real sector condition itself. The activity of real sector is showed by behavior of manufacturing sector and construction sector. The data employed in the study are secondary time series data from quarterly data for period of 1993:I-2005:II. They constitute observation consisting of 50 series of data of picked from several publication. The method of analysis used in the study are structural vector autoregression model with emphasized on impulse response analysis. The result of structural vector autoregression model, which be showed by impulse response analysis, suggests that Gross Domestic Product (GDP), credit behavior, and real sector give negatively response to positive shocks or Gross Domestic Product (GDP), credit behavior, and real sector decreased. This estimation result offer strong empirical evidence for effectiveness and relevance of a credit channel in Indonesia. Positive shocks are shocks to increases in interest rate spread. In this research, interest rate spread are spread between domestic lending rate and US interest rate, domestic lending rate and German interest rate, and domestic lending rate and China interest rate. Futhermore, the estimation result also show that shocks of an increase in interest rate spread caused real appreciation

Evidence of homo economicus? Findings from experiment on evolutionary prisoners' dilemma game

This paper aims to analyze subjects’ behavior in an experiment on evolutionary process of prisoners’ dilemma game. The experiment has been designed by using sixteen one-shot prisoners’ dilemma games with payoffs perturbation and random matching players under perfect information. The subjects of the experiment were students and staff in Universitas Gadjah Mada, Indonesia. In contrast to previous studies, for instance Selten and Stoecker’s (1986) Cooper’s, et.al (1991, 1996), the majority of the subjects in this experiment tend to choose Nash equilibrium strategy consistently from the first game. The result showed that the proportion of the Nash equilibrium outcome was consistently in the range of 85%-88%, whereas the tacit cooperation or Pareto optimum outcome was about 1%-2%. There were evidence that payoffs perturbation influences players’ decision. In contrast to the previous studies above, the results from this study revealed that the vast majority of the subjects tend to choose the dominant strategy as prescribed in Game Theory

Evidence of homo economicus? Findings from experiment on evolutionary prisoners' dilemma game

This paper aims to analyze subjects’ behavior in an experiment on evolutionary process of prisoners’ dilemma game. The experiment has been designed by using sixteen one-shot prisoners’ dilemma games with payoffs perturbation and random matching players under perfect information. The subjects of the experiment were students and staff in Universitas Gadjah Mada, Indonesia. In contrast to previous studies, for instance Selten and Stoecker’s (1986) Cooper’s, et.al (1991, 1996), the majority of the subjects in this experiment tend to choose Nash equilibrium strategy consistently from the first game. The result showed that the proportion of the Nash equilibrium outcome was consistently in the range of 85%-88%, whereas the tacit cooperation or Pareto optimum outcome was about 1%-2%. There were evidence that payoffs perturbation influences players’ decision. In contrast to the previous studies above, the results from this study revealed that the vast majority of the subjects tend to choose the dominant strategy as prescribed in Game Theory

A bridge too far; the strive to establish a financial service regulatory authority (OJK) in Indonesia

The Government of Indonesia (GOI) has been proposing a draft act on financial service regulatory authority, called Otoritas Jasa Keuangan (OJK hereafter). In the aftermath of 1998 Asian crisis, the establishment of the institution was mandated through Bank Indonesia Act (Indonesia’s central bank bill) in 1999, which was later updated in 2004. According to the draft act, the OJK has been designed using an integrated approach, which is similar to the arrangement of FSA in the UK. This paper aims to examine the feasibility of establishing OJK. The existing financial supervision suffers from several problems: a) the quality of supervisions tend to be heterogeneous among the financial supervision bodies, b) there is a gap in supervision, whereby thousand of non-banking financial institutions have not been supervised properly, and c) financial offences have been flourishing in inter market transactions. We found that the establishment of OJK, however, would not minimize, let alone, resolve the problems above. The draft act has not proposed a mechanism on how to address these very issues. We estimated the minimum irreducible costs of establishing and operating OJK and found that the costs are paramount. According to the draft act, the costs would burden all financial institutions and obviously this creates complexity in financing OJK. Finally, two alternative approaches have been proposed in order to improve the feasibility and the effectiveness of the OJK by considering the structure of financial sector supervision in Indonesia