Face Value

There is growing evidence of systematic heterogeneity in behavior by observable characteristics, such as what one would see in a face. We ask, is there informational value in knowing these characteristics in a strategic interaction? Subjects are given the opportunity to purchase a photograph of their partner in the play of a trust game. Not everyone purchases the photo, even at prices as low as $0.20. Senders (first movers in the game) have a more inelastic demand for pictures than responders (second movers). White senders have a substantially higher demand than nonwhite senders or responders. For responders, there is no difference in demand for pictures across ethnicity or sex. White senders who pay to see the picture of their partner use the information to discriminate, sending significantly less to black responders than to white responders. Overall, responders return a higher percentage of the amount received as offers go up, but they do differentiate that percentage when they see the picture of the sender, returning more to a member of the same ethnicity. A face, it appears, has strategic value, especially for those who will use the information to differentiate their decisions.

Care provision: An experimental investigation

In many principal-agent settings, the effort provided by the agent benefits a third party. In these settings, the quality of the work is determined, at least in part, by pro-social motivations. We present lab experiments that utilize a new three-player trust game to examine one such setting, care provision. Players include a principal, an agent, and a needy recipient. The principal can transfer resources to an agent, who then can transfer resources to the needy recipient; the latter transfers are tripled. As in the two-player version, we find high, but variable, levels of trust and reciprocity (agent transfers to target) in the baseline game. Two treatments allow us to gauge the impact of potential policy interventions to enhance care of the target recipient. The first provides a budget subsidy to the principle, and the second alters the effectiveness (multiplier) of the agent’s transfers. Results show that the behavior of the agent does not vary by treatment, and is determined primarily by the amount received from the principal. Principals, on the other hand, do respond to the policy changes. While budget subsidies increase the expenditure of the principal only slightly, policies impacting the agent’s efficiency increase the amount entrusted to them by principals and significantly impact the well-being of the recipient. Results suggest that policies that increase the effectiveness of care workers (the agents) may significantly impact the quality of work provided. Examples of such policies include increased worker training and reductions in red tape

Subsidizing Unit Donations: Matches, Rebates, and Discounts Compared

An influential result in the literature on charitable giving is that matching subsidies dominate rebate subsidies in raising funds. We investigate whether this result extends to ‘unit donation’ schemes, a popular alternative form of soliciting donations. There, the donors’ choices are about the number of units of a charitable good to fund at a given unit price, rather than the amount of money to give. Comparing matches and rebates as well as simple discounts on the unit price, we find no evidence of dominance in our online experiment: The three subsidy types are equally effective overall. At a more disaggregate level, rebates lead to a higher likelihood of giving while matching and discount subsidies lead to larger donations by donors. This suggests that charities using a unit donation scheme enjoy additional degrees of freedom in choosing a subsidy type. Rebates merit additional consideration if the primary goal is to attract donors

The UN in the lab

We consider two alternatives to inaction for governments combating terrorism, which we term Defense and Prevention. Defense consists of investing in resources that reduce the impact of an attack, and generates a negative externality to other governments, making their countries a more attractive objective for terrorists. In contrast, Prevention, which consists of investing in resources that reduce the ability of the terrorist organization to mount an attack, creates a positive externality by reducing the overall threat of terrorism for all. This interaction is captured using a simple 3×3 “Nested Prisoner’s Dilemma” game, with a single Nash equilibrium where both countries choose Defense. Due to the structure of this interaction, countries can benefit from coordination of policy choices, and international institutions (such as the UN) can be utilized to facilitate coordination by implementing agreements to share the burden of Prevention. We introduce an institution that implements a burden-sharing policy for Prevention, and investigate experimentally whether subjects coordinate on a cooperative strategy more frequently under different levels of cost sharing. In all treatments, burden sharing leaves the Prisoner’s Dilemma structure and Nash equilibrium of the game unchanged. We compare three levels of burden sharing to a baseline in a between-subjects design, and find that burden sharing generates a non-linear effect on the choice of the efficient Prevention strategy and overall performance. Only an institution supporting a high level of mandatory burden sharing generates a significant improvement in the use of the Prevention strategy

Social learning in coordination games: does status matter

Abstract: We report the results of experiments designed to test the impact of social status on learning in a coordination game

Group-level selection increases cooperation in the public goods game

When groups compete for resources, some groups will be more successful than others, forcing out less successful groups. Group-level selection is the most extreme form of group competition, where the weaker group ceases to exist, becoming extinct. We implement group-level selection in a controlled laboratory experiment in order to study its impact on human cooperation. The experiment uses variations on the standard linear public goods game. Group-level selection operates through competition for survival: the least successful, lowest-earning groups become extinct, in the sense that they no longer are able to play the game. Additional control treatments include group comparison without extinction, and extinction of the least successful individuals across groups. We find that group-level extinction produces very high contributions to the provision of the public good, while group comparison alone or individual extinction fail to cause higher contributions. Our results provide stark evidence that group-level selection enhances within-group cooperation

Harmonizing the Metabolic Syndrome: A Joint Interim Statement of the International Diabetes Federation Task Force on Epidemiology and Prevention; National Heart, Lung, and Blood Institute; American Heart Association; World Heart Federation; International Atherosclerosis Society; and International Association for the Study of Obesity

A cluster of risk factors for cardiovascular disease and type 2 diabetes mellitus, which occur together more often than by chance alone, have become known as the metabolic syndrome. The risk factors include raised blood pressure, dyslipidemia (raised triglycerides and lowered high-density lipoprotein cholesterol), raised fasting glucose, and central obesity. Various diagnostic criteria have been proposed by different organizations over the past decade. Most recently, these have come from the International Diabetes Federation and the American Heart Association/National Heart, Lung, and Blood Institute. The main difference concerns the measure for central obesity, with this being an obligatory component in the International Diabetes Federation definition, lower than in the American Heart Association/National Heart, Lung, and Blood Institute criteria, and ethnic specific. The present article represents the outcome of a meeting between several major organizations in an attempt to unify criteria. It was agreed that there should not be an obligatory component, but that waist measurement would continue to be a useful preliminary screening tool. Three abnormal findings out of 5 would qualify a person for the metabolic syndrome. A single set of cut points would be used for all components except waist circumference, for which further work is required. In the interim, national or regional cut points for waist circumference can be used