The Framing of Games and the Psychology of Play

Psychological game theory can help provide a rational choice explanation of framing effects; frames influence beliefs, beliefs influence motivations. We explain this theoretically, and explore the empirical relevance experimentally. In a 2×2 design of one-shot public good games we show that frames affect subject’s first- and second-order beliefs, and contributions. From a psychological game-theoretic framework we derive two mutually compatible hypotheses about guilt aversion and reciprocity under which contributions are related to second- and first-order beliefs, respectively. Our results are consistent with either.Framing, psychological games, guilt aversion, reciprocity, public good games, voluntary cooperation

The Impact of Fairness on Decision Making - An Analysis of Different Video Experiments

Experimentally observed deviations of behavior from game theoretic predictions suggest that fairness does influence decision making. Fairness in the sense of equality has become an essential element of economic models aiming at explaining actual behavior (cf. Fehr and Schmidt, 1999; Bolton and Ockenfels, 2000). In this paper I will argue that equality is not the only fairness norm to be taken into account. More equity norms than equality exist, including inequality of payoffs. Since inequitable payoff allocations are advantageous for the one player and disadvantageous for the other, subjects may fall prey to a self-serving bias in their fairness perceptions. Opponents may adhere to different conceptions of fairness making agreement impossible. Using the video method (Hennig-Schmidt, 1999) I further show in a bargaining experiment that behavior is goal-oriented. Fairness criteria based on equity norms guide the formation and adaptation of aspiration levels.experimental economics, video experiments, fairness, equity principle, self-serving bias, aspiration levels, decision making

Neutral versus Loaded Instructions in a Bribery Experiment

This paper contributes to the ongoing methodological debate on context-free versus in-context presentation of experimental tasks. We report an experiment using the paradigm of a bribery experiment. In one condition, the task is presented in a typical bribery context, the other one uses abstract wording. Though the underlying context is heavily loaded with negative ethical preconceptions, we do not find significant differences. We conjecture that the experimental design transmits the essential features of a bribery situation already with neutral framing, such that the presentation does not add substantially to subjects' interpretation of the task.Corruption, context, framing, valence, experimental instructions, laboratory, trust, reciprocity, ethical behaviour, social norms

The Impact of Fairness on Decision Making - An Analysis of Different Video Experiments

Experimentally observed deviations of behavior from game theoretic predictions suggest that fairness does influence decision making. Fairness in the sense of equality has become an essential element of economic models aiming at explaining actual behavior (cf. Fehr and Schmidt, 1999; Bolton and Ockenfels, 2000). In this paper I will argue that equality is not the only fairness norm to be taken into account. More equity norms than equality exist, including inequality of payoffs. Since inequitable payoff allocations are advantageous for the one player and disadvantageous for the other, subjects may fall prey to a self-serving bias in their fairness perceptions. Opponents may adhere to different conceptions of fairness making agreement impossible. Using the video method (Hennig-Schmidt, 1999) I further show in a bargaining experiment that behavior is goal-oriented. Fairness criteria based on equity norms guide the formation and adaptation of aspiration levels

In Search of Workers' Real Effort Reciprocity - A Field and a Laboratory Experiment

updated version of paper no 5

In Search of Workers' Real Effort Reciprocity - A Field and a Laboratory Experiment

We present a field experiment to assess the effect of own and peer wage variations on actual work effort of employees with hourly wages. Work effort neither reacts to an increase of the own wage, nor to a positive or negative peer comparison. This result seems at odds with numerous laboratory experiments that show a clear own wage sensitivity on effort. In an additional real-effort laboratory experiment we show that explicit cost and surplus information that enables to exactly calculate employer’s surplus from the work contract is a crucial pre-requisite for a positive wage-effort relation. This demonstrates that employee’s reciprocity requires a clear assessment of the surplus at stake

How Payment Systems Affect Physicians´ Provision Behaviour – An Experimental Investigation

A central concern in health economics is to understand the influence of commonly used physician payment systems. We introduce a controlled laboratory experiment to analyze the influence of fee-for-service (FFS) and capitation (CAP) payments on physicians' behaviour. Medical students decide as experimental physicians on the quantity of medical services. Real patients gain a monetary benefit from their choices. Our main findings are that patients are overserved in FFS and underserved in CAP. Financial incentives are not the only motivation for physicians' quantity decisions, though. The patient benefit is of considerable importance as well. Patients are affected differently by the two payment systems. Those patients in need of a low level of medical services are better off under CAP, whereas patients with a high need of medical services gain more health benefit when physicians are paid by FFS.Physician payment system; laboratory experiment; incentives; fee-for-service; capitation

In Search of Worker's Real Effort Reciprocity - A Field and a Laboratory Experiment

We present a field experiment to assess the effect of own and peer wage variations on actual work effort of employees with hourly wages. Work effort neither reacts to an increase of the own wage, nor to a positive or negative peer comparison. This result seems at odds with numerous laboratory experiments that show a clear own wage sensitivity on effort. In an additional real-effort laboratory experiment we show that explicit cost and surplus information that enables to exactly calculate employer's surplus from the work contract is a crucial pre-requisite for a positive wage-effort relation. This demonstrates that employee's reciprocity requires a clear assessment of the surplus at stake.efficiency wage, reciprocity, fairness, feild experiment, real effort

How Payment Systems Affect Physicians' Provision Behaviour – An Experimental Investigation

Understanding how physicians respond to incentives from payment schemes is a central concern in health economics research. We introduce a controlled laboratory experiment to analyse the influence of incentives from fee-for-service and capitation payments on physicians’ supply of medical services. In our experiment, physicians choose quantities of medical services for patients with different states of health. We find that physicians provide significantly more services under fee-for-service than under capitation. Patients are overserved under fee-forservice and underserved under capitation. However, payment incentives are not the only motivation for physicians’ quantity choices, as patients’ health benefits are of considerable importance as well. We find that patients in need of a high (low) level of medical services receive a larger health benefit under fee-for-service (capitation).Physician payment system; laboratory experiment; incentives; fee-for-service; capitation

Experimenting over a Long Distance - A method to facilitate intercultural experiments

We report a new method for Experimenting over a Long Distance (ELD)allowing to simultaneously run decentralized interactive experiments in geographically separated subject pools. Applying ELD to an intercultural trust experiment with participants from Argentina, China and Germany we found a striking evidence for transcontinental trust behavior. In addition to Chinese senders’ discrimination of Argentinean players no discrimination in trust and reciprocity behavior was observed. Neverthe- less, we found significantly different levels of trust and reciprocity in the different national cultures.interactive intercultural experiments, investment game, trust