Fight Alone or Together? The Need to Belong

Alliances often face both free-riding and hold-up problems, which under- mine the effectiveness of alliances in mobilizing joint fighting effort. Despite of these disadvantages, alliances are still ubiquitous in all types of contests. This paper asks if there are non-monetary incentives to form alliances, e.g., intimidating/discouraging the single player(s) who is/are left alone. For this purpose, I compare symmetric (2 vs. 2) and asymmetric (2 vs. 1) contests to their equivalent 4-player and 3-player individual contests, respectively. We find that alliance players in symmetric (2 vs. 2) contests behave the same as those in equivalent 4-player individual contests. However, in asymmetric (2 vs. 1) contests, stand-alone players were strongly discouraged to exert effort (especially the females), compared to the 3-player individual contests. Alliance players may have anticipated this effect and also reduced their effort, if alliances share the prize according to the merit rule. Behavioural factors such as the need to belong can help reconcile the "paradox of alliance formation"

The Application of Formative Assessment in High School English Reading Teaching

Teaching evaluation is a very important part of high school English teaching. Curriculum assessment has an important impact on students\u27 learning effectiveness and achievement. The current research on English reading teaching dominated by summative assessment only focuses on the strategic research on how to promote the improvement of English reading ability in schools, which makes it difficult for students to form good reading habits. Compared with summative assessment, formative assessment can enable high school students to participate more fully in the classroom, and to a certain extent, effectively improve high school students\u27 interest and mastery of English reading, so as to improve high school students\u27 English reading ability. Using formative assessment in the English reading classroom can better help students learn English reading and achieve better classroom result

Are Consumers Fooled by Discounts? An Experimental Test in a Consumer Search Environment

In this paper we investigate experimentally if people search optimally and how price promotions influence search behavior. We implement a sequential search task with exogenous price dispersion in a baseline treatment and introduce discounts in two experimental treatments. We find that search behavior is roughly consistent with optimal search but also observe some discount biases. If subjects don't know in advance where discounts are offered the purchase probability is increased by 19 percentage points in shops with discounts, even after controlling for the benefit of the discount and for risk preferences. If consumers know in advance where discounts are given then the bias is only weakly significant and much smaller (7 percentage points).Consumer Search Theory, Search Cost, Price Promotion

Brothers in Arms - An Experiment on the Alliance Puzzle

Our experimental analysis of alliances in conflicts leads to three main findings. First, even in the absence of repeated interaction, direct contact or communication, free-riding among alliance members is far less pronounced than what would be expected from non-cooperative theory. Second, this possible solidarity among ‘brothers in arms’ when fighting against an outside enemy may rapidly deteriorate or disappear as soon as the outside enemy disappears. Third, when fighting an outside enemy, ‘brothers in arms’ may already anticipate future internal conflict about dividing the spoils of winning; however, this subsequent internal conflict does not discourage alliance members from expending much effort in the contest against the external enemy.alliance, conflict, contest, free-riding, hold-up problem, solidarity

Brothers in arms: An experiment on the alliance puzzle

Our experimental analysis of alliances in conflicts leads to three main findings. First, even in the absence of repeated interaction, direct contact or communication, free-riding among alliance members is far less pronounced than what would be expected from non-cooperative theory. Second, this possible solidarity among brothers in arms when fighting against an outside enemy may rapidly deteriorate or disappear as soon as the outside enemy disappears. Third, when fighting an outside enemy, brothers in arms may already anticipate future internal conflict about dividing the spoils of winning; however, this subsequent internal conflict does not discourage alliance members from expending much effort in the contest against the external enemy. -- Unsere experimentelle Studie zu Allianzen in Konflikten führt zu drei Hauptergebnissen. Selbst ohne wiederholte Interaktion, direkten Kontakt oder Kommunikation zwischen den Teilnehmern ist das Trittbrettfahren der Mitglieder der Allianz viel weniger stark ausgeprägt, als es die nicht-kooperative Theorie erwarten lassen würde. Diese Solidarität zwischen den Kampfgefährten, die im Wettbewerb mit einem Außenstehenden zu beobachten ist, nimmt jedoch rapide ab, sobald der Gegner verschwunden ist. Im Kampf mit dem externen Gegner können die Kampfgefährten bereits damit rechnen, dass es zu einem internen Konflikt über die Aufteilung der Kriegsbeute kommen wird; dieser folgende interne Verteilungskonflikt hält die Mitglieder der Allianz jedoch nicht davon ab, einen hohen Einsatz im Kampf mit dem externen Gegner zu leisten.Alliance,conflict,contest,free-riding,hold-up problem,solidarity

Absolute vs. relative success: Why overconfidence is an inefficient equilibrium

Overconfidence is one of the most ubiquitous biases in the social sciences, but the evidence regarding its overall costs and benefits is mixed. To test the possibility that overconfidence might yield important relative benefits that offset its absolute costs, we conducted an experiment (N=298 university students) in which pairs of participants bargain over the unequal allocation of a prize that was earned via a joint effort. We manipulated confidence using a binary noisy signal to investigate the causal effect of negotiators’ beliefs about their relative contribution on the outcome of the negotiation. Our results provide evidence that high levels of confidence lead to relative benefits (how much one earns compared to one’s partner) but absolute costs (how much money one receives overall). These results suggest that overconfidence creates an inefficient equilibrium whereby overconfident negotiators benefit over their partners even as they bring about joint losses

Three essays on consumer search behavior in experimental market environments.

This thesis investigates consumer search behavior in different contexts and its implications on certain market outcomes. It consists of three self-contained essays. Part one investigates if people search optimally and how price promotions (such as the provision of price discounts) influence search intensity and risk-taking behavior. We start with a typical sequential search task in a finite time horizon (with exogenously determined price dispersion) as the baseline treatment. In the two experimental treatments, exogenous discounts are introduced to the search process. The treatments differ in the amount of information on the discounts revealed to the subjects. Subjects’ search behavior is roughly consistent with optimality for a risk-neutral agent, but significantly influenced by the introduction of discount vouchers. We find that subjects’ search intensity is significantly reduced if they are in a shop that offers discounts, even when the monetary benefit induced by the discount has been taken into account. This suggests that people seem to gain extra non-monetary utility from buying a discounted product. Alternatively, subjects might overestimate the value of a discount. Following the findings in part one, we focus on price-framing effects of discounts on consumer search behavior in part two. In order to isolate the price-framing effect from all other possible influences, we adopt an extremely simple two-shop search model in which a consumer who sees the price for an item in a shop has to decide either to buy it or to incur a search cost to learn the ex-ante uncertain price in a second shop. The experiment is designed such that a rational buyer should make identical decisions in the base treatment (where prices are posted as net prices in both shops) and in the experimental treatments (where the price in one of the shops is framed as a gross price with a discount, holding the net-price constant). Using structural estimation of the observed risk preferences, we find that people tend to be more risk-averse and hence buy from the initial shop more often in the discount treatments, regardless of where the discount is offered. The seemingly trivial change to a discount-framing increases the complexity of the decision problem. Subjects reveal a tendency to stick with the comparatively less complex options more frequently as the complexity of the decision problem increases. However, this bias declines with experience, as subjects become more and more familiar with the framing. In part three, we study search behavior in a market experiment, where prices are determined endogenously by human players. More specifically, we examine the behavioral factors and the underlying mechanism which drive the widely observed asymmetric price adjustment to cost shocks (in a world with costly search behavior and information asymmetry). We show that price dispersion, as well as asymmetric price adjustment to cost shocks, arises in experimental markets, even though the standard theory predicts neither. We find that after controlling all the potential theoretical factors, the observed price dispersion can be explained by the presence of bounded rational play. Under price dispersion, asymmetric price adjustment arises naturally, as it is harder for buyers to learn that a negative cost shock has taken place. Learning is much quicker after a positive shock.Thesis (Ph.D.) -- University of Adelaide, School of Economics, 201

What causes rockets and feathers? An experimental investigation

Prices usually adjust much faster when costs increase than when costs decrease. In spite of the many empirical studies confirming this “Rockets-and-Feathers” phenomenon for different industries, the mechanism driving it is not well understood. We use simple experimental markets with and without search frictions and either privately or publicly observed cost shocks to study how sensitive the “Rockets-and-Feathers” phenomenon is to changes in search costs and information conditions. In contrast to standard theoretical predictions we observe price dispersion and spontaneous asymmetric price adjustments in all treatments. Neither search costs nor private information on cost shocks are indispensable for prices to adjust asymmetrically in the short term. The initial asymmetry quickly disappears if the direction of the cost shocks are publicly known, while it persists in both treatments with private information

Are Consumers Fooled by Discounts? An Experimental Test in a Consumer Search Environment

Abstract In this paper we investigate experimentally if people search optimally and how price promotions in ‡uence search behavior. We implement a sequential search task with exogenous price dispersion in a baseline treatment and introduce discounts in two experimental treatments. We …nd that search behavior is roughly consistent with optimal search but also observe some discount biases. If subjects don't know in advance where discounts are o¤ered the purchase probability is increased by 19 percentage points in shops with discounts, even after controlling for the bene…t of the discount and for risk preferences. If consumers know in advance where discounts are given then the bias is only weakly signi…cant and much smaller (7 percentage points)