Continuous and Step-level Pay-off Functions in Public Good Games: A Conceptual Analysis

Conflicts between individuals’ and collective interests are ubiquitous in social life. Numerous experimental studies have investigated the resolution of such conflicts using public good games with either continuous or step-level payoff functions. A conceptual analysis using both classic game theory and social exchange theory shows that these two types of games are fundamentally different. A continuous function game is a social dilemma in that it contains a conflict between individual and collective interests whereas a step-level game is primarily a social coordination game. Thus, we conclude that one can not safely generalize results from step-level to continuous form games. Additionally, our analysis shows that the distinction between continuous and single-step games can be blurred by segmenting a continuous function into steps or adding steps to a single-step game. We identify characteristics of the payoff function that conceptually mark the transition from a dilemma to a coordination problem.

Auction Fever: Theory and Experimental Evidence

It is not a secret that certain auction formats yield on average higher prices than others. The phenomenon that dynamic auctions are more likely to elicit higher bids than static one-shot auctions is often associated with the term ''auction fever.'' On a psychological level, we consider the so-called pseudo-endowment effect as largely responsible for peoples’ tendency to submit higher bids, potentially amplified by the source-dependence effect. The phenomenon of auction fever is replicated in an experimental investigation of different auction formats within a private values framework where bidders have private but incomplete knowledge of their valuation for a hypothetical good. We suggest this assumption to be more realistic than definite private values, as assumed in the traditional IPV model. An additional experimental investigation within the traditional IPV framework does not either reveal any indication for the appearance of auction fever. On the basis of our experimental observations we present a model of reference-dependent utility theory that comprehends the phenomenon by assuming that bidders' reference points are shifted by the pseudo-endowment and the source-dependence effect.

Continuous and step-level pay-off functions in public good games : a conceptual analysis

Conflicts between individuals’ and collective interests are ubiquitous in social life. Numerous experimental studies have investigated the resolution of such conflicts using public good games with either continuous or step-level payoff functions. A conceptual analysis using both classic game theory and social exchange theory shows that these two types of games are fundamentally different. A continuous function game is a social dilemma in that it contains a conflict between individual and collective interests whereas a step-level game is primarily a social coordination game. Thus, we conclude that one can not safely generalize results from step-level to continuous form games. Additionally, our analysis shows that the distinction between continuous and single-step games can be blurred by segmenting a continuous function into steps or adding steps to a single-step game. We identify characteristics of the payoff function that conceptually mark the transition from a dilemma to a coordination problem

Finding Teammates Who Are Not Prone to Sucker and Free-Rider Effects: The Protestant Work Ethic as a Moderator of Motivation Losses in Group Performance

This study examined whether differences in the endorsement of the `Protestant Work Ethic' (PWE) are related to motivation losses in group work. Three factors were derived from male student scores on the Mirels—Garrett Protestant Work Ethic Scale, Ho's Australian Work Ethic Scale and a scale designed to assess preferences for reward distributions: instrumental value of work, ethical value of work and normative value of equity. The study assessed motivation loss in two situations; one designed to promote free-rider effects and another designed to promote sucker effects. Results showed that the sucker effect was moderated by all three factors but in qualitatively different ways whereas the free rider effect was not strongly moderated by any of the PWE factors

Information Flow and Influence during Collective Search, Discussion, and Choice

If decision-relevant information is distributed among team members, the group is inclined to focus on shared information and to neglect unshared information, resulting often in suboptimal decisions. This classical finding is robust in experimental settings, in which the distribution of information is created artificially by an experimenter. The current paper looks at information sharing effects when access to information is not restricted, and decision makers are very familiar with the decision task. We analyzed archival search and discussion data obtained from business executives completing a personnel selection exercise. Information popularity in the population from which groups were composed predicted number of group members accessing items during information searches and whether the group discussed the items. The number of group members who accessed an item predicted whether information was repeated during discussion, and repetition predicted which items were included on an executive summary. Moreover, cognitively central group members were more influential than cognitively peripheral members. One implication is that collective decision making amplifies what is commonly known at the expense of disseminating what is not.Information Sharing, Cognitive Centrality, Group Decision Making, Collective Choice, Archival Data

Continuous versus Step-Level Public Good Games

We will firstly outline the rationale of a public good game and explain the distinction between a continuous public good game and a threshold public good game. As a vast majority of experimental research in social psychology on public good games has used threshold public good games, we will then outline the structure of a dilemma game with a provision point. Our point is that dilemma games with a provision point violate two important assumptions commonly held for public good games: a) there is always a conflict between the group’s interest and the individual’s interest; and b) an individual is always better off defecting. A threshold dilemma game is a dilemma with a coordination game embedded in it. Hence it provides focal point solutions and may as a consequence leave less room for other factors to affect behavior. Moreover, games with a provision point might yield different results than games without a provision point. We will argue that above that threshold dilemma games do not provide good models of many the public goods problems that are encountered in real life. We will propose that a public good game with a tilted S function provides a more appropriate model of real life dilemmas while fulfilling the defining properties of public good games

Zum systematischen Vergleich von Rentenversicherung und Fondsentnahmeplänen unter dem Aspekt des Kapitalverzehrrisikos

A Systematic Comparison of Pension Annuities and Self-Annuitization under the Criterion of Capital Exhaustion is presented. The present paper further develops the paper of Albrecht/Goebel (SFB 504 discussion paper 00-31). New features are the evaluation of real estate funds, the consideration of real estate funds, the consideration of a 65 year old retiree and the consideration of the respective maximum and minimum funds for the evaluation period. The risk of self-annuitization is specified by the ruin probability of outliving one's wealth. It is assumed that the amount of withdrawal from the fund is equivalent to the constant annuity of the pension insurance contract. Again the determination of the ruin probability is the central objective of the paper.

Finding Team Mates who are not prone to Sucker and Free-Rider effects: The Protestant Work Ethic as a Moderator of Motivation Losses in Group Performance

This study examines the contribution of a personality variable in motivation losses in group performance. Differences in the endorsement of the ‘Protestant Work Ethic’ can account for variance in motivation losses in group work. Male student scores on the Mirels- Garrett Protestant Work Ethic Scale and Ho’s Australian Work Ethic Scale as well as different preferences for reward distributions were used as moderator variables. The study tested motivation losses in a situation that was designed to provoke the free-rider effect and in a situation that was designed to provoke the sucker-effect. Results showed that different facets of the Protestant Work Ethic have different effects on behavior in group work situations: Whereas approval of the equity principle moderates the sucker-effect, belief in work as a value moderates the free-rider effect

Auction fever : theory and experimental evidence

It is not a secret that certain auction formats yield on average higher prices than others. The phenomenon that dynamic auctions are more likely to elicit higher bids than static one-shot auctions is often associated with the term ''auction fever.'' On a psychological level, we consider the so-called pseudo-endowment effect as largely responsible for peoples’ tendency to submit higher bids, potentially amplified by the source-dependence effect. The phenomenon of auction fever is replicated in an experimental investigation of different auction formats within a private values framework where bidders have private but incomplete knowledge of their valuation for a hypothetical good. We suggest this assumption to be more realistic than definite private values, as assumed in the traditional IPV model. An additional experimental investigation within the traditional IPV framework does not either reveal any indication for the appearance of auction fever. On the basis of our experimental observations we present a model of reference-dependent utility theory that comprehends the phenomenon by assuming that bidders' reference points are shifted by the pseudo-endowment and the source-dependence effect

Information Sharing, Cognitive Centrality, and Influence among Business Executives during Collective Choice

Laboratory studies have shown that decision-making groups tend to focus on common information at the expense of unique information. In the current study, high level business executives completed a personnel selection task. Access to information about the candidates was not controlled as in a typical study of information sharing, but common, partially shared, and unique information arose naturally from the individual members’ information searches. During subsequent discussions, groups mentioned more common than partially shared than unique information. However, the underlying processes seemed to be different from what has been observed in laboratory studies. The popularity of information in the population from which groups were composed predicted both the number of a group’s members who accessed an item in their information searches and whether the group discussed the item. However, the number of group members who accessed an item did predict whether information was repeated during discussion, and repetition predicted which items were included on a final written summary. Finally, cognitively central group members were more influential than cognitively peripheral members