Communication, Coordination and Networks

We study experimentally how the network structure and length of pre-play communication affect behavior and outcome in a multi-player coordination game with conflicting preferences. Network structure matters but the interaction between network and time effects is more subtle. Under each time treatment, substantial variations are observed in both the rate of coordination and distribution of coordinated outcomes across networks. But increasing the communication length improves both efficiency an equity of coordination. In all treatments, coordination is mostly explained by convergence in communication. We also identify behaviors that explain variations in the distribution of coordinated outcomes both within and across networks.experiment; pre-play communication; coordination; network; efficiency; equity

Reserve price effects in auctions: estimates from multiple RD designs

We present evidence from 260,000 online auctions of second-hand cars to identify the impact of public reserve prices on auction outcomes. To establish causality, we exploit multiple discontinuities in the relationship between reserve prices and vehicle characteristics to present RD estimates of reserve price effects on auction outcomes. Our first set of results show that, in line with the robust predictions of auction theory, an increase in reserve price decreases the number of bidders, increases the likelihood the object remains unsold, and increases expected revenue conditional on sale. Reserve price effects are found to be larger when there are more entrants, and when the reserve price is lower to begin with. Our second set of results then combine these estimates to calibrate the reserve price effect on the auctioneer's expected revenue. This reveals the auctioneer's reserve price policy to be locally optimal. Our final set of results provide novel evidence on reserve price effects on the composition of bidders. We find that an increase in reserve price: (i) decreases the number of potential bidders as identified through individual web browsing histories; (ii) leads to only more experienced and historically successful bidders still entering the auction; (iii) the characteristics of actual winners are less sensitive to the reserve price than those of the average bidder, suggesting auction winners are not the marginal entrant.

Who Is (More) Rational?

Revealed preference theory o¤ers a criterion for decision-making quality: if decisions are high quality then there exists a utility function that the choices maximize. We conduct a large-scale ?eld experiment that enables us to test subjects?choices for consistency with utility maximization and to combine the experimental data with a wide range of individual socioeco-nomic information for the subjects. There is considerable heterogeneity in subjects?consistency scores: high-income and high-education subjects display greater levels of consistency than low- income and low-education subjects, men are more consistent than women, and young subjects are more consistent than older subjects. We also ?nd that consistency with utility maximization is strongly related to wealth: a standard deviation increase in the consistency score is associated with 15-19 percent more wealth. This result conditions on socioeconomic variables including current income, education, and family structure, and is little changed when we add controls for past income, risk tolerance and the results of a standard personality test used by psychologists.

Consistency, Heterogeneity, and Granularity of Individual Behavior under Uncertainty

By using graphical representations of budget sets over bundles of state-contingent commodities, we generate a very rich data set well-suited to studying behavior under uncertainty at the level of the individual subject. We test the data for consistency with the maximization hypothesis, and we estimate preferences using a two-parameter utility function based on Faruk Gul (1991). This specification provides a good interpretation to the data at the level of the individual subject and can account for the highly heterogeneous behaviors observed in the laboratory. The parameter estimates jointly describe attitudes toward risk and allow us to characterize the distribution of risk preferences in the population.uncertainty, revealed preference, Expected Utility Theory, loss/disappointment aversion, experiment

Network architecture, salience and coordination

This paper reports the results of an experimental investigation of dynamic games in networks. In each period, the subjects simultaneously choose whether or not to make an irreversible contribution to the provision of an indivisible public good. Subjects observe the past actions of other subjects if and only if they are connected by the network. Networks may be incomplete so subjects are asymmetrically informed about the actions of other subjects in the same network, which is typically an obstacle to the attainment of an efficient outcome. For all networks, the game has a large set of (possibly inefficient) equilibrium outcomes. Nonetheless, the network architecture makes certain strategies salient and this in turn facilitates coordination on efficient outcomes. In particular, asymmetries in the network architecture encourage two salient behaviors, strategic delay and strategic commitment. By contrast, we find that symmetries in the network architecture can lead to mis-coordination and inefficient outcomes

Network Architecture, Salience and Coordination

This paper reports the results of an experimental investigation of monotone games with imperfect information. Players are located at the nodes of a network and observe the actions of other players only if they are connected by the network. These games have many sequential equilibria; nonetheless, the behavior of subjects in the laboratory is predictable. The network architecture makes some strategies salient and this in turn makes the subjects’ behavior predictable and facilitates coordination on efficient outcomes. In some cases, modal behavior corresponds to equilibrium strategies

Why North Korean Refugees are Reluctant to Compete: The Roles of Cognitive Ability

The study compares the competitiveness of three Korean groups raised in different institutional environments: South Korea, North Korea, and China. Laboratory experiments reveal that North Korean refugees are less likely to participate in competitive tournaments than South Koreans and Korean-Chinese immigrants. Analysis using a choice model with probability weighting suggests that lower cognitive ability may lead to lower expected performance, more pessimistic beliefs, and greater aversion to competition

Endline Report for the Self-Supporting Rural Development Project with Saemaul Undong's Participatory Approach in Myanmar

The Self-Supporting Rural Development Project with Saemaul Undong's Participatory Approach (hereafter SMU) in Myanmar, implemented jointly by Korea International Cooperation Agency (KOICA) and the Ministry of Agriculture, Livestock, and Irrigation (MOALI) from 2014 to 2019, is the largest rural development project in Southeast Asia implemented by KOICA. Excluding the budget for the construction of the Saemaul Undong Training Institute in Myanmar, the project is worth more than 10 billion Korean won (equivalent to USD 9 million), which includes the budget for the implementation of rural community development projects in 100 pilot villages across nine regions in Myanmar over three years. As the scale of KOICA's development projects has expanded dramatically, and projects with large budgets of over 10 billion won, including Myanmar's rural community development projects, have increased significantly, there have been increasing discussions on how to evaluate various projects implemented by KOICA. The evaluation method used by KOICA can be described as Process Evaluation using Project Design Matrix(PDM), which summarizes the logical framework based on the Theory of Change. While the PDM evaluated in the order of inputs, activities, outputs, outcomes, and impacts has the advantage of being particularly useful for process evaluation, it assumes a causal relationship between inputs/activities and outcomes/impacts and thus cannot be scientifically proven. In an effort to address these limitations of process evaluation, impact evaluation method focused on identifying causal relationships has received increasing attention. Abhijit Banerjee (University of MIT), Esther Duflo (University of MIT), and Michael Kremer (University of Harvard) have conducted impact evaluations applying a randomized controlled trial (RCT) to various development projects since the mid-1990s. They have also received the 2019 Nobel Prize in Economics for their contributions to poverty alleviation and development policies based on scientific evidence derived from impact evaluation findings. National aid agencies such as USAID and DFID, and inter-governmental organizations such as the World Bank and the Asian Development Bank have been actively conducting impact evaluations of their development projects. In particular, the World Bank has established the Development Impact Evaluation Initiative (DIME) in order to evaluate their major projects. KOICA also carried out an impact evaluation, along with process evaluation, when implementing the Myanmar rural community development project in line with these international evaluation trends