Dynamic Behavior in Minimum Effort Coordination Games - Some Theory of Group Size and Inter-Group Competition as Coordination Devices

This paper presents a model of individual behavior in minimum effort coordination games, focusing primarily on the effects of the number of players and the introduction of inter-group competition. It is shown that independent of the number of players and the number of competing groups, the most inefficient equilibrium is always the stochastically stable one. Yet, it turns out that the `security' of more efficient equilibria increases with a decrease of the number of players and with an increase of the number of competing groups.Minimum Effort Coordination, Group Competition, Stochastic Stability, Dynamic Games

A Model of Boundedly Rational Consumer Choice

The paper presents an extended version of the standard textbook problem of consumer choice. As usual, agents have to decide about their desired quantities of various consumption goods, at the same time taking into account their limited budget. Prices for the goods are not fixed but arise from a Walrasian interaction of total demand and a stylized supply function for each of the goods. After showing that this type of model cannot be solved analytically, three different types of evolutionary algorithms are set up to answer the question whether agents' behavior according to the rules of these algorithms can solve the problem of extended consumer choice. There are two important answers to this question: a) The quality of the results learned crucially depends on the elasticity of supply, which in turn is shown to be a measure of the degree of state dependency of the economic problem. b) Statistical tests suggest that for the agents in the model it is relatively easy to adhere to the budget constraint, but that it is relatively difficult to reach an optimum with marginal utility per Dollar being equal for each good.

Mixed motives in a Cournot game

The paper analyzes a Cournot model with two types of firms: Maximizers of profits and maximizers of relative payoffs. It is shown that the equilibrium is located somewhere between the regular Cournot-Nash equilibrium and the competitive Walrasian (or Bertrand-) equilibrium.Bertrand Equilibrium

Competition as a Coordination Device. Experimental Evidence from a Minimum Effort Coordination Game

The problem of coordination failure, particularly in 'team production' situations, is central to a large number of mircroeconomic as well as macroeconomic models. As this type of inefficient coordination poses a severe economic problem, there is a need for institutions that foster efficient coordination of individual economic plans. In this paper, we introduce such a rather classical economic institution: competition. In a series of laboratory experiments, we reveal that the true reason for coordination failure is strategic uncertainty, which can be reduced almost completely by introducing a appropriately designed mechanism of (inter-group) competition.coordination failure, team production, competition

Möglichkeitsräume und Sagbarkeitsgrenzen –: Konsum als politisches Motiv in Reiseberichten des 16. Jahrhunderts

Spaces of possibilities and limits of speaking – Consumption as a political motif of travel reports of the 16th century In this essay French and Spanish travel reports from the 16th century are used as sources of history of consumption. The travel reports all dealt with a new continent named “America” which was equated with visions of a new society. The article identifies three patterns of interpretation which show different variations of acquirement. The first model is orientated on a Christian prototype of man, the native without needs. The second model depicts the organisation of complex Indian societies in Middle- and South-America. The last model contains an economic founded dream of a cultivated landscape. All models show an intention to verify traditional systems of social life in Europe and are by this means typically “political”

Selfish in the End?:An Investigation of Consistency and Stability of individual Behavior

This paper puts three of the most prominent specifications of ‘other-regarding’ preferences to the experimental test, namely the theories developed by Charness and Rabin, by Fehr and Schmidt, and by Andreoni and Miller. In a series of experiments based on various dictator and prisoner’s dilemma games, we try to uncover which of these concepts, or the classical selfishapproach, is able to explain most of our experimental findings. The experiments are special with regard to two aspects: First, we investigate the consistency of individual behavior within and across different classes of games. Second, we analyze the stability of individual behavior over time by running the same experiments on the same subjects at several points in time. Our results demonstrate that in the first wave of experiments, all theories of other-regarding preferences explain a high share of individual decisions. Other-regarding preferences seem to wash out over time, however. In the final wave, it is the classical theory of selfish behaviorthat delivers the best explanation. Stable behavior over time is observed only for subjects, who behave strictly selfish. Most subjects behave consistently with regard to at least one of the theories within the same class of games, but are much less consistent across games.individual preferences; consistency; stability; experimental economics

The Monotonicity Puzzle. An Experimental Investigation of Incentives Structures

Non–monotone incentive structures, which — according to theory — are able to induce optimal behavior, are often regarded as empirically less relevant for labor relationships. Scientific attention is (therefore) confined to monotone if not linear contracts. This paper reports on experimental tests comparing non–monotone vs. monotone contracts in a simple dynamic agency model. The results demonstrate that selecting the non–monotone contract over of the monotone one is not only optimal from a theoretical point of view, but also remains preferable given the agents’ observed behavior. However, roughly 50 per cent of the principals prefer the monotone contract.experimental agency, non–monotone contracts

Inequity Aversion and Individual Behavior in Public Good Games: An Experimental Investigation

We present a simple two-steps procedure for a within-subject test of the inequity aversion model of Fehr and Schmidt (1999). In the first step, subjects played modified ultimatum and dictator games and were classified according to their preferences. In the second step, subjects with specific preferences according to the Fehr and Schmidt model were matched into pairs and interacted with each other in a standard public good game and a public good game with punishment possibility. Our results show that the specific composition of groups significantly influences the subjects' performance in the public good games. We identify the aversion against advantageous inequity and the information about the coplayer's type as the main influencing factors for the behavior of subjects. --individual preferences,inequity aversion,experimental economics,public goods

Inequity Aversion and Individual Behavior in Public Good Games: An Experimental Investigation

We present a simple two-steps procedure for a within-subject test of the inequity aversion model of Fehr and Schmidt (1999). In the first step, subjects played modified ultimatum and dictator games and were classified according to their preferences. In the second step, subjects with specific preferences according to the Fehr and Schmidt model were matched into pairs and interacted with each other in a standard public good game and a public good game with punishment possibility. Our results show that the specific composition of groups significantly influences the subjects' performance in the public good games. We identify the aversion against advantageous inequity and the information about the coplayer's type as the main influencing factors for the behavior of subjects. --individual preferences,inequity aversion,experimental economics,public goods

Laying off or Not? the Influence of Framing and Economics Education

This paper provides a critical re-examination of Rubinstein's survey (Rubinstein; Economic Journal 2006), in which he questions the way economics is taught. The observations obtained in our new survey cast some doubts on the original findings, and, in particular, question Rubinstein's conjecture that our students' views on economic issues are influenced by the way we teach economics.