Can You Believe Your Neighbors' Behaviors?

In the theoretical assumption of informational cascades, private signals and predecessors' actions are equivalently informative before informational cascades, but are not once informational cascades have started. This experimental study tests this assumption by measuring the informativeness of private signals and predecessors'' actions for human subjects in and out of informational cascades. We observed that subjects in informational cascades do not extract much information from predecessors'' actions, indicating that they recognize other subjects'' cascading behaviors, that subjects rely more on their private signals than on predecessors'' actions even when both of them are equivalently informative, and that subjects cannot estimate posterior beliefs precisely in a Bayesian way due to cognitive biases such as anchoring and adjustment or conservatism.

Why Lying Pays: Truth Bias in the Communication with Conflicting Interests

We conduct experiments of a cheap-talk game with incomplete information in which one sender type has an incentive to misrepresent her type. Although that Sender type mostly lies in the experiments, the Receiver tends to believe the Sender's messages. This confirms ``truth bias'' reported in communication theory in a one-shot, anonymous environment without nonverbal cues. These results cannot be explained by existing refinement theories, while a bounded rationality model explains them under certain conditions. We claim that the theory for the evolution of language should address why truthful communication survives in the environment in which lying succeeds.Cheap talk, Communication, Private information, Experiment, Equilibrium refinement, Bounded rationality, Truth bias

"Voice Matters in a Dictator Game"

We examine a dictator game with a "voice" option in the laboratory. In our experiment, the recipient has an opportunity to state a payoff-irrelevant request for the minimum acceptable offer before the dictator dictates his/her offer. In this game, it is predicted not only by the standard game theory, but by the behavioral game theory such as theories of other-regarding preferences, that the dictator's offer is independent of the recipient's request. Some findings based on our data are as follows: the above independence hypothesis is rejected; as the recipient's request increases, the dictator's offer increases when the requests are less than 50% of the pie; on the other hand, when the request goes beyond 50% of the pie, the offer decreases as the request increases. That is, "voice" matters in a dictator game. We also conduct a clustering analysis to classify dictators' behaviour into some notable patterns. As a result, we obtain the following three behavioural patterns: the other-disregarding, the punishing the greedy, and the lenient.

An Experimental Study of Leniency Programs

Antitrust authorities of many countries have been trying to establish appropriate competition policies based on economic analysis. Recently an anti-cartel policy called a "leniency program" has been introduced in many countries as an effective policy to dissolve cartels. In this paper, we studied several kinds of leniency programs through laboratory experiments. We experimentally controlled for two factors: 1) cartel size: the number of cartel members in a group, small (two-person) or large (seven-person), 2) schedule of reduced fine: the number of firms that are given reduced fines. The experimental results showed that (1) an increase in the number of cartel members in a group increased the number of cartels dissolved, (2) changing the coverage of reduced fine had no significant effect both in two-player case and in seven-player case.

Coordinating Antitrust Policies Against International Cartels

Theoretical research on leniency programs has so far focused attention on cartels formed within a country the purpose of the paper is to analyze the situation where a cartel is formed internationally. We consider a model with two firms operating in two countries. The antitrust authority (AA) in each country chooses either to implement a leniency program or to use traditional investigation to detect/deter cartel activity. Given the combination of antitrust policies, the two firms play market games simultaneously in both countries. Assuming that the information on the existence of a cartel in one country spills over to the other, we analyze a strategic interdependency faced by the AAs. Several policy objectives of the AA are considered. We find that if the objective is to maximize revenues from the penalty imposed on cartels, an asymmetric equilibrium exists in which one country chooses to free-ride the other's choosing a leniency program.Cartels

Why Lying Pays: Truth Bias in the Communication with Conflicting Interests

We conduct experiments of a cheap-talk game with incomplete information in which one sender type has an incentive to misrepresent her type. Although that Sender type mostly lies in the experiments, the Receiver tends to believe the Sender's messages. This confirms "truth bias" reported in communication theory in a oneshot, anonymous environment without nonverbal cues. These results cannot be explained by existing refinement theories, while a bounded rationality model explains them under certain conditions. We claim that the theory for the evolution of language should address why truthful communication survives in the environment in which lying succeeds.

"Voice Matters in a Dictator Game"(in Japanese)

We examine a dictator game with a "voice" option in the laboratory. In the dictator game, player 1 dictates how to divide a pie, and player 2 simply receives his/her share, i.e., unlike in an ultimatum game, he/she does not have an option to reject this division. In our experiment, player 2 has an opportunity to state a payoff-irrelevant request for the minimum acceptable offer before player 1 dictates his/her offer. In this game,it is predicted not only by the standard game theory, but by the behavioral game theory such as the theory of other-regarding preferences, that player 1's offer is independent of player 2's request. Some findings based on our data are as follows: the above independence hypothesis is rejected; as player 2's request increases, player 1's offer increases when the requests are less than 50% of the pie; on the other hand, when the request goes beyond 50% of the pie, the offer decreases as the request increases. That is, "voice" matters without having strategic meaning. We also conduct a clustering analysis to find three notably different tendencies among player 1's behavior.