The Curse of Knowledge in Economic Settings: An Experimental Analysis

In economic analyses of asymmetric information, better-informed agents are assumed capable of reproducing the judgments of less-informed agents. We discuss a systematic violation of this assumption that we call the "curse of knowledge." Better-informed agents are unable to ignore private information even when it is in their interest to do so; more information is not always better. Comparing judgments made in individual-level and market experiments, we find that market forces reduce the curse by approximately 50 percent but do not eliminate it. Implications for bargaining, strategic behavior by firms, principal-agent problems, and choice under un-certainty are discussed

The Role of Tacit Routines in Coordinating Activity

We explore the influence of tacit routines in obtaining coordination. Our experiment uses simple laboratory "firms," in which we interfere with one kind of firm's ability to develop tacit routines. Thus, our firms vary in the degree to which they rely on this kind of knowledge – instead of other, explicit, mechanisms – for obtaining coordination. We find that interfering with the development of tacit routines harms firms’ ability to coordinate. We then explore the extent to which firms are able to transfer their ability to coordinate activity, either to a new domain or to new members. Our results indicate that tacit routines transfer more easily than other mechanisms to a new, but closely related, domain. However, routine-based firms perform slightly worse in their ability to incorporate new members

Timing and Virtual Observability in Ultimatum Bargaining and "Weak Link" Coordination Games

Previous studies have shown that simply knowing one player moves first can affect behavior in games, even when the first-mover's moves are known to be unobservable. This observation violates the game-theoretic principle that timing of unobserved moves is irrelevant, but is consistent with virtual observability, a theory of how timing can matter without the ability to observe actions. However, this previous research only shows that timing matters in games where knowledge that one player moved first can help select that player's preferred equilibrium, presenting an alternative explanation to virtual observability. We extend this work by varying timing of unobservable moves in ultimatum bargaining games and “weak link” coordination games. In the latter, the equilibrium selection explanation does not predict any change in behavior due to timing differences. We find that timing without observability affects behavior in both games, but not substantially

Ein Experiment zum Anlegerverhalten

Portfolio selection is one important example of decision making under risk. We empirically investigate how decision makers behave when making these decisions, As a baseline we compare this intuitive decision making with the optimal decision making described by Markowitz' portfolio theory. Our results show that intuitive behavior is quite different from optimal behavior. Especially, subjects did not hold the optimal risky portfolio and they trade much more than predicted by portfolio theory

Cultural Conflict and Merger Failure: An Experimental Approach

We use laboratory experiments to explore merger failure due to conflicting organizational cultures. We introduce a laboratory paradigm for studying organizational culture that captures several key elements of the phenomenon. In our experiments, we allow subjects in "firms" to develop a culture, and then merge two firms. As expected, performance decreases following the merging of two laboratory firms. In addition, subjects overestimate the performance of the merged firm and attribute the decrease in performance to members of the other firm rather than to situational difficulties created by conflicting culture

Bounds on \"{U}bercrossing and Petal Numbers for Knots

An $n$-crossing is a point in the projection of a knot where $n$ strands cross so that each strand bisects the crossing. An \"ubercrossing projection has a single $n$-crossing and a petal projection has a single $n$-crossing such that there are no loops nested within others. The \"ubercrossing number, $\text{\"u}(K)$, is the smallest $n$ for which we can represent a knot $K$ with a single $n$-crossing. The petal number is the number of loops in the minimal petal projection. In this paper, we relate the \"{u}bercrossing number and petal number to well-known invariants such as crossing number, bridge number, and unknotting number. We find that the bounds we have constructed are tight for $(r, r+1)$-torus knots. We also explore the behavior of \"{u}bercrossing number under composition.Comment: 13 pages, 8 figure

Advanced Mid-Water Tools for 4D Marine Data Fusion and Visualization

Mapping and charting of the seafloor underwent a revolution approximately 20 years ago with the introduction of multibeam sonars -- sonars that provided complete, high-resolution coverage of the seafloor rather than sparse measurements. The initial focus of these sonar systems was the charting of depths in support of safety of navigation and offshore exploration; more recently innovations in processing software have led to approaches to characterize seafloor type and for mapping seafloor habitat in support of fisheries research. In recent years, a new generation of multibeam sonars has been developed that, for the first time, have the ability to map the water column along with the seafloor. This ability will potentially allow multibeam sonars to address a number of critical ocean problems including the direct mapping of fish and marine mammals, the location of mid-water targets and, if water column properties are appropriate, a wide range of physical oceanographic processes. This potential relies on suitable software to make use of all of the new available data. Currently, the users of these sonars have a limited view of the mid-water data in real-time and limited capacity to store it, replay it, or run further analysis. The data also needs to be integrated with other sensor assets such as bathymetry, backscatter, sub-bottom, seafloor characterizations and other assets so that a “complete” picture of the marine environment under analysis can be realized. Software tools developed for this type of data integration should support a wide range of sonars with a unified format for the wide variety of mid-water sonar types. This paper describes the evolution and result of an effort to create a software tool that meets these needs, and details case studies using the new tools in the areas of fisheries research, static target search, wreck surveys and physical oceanographic processes

Timing and Virtual Observability in Ultimatum Bargaining and Weak Link Coordination Games

Previous studies have shown that simply knowing some players move first can affect behavior in games, even when the first-movers' moves are unobservable. This observation violates the game-theoretic principle that timing of unobserved moves is irrelevant. We extend this work by varying timing of unobservable moves in ultimatum bargaining games and "weak link" coordination games. Timing without observability affects both bargaining and coordination, but only weakly. The results are consistent with theories that allow "virtual observability" of first-mover choices, rather than theories in which timing matters only because first-mover advantage is used as a principle of equilibrium selection