Anticipatory Feelings in Intertemporal Choice on Consumption: A Dynamic Experiment

Following the evaluation of anticipatory feelings in Scitovsky\u2019s Joyless Economy, we explored a specific interpretation of reversals in intertemporal choice. Anticipatory feelings can be explained as the feeling experienced by the agent while awaiting an upcoming event. We adopted a dynamic experiment where individuals made decisions of consumption at multiple points of time: three experimental sessions in three different dates at two-week intervals. We elicited the initial plans of the same sample in three different sessions over a one-month period and tracked how they implemented their plans as the anticipated event drew closer. The paper innovates with respect to the literature on intertemporal decision making in that the motivation for a varying discount rate, caused by anticipation or procrastination, has been elicited with both monetary and non-monetary (consumption) incentives and within a dynamic setting. We found that anticipatory feeling is a significant possible explanation behind choice reversal. The results remained significant after controlling the other explanatory factors such as risk aversion, uncertainty and time inconsistency

Trusting versus monitoring: an experiment of endogenous institutional choices

We investigate the problem of deciding between trusting and monitoring, and how this decision affects subsequent behavior, using a laboratory experiment where subjects choose between the Ultimatum and the Yes-No Game. Despite the similarity of the two games in Ultimatum Games responders monitor the allocation proposal, while in Yes-No games responders react without monitoring, i.e. have to rely on trust. We permit either the proposer or responder to make the game choice and analyze how both roles choose between trusting and monitoring, what the ensuing effects of their choices are, and how they vary depending on who has chosen the game. We, also, experimentally vary the cost of monitoring and the responder’s conflict payoff. Since monitoring is usually costly, the amount to share in Yes-No Games (YNG) can exceed that in Ultimatum Games (UG). Regarding the conflict payoff, it can be positive or negative with the former rendering Yes-No interaction a social dilemma. According to our results, proposers (responders) opt for trusting significantly more (less) often than for monitoring. Average offers are higher in Ultimatum than in Yes-No games, but neither UG nor YNG offers depend on who has chosen between games

Who cares when Value (Mis)reporting May Be Found Out? An Acquiring-a-Company Experiment with Value Messages and Information Leaks

We modify the Acquiring-a-Company game to study how information leaks affect lying and market outcomes in an ultimatum bargaining setting with asymmetric information. Privately informed sellers send messages about the alleged value of their company to potential buyers. Via random leaks buyers, however, can learn the true value before proposing a price which the seller finally accepts or not. Only 14.5% of the messages are truthful, whereas two-thirds of all sellers exaggerate the company’s value to persuade buyers to offer more, especially when the true value is small. Although a higher leak probability does not reduce the frequency of misreporting, it weakens overreporting and strengthens underreporting. Buyers who found out value misreporting anchor their price proposals on the true value but do not explicitly discriminate against liars. Sellers are mainly opportunistic and make their acceptances dependent on the resulting positive payoff. Even if ethical concerns do not seem to matter much, probabilistic leaks are welfare enhancing

Trust, trustworthiness and Social Networks: Playing a Trust Game when Networks are formed in a Lab

We run a laboratory experiment were friendship networks are generated endogenously within an anonymous group. Our experiment builds on two phases in sequence: a network formation game and a trust game. We find that in those sessions where the trust game is played before the network formation game, the overall level of trust is not significantly different from the one observed in a simple trust game; in those sessions where the trust game is played after the network formation game we find that the overall level of trust is significantly lower than in the simple trust game. Hence surprisingly trust does not increase because of enforced reciprocity and moreover a common social history does affect the level of trust, but in a negative manner. Where network effects matter is in the choice of whom to trust: while we tend to trust less on average those with whom we have already interacted compared to total strangers, past history allows us to select whom to trust relatively more than others

Do inter-sectoral flows of services matter for productivity growth? An input/output analysis of OECD countries

This article investigates the impact of technology-intensive services sectors on direct and indirect labour coefficients in a sample of OECD countries. We find that both domestic and imported services contribute to increase productivity. We also find that different service industries (transport, communication, financial, and business services) have a different impact on technological change in non-service sectors classified according to the Pavitt taxonomy