On the role of heuristics: Experimental evidence on inflation dynamics

We carry out an experiment on a macroeconomic price setting game where prices are complements. Despite relevant information being common knowledge and price flexibility we observe significant deviation from equilibrium prices and history dependence. In a first treatment we observe that equilibrium values were obtained in the long run but at the cost of a very slow adjustment and thus history dependence. By reporting a business indicator in a simpler form, subjects were given the chance to coordinate their prices by help of a heuristic in a second treatment. This option was widely taken, bringing about excess volatility and a deviation from equilibrium even in the long run. In a third treatment with staggered pricing we observe, contrary to theoretical predictions, the one-round ahead (publicly known) shock is significant, but future inflation is not. Our findings cast light on price dynamics when subjects have limited computational capacities. --Inflation Persistence,Staggered Prices,Sticky Reasoning,New Keynesian Phillips Curve

LIONESS Lab: a free web-based platform for conducting interactive experiments online

LIONESS Lab is a free web-based platform for interactive online experiments. An intuitive, user-friendly graphical interface enables researchers to develop, test, and share experiments online, with minimal need for programming experience. LIONESS Lab provides solutions for the methodological challenges of interactive online experimentation, including ways to reduce waiting time, form groups on-the-fly, and deal with participant dropout. We highlight key features of the software, and show how it meets the challenges of conducting interactive experiments online

Teaching microeconomic principles with smartphones – lessons from classroom experiments with classEx

Classroom experiments as a teaching tool increase understanding and especially motivation. Traditionally, experiments have been run using pen-and-paper or in a computer lab. Pen-and-paper is time and resource consuming. Experiments in the lab require appropriate installations and impede the direct interaction among students. During the last two years, we have created fully elaborated packages to run a complete course in microeconomics principles using face-to-face experiments with mobile devices. The experiments are based on Bergstrom-Miller (2000), and we used classEx, a free online tool, to run them in the classroom.The packages were used at Universitat Pompeu Fabra with over 500 undergraduate students in the fall 2016. This paper presents our experience on classEx and the Bergstrom-Miller approach working in combination, and the lessons learned

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Classroom experiments as a teaching tool increase understanding and especially motivation.Traditionally, experiments have been run using pen-and-paper or in a computer lab. Pen-and-paper is time and resource consuming. Experiments in the lab require appropriate installations and impede the direct interaction among students. During the last two years, we have created fully elaborated packages to run a complete course in microeconomics principles using face-to-face experiments with mobile devices. The experiments are based on Bergstrom-Miller (2000), and we used classEx, a free online tool, to run them in the classroom.The packages were used at Universitat Pompeu Fabra with over 500 undergraduate students inthe fall 2016. This paper presents our experience on classEx and the Bergstrom-Miller approachworking in combination, and the lessons learned

Team reasoning - Experimental evidence on cooperation from centipede games

Previous laboratory studies on the centipede game have found that subjects exhibit surprisingly high levels of cooperation. Across disciplines, it has recently been highlighted that these high levels of cooperation might be explained by “team reasoning”, the willingness to think as a team rather than as an individual. We run an experiment with a standard centipede game as a baseline. In two treatments, we seek to induce team reasoning by making a joint goal salient. First, we implement a probabilistic variant of the centipede game that makes it easy to identify a joint goal. Second, we frame the game as a situation where a team of two soccer players attempts to score a goal. This frame increases the salience even more. Compared to the baseline, our treatments induce higher levels of cooperation. In a second experiment, we obtain similar evidence in a more natural environment–a beer garden during the 2014 FIFA Soccer World Cup. Our study contributes to understanding how a salient goal can support cooperation