An Experimental Comparison of the Fairness Models by Bolton and Ockenfels and by Fehr and Schmidt

We present an experiment to compare the two fairness theories by Bolton and Ockenfels [ERC] and by Fehr and Schmidt [F&S]. If one wants to compare their predictive power, most of the experiments that are interpreted retrospectively are not helpful, since both theories make equal or very similar predictions. Both models rely on inequality aversion. The fundamental difference between them is that ERC assumes that subjects like the average payoff to be as close as possible to their own payoff while F&S assumes that subjects dislike a payoff difference to any other individual. To obtain explicitly opposite predictions by the two theories we chose a game that focuses on their fundamental difference. A person received a fixed payoff and chose between three different allocations of money between a person who received in all allocations more than her and a person who always received less. The allocations with an average payoff for the other two persons closer to her's, had both individual payoffs more distant from her's. ERC predicts that she chooses the allocation that is most unequal between the other two persons. The choice of the opposite allocation is predicted by F&S. Subjects knew that their decision could never influence their own payoff. To prevent interference of preferences for efficiency with our objective, we designed two treatments, one where following the ERC prediction leads to a maximization of total payoff, one where maximization of total payoff is in line with the F&S prediction. In the second treatment the results clearly confirm the F&S prediction. In the first treatment subjects chose in about equal proportions the two extreme allocations. Hence the performance of F&S is much better than that of ERC, although both theories ignore the importance that subjects assign to efficiency.

Bidding behavior in the bisection auction – an experimental investigation

We present a laboratory experiment in which we investigate bidding behavior with independent private values in the recently proposed bisection auction, and compare it with two classical auction formats - the Vickrey auction and the English auction. We test whether subjects behave strategically equivalent, following the dominant truth-telling strategy, as predicted by theory. Furthermore, we provide some insights concerning the learning process, the efficiency of allocation, and the revenue to the auctioneer. Data show that the bisection auction performs better than the Vickrey auction and only in some terms worse than the English auction.Economics ;

Inequality Aversion, Efficiency, and Maximin Preferences in Simple Distribution Experiments

We present simple one-shot distribution experiments comparing the relative im-portanceof efficiency, maximin preferences and inequality aversion, as well asthe relative performance of the fairness theories by Bolton and Ockenfels (2000)and Fehr and Schmidt (1999). While the Fehr and Schmidt model performsbetter in a direct comparison, this appears to be due to being in line with max-iminpreferences. More importantly, we find that the influence of both efficiencyand maximin preferences is stronger than that of inequality aversion. We discusspotential implications our results might have for the interpretation of otherexperiments.economics of technology ;

Axiomatic Characterization of Data-Driven Influence Measures for Classification

We study the following problem: given a labeled dataset and a specific datapoint x, how did the i-th feature influence the classification for x? We identify a family of numerical influence measures - functions that, given a datapoint x, assign a numeric value phi_i(x) to every feature i, corresponding to how altering i's value would influence the outcome for x. This family, which we term monotone influence measures (MIM), is uniquely derived from a set of desirable properties, or axioms. The MIM family constitutes a provably sound methodology for measuring feature influence in classification domains; the values generated by MIM are based on the dataset alone, and do not make any queries to the classifier. While this requirement naturally limits the scope of our framework, we demonstrate its effectiveness on data

The Invariant Method is Manipulable

We show that the invariant method (Pinski and Narin, 1976), recently axiomatised by Palacios-Huerta and Volij (2004), and used to quality-rank academic journals is subject to manipulation: a journal can boost its performance by making additional citations to other journals.Economics (Jel: A)

The Invariant Method is Manipulable

We show that the invariant method (Pinski and Narin, 1976), recently axiomatised by Palacios-Huerta and Volij (2004), and used to quality-rank academic journals is subject to manipulation: a journal can boost its performance by making additional citations to other journals.quality ranking academic journals, invariant method, manipulation

Measuring the Willingness to Pay to Avoid Guilt: Estimation Using Equilibrium and Stated Belief Models

We estimate structural models of guilt aversion to measure the population level of willingness to pay (WTP) to avoid feeling guilt by letting down another player. We compare estimates of WTP under the assumption that higher-order beliefs are in equilibrium (i.e. consistent with the choice distribution) with models estimated using stated beliefs which relax the equilibrium requirement. We estimate WTP in the later case by allowing stated beliefs to be correlated with guilt aversion, thus controlling for a possible source of a consensus effect. All models are estimated using data from an experiment of proposal and response conducted with a large and representative sample of the Dutch population. Our range of estimates suggests that responders are willing to pay between 0.40 and 0.80 Euro to avoid letting down proposers by 1 Euro. Furthermore, we find that WTP estimated using stated beliefs is substantially overestimated (by a factor of two) when correlation between preferences and beliefs is not controlled for. Finally, we find no evidence that WTP is significantly related to the observable socio-economic characteristics of players.guilt aversion, willingness to pay, equilibrium and stated beliefs models

Measuring the Willingness to Pay to Avoid Guilt: Estimation using Equilibrium and Stated Belief Models

We estimate structural models of guilt aversion to measure the population level of willingness to pay (WTP) to avoid feeling guilt by letting down another player. We compare estimates of WTP under the assumption that higher-order beliefs are in equilibrium (i.e. consistent with the choice distribution) with models estimated using stated beliefs which relax the equilibrium requirement. We estimate WTP in the later case by allowing stated beliefs to be correlated with guilt aversion, thus controlling for a possible source of a consensus effect. All models are estimated using data from an experiment of proposal and response conducted with a large and representative sample of the Dutch population. Our range of estimates suggests that responders are willing to pay between 0.40 and 0.80 Euro to avoid letting down proposers by 1 Euro. Furthermore, we find that WTP estimated using stated beliefs is substantially overestimated (by a factor of two) when correlation between preferences and beliefs is not controlled for. Finally, we find no evidence that WTP is significantly related to the observable socio-economic characteristics of players.guilt aversion; willingness to pay; equilibrium and stated beliefs models

Article length bias in journal rankings

The quality of publications, approximated by the containing journal''s quality indicator, is often the basis for hire and promotion in academic and research positions. Over the years a handful of ranking methods have been proposed. Discussing the most prominent methodswe show that they are inherently biased against journals publishing short papers.Economics ;