174 research outputs found
A Prize to Give for: An Experiment on Public Good Funding Mechanisms
This paper investigates fund-raising mechanisms based on a prize as a way to overcome free riding in the private provision of public goods, under the assumptions of income heterogeneity and incomplete information about income levels. We compare experimentally the performance of a lottery, an all-pay auction and a benchmark voluntary contribution mechanism. We find that prize-based mechanisms perform better than voluntary contribution in terms of public good provision after accounting for the cost of the prize. Comparing the prize-based mechanisms, total contributions are significantly higher in the lottery than in the all-pay auction. Focusing on individual income types, the lottery outperforms voluntary contributions and the all-pay auction throughout the income distribution.Auctions, Lotteries, Public Goods, Laboratory Experiments
Testing Theories of Reciprocity: Do Motivations Matter?
One of the key issues for understanding reciprocity is how people evaluate the kindness of an action. In this paper we argue that the motivation driving an action plays an important role for the reciprocating response to that action. We test experimentally the hypothesis that reciprocal behavior is stronger in response to actions driven by intrinsic motivation, as opposed to extrinsic motivation. Our results indicate that reciprocity is significantly stronger when extrinsic motivation can be ruled out, both at the aggregate and the individual level. These findings suggest that models of reciprocal behavior should take into account not only outcomes but also intentions and, in particular, motivations: the type of motivation of an action matters for its perceived kindness and, as a consequence, for reciprocity.Reciprocity, Intrinsic Motivation, Laboratory Experiments
Herding, Social Preferences and (Non-) Conformity
We study the role of social preferences and conformity in explaining herding behavior in anonymous risky environments. In an experiment similar to information cascade settings, but with no private information, we find no evidence for conformity. On the contrary, we observe a significant amount of non-conforming behavior, which cannot be attributed to errors.herding, information cascades, conformity, non-conformity, laboratory experiments
Influential Listeners: An Experiment on Persuasion Bias in Social Networks
This paper presents an experimental investigation of persuasion bias, a form of bounded rationality whereby agents communicating through a social network are unable to account for possible repetitions in the information they receive. The results indicate that network structure plays a significant role in determining social influence. However, the most influential agents are not those with more outgoing links, as predicted by the persuasion bias hypothesis, but those with more incoming links. We show that a boundedly rational updating rule that takes into account not only agents' outdegree, but also their indegree, provides a better explanation of the experimental data. In this framework, consensus beliefs tend to be swayed towards the opinions of influential listeners. We then present an effort-weighted updating model as a more general characterization of information aggregation in social networks.
Social capital and Growth in Brazilian Municipalities
According to the modern theory of social capital (see Coleman (1990), Putnam (1993), Fukuyama (1995)), widespread trust would influence the economic performances of a country through a) reduction of transactional costs (monitoring and preventive activities to protect themselves from being exploited in economic transactions) and legal disputes; b) higher percentage of time devoted to innovation in new products or processes; c) higher reliability of formal institutions like the government and the central bank which implies that people can adopt more appropriate horizons in making investment decisions and choose production technologies that are optimal over the long, rather than short, run; d) a stronger social cohesion due to the sharing of ethical norms which induces cooperative behaviours and organisational innovations. On the basis of these theories a large number of empirical contributions which confirm the existence of a positive relation between growth, efficiency and the level of trust has been produced. Following the seminal work by Knack et al. (ibidem), we try to explain growth in Brazil over the period 2000-2003 using indicators of social capital. We develop our analysis at the most detailed geographical level, considering all 5507 municipalities. This choice is motivated by the great heterogeneity inside every country in terms of growth rate. While we observe homogeneity in some countries, like Sergipe, in other countries, like Sao Paulo, we have huge differences. This forces us to consider the municipalities as unit of observation; otherwise the country level would force us to loose all the heterogeneity. In order to obtain good measures of social capital, we start from a set of objective measure, and then analyse then with factor component analysis. We find a robust evidence of the positive effect of social capital on growth rates of income per capita.DYNREG15
Testing theories of reciprocity: do motivations matter?
One of the key issues for understanding reciprocity is how agents evaluate the kindness of an action. In this paper we investigate experimentally the hypothesis that the motivation driving an action is relevant for its perceived kindness and, as a consequence, for reciprocal behavior. In particular, we examine the hypothesis that, for a given distributional outcome, positive reciprocity is less strong in response to strategically motivated actions than to non-strategically motivated actions. Our results indicate that, both at the aggregate and the individual level, reciprocity is significantly stronger when strategic motivations can be ruled out. These findings suggest that intentions matter and, in particular, that models of intention-based reciprocity should take into account the nature of the motivations behind choices
Risk Aversion, Over-Confidence and Private Information as determinants of Majority Thresholds
Economic Behavior under Alcohol Influence: An Experiment on Time, Risk, and Social Preferences
We report results from an incentivized laboratory experiment to provide controlled evidence
on the causal effects of alcohol consumption on risk preferences, time perception
and altruism. Our design allows disentangling the pharmacological effects of alcohol intoxication
from those mediated by expectations, as we compare behaviors of three groups of subjects: those participating to an experiment with no reference to alcohol, those exposed to the possibility of consuming alcohol but assigned to a placebo and those having effectively
consumed alcohol. Once randomly assigned to one treatment, subjects were administered a series of consecutive economic tasks, being the sequence kept constant across treatments.
After controlling for both the willingness to pay and the potential misperception of probabilities as elicited in the experiment, we do not detect any effect of alcohol in depleting subjectsā risk tolerance. On the contrary, we find that alcohol intoxication increases impatience.
Moreover, we find that alcohol makes subjects less generous as we detect a negative relationship between the blood alcohol concentration and the amount of money donated to
NGOs
Trust and trustworthiness in corrupted economic environments
We use an original variant of the standard trust game to study the effects of corruption on trust and trustworthiness. In this game, both the trustor and the trustee know that part of the surplus they can generate may be captured by a third ācorruptedā player under different expected costs of audit and prosecution. We find a slightly higher trustorās giving in the presence of corruption, matched by a significant excess of reciprocity from the trustee. Both the trustor and the trustee expect, on average, corruption to act as a tax, inelastic to changes in the probability of corruption prosecution. Expectations are correct for the inelasticity assumption and for the actual value of the ācorruption taxā. Our experimental findings lead to the rejection of four standard hypotheses based on purely self-regarding preferences. We discuss how the apparently paradoxical excess reciprocity effect is consistent with the cultural role of heroes in history, where examples of commendable giving have been used to stimulate emulation of ordinary people. Our results suggest that the excess reciprocity component of the trustee makes the trustorās excess giving a rational and effective strategy
We can be heroes: trust and resilience in corrupted economic environments
We use an original variant of the standard trust game, in order to study the effect of corruption on trust and trustworthiness. In this game, both the trustor and the trustee know that part of the surplus they can generate may be captured by a third ācorruptedā player under different expected costs of audit and prosecution. We find slightly higher trustorās giving in presence
of corruption, matched by a significant effect of excess reciprocity from the trustee. Both the trustor and the trustee expect on average corruption acting as a tax, inelastic to changes in the
risk of corruptor audit. Expectations are correct for the inelasticity assumption, and for the actual value of the ācorruption taxā. Our experimental findings lead to the rejection of four standard hypotheses based on purely self-regarding preferences. We discuss how the apparently paradoxical excess reciprocity effect is consistent with the cultural role of heroes
in history where examples of commendable giving were used to stimulate emulation of the ordinary people. Our results suggest that the excess reciprocity component of the trustee makes
trustorās excess giving a rational and effective strategy
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