Revisiting Strategic versus Non-Strategic Cooperation

We use a novel experimental design to disentangle strategically- and non-strategically-motivated cooperation. By using contingent responses in a repeated sequential prisoners' dilemma with a known probabilistic end, we differentiate end-game behavior from continuation behavior within individuals while controlling for expectations. This design allows us to determine the extent to which strategically-cooperating individuals are responsible for the so-called end-game effect. Experiments with two different subject pools indicate that the most common motive for cooperation in repeated games is strategic and that the extent to which end-game effects are driven by strategically-cooperating individuals depends on the profitability of cooperation.reputation building, strong reciprocity, conditional cooperation, strategic cooperation

Does R&D cooperation facilitate price collusion? An experiment

We examine in a laboratory experiment whether R&D cooperation facilitates tacit price collusion. For two scenarios of technological spillovers, a baseline treatment without binding contract possibilities and a contract treatment where it is possible to credibly commit to an R&D contract, are run. We find that the degree of price collusion in the contract treatments is significantly higher in periods where R&D contracts are made than in periods without contracts, and than in the baseline treatments

Naked exclusion in the lab: The case of sequential contracting

In the context of the naked exclusion model of Rasmusen, Ramseyer and Wiley (1991) and Segal and Whinston (2000b), we examine whether sequential contracting is more conducive to exclusion in the lab, and whether it leads to lower exclusion costs for the incumbent, than simultaneous contracting. We find that an incumbent who proposes exclusive contracts to buyers sequentially, is better able to deter entry than an incumbent who proposes contracts simultaneously. In contrast to theory, this comes at a substantial cost for the incumbent.

The Causal Effect of Ethnic Diversity on Support for Redistribution and the Role of Discrimination

We review the literature that investigates the causal effect of ethnic diversity on support for redistribution. The results indicate that ethnic diversity or an increase in the salience of ethnic minorities tends to reduce support for redistribution. Evidence is presented that this finding can be interpreted as an outcome of ethnic discrimination. Nonetheless, there is substantial heterogeneity, such that the effect of ethnic diversity on support for redistribution depends on the specific context. An important moderator of the effect is whether ethnic diversity is accompanied by interethnic contact

Transparency and cooperation in repeated dilemma games:A meta study

We use data from experiments on finitely repeated dilemma games with fixed matching to investigate the effect of different types of information on cooperation. The data come from 71 studies using the voluntary contributions paradigm, covering 122 data points, and from 18 studies on decision-making in oligopoly, covering another 50 data points. We find similar effects in the two sets of experimental games. We find that transparency about what everyone in a group earns reduces contributions to the public good, as well as the degree of collusion in oligopoly markets. In contrast, transparency about choices tends to lead to an increase in contributions and collusion, although the size of this effect varies somewhat between the two settings. Our results are potentially useful for policy making, because they provide guidance on the type of information to target in order to stimulate or limit cooperation

The Causal Effect of Ethnic Diversity on Support for Redistribution and the Role of Discrimination

We review the literature that investigates the causal effect of ethnic diversity on support for redistribution. The results indicate that ethnic diversity or an increase in the salience of ethnic minorities tends to reduce support for redistribution. Evidence is presented that this finding can be interpreted as an outcome of ethnic discrimination. Nonetheless, there is substantial heterogeneity, such that the effect of ethnic diversity on support for redistribution depends on the specific context. An important moderator of the effect is whether ethnic diversity is accompanied by interethnic contact

Empirical Evidence on Repeated Sequential Games

Sequentiality of moves in an infinitely repeated prisoner’s dilemma does not change the conditions under which mutual cooperation can be supported in equilibrium as compared to simultaneous decision-making. The nature of the interaction is different, however, given that the second mover in a sequential-move game does not face strategic uncertainty in the stage game. We study in an experiment whether sequentiality has an effect on cooperation rates. We find that with intermediate incentives to cooperate, sequentiality increases cooperation rates by around 40 percentage points after learning, whereas with very low or high incentives to cooperate, cooperation rates are respectively very low or high in both settings

Predicting Lotto Numbers

We investigate the “law of small numbers” using a unique panel data set on lotto gambling. Because we can track individual players over time, we can measure how they react to outcomes of recent lotto drawings. We can therefore test whether they behave as if they believe they can predict lotto numbers based on recent drawings. While most players pick the same set of numbers week after week without regards of numbers drawn or anything else, we find that those who do change, act on average in the way predicted by the law of small numbers as formalized in recent behavioral theory. In particular, on average they move away from numbers that have recently been drawn, as suggested by the “gambler’s fallacy”, and move toward numbers that are on streak, i.e. have been drawn several weeks in a row, consistent with the “hot hand fallacy”.gambler’s fallacy; hot hand fallacy; representativeness; law of small numbers