Detecting motives for cooperation in public goods experiments

This study clarifies the types of motives that are important as a source of cooperation in a linear public goods experiment. Our experimental design separates contributions into those due to confusion, one-shot motives (which includes altruism, warm-glow, inequality aversion, and conditional cooperation), and multi-round motives (which includes a strategic motive under incomplete information, a failure of backward induction, and reciprocity). The experiment reveals that multi-round motives plays an important role in driving cooperative behavior. Confusion and one-shot motives play a minor role.     

Motives for sharing in social networks

What motivates people in rural villages to share? We first elicit a baseline level of sharing using a standard, anonymous dictator game. Then using variants of the dictator game that allow for either revealing the dictator's identity or allowing the dictator to choose the recipient, we attribute variation in sharing to three different motives. The first of these, directed altruism, is related to preferences, while the remaining two are incentive-related (sanctions and reciprocity). We observe high average levels of sharing in our baseline treatment, while variation across individuals depends importantly on the incentive-related motives. Finally, variation in measured reciprocity within the experiment predicts observed ‘real-world’ gift-giving, while other motives measured in the experiment do not predict behavior outside the experiment.     

Are Family Transfers Crowded Out by Public Transfers?

We give an account of an overlapping–generations experiment with multiple families in which voluntary transfers can take the form of support to the elderly or grants to children. Support to the old is a purely intergenerational (intra–family) transfer, whereas grants to children also involve an element of intra–generational (inter–family) redistribution through a compulsory pension system. Our data show that higher compulsory inter–family transfers lead subjects to place relatively more emphasis on support instead of grants: grants are crowded out, but support is not significantly affected. The efficiency of voluntary transfers increases, however. Furthermore, if subjects give transfers, they do not use tokens of direct reciprocity; evidence of indirect reciprocity in transfer behavior can only be obtained for the case where compulsory transfers are high.
JEL classification : C 91; H 55     

Separating reputation, social influence, and identification effects in a dictator game

This study explores the ways in which information about other individual's action affects one's own behavior in a dictator game. The experimental design discriminates behaviorally between three possible effects of recipient's within-game reputation on the dictator's decision: Reputation causing indirect reciprocity, social influence, and identification. The separation of motives is an important step in trying to understand how impulses towards selfish or generous behavior arise. The statistical analysis of experimental data reveals that the reputation effects have a stronger impact on dictators’ actions than the social influence and identification.     

Social Preferences in the Lab: A Comparison of Students and a Representative Population

We report from a lab experiment conducted with a sample of participants that is nationally representative for the adult population in Norway and two student samples (economics students and non‐economics students). The participants make choices both in a dictator game (a non‐strategic environment) and in a generalized trust game (a strategic environment). We find that the representative sample differs fundamentally from the student samples, both in the relative importance assigned to different moral motives (efficiency, equity, and reciprocity) and in the level of selfish behavior. It is also interesting to note that the gender effects observed in the student samples do not correspond to the gender effects observed in representative sample. Finally, whereas economics students behave less pro‐socially than non‐economics students, the two student groups are similar in the relative importance they assign to different moral motives.     

Social status and group norms: Indirect reciprocity in a repeated helping experiment

In the economic literature, reciprocity is typically studied in situations of repeated interaction between two individuals. It refers to one individual rewarding kind acts of the other or punishing hostile acts. In contrast, this paper studies indirect reciprocity, where a cooperative action is rewarded by a third actor, not involved in the original exchange. We provide experimental evidence on indirect reciprocity. The experiment is based on the ‘repeated helping game’ developed by Nowak and Sigmund (J. Theoret. Biol. 194 (1998) 561; Nature 393 (1998) 573), involving random pairing in large groups. Pairs consist of a donor and a recipient. Donors decide whether or not to provide costly ‘help’ to the recipients they are matched with, based on information about the recipient's behavior in encounters with third parties. We observe clear evidence of indirect reciprocity. Many decision-makers respond to the information about previous decisions (whether or not to help others) of the recipients. In our experiments, this indirect reciprocity is largely based on norms about how often the recipient should have helped others in the past. We show that these norms develop similarly within groups of interacting subjects, but distinctly across groups. This leads to the emergence of group norms.     

KEIRETSU SHAREHOLDING TIES: ANTITRUST ISSUES

Antitrust concern about keiretsu shareholding ties is misplaced and at odds with economic reasoning and with empirical investigation. Holding stock in a trading partner slants the bargaining over product market variables in favor of the trading partner. Divesting such a stock interest accomplishes the reverse. The firm holding shares in a trading partner can credibly threaten to divest should the trading partner behave opportunistically. Divesting withdraws the bargaining advantage that the equity position had conferred. Therefore, a firm may establish a partial equity position in a trading partner to deter opportunism. Additionally, Japanese banks' shareholding in the companies to which they lend resolves agency problems and lowers borrowing costs. Organizing firms into cross-shareholding groups magnifies these favorable effects by assuring that direct shareholding by banks gives rise to indirect shareholding as well. Keiretsu shareholding ties impede U.S. exports to Japan because they lower the keiretsu members' costs of transacting with one another and not because they raise rivals' costs .     

Social motives in intergroup conflict: Group identity and perceived target of threat

We experimentally test the social motives behind individual participation in intergroup conflict by manipulating the perceived target of threat—groups or individuals—and the symmetry of conflict. We find that behavior in conflict depends on whether one is harmed by actions perpetrated by the out-group, but not on one׳s own influence on the outcome of the out-group. The perceived target of threat dramatically alters decisions to participate in conflict. When people perceive their group to be under threat, they are mobilized to do what is good for the group and contribute to the conflict. On the other hand, if people perceive to be personally under threat, they are driven to do what is good for themselves and withhold their contribution. The first phenomenon is attributed to group identity, possibly combined with a concern for social welfare. The second phenomenon is attributed to a novel victim effect. Another social motive—reciprocity—is ruled out by the data.     

Strong reciprocity and team production: Theory and evidence

Punishment of shirkers is often an effective means of attenuating incentive problems and sustaining coordination in work teams. Explanations of the motivation to punish generally rely either on small group size or on a Folk theorem that requires coordinated punishment and, hence, highly accurate information concerning the behavior of each player. We provide a model of team production in which the punishment of shirkers depends on strong reciprocity: the willingness of some team members to contribute altruistically to a joint project and also to bear costs in order to discipline fellow members who do not contribute. This alternative does not require small group size, complex coordinated punishing activities, or implausible informational assumptions. An experimental public goods game provides evidence for the behavioral relevance of strong reciprocity and how it differs from unconditional altruism.     

Dissertation abstract: Experiments on fairness and reputation

The three dissertation essays investigate different aspects of reputation in games where fairness is an important consideration. The first essay studies the effects of reputation on indirect reciprocity in different dictator games. The first experiment places dictators in two environments where they can either give money to the paired player or take money away from them: in one treatment the paired player is a stranger and in the other treatment the dictator has information on the paired player’s reputation. Contrary to anecdotal evidence, the statistical tests show that the dictators’ behavior towards a stranger is not statistically significantly different from their behavior towards an individual with an established reputation. The findings arise because a high proportion of dictators acted purely in their own self interest in both treatments. The data also provides evidence that dictators are more generous when they know that their choices (but not their identities) will be revealed in the future. In the second experiment the dictators’ choices were restricted to only generous actions. In such environment the dictators sent more money on average to recipients with a reputation for being generous than to recipients without a reputation. The second essay explores the ways in which information about others’ actions affects one’s own behavior in a dictator game. The experimental design discriminates behaviorally between three possible effects of recipient’s within-game reputation on the dictator’s decision: reputation causing indirect reciprocity, social influence, and identification. The separation of motives helps to identify the mechanisms of social transmission of impulses towards selfish or generous behavior. The data analysis reveals that the reputation effects have a stronger impact on dictators’ actions than social influence and identification. In the third essay¹ we examine the reputation effects in a labor market setting by analyzing the influence of negative technological shocks on long run relationships between firms and workers. The positive correlation between wage and effort in static conditions has been demonstrated in many experimental studies and has been one of the prominent explanations for the existence of wage rigidity. We subject these findings to further tests in a non-stationary environment that better corresponds to outside-the-lab market conditions. We observe the positive correlation of wages and effort but do not find support for downward wage rigidity in our data. Once the shocks occur, firms lower the wages and relationships often break down. The workers who accept a lower wage respond with exerting a lower effort. JEL Classification C70, C91, D63, D64 ¹Co-authored with Ninghua Du. Dissertation Committee: Dissertation Advisor: James C. Cox Martin Dufwenberg, Price V. Fishback, Ronald L. Oaxaca     

Imitation and the Incentive to Contribute Early in a Sequential Public Good Game

Whether motivated by reciprocity or conformity, imitation is common in public good contexts. We consider the incentive for an agent to contribute to a public good if he expects imitation from others. Using a sequential public good game with exogenous ordering, we show that agents early enough in the sequence who believe imitation to be sufficiently likely would want to contribute. By contributing, they expect total contributions to increase significantly. We also show that preferences determine how early an agent need be, that the observed share of imitators in experiments is sufficiently high to warrant contribution and that an increase in group size reduces the incentive to contribute.     

Indirect reciprocity and strategic reputation building in an experimental helping game

We study indirect reciprocity and strategic reputation building in an experimental helping game. At any time only half of the subjects can build a reputation. This allows us to study both pure indirect reciprocity that is not contaminated by strategic reputation building and the impact of incentives for strategic reputation building on the helping rate. We find that pure indirect reciprocity exists, but also that the helping decisions are substantially affected by strategic considerations. Finally, we find that strategic do better than non-strategic players and non-reciprocal do better than reciprocal players, casting doubt on previously proposed evolutionary explanations for indirect reciprocity.     

Indirect reciprocity and strategic reputation building in an experimental helping game

We study indirect reciprocity and strategic reputation building in an experimental helping game. At any time only half of the subjects can build a reputation. This allows us to study both pure indirect reciprocity that is not contaminated by strategic reputation building and the impact of incentives for strategic reputation building on the helping rate. We find that pure indirect reciprocity exists, but also that the helping decisions are substantially affected by strategic considerations. Finally, we find that strategic do better than non-strategic players and non-reciprocal do better than reciprocal players, casting doubt on previously proposed evolutionary explanations for indirect reciprocity.     

Markets as communication systems

As the information relative to endowments, costs and preferences is dispersed among many agents, the quality of resource allocation depends on the ability of markets to communicate information inside the economic system. Because information is transferred through negotiation and transaction behaviors, the network of trading relations defines the channels through which it flows. In the present study, we use new computational tools to analyze the performance of two wholesale trade institutions widely used around the world: network trading and marketplace trading. Whilst network trading and marketplace trading disseminate far fewer bits of information than a perfectly transparent benchmark market, they often manage to generate an allocation of resources that is almost as good. In many cases, network trading proves more effective than marketplace trading (contrary to a common preconception). This surprising performance of network trading is linked to a form of indirect arbitrage induced by connections between networks. Implications for market design and public policy making are presented, along with prospects for further research.     

基于互惠视角的团队协作激励机制博弈分析

团队激励的关键问题是团队成员的合作问题。修正放松了关于团队成员的理性人假设,引入互惠性假设,用考虑互惠心理效用的效用函数替代物质效用函数,构建包括两个团队成员的团队协作生产的博弈模型。研究了两种博弈模型的团队成员最优自身努力水平和帮助他人的努力水平,并进行对比分析。结果表明,在同时考虑物质效用和互惠心理效用的情况下,非理性团队成员的行为更加复杂,他们会在物质收益和互惠收益之间寻求平衡。     

Reciprocity and voting

In this paper we present a two-period model where a left-wing and a right-wing political party are solely interested in the policies they pursue. We assume that voters display reciprocal behavior. By contrast, political parties are not motivated by reciprocity. We show that reciprocity may have dramatic consequences for models of voting behavior. The incentive to be kind to the median voter may ensure that a position closer to the median voter's position is adopted even if political parties are not directly interested in being elected and cannot commit to a political stance during an election campaign. Moreover, reciprocity increases incumbency advantages.     

Antisocial behavior in experiments: What have we learned from the past two decades?

Antisocial behavior experiments, both conducted in the laboratory or in the field, have become commonplace in the experimental economics literature. Such experiments found their relevance in the real world as people are not always selfish or nice to others, but they also sometimes behave spitefully. This paper focuses on payoff-destruction experiments conducted over the last two decades and synthesizes the findings. We are able to find 46 studies where we found inequity reduction and pure spite as the main motives for such behavior. This behavior can also be explained by conflict experience. We conclude with suggestions for future research.     

Cooperation under alternative punishment institutions: An experiment

While peer punishment has been shown to increase group cooperation, there is open debate on how cooperative norms can emerge and on what motives drive individuals to punish. In a public good experiment we compared alternative punishment institutions and found (1) higher cooperation levels under a consensual punishment institution than under autonomous individual punishment; (2) similar cooperation levels under sequential and simultaneous punishment institutions.     

Discrimination via Exclusion: An Experiment on Group Identity and Club Goods

We study using laboratory experiments the impact on cooperation of allowing individuals to invest in group‐specific, excludable public goods. We find that allowing different social groups to voluntarily contribute to such goods increases total contributions. However, a significant proportion of that contribution goes toward the group‐specific club good rather than the public good, even when the latter has higher financial returns to cooperation. We find significant evidence of in‐group biases, which are manifested by positive in‐group reciprocity. That is, club goods allow subjects to display their preferences for interaction with their in‐group members, as well as positive in‐group reciprocity.     

Family Transfers Involving Three Generations

Most models of family transfers consider only two generations and focus on two motives: altruism and exchange. They also assume perfect substitution between inter-vivos downward transfers and bequests. Based on French evidence, we show that parent-to-child transfers belong to three distinct categories (investment in child's education, financial assistance, wealth transmission), and advocate a three -generation framework. Thus, transfer behavior of parents toward their children is strongly influenced by the behavior of their own parents. There is also some evidence of the Cox and Stark demonstration effect: parents help their own parents, expecting to receive comparable support from their children. Such behavior can be regarded as indirect reciprocity : the beneficiary does not give back to the initial giver but to a third person of another generation.
JEL classification : D 10; D 31; D 63; D 64