Breeding hybrid strategies: optimal behaviour for oligopolists

Oligopolistic pricing decisions-in which the choice variable is not dichotomous as in the simple prisoner's dilemma but continuous-have been modeled as a generalized prisoner's dilemma (GPD) by Fader and Hauser, who sought, in the two MIT Computer Strategy Tournaments, to obtain an effective generalization of Rapoport's Tit for Tat for the three-person repeated game. Holland's genetic algorithm and Axelrod's representation of contingent strategies provide a means of generating new strategies in the computer, through machine learning, without outside submissions.The paper discusses how findings from two-person tournaments can be extended to the GPD, in particular how the author's winning strategy in the Second MIT Competitive Strategy Tournament could be bettered. The paper provides insight into how oligopolistic pricing competitors can successfully compete, and underlines the importance of niche strategies, successful against a particular environment of competitors.Bootstrapping, or breeding strategies against their peers, provides a means of examining whether repetition leads to cooperation: we show that it can, under certain conditions, for simple and extended two- and three-person GPD repeated games. The paper concludes with a discussion of the relationship between Selten's trembling-hand perfect equilibrium and Maynard Smith's evolutionarily stable strategies, with practical simulations of successful and unsuccessful invasions by new strategies.     

Inter-ethnic trust and reciprocity: results of an experiment with small businessmen

We investigate inter-ethnic trust and reciprocity by having subjects from distinct ethnic origins play the trust game [Games Econom. Behav. 10 (1995) 122]. The participants in the experiment are male small businessmen of Turkish or Belgian ethnic origin, all of whom have a business in the same city (Ghent, Belgium). Our main finding is that the average levels of trust and reciprocity are independent of ethnic origin and, moreover, independent of the ethnic origin of the opposite party.     

How to identify trust and reciprocity

This paper uses a three-games (or triadic) design to identify trusting and reciprocating behavior. A large literature on single-game trust and reciprocity experiments is based on the implicit assumption that subjects do not have altruistic or inequality-averse other-regarding preferences. Such experimental designs test compound hypotheses that include the hypothesis that other-regarding preferences do not affect behavior. In contrast, experiments with the triadic design do discriminate between transfers resulting from trust or reciprocity and transfers resulting from other-regarding preferences that are not conditional on the behavior of others. Decomposing trust from altruism and reciprocity from altruism or inequality aversion is critical to obtaining empirical information that can guide the process of constructing models that can increase the empirical validity of game theory.     

Exploring the role of gender in common-pool resource extraction: evidence from laboratory and field experiments in fisheries

There is active debate on gender issues in natural resource management. For example, it is proposed that women are more cooperative than men when dealing with natural resources decisions; however, few scientific studies have directly addressed this hypothesis. We provide evidence for a greater cooperative attitude in women compared to men in both college students and coastal fishing communities of Baja California, Mexico, by means of game theory experiments. In both laboratory and field experiments, women changed their behaviour towards lower extraction compared to men, when regulations, sanctions or social scolding were introduced in the games. These results suggest that raising the role of women in decision-making, along with an adequate institutional framework, may lead to a more sustainable use of natural resources.     

Repetition and signalling: experimental evidence from games with efficient equilibria

We report experiments where subjects generally fail to attain the efficient equilibrium of a one-shot game, but attain the efficient equilibrium of the repeated version. The results suggest that in the repeated game actions are used to signal future intentions.     

House money effects in public good experiments: Comment

We reconsider evidence from experiments that claim to show that using “house money” in standard public goods experiments has no effect on behavior. We show that it does have an effect when one examines the data using appropriate statistical methods that consider individual-level responses and account for the error structure of the panel data. JEL Classification D7 · C92 I am grateful for comments from two referees and an editor. All data and statistical code are available for public access at the ExLab Digital Library located at http://exlab.bus.ucf.edu.     

Of mice and men: Within gender variation in strategic behavior

We study behavioral differences across and within genders in a family of ultimatum and dictator games. We find these differences are due not only to altruistic preferences but also beliefs about the strategic behavior of others. The behavior of men in strategic situations is not significantly more aggressive than women on average. But this average masks wide variation in intra-gender behavior. In particular, a sizable minority of males are “mice,” behaving timidly in strategic environments. Our experimental design shows that the standard ultimatum game can mask significant inter- and intra-gender differences in strategic behavior. These behavioral patterns in strategic environments are shown to be correlated with preferences for altruism in non-strategic settings. Such gender differences could well manifest themselves in real-world large-stakes transactions, such as salary negotiations.     

Context matters to explain field experiments: Results from Colombian and Thai fishing villages

During the last decade, field experiments regarding the study of common pool resource governance have been performed that replicated earlier findings of laboratory experiments. One of the questions is how the decisions made by participants in rural communities are influenced by their experience. This paper presents the results of field experiments in Colombia and Thailand on fishery resources. Context information is derived from the communities via in-depth interviews, surveys and role playing exercises. The use of different methodological tools allowed to link decisions in field experiments with contextual variables for two fishery villages. Explanation of core variables in social dilemmas is given, the degree of cooperation levels, preferred rules, rule compliance and enforcement. Main findings include: i) fishermen made decisions in the field experiments that reflected their own experience and context, ii) agreements for rule crafting are possible only under specific conditions that guarantees livelihoods and sustainability, iii) the broader context determines cooperation levels at a local level, iv) inequalities in the sanctioning of rule breakers decrease the possibilities of reaching cooperation agreements, and v) high levels of trust among local fishermen is not a sufficient condition for resource sustainability, when trust in external rule makers and enforcers is low.     

Stated beliefs versus inferred beliefs: A methodological inquiry and experimental test

Belief elicitation in game experiments may be problematic if it changes game play. We experimentally verify that belief elicitation can alter paths of play in a two-player repeated asymmetric matching pennies game. Importantly, this effect occurs only during early periods and only for players with strongly asymmetric payoffs, consistent with a cognitive/affective effect on priors that may serve as a substitute for experience. These effects occur with a common scoring rule elicitation procedure, but not with simpler (unmotivated) statements of expected choices of opponents. Scoring rule belief elicitation improves the goodness of fit of structural models of belief learning, and prior beliefs implied by such models are both stronger and more realistic when beliefs are elicited than when they are not. We also find that “inferred beliefs” (beliefs estimated from past observed actions of opponents) can predict observed actions better than the “stated beliefs” from scoring rule belief elicitation.     

On the scope of experiments in economics: comments on Siakantaris

The problem of ‘parallelism’ or external validitycan in principle be solved; I try to show how by means of twosimple examples. I also criticise attempts to dismiss experimentaleconomics that appeal to alleged ontological differences betweenthe natural and the social realm.     

Moving from the lab to the field: Exploring scrutiny and duration effects in lab experiments

The most important issue facing experimental economists is the generalizability of lab results. This letter examines more than 1200 doctor/patient consultations, in which scrutiny and duration of treatment were varied. We show that scrutiny has an important but short-lived effect.     

Budget processes: Theory and experimental evidence

This paper studies budget processes, both theoretically and experimentally. We compare the outcomes of bottom-up and top-down budget processes. It is often presumed that a top-down budget process leads to a smaller overall budget than a bottom-up budget process. Ferejohn and Krehbiel [Ferejohn, J., Krehbiel, K., 1987. The budget process and the size of the budget, Amer. J. Polit. Sci. 31, 296–320] showed theoretically that this need not be the case. We test experimentally the theoretical predictions of their work. The evidence from these experiments lends strong support to their theory, both at the aggregate and the individual subject level.     

Whatever you say, your reputation precedes you: Observation and cheap talk in the trust game

Behavior in trust games has been linked to general notions of trust and trustworthiness, important components of social capital. In the equilibrium of a trust game, the investor does not invest, foreseeing that the allocator would keep all of the returns. We use a human-subjects experiment to test the effects of changes to the game designed to increase cooperation and efficiency. We add a pre-play stage in which the investor receives a cheap-talk message from the allocator, observes the allocator's previous decision, or both. None of these changes alter the game's theoretical predictions. We find that allowing observation results in substantially higher cooperation and efficiency, but cheap talk has little effect.     

Water markets design and evidence from experimental economics

Market mechanisms are gaining increasing acceptance all over the world as a way of making more efficient use of scarce water resources. Designing regulatory frameworks that ensure both inter- and intra-temporal efficient allocations is a daunting task, especially if supply is stochastic and there is ample storage capacity. In addition to defining tradable rights, specific provisions must regulate the use of reservoirs. Commonly, water statutes include provisions that establish asymmetries regarding the allocation of water, and market restrictions that ban water trading across different users. In this article, we use data collected in a laboratory to test two specific market regulations included in the 1999 Water reform in Spain. First, junior right holders are not allowed to buy water from senior users. Second, the law does not explicitly define water rights over units left in reservoirs for the following season. Results suggest that trading restrictions among water right holders lead to welfare losses for senior users. It is shown that removing this restriction would increase senior right holders’ benefits, without reducing those of junior users. Results show that defining water rights over saved units across periods would increase the average stock levels of reservoirs, and reduce market price instability. The lessons learned from the Spanish experience are applicable to settings characterized by unstable natural water supply and the availability of large storage facilities.      

Head-enders as stationary bandits in asymmetric commons: Comparing irrigation experiments in the laboratory and the field

The emergence of large-scale irrigation systems has puzzled generations of social scientists, since they are particularly vulnerable to selfish rational actors who might exploit inherent asymmetries in the system (e.g. simply being the head-ender) or who might free ride on the provision of public infrastructure. As part of two related research projects that focus on how subtle social and environmental contextual variables affect the evolution and performance of institutional rules, several sets of experiments have been performed in laboratory settings at Arizona State University and in field settings in rural villages in Thailand and Colombia. In these experiments, participants make both a decision about how much to invest in public infrastructure and how much to extract from the resources generated by that public infrastructure. With both studies we find that head-enders act as stationary bandits. They do take unequal shares of the common-pool resource but if their share is very large relative to downstream participants' shares, the latter will revolt. Therefore for groups to be successful, head-enders must restrain themselves in their use of their privileged access to the common-pool resource. The comparative approach shows that this result is robust across different social and ecological contexts.     

Religiosity and social trust: evidence from Canada

Using the latest wave of the Canadian Ethnic Diversity Survey, I investigate whether religious identity and religious intensity associate with the degree to which people trust others, controlling for a wide range of characteristics. The analysis shows that Canadian Roman Catholics are appreciably less trusting than mainline Protestants, and religious nones are situated in between these two groups. With regard to religious intensity, I find that higher commitment negatively correlates with trust in unknown others for Roman Catholics. The reverse is true for Protestants. Results also show stark cross-denominational variations within Protestantism, as two highly committed denominations of Mennonite and Pentecostal are found to be the most and the least trusting religious groups in Canada. No non-Christian religious minority is found statistically significantly less trusting than Canadian Roman Catholics. Considering particularized trust in one’s neighbours and co-workers yields comparable conclusions.     

Holding back from theory: limits and methodological alternatives of randomized field experiments in development economics

ABSTRACT

In this paper, we critically and constructively examine the methodology of evidence-based development economics, which deploys randomized field experiments (RFEs) as its main tool. We describe the context in which this movement started, and illustrate in detail how RFEs are designed and implemented in practice, drawing on a series of experiments by Pascaline Dupas and her colleagues on the use of bednets, saving and governance in Kenya. We show that this line of experiments have evolved to address the limitation of obtaining policy-relevant insights from RFEs alone, characterized as their lack of external validity in the literature. After examining the two prominent responses by leading figures of evidence-based development economics, namely machine learning and structured speculation, we propose an alternative methodological strategy that incorporates two sub-fields, namely experimental economics and behavioral economics, to complement RFEs in investigating the data-generating process underlying the treatment effects of RFEs. This strategy highlights promising methodological developments in RFEs neither captured by the two proposals nor recognized by methodologists, and also guides how to combine different sub-fields of economics.     

Recent trends in co-authorship in economics: evidence from RePEc

This article investigates the recent trends in co-authorship in economics. Using data from more than 700 000 journal articles we show that the average number of authors per article has increased over the last years. This process is likely to be continued in the future. In a regression analysis, we present evidence how the authorship of papers is related to the number of citations, the JEL classification, the number of journal pages and the length of the title.     

Incorporating research findings in the economics syllabus: evidence on genuine sociality from Italy and the UK

Economics education is proving slow in incorporating into the syllabus the genuine advances made in economics research in the last few decades. As economics education relies primarily on the single approach of neoclassical economics, whilst recent advances in research have been marked by a wide variety of approaches, many of which are interdisciplinary, the methodological divide between education and research is growing wider. We attempt to measure how keen students are to incorporate research findings in the syllabus by developing a questionnaire which introduces undergraduate students in Italy and the U.K. to key findings in the research literature on genuine sociality, an area in which the methodological divide is very noticeable. Students display moderate support for being taught the material on genuine sociality. Students who wish to incorporate genuine sociality in the syllabus tend to be older, value virtue and have a religion.