Exploring group decision making in a power-to-take experiment

Most studies that compare individual and group behavior neglect the in-group decision making process. This paper explores the decision making process within groups in a strategic setting: a two player power-to-take experiment. Discussions preceding group decisions are video taped and analyzed. We find the following: (1) no impact of the group setting as such on individual behavior; (2) heterogeneity of individual types; (3) perceptions of fairness are hardly discussed and are prone to the self-serving bias; (4) groups ignore the decision rule of other groups and typically view them as if they were single agents. (5) We also show that to explain group outcomes two factors have to be taken into account that are often neglected: the distribution of individual types over groups and the decision rules that groups use to arrive at their decision. JEL Classification A12 · C72 · C91 · C92     

The impacts of social pension on rural household expenditure: evidence from China

In 2009, China began to implement a new social pension scheme in rural areas. We examine the impacts of this social pension on two main components of rural household expenditure, consumption and agricultural production investment. Our findings show that on average, rural households increase consumption by 1–3% and agricultural investment by as high as 6–9% in pilot counties. Further estimations reveal that the pension mainly affects the households with old-aged members and the poorer families, and that the saving rate hasn’t been changed by the pension, which support more the contingent income than the life-cycle hypothesis. We also find that among various types of expenditures, the most dramatic increases have occurred in food consumption and operational inputs on agricultural production.     

The stability of decision making in committees: The one-core

We study the stability of decision making in committees. A policy proposal introduced by a committee member is either adopted or abandoned in favor of a new proposal after deliberations. If a proposal is abandoned, it is in spite of the committee member who introduced it, who does not cooperate in any effort to defeat it. Shenoy (1980) proposes the one-core as a solution concept for this game, and shows that this solution may be empty. We provide a necessary and sufficient condition for the existence of a stable policy under the majority rule. This result highlights a trade-off between the size of a committee, the number of competing policy options, and the existence of a stable outcome. Our findings imply a tension between political stability and the existence of a large number of competing interests in democracies.     

前景理论：风险决策分析

本文批评了风险决策的描述性模型期望效用理论,并提出了一种替代性模型,称为前景理论。风险前景中的选择显示出几种与效用理论的基本原则不一致的普遍效应。特别是,相     

Precautionary motivation and consumption insurance: Empirical analysis of household consumption behavior in rural China

Based on a household survey in rural China, this paper discusses parameters such as precautionary motive, excess sensitivity, consumption insurance, and inter-temporal substitution in the household consumption function in rural China. The conclusions of the paper indicate that there is a significant precautionary motive in household consumption in rural China, but the function of consumption insurance is very limited, and the consumption is also excessively sensitive to the income change. Such parameters are different among consumers within different groups. __________ Translated from Zhongguo Nongcun Jingji 中国农村经济 (Chinese Rural Economy), 2006, (4): 12–19     

Designing knowledge chain networks in China — A proposal for a risk management system using linguistic decision making

Designing Knowledge Supply Networks (KSN) with universities and research institutes has become a key source of technological innovations in Mainland China. In order to explore the key design principles, we first present typologies within KSN and explain the factors that can push, guide, or support the innovation process in such a network. Second, we identify and classify the particular risks that prevail when KSN are designed in an emerging region. To assess these risks, we next propose an advanced method that takes into consideration typical problems in group decision-making processes by applying linguistic operators derived from the field of decision theory and fuzzy-sets theory. The risk evaluation method is illustrated with a case study. Fourth, we offer advice on the mitigation of risks in KSN. Finally, we provide insights into the implementation of the risk evaluation method and its automation using Stakeholder Information Systems.     

PowerPlay: Exploring decision making behaviors in energy efficiency markets

Computer models are widely used to analyze decisions about energy efficiency improvements in the residential and commercial sectors. Few models exist that can actually be run interactively by decision makers to play out alternative future scenarios. None are available that interactively capture the dynamics, subtleties and complexities of interdependent decisions by utilities, households and firms in an ever-changing technological and economic environment.This paper presents the features and experiences of PowerPlay, a computer-facilitated game which fills that gap and does more: it is a game to be played by at least a dozen player groups who interact with each other, make deals (or break them), plan for the future and revise decisions. The computer model functions like a game board to trace actions and offer choices. The observed behaviors can be analyzed to advance understanding of investment strategies and consumer choices; to generate experimentally-based data on energy efficiency changes; and to provide the basis for analyses that can substantiate or complement historical, time-series driven specifications of energy models.     

A network experiment in continuous time: The influence of link costs

In recent work on non-cooperative network formation star-shaped networks play an important role. In a particular theoretical model of Bala and Goyal (2000) center-sponsored stars are the only strict Nash networks. In testing this theoretical model, Falk and Kosfeld (2003) do not find experimental evidence that players select the center-sponsored star. Based on a slight modification of Bala and Goyal’s model, we design a network formation experiment in which, depending on link costs, periphery-sponsored stars and the empty network are the only strict Nash networks. We observe that almost all groups not only reach a strict Nash network once but also switch the center player in periphery-sponsored stars several times. The main innovation in our experiment is to use a continuous time framework which we believe to be a more realistic setting to study behavior in network formation situations and which makes coordination on stars much easier than simultaneous strategy adaptation in discrete time. Electronic Supplementary Material Supplementary material is available in the online version of this article at http://dx.doi.org/10.1007/s10683-006-9125-1. JEL Classification C72 · C92 · D81     

Reciprocity in financial decision making: intuitive and analytical mind-reading strategies

In financial games requiring to take into account the reciprocal benefits, mind-reading—that is, trying to identify other people’s thoughts—is involved. Mind-reading may occur through either analytical or intuitive strategies. Two studies were carried out to deepen the role of analytical and intuitive modes of thinking in mind-reading in financial decision making. Employing the Ultimatum Game as a setting suitable for researching into these topics, we found that the sums of money offered by undergraduates were modulated depending both on the psychological portraits of the responders and on the two modes of thinking. Specifically we found that the sums of money the undergraduates offered varied consistently across the two studies according to specific responder’s psychological features such as honesty, sense of justice, personal dignity. As for the two modes of thinking, it turned out that in the intuitive task proposers offered larger amount of money than in the analytical task.     

Antecedents of creative decision making in organizational crisis: A team-based simulation

Although it has been claimed that the devastation and complexities that characterize an organizational crisis may be addressed most effectively with creative solutions, theoretical and empirical research examining this challenge is scarce. We developed a theoretical model concerning creative decision making during organizational crisis for crisis management teams. To test this theory, we collected data from 191 individuals in 37 teams who participated in multi-hour, multi-phased organizational crisis simulations in the United States and Canada. Using regression analysis, we found that crisis management teams generated a creative decision when they were familiar with solutions, trusted their team members, and had creative intentions. This study supports organizational efforts to leverage education, training and accountability to reinforce creativity in crisis decision making.     

A model of decision making in an ecologically realistic environment: Relative comparison and the Independence of Irrelevant Alternatives

Models of behavior in a variety of areas often assume that decision-makers will adhere to the axioms of economic rationality. This requires that outcomes can be assigned objective values by stable evaluation frameworks. Yet both human and animal behavior is often not economically rational. Instead relative comparison of options is often used to assess value. We are interested in conditions that might lead natural selection to favor relative comparison of options over behavior that is consistent with the axioms of rationality. We compare an economically rational strategy with a relative comparison strategy (trade-off contrast). We model these strategies in a simple environment where decisions are multi-period; there is stochastic fluctuation in the choices available at any given time; and uncertainty about what choices will be available in the future. We investigate five levels of interaction between the attributes of the options that range from perfect complementarity to perfect substitutability. Our results show that, for some of the parameter space, a non-rational strategy achieved higher fitness than an economically rational strategy and that these differences were large enough to be biologically significant.     

Some aspects of decision making in the UK manufacturing sector

The links between price, output, labour services, inventories, backlog and expected values of input prices and income are considered in an adjustment framework. A five equation model is estimated by Ordinary Least Squares and a Two Step approximation to Generalized Least Squares using data from the U.K. manufacturing sector with expected values assumed to be generated by ARIMA processes. Simulation is used to discuss the model, and estimation method, while the stability of the links between the variables is considered.     

Intermediaries in corruption: an experiment

Anecdotal evidence suggests that intermediaries are ubiquitous in corrupt activities; however, empirical evidence on their role as facilitators of corrupt transactions is scarce. This paper asks whether intermediaries facilitate corruption by reducing the moral or psychological costs of possible bribers and bribees. We designed bribery lab experiment that simulates petty corruption transactions between private citizens and public officials. The experimental data confirm that intermediaries lower the moral costs of citizens and officials and, thus, increase corruption. Our results have implications with respect to possible anti-corruption policies targeting the legitimacy of the use of intermediaries for the provision of government services.     

Constitutional choice in ancient Athens: the evolution of the frequency of decision making

Contrary to modern representative democracies where elections tend to take place years apart, in the direct democracy of ancient Athens the assembly of the citizens met to decide policy up to forty times per year. The paper explores a model of constitutional choice where self-interested citizens decide how long to wait until they vote by maximising the net gain from an uncertain voting outcome. It is found that the frequency of voting increases unambiguously when the probability of being a member of the winning majority increases, and decreases with the loss from being a member of the losing minority and the resource cost of the vote. Under some plausible conditions, the frequency also rises with increases in the utility gain from the vote, the discount rate, and the required majority to pass a policy motion. It is argued that those conditions were met in Athens.     

The rationality and efficacy of decisions under uncertainty and the value of an experiment

Summary A decision maker faces a known prior distribution over payoff relevant states. We compare the expected utility of this individual under two scenarios. In the first, the decision maker makes a choice without further information. In the second, the decision maker has access to an experiment before choosing an action. However, the decision maker does not know the true joint distribution over states and messages. The value of the experiment as measured by the difference in the two utility levels can be negative as well as positive. We give a condition which is necessary and sufficient for the experiment to be valuable in our sense, for any decision problem.An earlier version of this paper was circulated under the title Noisy Bayes Updating and the Value of Information. We have gained from the comments of Stephen Coate, John Geanakoplos, Larry Samuelson, Timothy Van Zandt and seminar participants at Harvard Business School, Princeton, Boston University, the international conference on game theory at Stony Brook 1992 and the Winter meeting of the Econometric Society at Anaheim 1993. The first author received support for this project from NSF grant #SES-9308515 and a University of Pennsylvania Research Foundation Grant.     

The impact of growth and inequality on rural poverty in China

This paper analyzes the evolution of poverty in China from the late 1980s to the late 1990s, employing a version of Shapley decomposition tailored to unit-record household survey data. The changes in poverty trends are attributed to two proximate causes—income growth and shifts in income distribution. Different data sets, poverty lines, poverty measures, and equivalence scales are used to examine the robustness of the results. Potential biases arising from ignoring differential regional prices and inflation are also investigated. Notwithstanding some ambiguities in the results, it is consistently found that rural poverty increased in the second half of the 1990s and adverse distributional changes are the main cause. Journal of Comparative Economics 34 (4) (2006) 694–712.     

The effect of rural labor migration on poverty alleviation: a village-level study in China

The construction of the new socialist countryside is being carried out in China nowadays. Although lots of successful experience has been gotten, different problems occur in various regions yet. To analyze the relationships among rural labor migration, poverty alleviation and characteristics of migrants is important in considering the effect of rural labor migration on the construction of the new socialist countryside. Available sampling and typical case study are adopted and 236 questionnaires are collected from[bur villages in northwest GuangxL China, Daxin Lixin, Longhe and Yongchang. We analyze the rural labor migration status, characteristics of migrants, remittance situation and income, household income and the ratio of remittance income to total household income. A bout 2/3 of the households have migrants in surveyed villages. And nearly half of the migration households have only one fam- ily member as migrants in the four villages. The migrants mainly comprise male and the younger, with the education level of junior middte school and higher More than half of the migrants are employed in Guangdong Province. But the characteristics of migrants in Yongchang are more diverse. The rural labor migration in the village is extremely active and extensive. And over 60% of the household with family members as migrants have remittance income. The rate in Yongchang is extremely high (80%). And the income of households with migrants getting remittance income significantly higher than their counterparts. More than half of their income comes from remittance as far as the former kind of household is concerned And in Yongchang, the rate is nearly 80%. The conclusion is that rural labor migration is popular and extensive in lots of villages. And the migration and remittance play an important role in rural household income, especially in some poor villages. For this kind of village, the rural labor migration may be some compulsory course in rural development. And the rural labor emigration is an essential way in poverty al-leviation. This is the first step in the construction of the new socialist countryside.     

In the wake of tsunami: Lessons learned from the household decision to replant mangroves in Thailand

The Indian Ocean tsunami has increased interest in replanting mangroves as natural storm barriers. This paper analyzes the household decision to replant mangroves in four case study villages in Thailand in line with existing studies on the voluntary contribution to step-level public goods and the decision by adult members of a household to devote some labor to an outside activity. The null hypothesis that dependency on mangrove-based income has no influence on participation in replanting is rejected. Awareness of community conservation efforts and of the environmental impacts of shrimp farms also motivates participation. Allocation of male and female labors to replanting is also found to be jointly determined.     

Enjoy the silence: an experiment on truth-telling

We analyze experimentally two sender–receiver games with conflictive preferences. In the first game, the sender can choose to tell the truth, to lie, or to remain silent. The latter strategy is costly. In the second game, the receiver must decide additionally whether or not to costly punish the sender after having observed the history of the game. We investigate the existence of two kinds of social preferences: lying aversion and preference for truth-telling. In the first game, senders tell the truth more often than predicted by the sequential equilibrium analysis, they remain silent frequently, and there exists a positive correlation between the probability of being truthful and the probability of remaining silent. Our main experimental result for the extended game shows that those subjects who punish the sender with a high probability after being deceived are precisely those who send fewer but more truthful messages. Finally, we solve for the Perfect Bayesian Nash Equilibria of a reduced form of the baseline game with two types of senders. The equilibrium predictions obtained suggest that the observed excessive truth-telling in the baseline game can be explained by lying aversion but not by a preference for truth-telling.

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Electronic Supplementary Material  The online version of this article () contains supplementary material, which is available to authorized users. Financial support through the Ramón y Cajal program of the Spanish Ministry of Education and Science is gratefully acknowledged. This work was initiated while the author was working at Maastricht University.     

Recognizing contributors: an experiment on public goods

We experimentally investigate the impact of recognizing contributors on public good contributions. We vary recognizing all, highest or lowest contributors. Consistent with previous studies, recognizing all contributors significantly increases contributions relative to the baseline. Recognizing only the highest contributors does not increase contributions compared to not recognizing contributors, while recognizing only the lowest contributors is as effective as recognizing all contributors. These findings support our conjecture that aversion from shame is a more powerful motivator for giving than anticipation of prestige.