Learning Direction Theory and the Winner’s Curse

We report an experiment on a decision task by Samuelson and Bazerman (1985). Subjects submit a bid for an item with an unknown value. A winners curse phenomenon arises when subjects bid too high and make losses. Learning direction theory can account for this. However, other influences on behaviour can also be identified. We introduce impulse balance theory to make quantitative predictions on the basis of learning direction theory. We also look at monotonic ladder processes. It is shown that for this kind of Markov chains the impulse balance point is connected to the mode of the stationary distribution.     

Giving at the close: Experimental evidence on cooperation in contributing to a public good

We present a simple dynamic model of contributions to a public good. We test the model by conducting a public good game experiment and fundraising experiment among religious Jewish students for the procurement of sustainable supplies for their campus synagogue. The results of the experiments show a high level of cooperation; particularly, the results of the public good experiment show that contributions are above the predicted optimum. Nevertheless, in accordance with the economic theory, we find that the contribution path is upward sloping and contributions increase with the benefit of the public good. Our findings also suggest that the level of contributions and their path are affected by peer and gender effects.     

Individual behavior of first-price auctions: The importance of information feedback in computerized experimental markets

This article reports the results of an individual choice experiment designed to test the Nash equilibrium predictions of the first-price sealed-bid auction. A subject faced in 100 auctions always the same resale value and competed with computer-simulated bids. The design used between-subjects variation and involved information feedback as the treatment variable. Earlier experimental work on first price auctions has frequently reported an overbidding relative to the risk neutral Nash equilibrium. Our data provide evidence that overbidding can be fostered by the standard information feedback in auction experiments, which, after each auction, reveals the winning bid only. By means of learning direction theory we explain the individual bidding dynamics in our experiment. Finally we apply impulse balance theory and make long run predictions of individual bidding behavior.     

Revisiting the impact of impure public goods on consumers’ prosocial behavior: A lab experiment in Shanghai

In this study, we implemented a dictator game experiment to examine how the increase of the public characteristic in an impure public good affects individuals’ prosocial behaviour. A within‐subject design was used in the experiment. The dictator game was repeated six times with an impure public good introduced in four of them. We observe that the increase of the public characteristic in an impure public good partly crowds out individuals’ subsequent donations, which could be explained by a seemingly ‘mental accounting’ mental process. In addition, we also find that the selfish behaviour of individuals in dictator games with impure public goods, to some extent, has an inertia influence on their subsequent donations when the impure public good is removed.     

Framing and Misperception in Public Good Experiments

Earlier studies have found that framing has a substantial impact on the degree of cooperation observed in public good experiments. We show that the way the public good game is framed affects misperceptions about the incentives of the game. Moreover, we show that such framing‐induced differences in misperceptions are linked to the framing effect on subjects' cooperation behavior. When we do not control for the different levels of misperceptions between frames, we observe a significant framing effect on subjects' cooperation preferences. However, this framing effect becomes insignificant once we remove subjects who misperceive.     

Improving Voluntary Public Good Provision Through a Non-governmental,Endogenous Matching Mechanism: Experimental Evidence

Social norms can help to foster cooperation and to overcome the free-rider problem in the private provision of public goods. This paper focuses on the endogenous establishment of an average-oriented norm which sanctions deviations from average public good contributions. In a laboratory experiment, we analyse whether subjects are willing to implement a punishment and reward scheme at their own expense by applying the theory of non-governmental norm enforcement put forward by Buchholz et al. (J Public Econ Theory 16(6):899–916, 2014). Based on their theory, which omits a central authority but introduces an endogenously determined enforcement mechanism, we implement a two-stage public good game. In the first stage, subjects determine the strength of the sanctioning mechanism on their own. In the second stage, they decide on their personal contributions to the public good based on the established mechanism. In line with comparable pool punishment experiments, we find that subjects are apparently willing to contribute funds in order to establish a norm enforcement mechanism. Groups over-invest in the mechanism, but this over-investment decreases over time. These investments seem to be driven by the subjects’ previous individual contributions and partly by a number of strategic considerations, i.e. the previous average contribution made to the public good lowers the investment in the sanctioning mechanism. In the second stage of our experiment, higher norm enforcement parameters tend to lead to higher public good contributions. The earnings with the mechanism are on average higher than without.     

Voluntary Participation and Spite in Public Good Provision Experiments: An International Comparison

This paper studies voluntary public good provision in the laboratory, in a cross-cultural experiment conducted in the United States and Japan. Our environment differs from the standard voluntary contribution mechanism because subjects first decide whether or not to participate in providing this non-excludable public good. This participation decision is conveyed to the other subject prior to the subjects' contribution decisions. We find that only the American data are consistent with the evolutionary-stable-strategy Nash equilibrium predictions, and that behavior is significantly different across countries. Japanese subjects are more likely to act spitefully in the early periods of the experiment, even though our design changes subject pairings each period so that no two subjects ever interact twice. Surprisingly, this spiteful behavior eventually leads to more efficient public good contributions for Japanese subjects than for American subjects.     

Public debt dynamics: the effects of austerity,inflation, and growth shocks

We study the impact of macroeconomic shocks on US public debt dynamics using a VAR with debt feedback. Following a primary balance, or austerity, shock, the debt ratio initially declines but at a cost of lower growth. The debt ratio then rises to its pre-shock path, suggesting the austerity shock could be self-defeating. An inflation shock reduces the debt ratio initially, while a positive growth shock unambiguously lowers debt. Our specification, properly incorporating the debt equation, produces different debt impulse responses and forecasts from VAR models either excluding debt or including debt linearly.     

Endogenous Move Structure and Voluntary Provision of Public Goods: Theory and Experiment

In this paper, we examine voluntary contributions to a public good, embedding Varian's (1994) voluntary contribution game in extended games that allow players to choose the timing of their contributions. We show that predicted outcomes are sensitive to the structure of the extended game, and also to the extent to which players care about payoff inequalities. We then report a laboratory experiment based on these extended games. We find that behavior is similar in the two extended games: subjects avoid the detrimental move order of Varian's model, where a person with a high value of the public good commits to a low contribution, and instead players tend to delay contributions. These results suggest that commitment opportunities may be less damaging to public good provision than previously thought.     

Strong,bold, and kind: self-control and cooperation in social dilemmas

We develop a model that relates self-control to cooperation patterns in social dilemmas, and we test the model in a laboratory public goods experiment. As predicted, we find a robust association between stronger self-control and higher levels of cooperation, and the association is at its strongest when the decision maker’s risk aversion is low and the cooperation levels of others high. We interpret the pattern as evidence for the notion that individuals may experience an impulse to act in self-interest—and that cooperative behavior benefits from self-control. Free-riders differ from other contributor types only in their tendency not to have identified a self-control conflict in the first place.     

Pork versus public goods: an experimental study of public good provision within a legislative bargaining framework

We experimentally investigate a legislative bargaining model with both public and particularistic goods. Consistent with the qualitative implications of the model: there is near exclusive public good provision in the pure public good region, in the pure private good region minimum winning coalitions sharing private goods predominate, and in the “mixed” region proposers generally take some particularistic goods for themselves, allocating the remainder to public goods. As in past experiments, proposer power is not nearly as strong as predicted, resulting in public good provision decreasing in the mixed region as its relative value increases, which is inconsistent with the theory.     

Strategyproof Cost Sharing of Multiple Excludable Public Goods

In a model of cost sharing of multiple excludable public goods, we examine the properties of mechanisms satisfying strategyproofness, no subsidy, outcome non‐bossiness, budget balance, individual rationality and consumer sovereignty. We show that such mechanisms in general will not satisfy the equity property of equal treatment of equals. This contrasts with the single excludable public good case.     

Do binding agreements solve the social dilemma?

We investigate experimentally whether “binding agreements” can provide a solution to the social dilemma that arises in the presence of pure public goods. Signing a binding agreement can prevent players from free riding on the contributions to the public good. However, a well known theoretical result is that the outcome of the endogenous formation of agreements is not necessarily efficient. Our setting is a bargaining game in which agreements form sequentially. The individual level of contribution to the public good increases with the size of the coalition reaching an agreement and the global agreement is always the socially optimal structure. There are two equilibrium outcomes, the global agreement and an asymmetric structure, which consists of two coalitions of different sizes, the small one free riding on the contributions of the larger one. We run an experiment which lends force to the theoretical result that outcomes may be inefficient. However, subjects do not play Nash and the experimental outcome is, on average, even more inefficient than the theory predicts. Our analysis leads to the conclusion that different types of behaviour co-exist.     

Favor trading in public good provision

Favor trading is common. We do something nice for someone and they do something nice in return. Several motives might underlie such behavior, including altruism, strategic motives, and direct or indirect positive reciprocity. It is not yet well-understood how these fit together to affect behavior, how they interact in various institutional structures, and how they play out over time. We use a laboratory experiment to study the elements and dynamics of favor trading in a particular setting: the private provision of a public good. In our experiment, giving subjects the ability to practice targeted reciprocity by making a simple, low-cost change in information provision increases contributions to the public good by 14 %. Subjects reward group members who have previously been generous to them and withhold rewards from ungenerous group members. Strategic concerns cannot explain all of this behavior, and it must be at least partly due to direct reciprocity. When someone cannot directly benefit from favor trading, he gives much less to the public good. People thus excluded from the “circle of reciprocity” provide a clean and strict test of indirect reciprocity. Contrary to previous studies in the literature, we do not observe indirect reciprocity.     

大型公益建设项目全寿命集成管理模式研究

本文将项目管理的三维结构体系和项目环境进行综合研究,结合大型公益建设项目管理系统的内涵和特点,构建大型公益建设项目集成管理的系统模型。在以实现大型公益建设项目整体目标和整个系统最优化的前提下。根据系统工程理论和战略管理理论,形成时间维——项目全寿命周期过程集成、逻辑维——项目管理要素集成、知识维——项目管理知识和技术的三维系统和项目内外环境要素共同形成的大型公益建设项目管理空间结构。并对管理体系的运行机理及支撑条件进行阐述。     

Economic growth,public, and private investment returns in 17 OECD economies

Portuguese Economic Journal - We study the macroeconomic effects of public and private investment in 17 OECD economies through a VAR analysis with annual data from 1960 to 2014. From impulse...     

The Private Provision of Public Goods under Uncertainty: A Symmetric-Equilibrium Approach

Various studies have examined whether increased uncertainty about the non‐Nash response of others to an individual's voluntary contribution to a public good affects that individual's contribution so as to mitigate the free‐rider problem. We extend this single‐agent approach to the analysis of a symmetric equilibrium. We provide conditions on group size and endogenous relative risk aversion that imply increased equilibrium contributions in response to greater uncertainty about the productivity of each individual's contribution to the actual level of the public good. These results enable us to broaden the circumstances in which the theory predicts that increased uncertainty reduces free riding.     

The cost of adjustment: On comovement between the trade balance and the terms of trade

The S-shaped cross-correlation function between the trade balance and the terms of trade has been documented for several countries and time frames. The ability of two-country, two-good business cycle models to reproduce this regularity hinges on the dynamics of capital formation. We consider the consequences of modeling the adjustment costs for comovement in the trade balance and the terms of trade. Both complete and incomplete market models with capital adjustment costs à la Hayashi (1982) deliver the S-curve seen in the data while the model with investment adjustment costs à la Christiano et al. (2005) does not.     

The international wealth channel: a global error-correcting analysis

This article investigates empirically whether shocks to asset prices transmit into the trade balance through consumption and investment for a group of five of the world??s most industrialized countries. We refer to this transmission channel as the international wealth channel and estimate a GVAR model including 29 countries with quarterly data over the period 1981Q1?C2006Q4. Generalized impulse response functions show that after a negative stock price shock US and UK consumption decreases, followed by an improving trade balance. This pattern is also visible for France, but not for Germany and Japan. Stock price decreases are only associated with decreasing investment and an improving trade balance in the UK. For housing, we do find that a negative shock to UK housing prices decreases domestic investment and improves the trade balance. However, this pattern is not visible in the other countries. Finally, a domestic negative real exchange rate shock only has a significantly positive impact on the US trade balance.