PEER TRANSPARENCY IN TEAMS: DOES IT HELP OR HINDER INCENTIVES?*

In a joint project involving two players of a two‐round effort investment game with complementary efforts, transparency, by allowing players to observe each other’s efforts, achieves at least as much, and sometimes more, collective and individual efforts relative to a nontransparent environment. Without transparency multiple equilibria can arise, and transparency eliminates the inferior equilibria. When full cooperation arises only under transparency, it occurs gradually: No worker sinks in the maximum amount of effort in the first round, preferring instead to smooth out contributions over time. If the players’ efforts are substitutes, transparency makes no difference to equilibrium efforts.     

Unraveling in first-price auction

In a private values first-price auction with random number of bidders, the auctioneer has to decide whether to announce or not the actual number of bidders. If the auctioneer cannot commit to any particular announcement policy, then he would like to reveal when the number of bidders is high in order to increase bidding competition. By the same logic, the auctioneer should like to conceal if the number turns out to be small. When bidders' types are independent, full revelation by the auctioneer is shown to be a unique equilibrium with ‘skeptical belief’ as the unique equilibrium belief.     

SEQUENTIAL EXPERT ADVICE: SUPERIORITY OF CLOSED‐DOOR MEETINGS

Two career‐concerned experts sequentially give advice to a Bayesian decision maker (D). We find that secrecy dominates transparency, yielding superior decisions for D. Secrecy empowers the expert moving late to be pivotal more often. Further, (i) only secrecy enables the second expert to partially communicate her information and its high precision to D and swing the decision away from first expert's recommendation; (ii) if experts have high average precision, then the second expert is effective only under secrecy. These results are obtained when experts only recommend decisions. If they also report the quality of advice, fully revealing equilibrium may exist.     

Group size paradox and public goods

In an economy with voluntarily provided public goods and private product varieties, and a general class of CES preferences, it is shown that aggregate public good contribution follows an inverted-U pattern with respect to group size when private and public goods are substitutable in preferences. With complementarity, however, aggregate provision grows monotonically with group size.     

Using Eye Tracking to Assess the Impact of Advertising Appeals on Donor Behavior

This research examines print advertisements of nonprofit organizations (NPOs) using eye-tracking technology and a nonverbal, emotional scale to assess donor behavior. Attention to three areas of interest, including the text, face, and brand/logo, was visually tracked. Next, three eye-tracking metrics (Time to First Fixation, Fixation Count, and Total Visit Duration) and corresponding donor behavior were measured. The eye-tracking metrics were effective indicators of an advertisement’s propensity to stimulate donor behavior. The findings in this research show that NPO advertisements should encourage viewers to look at the face in the advertisement layout. The more times the subject went back and looked at the face, and the more total time spent looking at the face, the greater the likelihood they would recommend to others to donate. These characteristics are shown in this research to be those of negative emotional appeals.