A Backward Induction Experiment

This paper reports experiments with one-stage and two-stage alternating-offers bargaining games. Payoff-interdependent preferences have been suggested as an explanation for experimental results that are commonly inconsistent with players' maximizing their monetary payoffs and performing backward induction calculations. We examine whether, given payoff-interdependent preferences, players respect backward induction. To do this, we break backward induction into its components, subgame consistency and truncation consistency. We examine each by comparing the outcomes of two-stage bargaining games with one-stage games with varying rejection payoffs. We find and characterize systematic violations of both subgame and truncation consistency. Journal of Economic Literature Classification Numbers: C70, C78.     

Modelling demand for lotto using a novel method of correcting for endogeneity

Modelling lottery sales as a function of the mean, standard deviation and skewness of the probability distribution of returns potentially gives insights into how the design of a game could be modified to maximise net revenue. But use of OLS is problematic because the level of sales itself affects values of the moments (and insufficient instruments are available for IV regression). We draw on the concept of a rational expectations equilibrium, developing a new regression model which corrects for endogeneity where the causal impact of the dependent variable on the right-hand side variables is deterministic. We apply the model to data on lotto sales from Spain. Using the Spanish data, we show that results provide more reliable guidance to lottery agencies because accounting for endogeneity leads to significantly different results from OLS and these results have superior performance in out-of-sample forecasting of sales. More generally, results prove consistent with the Friedman-Savage explanation of why people buy lottery tickets and with evidence from racetrack data that ‘bettors love skewness’.     

How to Attract an Audience at a Conference: Paper,Person or Place?

We analyze the drivers of audience size and the number of questions asked in parallel sessions at the annual conference of the German Economics Association. We find that the location of the presentation is at least as important for the number of academics attending a talk as the combined effect of the person presenting and the paper presented. Being a presenter in a late morning session on the second day of a conference, close to the place where coffee is served, significantly increases the size of the audience. When it comes to asking questions, location becomes less important, but smaller rooms lead to more questions being asked. Younger researchers and very senior researchers attract more questions and comments. There are also interesting gender effects. Women attend research sessions more diligently than men, but seem to ask fewer questions than men. Men are less likely to attend presentations on health, education, welfare and development economics than women. Our findings suggest that strategic scheduling of sessions could ensure better participation at conferences. Moreover, different behaviors of men and women at conferences might also contribute to the lack of women in senior scientist positions.     

In love with the debit card but still married to cash

Using shopping diary survey data, we show that changing payment patterns is a challenging task; even when consumers have fallen in love with a new payment instrument, they find it hard to divorce from their old payment instrument. We find a discrepancy between how consumers prefer to pay and how they actually pay. Half of the consumers who prefer the debit card to cash don’t use the debit card to pay a majority of their point-of-sale transactions. Our regression results show that the habit of paying cash plays a significant role explaining the presence of a gap.     

An empirical examination of consumer preferences for honey in Croatia

In past years, beekeeping as an agricultural sector has become more organized, but there is still a gap in knowledge in considering consumer preferences for honey. The aim of the research was to determine consumer preferences for honey and their attitudes towards the Protected Designation of Origin (PDO) label. Also, in the article is presented the current situation regarding the honey market and legislation of the PDO label at the EU and national levels. The result of the empirical research carried out on a sample of 1008 respondents showed that they mostly prefer a mild flavour and brighter colour of honey. According to the type, most of the respondents prefer acacia rather than floral and meadow honeys or other types of honey. The most common method of honey purchase is directly from the producers (75%). The results of the Principle Component Analysis (PCA) showed that the most important attributes are the intrinsic attributes of the honey and that the most common reasons for purchasing and consuming honey are for its health and medical benefits. The obtained results fill the gap in knowledge regarding consumer preferences for honey in the Croatian market and can be useful for the creation of new honey-marketing strategies for local beekeepers.     

Revealed preferences for portfolio selection – does skewness matter?

In this article, we consider the portfolio selection problem as a Bayesian decision problem. We compare the traditional mean–variance and mean–variance–skewness efficient portfolios. We develop bi-level programming problem to investigate the market’s preference for risk by using observed (market) weights. Numerical experiments are conducted on a portfolio formed by the 30 stocks in the Dow Jones Industrial Average. Numerical results show that the market’s preferences are better explained when skewness is included.     

Intergenerational Correlations of Extreme Right‐Wing Party Preferences and Attitudes toward Immigration

In this paper, we analyze the importance of parental socialization on the development of children's far right‐wing preferences and attitudes toward immigration. Using longitudinal data from Germany, our intergenerational estimates suggest that the strongest and most important predictor for young people's right‐wing extremism are their parents' right‐wing extremist attitudes. While intergenerational associations in attitudes toward immigration are equally high for sons and daughters, we find a positive intergenerational transmission of right‐wing extremist party affinity for sons, but not for daughters. Compared to the intergenerational correlation of other party affinities, the high association between fathers' and sons' right‐wing extremist attitudes is particularly striking.     

Cross-sectional earnings risk and occupational sorting: The role of risk attitudes

This paper investigates to what extent individuals' risk preferences are correlated with the cross-sectional earnings risk of their occupation. We exploit data from the German Socio-Economic Panel, which contains a direct survey question about willingness to take risks that has been shown to be a behaviorally valid measure of risk aversion. As a measure of earnings risk, we use the cross-sectional variation in earnings that is left unexplained by human capital variables in Mincerian wage regressions. Our evidence shows that individuals with low willingness to take risks are more likely to work in occupations with low earnings risk. This pattern is found regardless of the level of occupation categories, region, gender and labor market experience.     

Optimal Allocation for Comparing <Emphasis Type="Italic">k</Emphasis> Test Treatments to Positive and Negative Control with Unequal Weighting Under A-optimality and MV-optimality

Experiments in real life often involve comparisons of test treatments to more than one control. However, the controls may not always be of equal importance. In this paper we introduce weighted MV optimality criterion and present a detailed study using both weighted A and MV optimality criteria, of the problem of optimally comparing a set of test treatments to two controls (positive and a negative) that are of unequal importance to the experimenter.     

Pseudo empirical likelihood method in the presence of missing data

In this paper, we propose an estimator for the population mean when some observations on the study and auxiliary variables are missing from the sample. The proposed estimator is valid for any unequal probability sampling design, and is based upon the pseudo empirical likelihood method. The proposed estimator is compared with other estimators in a simulation study.