SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

Initial Endowment Effects in Multi-Unit Vickrey Auctions

Hudson, Darren.

The roots and uses of economic experiments in problem solving and hypothesis testing are explored in the present article. The literature suggests that the primary advantage of economics experiments is the ability to use controlled stimuli to test economic hypotheses. Other literature also suggests that experiments are useful in problem solving settings. The advantages and disadvantages of experiments are discussed.

Tipo: Journal Article

Palavras-chave: Experiments; Problem solving; Hypothesis testing; C81; C91; C92; C93.

Ano: 2003

URL: http://purl.umn.edu/43209

Akaichi, Faiçal; Nayga, Rodolfo M., Jr.; Gil, Jose Maria.

We report the result of experiments designed to assess the effect of initial endowments on willingness to pay values elicited from multi-unit Vickrey auctions. Comparing bids from an “endow and upgrade” approach with the “full bidding” approach, we find that the direction of the endowment effect generally depends on the number of endowed units of the conventional product that subjects are willing to give up in exchange for units of the upgraded product. The endowment effect is “reverse” when the number of units that participants are willing to give up is lower or equal to the number of remaining endowed units. However, we generally find an endowment effect when the number of units a participant is willing to give up is higher than the number of remaining...

On the Micro-Foundations of Money: The Capitol Hill Baby-Sitting Co-op

Palavras-chave: Endowment effect; Number of units of the endowed product; Multi-unit Vickrey auctions.; Agribusiness; Research Methods/ Statistical Methods; Teaching/Communication/Extension/Profession; C91; D12; D44.

Ano: 2011

URL: http://purl.umn.edu/103041

Hens, Thorsten; Schenk-Hoppe, Klaus Reiner; Vogt, Bodo.

This paper contributes to the micro-foundation of money in centralized markets with idiosyncratic uncertainty. It shows existence of stationary monetary equilibria and ensures that there is an optimum quantity of money. The rational solution of our model is compared with actual behavior in a laboratory experiment. The experiment gives support to the theoretical approach.

Optimal Timing of Farmland Investment - An Experimental Study on Farmers' Decision Behavior -

Palavras-chave: Micro foundations of money; Optimal; Quantity of money; Financial Economics; C73; C91; C92; E40; E41; E42.

Ano: 2003

URL: http://purl.umn.edu/26320

Maart, Syster Christin; Musshoff, Oliver.

Replaced with revised version of paper 5/26/11.

Extrapolation in Games of Coordination and Dominance Solvable Games

Palavras-chave: Experimental Economics; Investment; Real Options; Agribusiness; Agricultural Finance; Farm Management; Financial Economics; Institutional and Behavioral Economics; Risk and Uncertainty; C91; D81; D92.

Ano: 2011

URL: http://purl.umn.edu/103693

Mengel, Friederike; Sciubba, Emanuela.

We study extrapolation between games in a laboratory experiment. Participants in our experiment first play either the dominance solvable guessing game or a Coordination version of the guessing game for five rounds. Afterwards they play a 3x3 normal form game for ten rounds with random matching which is either a game solvable through iterated elimination of dominated strategies (IEDS), a pure Coordination game or a Coordination game with pareto ranked equilibria. We find strong evidence that participants do extrapolate between games. Playing a strategically different game hurts compared to the control treatment where no guessing game is played before and in fact impedes convergence to Nash equilibrium in both the 3x3 IEDS and the Coordination games. Playing...

Incorporating Fairness Motives into the Impulse Balance Equilibrium and Quantal Response Equilibrium Concepts: An Application to 2x2 Games

Palavras-chave: Game Theory; Learning; Extrapolation; Research Methods/ Statistical Methods; C72; C91.

Ano: 2010

URL: http://purl.umn.edu/98475

Tavoni, Alessandro.

Substantial evidence has accumulated in recent empirical works on the limited ability of the Nash equilibrium to rationalize observed behavior in many classes of games played by experimental subjects. This realization has led to several attempts aimed at finding tractable equilibrium concepts which perform better empirically; one such example is the impulse balance equilibrium (Selten, Chmura, 2008), which introduces a psychological reference point to which players compare the available payoff allocations. This paper is concerned with advancing two new, empirically sound, concepts: equity-driven impulse balance equilibrium (EIBE) and equity-driven quantal response equilibrium (EQRE): both introduce a distributive reference point to the corresponding...

Evaluating conservation auctions with limited information: the policy maker’s predicament

Palavras-chave: Fairness; Inequity aversion; Aspiration level; Impulse balance; Quantal Response; Behavioral economics; Experimental economics; Institutional and Behavioral Economics; C72; C91; D01; D63.

Ano: 2009

URL: http://purl.umn.edu/50740

Schilizzi, Steven; Latacz-Lohmann, Uwe.

Buying environmental services from private landholders using tendering mechanisms are usually subject to a budget constraint. Auction theory has mostly focused on target-constrained auctions and is less well developed for this type of auction. This paper examines a theoretical model specifically developed for budget-constrained tenders and assesses its capacity to predict tendering performance under information limitations typical of those found in field applications. But this assessment cannot be done without complementing the model with controlled laboratory experiments. Subject to their external validity, we find that the model is able to make the correct policy recommendation when comparing the tender to an equivalent fixed price scheme, even when the...

Experimental Evidence of Risk Aversion in Consumer Markets: The Case of Beef Tenderness

Palavras-chave: Auctions; Procurement; Tenders; Conservation; Economic experiments; Model validation; Environmental Economics and Policy; Land Economics/Use; C91; C92; D44; Q24; Q28.

Ano: 2011

URL: http://purl.umn.edu/100884

Alfnes, Frode; Rickertsen, Kyrre; Ueland, Oydis.

Consistency of quality is important for brand loyalty and market share in consumer markets. Among consumers of beef, tenderness is the primary quality attribute. We use an experimental auction market to investigate how inconsistency in tenderness affects consumers willingness to pay (WTP) for beef. We find that both the level and the spread of tenderness affect consumers WTP for beef. Categorization the beef into various classes of tenderness increased the total value of the beef by 8%, which suggests that improved tenderness labeling may be a profitable strategy.

An Experimental Analysis of Compliance in Dynamic Emissions Markets

Palavras-chave: Beef tenderness; Consumer demand; Experimental auction; Marketing; Risk aversion; Consumer/Household Economics; C91; D12; D8; Q13.

Ano: 2005

URL: http://purl.umn.edu/24553

Stranlund, John K.; Murphy, James J.; Spraggon, John M..

Two important design elements for emission trading programs are whether and to what extent firms are able to bank emissions permits, and how these programs are to be enforced. In this paper we present results from laboratory emissions markets designed to investigate enforcement and compliance when these markets allow permit banking. Banking is motivated by a decrease in the aggregate permit supply in the middle of multi-period trading sessions. Consistent with theoretical insights, our experiments suggest that high permit violation penalties have little deterrence value in dynamic emissions markets, and that the main challenge of enforcing these programs is to motivate truthful self-reports of emissions.

(Anti-) Coordination in Networks

Palavras-chave: Compliance; Enforcement; Emissions trading; Laboratory experiments; Permit markets; Permit banking; Environmental Economics and Policy; Public Economics; C91; L51; Q58.

Ano: 2010

URL: http://purl.umn.edu/93966

Kovarik, Jaromir; Mengel, Friederike; Romero, Jose Gabriel.

We study (anti-) coordination problems in networks in a laboratory experiment. Partici- pants interact with their neighbours in a fixed network to play a bilateral (anti-) coordination game. Our main treatment variable is the extent to which players are heterogeneous in the number of connections (neighbors) they have. Other network characteristics are held constant across treatments. We find the following results. Heterogeneity in the number of connections dramatically improves the rate of successful coordination. In addition, even though there is a multiplicity of Nash equilibria theoretically, a very sharp selection is observed empirically: the most connected player can impose her preferred Nash equilibrium almost always and observed Nash equilibria are...

Market Power in Tradable Emission Markets: A Laboratory Testbed for Emission Trading in Port Phillip Bay, Victoria

Palavras-chave: Game Theory; Networks; Coordination Problems; Experiments; Risk and Uncertainty; C72; C90; C91; D85.

Ano: 2010

URL: http://purl.umn.edu/61370

Cason, Timothy N.; Gangadharan, Lata; Duke, Charlotte.

In theory, competitive emission permit markets minimise total abatement cost for any emission ceiling. Permit markets are often imperfectly competitive, however, if they are thin and dominated by large firms. The dominant firm(s) could exercise market power and increase other firms’ costs of pollution control, while reducing their own emission control costs. This paper reports a testbed laboratory experiment to examine whether a dominant firm can exercise market power in a permit market organised using the double auction trading institution. Our parameters approximate the abatement costs of sources in a proposed tradable emissions market for the reduction of nitrogen in the Port Phillip Watershed in Victoria, Australia. We vary across treatments the...

WHEN DOES THE PRICE AFFECT THE TASTE? RESULTS FROM A WINE EXPERIMENT

Palavras-chave: Market Power; Emission Permits; Experiments; Environmental Regulation; Environmental Economics and Policy; C91; Q25; Q28.

Ano: 2003

URL: http://purl.umn.edu/57841

Almenberg, Johan; Dreber, Anna.

We designed an experiment that examines how knowledge about the price of a good, and the time at which the information is received, affects how the good is experienced. The good in question was wine, and the price was either high or low. Our results suggest that hosts offering wine to guests can safely reveal the price: much is gained if the wine is expensive, and little is lost if it is cheap. Disclosing the high price before tasting the wine produces considerably higher ratings, although only from women. Disclosing the low price, by contrast, does not result in lower ratings. Our finding indicates that price not only serves to clear markets, it also serves as a marketing tool; it influences expectations that in turn shape a consumer’s experience. In...

Social Preferences and Voting: An Exploration Using a Novel Preference Revealing Mechanism

Palavras-chave: Price-Quality Heuristic; Attribute Information; Role of Expectations; Marketing; Blind Tasting; Wine; Consumer/Household Economics; Demand and Price Analysis; C91; D03; D83; M31.

Ano: 2009

URL: http://purl.umn.edu/51755

Messer, Kent D.; Poe, Gregory L.; Rondeau, Daniel; Schulze, William D.; Vossler, Christian A..

Public referenda are frequently used to determine the provision of public goods. As public programs have distributional consequences, a compelling question is what role if any social preferences have on voting behavior. This paper explores this issue using laboratory experiments wherein voting outcomes lead to a known distribution of net benefits across participants. Preferences are elicited using a novel Random Price Voting Mechanism (RPVM), which is a more parsimonious mechanism than dichotomous choice referenda, but gives consistent results. Results suggest that social preferences, in particular a social efficiency motive, lead to economically meaningful deviations from self-interested voting choices and increase the likelihood that welfare-enhancing...

Conservation Auctions and Compliance: Theory and Evidence from Laboratory Experiments

Palavras-chave: Institutional and Behavioral Economics; Research Methods/ Statistical Methods; C91; C92; D64; D72; H41.

Ano: 2008

URL: http://purl.umn.edu/51132

Kawasaki, Kentaro; Fujie, Takeshi; Koito, Kentaro; Inoue, Norikazu; Sasaki, Hiroki.

Poster prepared for presentation at the Agricultural & Applied Economics Association 2010 AAEA,CAES, & WAEA Joint Annual Meeting, Denver, Colorado, July 25-27, 2010.

FOOD DECISION, INFORMATION AND PERSONALITY

Palavras-chave: Auctions; Conservation contracting; Compliance; Environmental Economics and Policy; C91; D44; Q24.

Ano: 2010

URL: http://purl.umn.edu/61188

Loheac, Youenn; Combris, Pierre; Issancou, Sylvie.

This study introduce measures of personality traits in an experiment which associate willingness to pay for food and sensory analysis tools in order to explore potential links between personality and food decisions. Measure of personality traits comes from experimental economics (risk aversion and time preference) and from psychology (sensation seeking and impulsivity). We introduce them in the analysis of behaviours of participants in their food decisions (purchase intent, willingness to pay, reaction to new information), and underline some significant links.

Closing down the Farm: An Experimental Analysis of Disinvestment Timing

Palavras-chave: Food decision; Information; Experimental methods; Risk aversion; Time preference; Personality traits; Agricultural and Food Policy; Consumer/Household Economics; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Food Security and Poverty; Health Economics and Policy; C91; D12.

Ano: 2010

URL: http://purl.umn.edu/116434

Maart, Syster Christin; Musshoff, Oliver; Odening, Martin; Schade, Christian.

Agrarian structures are often characterized by some kind of economic inertia. It is particularly puzzling why unprofitable farms persist over time instead of being sold. In this paper we analyze the exit decision of farmers using the real options approach. The validity of the real options theory is assessed by means of laboratory experiments. Our results show that real options models are able to predict actual disinvestment decisions better than traditional investment theory. Nevertheless, the observed disinvestment reluctance was even more pronounced as predicted by theory. This finding suggests the inclusion of bounded rationality into normative disinvestment models.

The Role of Bounded Rationality in Farm Financing Decisions – First Empirical Evidence –

Palavras-chave: Disinvestment; Real Options; Experimental Economics; Agricultural Finance; Farm Management; C91; D81; D92.

Ano: 2011

URL: http://purl.umn.edu/114375

Musshoff, Oliver; Hirschauer, Norbert; Wassmuss, Harm.

Farmers do not often change from their house bank to another bank, even if the competing banks offer better conditions. This “reluctance to switch” can be explained, on the one hand, by the transaction costs resulting from such a change of business relation. On the other hand, it may be the result of bounded rationality. The results of a survey of North German farmers show that they are indeed bounded rational borrowers. They greatly underestimate the monetary disadvantages which are caused by the higher interest rates for loans from their house bank. In other words: They do not switch bank even if their individually perceived transaction costs are already “covered” by the lower interest rates of the alternative loan offer.

Obesity and Hyperbolic Discounting: An Experimental Analysis

Palavras-chave: Financing behavior; Bounded rationality; Switching costs; Agricultural Finance; Farm Management; Financial Economics; Institutional and Behavioral Economics; Q12; G32; C91.

Ano: 2009

URL: http://purl.umn.edu/51545

Richards, Timothy J.; Hamilton, Stephen F.; Pofahl, Geoffrey M..

Behavioral economists maintain that addictions such as alcoholism, smoking and over-eating represent examples of present-bias in decision making that is fundamentally irrational. In this article, we develop a model of present bias and apparently hyperbolic discounting that is fully consistent with rational behavior. We construct an experiment to test our hypothesis and to determine whether discount rates differ for individuals who engage in behaviors that could endanger their health. Our results show that discount functions are quasi-hyperbolic in shape, and that obesity and drinking are positively related to the discount rate. Anti-obesity policy, therefore, would be best directed to informing individuals as to the long-term implications of short-term...

'Pocket and Pot': Hypothetical Bias in a No-Free-Riding Public Contribution Game

Palavras-chave: Addiction; Discounting; Experiments; Hyperbolic; Obesity; Time-inconsistency.; Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; Health Economics and Policy; Institutional and Behavioral Economics; C91; D12; D91; I18..

Ano: 2010

URL: http://purl.umn.edu/61186

Gubanova, Tatiana; Adamowicz, Wiktor L.; McMillan, Melville.

Hypothetical bias arises when values which people say they place on a good or service differ systematically from the values people reveal for the same good or service through actual, binding economic transactions. Studies of hypothetical bias with respect to public goods often use charitable contributions or other relatively unique goods and these studies employ a variety of mechanisms to elicit the stated and revealed values. This study proposes the inclusion of a free-rider barring random dictatorship mechanism in the standard public contribution game to investigate the issue of bias when a public good involves immediate monetary returns to subjects. Steps are taken to make the game have the look and feel of a real world trade-off between private...