727 research outputs found
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On the Ingredients for Bubble Formation: Informed Traders and Communication [Dataset]
No full textBubbles in asset markets have been documented in numerous experiments. Most experiments in which bubbles occur feature a declining fundamental value. This feature has been criticized for being atypical of real financial markets. Here, we experimentally study other ingredients for bubble formation that are common in such markets, namely the existence of inside information and communication among traders. We find that bubbles and mirages can occur if these additional ingredients are present. In particular, the mere possibility that some traders are better informed than others can create bubbles. Surprisingly, communication turns out to be counterproductive for bubble formation
Imitation - Theory and Experimental Evidence [Dataset]
No full textWe introduce a generalized theoretical approach to study imitation and subject it to rigorous experimental testing. In our theoretical analysis we find that the different predictions of previous imitation models are mainly explained by different informational assumptions, and to a lesser extent by different behavioral rules. In a laboratory experiment we test the different theories by systematically varying information conditions. We find significant effects of seemingly innocent changes in information. Moreover, the generalized imitation model predicts the differences between treatments well. The data provide support for imitation on the individual level, both in terms of choice and in terms of perception. Furthermore, individuals’ propensity to imitate more successful actions is increasing in payoff differences
Hierarchy, Coercion, and Exploitation: An Experimental Analysis [Dataset]
No full textThe power to coerce workers is important for the efficient operation of hierarchically structured organizations. However, this power can also be used by managers to exploit their subordinates for their own benefit. We examine the relationship between the power to coerce and exploitation in a laboratory experiment where a senior and a junior player interact repeatedly for a finite number of periods. We find that senior players try repeatedly to use their power to exploit junior workers. These attempts are successful only when junior workers have incomplete information about how their effort impacts on the earnings of senior players, but not when they have complete information. Evidence from an incentive-compatible questionnaire indicates that the social acceptabil
ity of exploitation depends on whether the junior worker can detect she is being exploited. We also show how a history of exploitation affects future interactions
Two are Few and Four are Many: Number Effects in Experimental Oligopoly [Dataset]
No full textIn this paper we investigate how the competitiveness of Cournot markets varies with the number of firms in an industry. We review previous Cournot experiments in the literature. Additionally, we conduct a new series of experiments studying oligopolies with two, three, four, and five firms in a unified frame. With two firms we find some collusion. Three-firm oligopolies tend to produce outputs at the Nash level. Markets with four or five firms are never collusive and typically settle at or above the Cournot outcome. Some of those markets are actually quite competitive with outputs close to the Walrasian outcome
Ambiguity attitudes [Supplemental material]
No full textThe handbook chapter reviews experimental methods to measure ambiguity attitudes, as well as the recent experimental evidence regarding these attitudes. The data file contains background data that form the basis of Table 1 in the chapter
Uniform vs. discriminatory auctions with variable supply – experimental evidence [Dataset]
No full textIn the variable supply auction considered here, the seller decides how many customers with unit demand to serve after observing their bids. Bidders are uncertain about the seller's cost. We experimentally investigate whether a uniform or a discriminatory price auction is better for the seller in this setting. Exactly as predicted by theory, it turns out that the uniform price auction produces substantially higher bids, and consequently yields higher revenues and profits for the seller. Furthermore, again as predicted by theory, the uniform price auction yields a higher number of transactions, which makes it also the more efficient auction format
Rage Against the Machines: How Subjects Learn to Play Against Computers [Dataset]
No full textWe use a large-scale internet experiment to explore how subjects learn to play against computers that are programmed to follow one of a number of standard learning algorithms. The learning theories
are (unbeknown to subjects) a best response process, fictitious play, imitation, reinforcement learning, and a trial
& error process. We explore how subjects’ performances depend on their opponents’ learning algorithm. Furthermore, we test whether subjects try to influence those algorithms to their advantage in a forward-looking way (strategic teaching). We find that strategic teaching occurs frequently and that all learning algorithms are subject to exploitation with the notable exception of imitation