Textbooks

• • W=Wakker, P. P. (2010). Prospect theory: For risk and ambiguity. Cambridge university press.

  • JH=Nicolas Jacquemet, Olivier L'Haridon (2018) Experimental Economics Method and Applications

Preliminaries for lectures and exp lab use

In this class, "sometimes you will be the diner, sometimes you will be part of the dinner, sometimes both."

• • All student participants must give a presentation of an experimental paper. See references 1, 2, and 3.

  • The registered students are required to do a few more assignments (e.g., z-Tree programming, refereeing a paper, designing an experiment), and encouraged to conduct a pilot exp with graduate students.

  • Each of you will be assigned a fixed client at exp lab throughout the semester for ease of data handling.

  • You can use pre-installed Stata at the lab, but you might need to install ztree2stata.ado in #2.

  • To begin z-Tree programming and self-debug, see Mr. Yoshino's slides.

Schedule

You should download and read the following papers prior to each class.

#1. (10/9) Introduction to incentive compatible preference/belief elicitation

W Ch.1.1-1.3, 2.3-2.5.

JH Ch. 5.6, 7.4.

• Trautmann, S. T., & van de Kuilen, G. (2014). Belief elicitation: A horse race among truth serums. The Economic Journal, 125(589), 2116-2135. Supplementary zTree programs

• Azrieli, Y., Chambers, C. P., & Healy, P. J. (2019). Incentives in experiments with objective lotteries. Experimental Economics, 1-29 (Online first).

>Give an theoretical foundation to desirability of random payment scheme, using institution design technique

• • • Read first EXPLAINING THE BDM—OR ANY RANDOM BINARY CHOICE ELICITATION MECHANISM TO SUBJECTS PAUL J. HEALY to see how widely Azrieli et al. (2019) framework applies to lab exp

Other references

• • • Lecture note for binary relations, for expected utility

    • Schotter, A., & Trevino, I. (2014). Belief elicitation in the laboratory. Annu. Rev. Econ., 6(1), 103-128.

    • Schlag, K. H., Tremewan, J., & Van der Weele, J. J. (2015). A penny for your thoughts: a survey of methods for eliciting beliefs. Experimental Economics, 18(3), 457-490.

    • Camerer, C. F., & Hogarth, R. M. (1999). The effects of financial incentives in experiments: A review and capital-labor-production framework. Journal of risk and uncertainty, 19(1-3), 7-42.

#2. (10/16) Higher order risk experiment participation（Lab）

• Masuda, T., & Lee, E. (2019). Higher order risk attitudes and prevention under different timings of loss. Experimental Economics, 22(1), 197-215. Instructions

>Observed prudence and prevention behavior violate EU, but can be explained by prob. weighting.

• Eeckhoudt, L., & Schlesinger, H. (2006). Putting risk in its proper place. The American Economic Review, 96(1), 280-289.

>Under EU, risk apportionment tasks is an exact test of signing any n-th order derivative of u.

• Noussair, C. N., Trautmann, S. T., & Van de Kuilen, G. (2014). Higher order risk attitudes, demographics, and financial decisions. Review of Economic Studies, 81(1), 325-355.

>Data from general subject pool show that prudent people have more savings and other financial assets.

• • • Stefan T. Trautmann , Gijs van de Kuilen , Higher Order Risk Attitudes: A Review of Experimental Evidence, European Economic Review (2018)

Gollier, C (2001). The Economics of Risk and Time, MIT Prress.

#3. (10/23) Higher order risk experiment data analysis（Lab)

• JH Ch.7

• Moffatt, P. G. (2015). Experimetrics: Econometrics for experimental economics. Macmillan International Higher Education.

#4. (11/1, Fri 2) Ambiguity experiment participation (L）

• JH Ch 5.6 Eliciting Beliefs

• Gilboa, I. (2009). Theory of decision under uncertainty (Vol. 45). Cambridge university press. (e-book is available at Osaka U library)

• Baillon, A., & Bleichrodt, H. (2015). Testing ambiguity models through the measurement of probabilities for gains and losses. American Economic Journal: Microeconomics, 7(2), 77-100.

• Baillon, Aurélien, Han Bleichrodt, Umut Keskin, Olivier l’Haridon, & Chen Li (2018). "The Effect of Learning on Ambiguity Attitudes," Management Science, vol. 64:5, pp.2181-2198.

• Li, Chen, Uyanga Turmunkh & Peter P. Wakker (2019). "Trust as a decision under ambiguity," Experimental Economics, online first. LTW's web exp (see footnote # link)

  • • Kocher, M. G., A. Lahno, and S. T. Trautmann (2018). Ambiguity aversion is not universal. European Economic Review 101, 268–283.

>Ambiguity attitude depends on sign and likelihood of outcomes.

• • • Chow, C. C., & Sarin, R. K. (2001). Comparative ignorance and the Ellsberg paradox. Journal of risk and Uncertainty, 22(2), 129-139. UofAslides

    • Baillon, A. (2017). Prudence with respect to ambiguity. The Economic Journal, 127(604), 1731-1755.

>Introduces an ambiguity counterpart of prudence under risk

#5. (11/6) Ambiguity experiment data analysis, Kittaka & Mikami pilot experiment (L)

• JH Ch 5.6 Eliciting Beliefs

• Gilboa, I. (2009). Theory of decision under uncertainty (Vol. 45). Cambridge university press. (e-book is available at Osaka U library)

  • Translated version is "不確実性下の意思決定理論."

• Baillon, A., & Bleichrodt, H. (2015). Testing ambiguity models through the measurement of probabilities for gains and losses. American Economic Journal: Microeconomics, 7(2), 77-100.

• Kocher, M. G., A. Lahno, and S. T. Trautmann (2018). Ambiguity aversion is not universal. European Economic Review 101, 268–283.

• Healy's note

  • IV. ELICITING BELIEFS ABOUT AN EVENT E

  • VII. UNDERSTANDING MONOTONICITY AND INCENTIVE COMPATIBILITY

Digression (11/11) Enjoy Free Scenario.

#6 (11/15) (Fri 2) 排他契約の実験研究＋markdownのススメ（講師：Wataru Tamura）

#7 (11/20) 参加者論文報告1 (Begins at 10:00, 30 mins per presenter, R=registered)

• • 1. [Aoyama] Baillon, Aurelien, Huang, Z., Selim, A. and Wakker, P. P. (2018). Measuring ambiguity attitudes for all (natural) events, Econometrica

    2. [Koyama] Blanco, M., Engelmann, D., Koch, A. K., & Normann, H. T. (2010). Belief elicitation in experiments: is there a hedging problem?. Experimental Economics, 13(4), 412-438.

    3. [Yoshino (R)] Somasse, G.B.; Smith, A.; Chapman, Z. Characterizing Actions in a Dynamic Common Pool Resource Game. Games 2018, 9, 101.

>Read JH Ch. 5 for talks 1 and 2. Keywords: Scoring rule, Ambiguity attitude index, Neo-additive capacity

#8 (11/27) 参加者論文報告2

• • 1. [Shimodaira (R)] His ongoing work on revealed social preference plus the literature:

       1. • Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism, James Andreoni and John Miller, 2002, Econometrica, 70 (2), 737-753

          • Individual Preferences for Giving, Raymond Fisman, Shachar Kariv, and Daniel Markovits, 2007, AER, 97 (5), 1858-1876

            • Appendix

          • The distributional preferences of an elite, Raymond Fisman, Pamela Jakiela, Shachar Kariv, and Daniel Markovits, 2015, Science, 349 (6254), aab0096

    2. [Kato] His ongoing work on charitable giving plus the literature:

       1. • Null, C. 2011. “Warm Glow, Information, and Inefficient Charitable Giving.” Journal of Public Economics 95 (5–6): 455–65. https://doi.org/10.1016/j.jpubeco.2010.06.018.

          • Karlan, Dean, and Daniel H. Wood. 2017. “The Effect of Effectiveness: Donor Response to Aid Effectiveness in a Direct Mail Fundraising Experiment.” Journal of Behavioral and Experimental Economics 66: 1–8. https://doi.org/10.1016/j.socec.2016.05.005.

>See Handbook of Exp. Econ. Results Chapter-54-Analyzing-Choice-with-Revealed-Preference-Is-Altruism-Rational-_2008.

#9 (12/4) Please attend NTU-ISER experimental workshop (guests: Eko Riyanto & Te Bao)

#10 (12/11) Dan & Toku pilot experiment (Moriguchi Prize presentations in the afternoon)

• Brindisi, F., Çelen, B., & Hyndman, K. (2014). The effect of endogenous timing on coordination under asymmetric information: An experimental study. Games and Economic Behavior, 86, 264-281.

#11 (12/18) Ambiguity experiment data analysis Cont'd (L)

• Data: Aoyagi, Masuda and Nishimura (in prep).

• Students ran Python (2), Stata (2), R (2), and Excel (2).

#12 (20/01/08) Experimetrics for decision under risk (L)

• • Moffatt, P. G. (2015). Experimetrics: Econometrics for experimental economics. Macmillan International Higher Education.

  • We covered Ch. 6.

    • MLE, house money effect, structural modeling, Holt and Laury method, certainty equivalent method, ml programming, probit, interval regression

  • See Moffatt Ch. 7, 12, 13 and 14 for more advanced topics (e.g., simulation based on MLE)

  • See also JH Ch. 7.4 especially Table 7.9

  • Glenn Harrison's note on MLE

  • Hsiao's Analysis of Panel Data (Econometric Society Monographs)

#13 (20/01/15) Variety of belief elicitation methods (Room 409)

• Trautmann, S. T., & van de Kuilen, G. (2014). Belief elicitation: A horse race among truth serums. The Economic Journal, 125(589), 2116-2135. Supplementary zTree programs

• JH Ch 5.6 Eliciting Beliefs

• Cason, Timothy, Tridib Sharma, and Radovan Vadovivc, (2018). "Correlated Beliefs: Predicting Outcomes in 2x2 Games," working paper.

  • # Is program (Visual Basic) available?

• Schotter, A., & Trevino, I. (2014). Belief elicitation in the laboratory. Annu. Rev. Econ., 6(1), 103-128.

#14 (20/01/22 period 2) Truth serum Cont'd, Wrap-Up

• Trautmann, S. T., & van de Kuilen, G. (2014). Belief elicitation: A horse race among truth serums. The Economic Journal, 125(589), 2116-2135. Supplementary zTree programs

• Hossain, T., & Okui, R. (2013). The binarized scoring rule. Review of Economic Studies, 80(3), 984-1001.

#15 (20/01/22 period 3) Koyama pilot experiment (Klein lecture from 4pm)

Other info

# 特別講義 (日程未定) o-Tree 実習（講師：後藤晶氏 （明治大学））

• 事前に必要な準備は後日お知らせします。

• 関連文献：後藤 (2019)

# Further topics

• Baillon, A., Schlesinger, H., & van de Kuilen, G. (2018). Measuring higher order ambiguity preferences. Experimental economics, 21(2), 233-256.

  • Halevy, Y. (2007). Ellsberg revisited: An experimental study. Econometrica, 75(2), 503-536.

  • Baillon, A., & Emirmahmutoglu, A. (2018). Zooming in on ambiguity attitudes. International Economic Review, 59(4), 2107-2131.

• Berger, L., & Bosetti, V. (2017). Are Policymakers Ambiguity Averse?. The Economic Journal.

• Baillon, A., L'Haridon, O., & Placido, L. (2011). Ambiguity models and the Machina paradoxes. American Economic Review, 101(4), 1547-60.

• Abeler, J., Nosenzo, D., & Raymond, C. (2019). Preferences for truth‐telling. Econometrica, 87(4), 1115-1153.

• リスク選好と時間選好の統合に向けて 芝 正太郎

• Hyndman, K., Terracol, A., & Vaksmann, J. (2009). Learning and sophistication in coordination games. Experimental Economics, 12(4), 450-472.

  • Heinemann, F., Nagel, R., & Ockenfels, P. (2009). Measuring strategic uncertainty in coordination games. The Review of Economic Studies, 76(1), 181-221.

  • Bednar, J., Chen, Y., Liu, T. X., & Page, S. (2012). Behavioral spillovers and cognitive load in multiple games: An experimental study. Games and Economic Behavior, 74(1), 12-31.

>Introduces "entropy" to quantify the dispersion of observed game plays

• • Nyarko, Y., & Schotter, A. (2002). An experimental study of belief learning using elicited beliefs. Econometrica, 70(3), 971-1005.

• Replicability