Can mutual escrow payments encourage cooperation in social dilemmas? with Bjoern Hartig
Adapting the concept of hostage exchange as developed by Williamson (1983), we propose a novel escrow account mechanism and test whether it encourages cooperation in one-shot social dilemmas. Subjects play a repeated complete stranger-matching prisoners’ dilemma game with voluntary opt-in. In two of our three treatments, opting-in requires both players to pay an opt-in fee framed as escrow account payments. After each PD game, the players can jointly consent to return the escrow payments, other- wise both player’s payments are destroyed. With low fees, cooperation breaks down at a similar rate as without fees, but cooperation rates remain stable with high fees. The effect is primarily driven by cooperators remaining active and continuing to cooperate, not by defectors dropping out or turning to cooperation. Destruction of the escrow is rare and never triggered by defectors. Fees have no significant effect on participation rates.
Rice Farming and the Origins of Cooperative Behavior with Theodoros Alysandratos and Michael Naef (The Economic Journal, Volume 133, Issue 654, 2023, Pages 2504–2532, https://doi.org/10.1093/ej/uead030)
This paper provides novel evidence for links between historic farming practices and current norms of cooperation. We hypothesise that the cooperation required in wetland rice farming gives rise to strong cultural norms of cooperativeness. We compare participants from prefectures that predominately practice wetland rice cultivation, to those from non-rice regions. A public goods game with and without punishment is the main measure for cooperativeness. Results indicate a strong and robust positive effect of wetland rice farming on cooperation and pro-social punishment. Complementary, consistent evidence from a natural field experiment and a survey further enriches our data.
Can market competition reduce anomalous behaviour? with Lawrence Choo (European Economic Review, Volume 141, 2022, 103958 https://doi.org/10.1016/j.euroecorev.2021.103958)
We use an experiment to study whether market selection can reduce anomalous behaviour in games. In different treatments, we employ two alternative mechanisms, the random mechanism and the auction mechanism, to allocate the participation rights to the red hat puzzle game, a well-known logical reasoning problem. Compared to the random mechanism, the auction mechanism significantly reduces deviations from the equilibrium play in the red hat puzzle game. Our findings show that under carefully designed incentives, market competition can indeed reduce anomalous behaviour in games.
儒家传统文化与家庭风险金融资产配置 （Confucian Culture and Family Financial Asset Allocation）with Pengpeng Mou and Lawrence Choo）(金融与经济 2023, (1), DOI: 10.19622/j.cnki.cn36-1005/f.2023.01.008)
Market Selection and Strategic Thinking Types: A Level-k Analysis with Lawrence Choo and Todd R. Kaplan (Previously circulated as: Can auction select people by their level-k types)
Markets are often used to select individuals for making decisions. In such cases, is it possible that there is a selection bias in that the strategic thinking of selected individuals differs from those not selected? Furthermore, would decisions themselves take into account such a selection bias. We answer these questions by using auctions to determine entry into the p-beauty contest game. We find that entry is affected by incentives leading to either the lower level-k type players or the higher level-k type players entering more often. In particular, when the value of winning the auction increases in the level-k types of all the players, higher level-k players bid higher. When the value of winning the auction decreases in the level-k types of all the players, the lower level-k players bid higher. We find no evidence for players altering their choices due to this selection bias. Our experiment thus suggests how to make predictions in such environments based on level-k.
Information Aggregation over Separated Markets. An Experiment with Lawrence Choo and Todd R. Kaplan
We use an experiment to study the information aggregation properties of markets when diverse and partial information about the true state of the world is held by informed traders spread across separated markets. We find that prices in the different markets can accurately reflect the true state when there are uninformed “information” intermediaries who are able to trade in multiple markets. We show that intermediaries with no prior information about the true state can facilitate its discovery across the different markets even when they have no incentives to do so. Furthermore, the accuracy of market prices do not depend on the degree of competition amongst the intermediaries. Overall, we show market prices can be informative even in the presence of market segmentation or fragmentation.
Opinion Dynamics and Social Identity with Veronika Grimm, Friederike Mengel and Duygu Ozdemir (analysing data).
The Effect of Social identity on Network Formation and Social Learning with Veronika Grimm and Friederike Mengel (collecting data).
Do people prefer redistribution through VAT? with Lawrence Choo and Boryana Madzharova (design stage).
Information Relevance and Motivated Belief Updating with Christoph Drobner and Sebastian Goerg (design stage).
Cooperation amongst Competitors with Lawrence Choo and Bjoern Hartig (refining the design).