Embedded Files
Working Papers
Working Papers
"Public information and coordination with a divided majority" with Angela de Oliveira and Brock Stoddard. Revise and resubmit.
Download: Appendix
In a laboratory experiment, we study coordination and information aggregation in a divided-majority voting game with public information and conflicting preferences. Voters observe private signals and a public signal about whether alternative A or B is socially optimal. Unless sufficiently many voters agree, an inferior default C occurs. When the public signal is very accurate and voters have common preferences, most voters coordinate on the public signal. However, when public-signal accuracy is reduced or preferences conflict, voters follow the public signal less frequently. While reduced public-signal accuracy substantially increases the frequency of coordination failure, conflicting preferences between subgroups do not.
"Long-term and short-term users of common-pool resources," with Garret Ridinger and Brock Stoddard. Submitted.
Download: Appendix
This experiment examines how over-extraction of a common-pool resource (CPR) by short-term users affects cooperation by long-term users. We modify the standard CPR payoff function to incorporate damage across time when the CPR is over-extracted. With only long-term users, a subgame-perfect equilibrium exists without damage. When long-term users interact with a short-term user, damage cannot be avoided in equilibrium. In the experiment, we find that damage occurs more often with groups of four long-term players than groups of three long-term players and one short-term player, contrary to predictions. The short-term players also extract less aggressively than predicted.
"Group size, communication, and common-value public goods," with Lawrence De Geest, Abdul Kidwai, Javier Portillo, and Brock Stoddard. Submitted.
Download: Appendix
We experimentally examine the effect of group size on communication in a common-value public goods game. Each player observes a private signal correlated with the uncertain return to contribution and sends a cheap-talk message to the group before making a contribution choice. There is a private incentive to exaggerate the expected return to encourage others to contribute. In theory, this incentive varies non-monotonically with group size due to the increase in potential contributors and the decrease in the likelihood of pivotality in others' contribution decisions. Experimental results show that the frequency of exaggeration increases with group size, but communication increases the frequency of efficient contribution decisions across all group sizes.
Refereed Publications
Refereed Publications
"Frequent reporting and short-termism: an experimental investigation," with Doug Davis, Oleg Korenok, and John Lightle. Management Science, accepted.
Financial market regulators have long debated the appropriate frequency of mandatory corporate financial disclosures. While frequent disclosures may help deter overinvestment, they may also encourage short-termism. This paper reports an experiment that uses a streamlined variant of the model in Gigler et al. (2014) to behaviorally examine the effects of varying reporting frequency on managerial investment decisions. Experimental results indicate that frequent reporting induces short-termism as predicted. Frequent reporting does not, however, reduce the overinvestment observed in the infrequent reporting regime. Nonbinding communication of intended investment plans reduces overinvestment, but only in the infrequent reporting regime.
"Inequality and the allocation of collective goods," with Brock Stoddard. Journal of Economic Behavior and Organization, 220: 756-767. April 2024. (Special issue: Social dilemmas.)
Download: Working Paper Appendices
We examine the allocation of a voluntarily-provided collective good with inequality in endowments or productive capabilities. After group members choose their contributions to a collective good, a third-party allocator distributes the resulting value among the group members. With and without inequality, we find that allocators significantly improve efficiency compared to automatic equal division of the collective good. However, inequality creates a conflict between various notions of equitable distribution, potentially diminishing the allocator’s ability to incentivize contribution. Our results show that inequality in endowments or productive capabilities indeed reduces the effectiveness of allocators compared to the baseline case of equality.
"Stress tests and information disclosure: an experimental analysis," with Doug Davis, Oleg Korenok, and John Lightle. Journal of Banking and Finance, 154: 106691. September 2023.
Download: Working Paper
To improve the stability of the banking system the Dodd Frank Act mandates that central banks conduct periodic evaluations of banks’ financial conditions. An intensely debated aspect of these ‘stress tests’ regards how much of that information should be disclosed to financial markets. This paper uses an environment constructed from a model by Goldstein and Leitner (2018) to gain some behavioral insight into the policy tradeoffs associated with disclosure. Experimental results indicate that variations in disclosure conditions are very sensitive to overbidding for bank assets. Absent overbidding, however, optimal disclosure robustly improves risk sharing even when banks behave non-optimally.
"Communication in multilateral bargaining with joint production," with Andrzej Baranski. Experimental Economics, 26(1): 55-77. March 2023.
Download: Working Paper Online Appendix
We experimentally investigate the effect on efficiency of pre-bargaining communication in a multilateral majoritarian bargaining game with joint production under two conditions: observable and unobservable productive investments. In both conditions, communication mainly fosters fair sharing and is rarely used by proposers to pit voters against each other. A virtuous cycle of proportional surplus sharing arises in treatments with observable investments regardless of whether communication is possible leading to high efficiency gains over time. In the absence of investment observability, communication is widely used by subjects to truthfully report their investments, which coupled with calls for equitable sharing, allows for substantial efficiency gains. These results contrast sharply with previous findings on bargaining over an exogenous fund where communication leads to highly unequal outcomes, competitive messages, and virtually no calls for fair sharing.
"Strategic thinking in contests," with David Bruner, David McEvoy, and Brock Stoddard. Experimental Economics, 25(3): 942-973. June 2022.
Download: Working Paper Appendices
We examine motives for overbidding in contests between individuals using a “two-headed” approach to decision-making. In two-headed contests, subject pairs send suggested bids and messages to a partner. Content analysis of the messages provides insight into an individual’s bidding motives. In addition, we elicit measures of preferences, beliefs, and impulsiveness. We find that beliefs about others’ bids and messages that emphasize winning (i.e., utility of winning) are the most robust predictors of overbidding. Our results suggest that analyzing communication provides a rich window into an individual’s thought process when making decisions, and can complement insights from elicited values from common decision tasks.
"Two-period duopolies with forward markets," with Arzé Karam and Matthias Pelster. Review of Industrial Organization, 60(1): 29-62. February 2022.
Download: Working Paper Instructions
We experimentally consider a dynamic multi-period Cournot duopoly with a simultaneous option to manage financial risk and a real option to delay supply. The first option allows players to manage risk before uncertainty is realized, while the second allows managing risk after realization. In our setting, firms face a strategic dilemma: They must weigh the advantages of dealing with risk exposure against the disadvantages of higher competition. In theory, firms make strategic use of the hedging component, enhancing competition. Our experimental results support this theory, suggesting that hedging increases competition and negates duopoly profits even in a simultaneous setting.
"Common-value public goods and informational social dilemmas," with Brock Stoddard. American Economic Journal: Microeconomics, 13(2): 343-369. May 2021.
Download: Working Paper Version Appendices
We experimentally examine private information and communication in a public goods environment with uncertain returns. We consider a common-value public goods game in which the return to contribution is either high or low. Before contributing, three players observe private signals correlated with the return and send cheap talk messages to one another. There are social gains from truthfulness, but a private incentive to exaggerate. We compare treatments with and without cheap talk, finding that communication is largely truthful and increases efficiency. In further treatments, we increase the incentive to exaggerate and find reduced truthfulness and smaller gains from communication.
"Incentivizing provision of collective goods: allocation rules," with Brock Stoddard and James Walker. Southern Economic Journal, 87(4): 1345-1365. April 2021.
Download: Working Paper Version Appendices
In a laboratory experiment, we study the voluntary provision of a divisible collective good. Allocations of the collective good to group members are determined by a third party “allocator” who benefits from increased provision of the collective good, but is rewarded externally. The allocator may resolve the free‐rider problem inherent in provision by assigning shares of the collective good to incentivize cooperation. The flexibility in allocations available to the allocator is varied across three treatment conditions. The highest level of collective good provision is observed within some groups in the mechanism that allows the allocator the greatest flexibility. However, greater flexibility comes at the cost of higher variance in allocation decisions by some allocators, leading to lower levels of provision in some groups.
"Giving, taking, earned money, and cooperation in public good games," with Oleg Korenok, Edward Millner, and Laura Razzolini. Economics Letters, 171: 211-213. October 2018.
Download: Working Paper Version Instructions
We conduct experiments designed to test whether earning the endowment increases the difference between giving and taking public good games. We find that neither the type of game nor the source of endowment affect cooperation rates.
"Strategic thinking in public goods games with teams," with Brock Stoddard. Journal of Public Economics, 161: 31-43. May 2018.
Download: Working Paper Version Appendices
We experimentally investigate team behavior in repeated public goods games and use team chat logs to study motives for contribution. Subjects are matched into two-person teams, and each team makes a joint decision in each period. We compare teams with individuals and find similar overall contributions. However, initial contribution is higher and endgame effects are more pronounced for teams. We examine strategic discussions within teams and find strong evidence of concern for repeated game effects and limited backward induction. We also find evidence of confusion and explore its potential sources.
"Rent-seeking and competitive preferences." Journal of Economic Psychology, 63: 102-116. December 2017. (Special Issue: Understanding Behavior in Contests.)
Download: Working Paper Version Appendices
In this experiment, I examine the extent to which competitive social preferences can explain over-bidding in rent-seeking contests. The Human treatment is a standard two-player contest. In the Robot treatment, a single player bids against a computerized player, eliminating potential social preference motives. The results show no difference in bids between treatments at the aggregate level. Further analysis shows evidence of heterogeneous treatment effects between impulsive and reflective subjects. Moreover, impulsive subjects are more likely than reflective subjects to deviate qualitatively from the shape of the theoretical best response function.
"Social preferences and cooperation in simple social dilemma games," with Arzé Karam and Ryan J. Murphy. Journal of Behavioral and Experimental Economics, 69: 1-3. August 2017.
Download: Working Paper Version Instructions
We use a laboratory experiment to examine the role of social preferences in simple one-shot social dilemma games by comparing play with and without a human counterpart. We find that cooperation rates are slightly lower without a human counterpart in all games we consider. However, the difference is small and statistically insignificant, suggesting that social preferences are not the primary driver of cooperation in one-shot social dilemma games.
"Estimating the effects of brownfields and brownfield remediation on property values in a New South city," with Peter M. Schwarz, Gwendolyn L. Gill, and Alex Hanning. Contemporary Economic Policy, 35(1): 143-164. January 2017.
Using data from Charlotte, NC, a New South city without a legacy of heavily contaminated properties, we find unremediated brownfields – typically former industrial properties believed to have modest contamination -- to have no effect on residential sales values, but proposed cleanup and actual remediation have positive, substantial, and significant effects especially within 0.5 miles of the brownfield. Our results are consistent whether we examine all property values within a given distance, such as 0.5 miles, or examine discrete distances, such as 0.3 to 0.5 miles. A conservative estimate of the benefits is on the order of $4 million.
"Framing and feedback in social dilemmas with partners and strangers," with Brock Stoddard. Games, 6(4): 394-412. 2015. (Special Issue: Experimental Studies of Social Dilemma Games.)
Download: PDF (Open Access) Appendix Instructions
We study framing effects in repeated social dilemmas by comparing payoff-equivalent Give- and Take-framed public goods games under varying matching mechanisms (Partners or Strangers) and levels of feedback (Aggregate or Individual). In the Give-framed game, players contribute to a public good, while in the Take-framed game, players take from an existing public good. The results show Take framing and Individual-level feedback lead to more extreme behavior (free-riding and full cooperation), especially for Partners. These results suggest Take framing and Individual-level feedback increase the variability of cooperation.
"Revealed reputations in the finitely-repeated prisoners' dilemma," with Matthew T. Jones, Kevin E. Pflum, and Paul J. Healy. Economic Theory, 58(3): 441-484. April 2015.
Download: Working Paper Version Instructions
In a sequential-move, finitely-repeated prisoners’ dilemma game (FRPD), cooperation can be sustained if the first mover believes her opponent might be a behavioral type who plays a tit-for-tat strategy in every period. We test this theory by revealing second mover histories from an earlier FRPD experiment to their current opponent. Despite eliminating the possibility of reputation building, aggregate cooperation actually increases when histories are revealed. Cooperative histories lead to increased trust, but negative histories do not cause decreased trust. We develop a behavioral model to explain these findings.
"Cursed beliefs with common-value public goods." Journal of Public Economics, 121: 52-65. January 2015.
Download: Working Paper Version Online Appendix
I show how improper conditioning of beliefs can reduce contribution in public goods environments with interdependent values. I consider a simple model of a binary, excludable public good. In equilibrium, provision of the public good is good news about its value. Naive players who condition expectations only on their private information contribute too little, despite the absence of free-riding incentives. In a laboratory experiment, contributions indeed fall short of the equilibrium prediction. Using modified games with different belief-conditioning effects, I verify that subjects fail to condition beliefs properly. However, improper belief conditioning cannot fully explain the results.
"Decomposing the effects of negative framing in linear public goods games." Economics Letters, 126: 63-65. January 2015.
Download: Working Paper Version Instructions
I examine two dimensions of framing in public goods games: Contributing vs. Taking and Gains vs. Losses. I find decreased cooperation under the Taking frame, but not under the Loss frame. This framing effect is stronger for men than women.
"Inequity aversion and advantage seeking with asymmetric competition." Journal of Economic Behavior and Organization, 86: 121-136. February 2013.
Download: Working Paper Version Instructions
In this experiment I study a three-player ultimatum game in which two proposers with unequal amounts of money simultaneously submit offers to one responder, who may accept at most one offer. I derive predictions for responder behavior under inequity aversion and advantage-seeking preferences. Unlike previously studied cases of symmetric proposer competition, the predictions of these two types of social preferences differ from each other and from self-interest. Both models predict that responders will sometimes accept the smaller offer. Results suggest heterogeneity among responders, with each of these two types of social preference occurring more frequently than self-interested money maximization.
Other Publications
Other Publications
"Experiments on communication in games: introduction to the special issue," with Brock Stoddard. Games, 12(1), 19, 2021.
Download: PDF (Open Access)
Communication is an important topic in the experimental study of strategic behavior, both because of the vital role of communication in variety of strategic games, and because of the insights that can be gained through analyzing communication contents in experiments. This special issue focuses on experimental studies of communication in games.
Google Sites
Report abuse