Work in progress

Abstract: We study experimentally two variants of the beauty contest game (BCG+ and BCG-, thereafter) with an interior equilibrium. Subjects choose an integer number between 1 and 100. The winner is the one whose chosen number is closest to 2/3×(mean+30) in BCG+ or 100-2/3×mean in BCG-. For both games, the unique equilibrium, assuming IEWDS, is 60. The key difference between the two elimination processes is alternation. Under positive feedback elimination occurs only on one side of the equilibrium point, either the upper side or the lower side, depending at which extremity of the interval the reasoning process is initiated. In contrast, under negative feedback, elimination alternates on both sides of the equilibrium point, whatever the extremity that is chosen as the starting point. We use eye-tracking to identify whether subjects rely on one-sided elimination under BCG+ and two-sided elimination with alternation under BCG-.

Abstract: We assess the impact of signed environmental externalities on individual portfolio decisions in a lab-in-the-field experiment on finance professionals and students. Participants are prone to accept lower returns for positive environmental impact but will not bear increased risk. They show asymmetric pro-environmental preferences depending on the sign of the externality. Finance professionals are more pro-environment than students, particularly regarding positive externalities, and less influenced by a ranking signal about environmental performance. Control tasks show that experimental measures of pro-social and environmental preferences are significant predictors for students, while actual market practices for professionals explain a significant part of professionals portfolio composition.

This paper investigates the effect of an additive unfair background risk on the optimal donation behavior of a purely altruistic decision-maker in

the dictator game. Assuming both the dictator and the recipient face this background risk, and that the dictator is risk-vulnerable, we find that the

presence of background risk reduces the deviation of the optimal donation from an equal split. This outcome holds whether the dictator’s fairness

is evaluated ex-ante or ex-post, offering new insights into the implications of risk vulnerability.

Abstract: We study theoretically and experimentally the approval mechanism (Masuda et al., 2013, 2014) in the case of a three-player voluntary contribution game with the minimum disapproval benchmark. The three-player game raises the issue of aggregating approval votes. We compare the unanimity and the majority approval rules. Backward elimination of weakly dominated strategies predicts null contributions under the majority rule and any contribution vector under the unanimity rule. The experimental results show that the approval mechanism is less efficient in three-player than in two-player voluntary contribution games. Furthermore, the unanimity rule is more effective at increasing contributions than the majority rule. Overall, our results suggest that the efficiency of the AM is mitigated in the case of three-player public goods games.