competition and the number of firms in a market are duopolies more competitive than atomistic markets this paper uses a variant of the standard search model to examine market equilibrium and the consequences for market equilibrium of an increase in the number of firms if marginal search costs increase with the number of searches then the demand curve facing any firm will be kinked with the elasticity of demand with respect to price decreases being less than with respect to price increases prices may not change in response to changes in marginal costs as the number of firms increases the maximum price that is consistent with equilibrium increases to the monopoly price but the minimum price decreases on the other hand if marginal search costs decrease with the number of searches equilibrium if it exists is characterized by a

persuasive advertising and product differentiation in a hotelling type differentiated products duopoly model we distinguish between three alternative ways that persuasive advertising may affect consumer perferences we illustrate the implications of our theory an contrast with results from models of informative advertising by analysing the relationship between the degree of product differentiation and equilibrium levels of advertising the analysis suggests that an positive relationship between equilibrium levels of advertising and inherent product substitutability is consistent only with advertising that increases perceived product differences

we the rich inequality identity and cooperation abstract inequality not only generates status differentials between rich and poor individuals it also generates status differentials between groups of different composition and income level we organise the social structure within which groups are embedded to manipulate their composition and relative status thus inducing weaker or stronger group identities in their members via the processes of social categorization identification and comparison we therefore manipulate the fundamental components of group identity rather than resorting to ad hoc identity reinforcement tasks how strongly individuals identify with each group will ultimately determine the degree of cooperativeness within the group and the whole society we find that the impact of inequality on social cooperativeness is not trivial cooperation varies with the strength of the group s identity as predicted by social identity theory in particular high endowment homogeneous groups cooperate most and increasingly over time low endowment homogeneous groups display intermediate levels of cooperation heterogeneous groups cooperate least a result driven by lack of cooperation on behalf of the rich as endowment sizes and groups are exogenously allocated we argue that our findings are a lower bound for the effects generated where endowments and groups are endogenously determined in or outside of the laboratory

does the allocation of property rights matter in the commons abstract a popular solution to the tragedy of the commons is to create private property rights to access the commons if resource users care about the welfare of others they may be unwilling to respect property rights regimes that lead to unfair or inequitable outcomes we explore in a series of laboratory experiments whether it is possible to undermine the efficacy of property rights solutions through the allocation process we find that both the extent to which property rights are enforced and how they are allocated significantly affect extraction and compliance our findings suggest that one of the most popular allocation methods is suboptimal we observe that occasional enforcement and the proportional allocation of property rights is dominated by no enforcement and the equal or inverse allocation of property rights our results support the view that allocation matters for property rights solutions to the commons problem

public good provision mechanisms and reciprocity this paper determines optimal public good provision mechanisms in an environment where agents are motivated by reciprocity in a two agent economy we show that the standard pivot mechanism is not strategy proof if at least one agent cares strongly enough about reciprocity truthful reporting maximises a player s own payoff and hence is viewed as selfish by his opponent who retaliates by understating demand for the public good incentive compatibility is restored if the mechanism is implemented sequentially when agents are asked to report their demands in turn a high report by the first mover he may result in him paying an unfairly large share of the provision cost should the second mover she understate her demand hence truthful reporting is not judged as selfish by the second mover who reciprocates by stating her true demand our results alert the institutional designer to the importance of game dynamics when agents are non selfish

material interests moral reputation and crowding out species protection on private land we consider how the reputation of being socially responsible works as an effective source of motivation in protecting a public good such as endangered species this paper investigates the mechanism design for endangered species protection on private land under asymmetric information about reputation and land quality we examine optimal monetary transfer by designing an efficient mechanism which takes into account the crowding out effect of monetary rewards on socially responsible behavior we find landowners who have good reputation contribute more than the optimum level landowners with poor reputation sacrifices information rent rather they buy reputation

immaterial rewards and sanctions in a voluntary contribution experiment in this article we compare the causes and effects of immaterial rewards and sanctions on cooperation in a voluntary contribution experiment it appears that both rewards and sanctions increase contributions and that rewards are more effective than sanctions only when subjects interact repeatedly within the same group the effect is however insignificant which could be due to the higher variance in presence of rewards and sanctions furthermore it is evidenced that rewards have some negative effect on the future contribution for both the imposer and the imposed when the partner matching is applied but both rewards and sanctions have mainly positive effects under the stranger matching thus it seems that the recipient of the feedback takes the message as a reliable external evaluation of her contribution only under the stranger matching protocol when the strategic use of feedback can largely be excluded jel c92 h41

do binding agreements solve the social dilemma we investigate whether binding agreements can provide a solution to the social dilemma that arises in the presence of pure public goods by signing a binding agreement players can prevent free riding by the contributors to a public good however a well known theoretical result is that the outcome of the endogenous formation of agreements is not necessarily efficient in our setting the individual level of contribution to the public good increases with the size of the coalition reaching an agreement and the global coalition is always the socially optimal structure agreements form sequentially and the equilibrium outcome is an asymmetric structure which consists of two coalitions our experiment therefore lends force to the theoretical result that outcomes may be inefficient in fact we observe an outcome which is even less efficient than that predicted by the equilibrium agreement structure however it seems that when subjects reach agreements they do so with the intention of cooperating rather than free riding furthermore it seems that they learn to cooperate over time and reach the global agreement more often towards the end of sessions keywords

perfect and imperfect strangers in social dilemmas abstract this paper focuses on social dilemma games in which players may or may not meet the same partner again in the future a novel prisoner s dilemma experiment a meta analysis of public goods experiments and a meta analysis of previous prisoner s dilemma experiments document high cooperation rates if the likelihood to meet the same partner again in the future is high

on the effects of asymmetric and endogenous taxation in experimental public goods games abstract in our experimental public goods game subjects face exogenously or endogenously determined asymmetric minimum contributions endogeneity does not affect overall contributions if asymmetric contribution levels are approved of endogenously the disadvantaged subjects contribute significantly less than in case of exogenous determination

tax morale and prosocial behaviour evidence from a palestinian survey the first empirical investigation is conducted into the relationship between prosocial behaviour and tax morale in the context of state capacity building as in the palestinian territories we consider public spirit a positive attitude adopted by citizens for the benefit of the community and associational activity individuals engagement in voluntary activities two major expressions of prosocial behaviour and estimate their impact on palestinians tax morale intrinsic motivation to pay taxes the empirical analysis employs a unique palestinian public opinion survey conducted in 2007 in the west bank and the gaza strip by using a bivariate probit model we find that tax morale increases with public spirit but it is lower among palestinians involved in associational activities predicted conditional probabilities indicate that public spirit has more impact when the respondent has low confidence in the institutions and in the rule of law finally more public spirit is required for a self employed person in order to deal with tax compliance than for a worker in the public sector unless the worker in the public sector has lower confidence in the institutions and in the rule of law than the self employed person

facilitating fit revelation in the competitive market this study examines firms strategic decisions in the competitive market regarding whether to engage in marketing activities to assist consumers in finding the fit between their personal tastes and products horizontal attributes we find that competitive firms strategies to facilitate fit revelation critically depend on the product qualities they offer in particular a firm offering a high quality product is more likely to facilitate fit revelation in the competitive market than it would as a market monopolist whereas a firm offering a low quality product is less likely to do so in addition the firm offering the high quality product implements fit revealing activities in a greater intensity than its rival that offers the low quality product if the quality difference between the two products is small and both products qualities are sufficiently high

the transmission of sustainable harvesting norms when agents are conditionally cooperative experimental and observational studies have highlighted the importance of agents being conditionally cooperative when facing a social dilemma we formalize this mechanism in a theoretical model that portrays a small community having joint access to a common pool resource the diffusion of norms of cooperation takes place via interpersonal relations while individual agents face the temptation of higher profits by overexploiting the resource agents remain conditionally cooperative unless other individuals are misbehaving already we can observe a bubble of conditional cooperators slowly building up followed by a sudden burst which means that a transition from a cooperative social norm to non cooperation occurs interestingly in some parameter regions alternative stable states and limit cycles arise the latter implies that the same community goes through such a transition repeatedly over long time spans history thus repeats itself in the form of the creation and erosion of social capital

mass media instrumental information and electoral accountability journalism is widely believed to be crucial for holding elected officials accountable at the same time economic theory has a hard time providing an instrumental explanation for the existence of accountability journalism according to the common downsian reasoning rational voters should not be willing to pay for information out of purely instrumental motives because the individual probabilities of casting the decisive vote are typically very low we show that this rationale does not apply when a group of voters shares a common goal such as accountability and information is delivered via mass media in contrast to the pessimistic downsian view rational voters can have a considerable willingness to pay for the provision of instrumental information in these scenarios our model thus reconciles the rational voter approach with the common perception of journalism as a watchdog that holds elected officials accountable

reciprocity matching and conditional cooperation in two public goods games experimental and empirical evidence identifies social preferences and proposes competing models of such preferences we find that participants match the contributions of others in the voluntary contribution mechanism vcm we also examine a game with different equilibria the weakest link mechanism wlm here in contrast participants match the minimum contribution of others

price discrimination of buyers with identical preferences and collusion in a model of advertising a model of advertising and price distributions is investigated whereby each seller can contact different buyers whose preferences are identical with different probabilities the model features a continuum of equilibria parametrized by the ratio of the buyers contacted by one seller differing across market segments and by the other sellers in general the sellers practice price discrimination across segments more asymmetric equilibria correspond to higher volumes of transactions and higher expected transaction prices this results in a lower expected utility for the buyers and higher expected profits thus identifying areas of influence can help the sellers to support collusion

selecting public goods institutions who likes to punish and reward we study the link between individual attitudes toward uncertainty on the one hand and preferences over as well as behavior within various public goods institutions on the other hand we incentive compatibly elicit preferences over voluntary contribution mechanisms with and without reward and punishment options and then randomly assign subjects to play in one of the four institutions we find that payoffs are significantly greater when punishment is allowed but that only a small minority of participants prefers such an environment somewhat surprisingly preferences over institutions are generally independent of individual characteristics conversely individual characteristics including institutional preferences are significantly predictive of behavior in the public goods game for instance risk averse individuals preemptively punish more often this suggests that when studying sanctions and rewards it is important to consider individual attitudes toward risk and uncertainty although they may not affect the original selection into institutions

reputation in a public goods game taking the design of credit bureaus to the lab abstract we present the results of a new laboratory experiment designed to mimic the ways in which credit bureaus will alter microfinance markets where loans are taken in groups bureaus can build reputations for borrowers at the group or the individual level and the optimal contract is not obvious in a modified public goods game with ejection and re assignment played by guatemalan micro entrepreneurs we find the use of group reputation to be effective in increasing contributions given the costs of transitioning microfinance bureaus to the sharing of individual information our results suggest that this change would not be cost effective

do reputation feedback systems really improve trust among anonymous traders an experimental study feedback systems are claimed to be a crucial component of the success of electronic marketplaces like ebay or amazon marketplace this article aims to compare the effects of various feedback systems on trust between anonymous traders through a set of experiments based on the trust game our results indicate that trust is significantly improved by the introduction of a reputation feedback system however such mechanisms are far from being perfect and are vulnerable to strategic ratings and reciprocation our findings indicate that some changes in rating rules may significantly improve the efficiency of feedback systems by avoiding strategic rating or reciprocation and hence stimulate trust and trustworthiness among traders in particular a system in which individuals are not informed of their partner s rating decision before making their own decision provides better results both in terms of trust and earnings

crime in the lab detecting social interaction abstract according to the standard economic perspective criminal activities vary with the price of crime which depends on the severity of punishment and the detection probability an alternative view claims that crime is also influenced by social interaction phenomena such as peer pressure or neighbourhood effects detecting social interaction in the field is fraught with difficulties however in this paper we argue that given its extensive control possibilities experiments are well suited to show the potential existence of social interaction effects we present an experimental study where people can engage in criminal activities we find support for the importance of social interaction on average subjects steal the more the more others steal this behaviour can be interpreted in terms of reciprocity

group formation and cooperation in social dilemmas a survey and meta analytic evidence abstract we survey the growing literature on group formation in the context of three types of social dilemma games public goods games common pool resources and the prisoner s dilemma the 62 surveyed papers study the effect of different sorting mechanisms endogenous endogenous with the option to play the game and exogenous on cooperation rates our survey shows that cooperators are highly sensitive to the presence of free riders independently of the sorting mechanism we complement the survey with a meta analysis showing no difference in terms of cooperation between studies implementing an endogenous and exogenous sorting what is more we find that it is no more likely for a cooperator to be matched with like minded partners in endogenously formed groups than in exogenously formed groups these observations are related as we show in the survey the success of a sorting method in matching like minded individuals and the levels of cooperation are closely interlinked

price match announcements in a consumer search duopoly using a model of sequential search we show that announcements to price match raise prices by altering consumer search behavior first price matching diminishes firms incentives to lower prices to attract consumers who have no search costs second for consumers with positive search costs price matching lowers the marginal benefit of search inducing them to accept higher prices finally price matching can lead to asymmetric equilibria where one firm runs fewer sales and both firms tend to offer smaller discounts than in a symmetric equilibrium price increases grow in the proportion of consumers who invoke price matching guarantees and in the level of equilibrium asymmetry

indirect reciprocity and money using an experimental analysis of a simple monetary economy as a basis we argue that a monetary system can be more stable than one would expect from individual rationality we show that positive reciprocity stabilizes the monetary system provided every participant considers the feedback of his choice to the stationary equilibrium if however the participants do not play stationary strategies and some participants notoriously refuse to accept money then due to negative reciprocity their behavior will eventually induce a break down of the monetary system

simultaneous decision making in competitive and cooperative environments we experimentally investigate simultaneous decision making in two contrasting environments a competitive environment a contest and a cooperative environment a voluntary contribution mechanism we find that the cooperative nature of the voluntary contribution mechanism spills over to the contest decreasing sub optimal overbidding in the contest however contributions to the public good are not affected by simultaneous participation in the contest there is a significant negative correlation between decisions made in competitive and cooperative environments i e more cooperative subjects tend to be less competitive and vice versa this correlation can be rationalized by heterogeneous social preferences towards inequality but not by bounded rationality theory

conditional cooperation with negative externalities an experiment abstract empirically the commons are not as tragic as standard theory predicts the predominant explanation for this finding is conditional cooperation yet many real life situations involve insiders who are directly affected by a dilemma and outsiders who may be harmed if the insiders overcome the dilemma the quintessential illustration is oligopoly if insiders overcome their dilemma and collude this inflicts harm on the opposite market side in our experiment harm on outsiders significantly reduces conditional cooperation of insiders we can exclude that this result is driven by inequity aversion reciprocity or efficiency seeking only guilt aversion can rationalize our findings with guilt being most pronounced if the active insiders not only inflict harm on the outsider but increase their own payoff at the expense of the outsider

equilibrium price distributions equilibrium price distributions for a homogeneous product consistent with individual incentives are investigated they arise in informationally imperfect markets in which the only primitive datum is the distribution of search costs it is shown that single multi and continuous price distributions are all viable long run phenomena depending on the nature of search costs a method for computing equilibrium price distributions is also provided jevons law of one price has long been an accepted dictum in economic theory in a classroom presentation it still serves sometimes implicitly as a major premise in many micro models of market interaction much of the descriptive theory as well as welfare analysis hinges on this assumption yet one s day to day experience reveals that price differentials are a viable phenomenon and that looking for lower prices may very well be a rewarding activity the prospects of eventually hitting a bargain and the resulting price reduction would more than compensate for the cost incurred during the search process moreover the existence of price dispersions appear to be an empirically stable phenomenon snapshots of markets for relatively homogeneous products reveal substantial and recurring price differentials stigler 1961 and pratt wise and zeckhauser 1979 for example report some evidence supporting this claim an important article by stigler 1961 focused economists attention on the crucial role played by the informational structure of markets it gave rise to the study of the

mandatory minimum contributions heterogeneous endowments and voluntary public good provision abstract in a public good experiment with heterogeneous endowments we investigate if and how the contribution level as well as the previously observed fair share rule of equal contributions relative to one s endowment hofmeyr et al 2007 keser et al 2014 are influenced by minimum contribution requirements we consider three different schedules fixmin requiring the same absolute contributions relmin requiring the same relative contributions and progmin requiring minimum contributions that progressively increase with the endowment we find that minimum contributions exert norm giving character and may lead to an increase in average group contributions this is especially true for the progressive schedule on the individual level this schedule leads to higher relative contributions by the wealthier players and thus violates the fair share norm on the group level it leads to the highest contribution level and the lowest inequality in total profits as measured by the gini index

economic choice political decision and the problem of limits assesses the arguments for the use of market or political processes for making collective choices the border between what is mine and what is ours is contested but it is unguarded where should it lie how would we know when it should be adjusted i uncover an old paradox a society can never use political means to guard against incursions across the border for political ends some other mechanism such as constitutional or other extra statutory rules are required

oligopolistic pricing with sequential consumer search n identical stores compete by choosing prices for a homogeneous good with constant marginal costs consumers search sequentially with perfect recall for the lowest price one class of consumers called shoppers have zero search costs while all other consumers have a positive search cost c there is a unique symmetric nash equilibrium price distribution with the property that it changes smoothly from marginal cost pricing when all consumers are shoppers and or c 0 and monopoly pricing when no consumers are shoppers remarkably as the number of stores increases the nash equilibrium becomes more monopolistic copyright 1989 by american economic association

price quality and reputation evidence from an online field experiment we examine the link between price quality seller claims and seller reputation in internet auctions after purchasing actual baseball cards and having them professionally graded we find that some buyers in the online graded market are misled by incredible claims of quality they pay higher prices but do not receive better quality and in fact are defrauded more often online seller reputation is effective for identifying good faith sellers but conditional on completed auctions reputable sellers do not provide better quality evidence also suggests that high claim sellers target less experienced buyers we attribute these patterns to two loopholes in the ebay rating system we benefited from the comments of austan goolsbee raphael thomadsen john shea dan vincent david reiley larry ausubel peter cramton v joseph hotz jeff smith jimmy chan vincent crawford mark duggan and attendees at numerous seminars and conferences we are particularly grateful to seth sanders and john list for their constructive advice at the early stage of the research to timothy bresnahan rachel kranton and thomas hubbard for their detailed suggestions in reshaping earlier versions and to editor ariel pakes and two anonymous referees for their careful readings special thanks to eight friends who acted as our agents in purchasing baseball cards in retail markets and to numerous sports card store owners who shared their insights on the sportscard industry excellent research assistance from randy alexander moore and krzysztof fizyta is gratefully acknowledged any remaining errors are ours

conditional cooperation and voluntary contributions to public goods we compare a partners condition where the same small group of subjects plays a repeated publi c good game to a strangers condition where subjects play this game in changing group formations subjects in the partners conditi on contribute from t he first period on significantly more to the publi c good than subjects in the strangers conditi on in the strangers conditi on contributions show a continual decay whil e in the partners conditi on contributions fluctuate on a high level until t hey decrease in the final periods we interpret subjects behavior in terms of conditional cooperation which is characterized by both future oriented and reactive behavior

contributions in linear public goods experiments with stranger matching two motivations we investigated why subjects contribute to the public good in a linear public goods game with stranger matching in this experiment subjects were asked to determine their contributions to the publ

strategic underinvestment in informative advertising the cases of substitutes and complements the authors analyze the strategic pricing and informative advertising decisions made by firms in duopolistic contexts they show that whether the products are substitutes or complements there exist strategic settings in which firms keep potential consumers uninformed about their products even if the advertising cost is zero

personalized pricing and advertising an asymmetric equilibrium analysis we study personalized price competition with costly advertising among n quality cost differentiated firms strategies involve mixing over both prices and whether to advertise in equilibrium only the top two firms advertise earning bertrand like profits welfare losses initially rise then fall with the ad cost with losses due to excessive advertising and sales by the wrong firm when firms are symmetric the symmetric equilibrium yields perverse comparative statics and is unstable our key results apply when demand is elastic when ad costs are heterogeneous and with noise in consumer tastes

play it again partner choice reputation building and learning from finitely repeated dilemma games often the fuller the reputational record people s actions generate the greater their incentive to earn a reputation for cooperation however inability to wipe clean one s past record might trap some agents who initially underappreciate reputation s value in a cycle of bad behaviour whereas a clean slate could have been followed by their reforming themselves in a laboratory experiment we investigate what subjects learn from playing a finitely repeated dilemma game with endogenous symmetric partner choice we find that with a high cooperation premium and good information investment in cooperative reputation grows following exogenous restarts although earlier end game behaviours are observed

rank order competition in the voluntary provision of impure public goods publicly provided goods often create differential payoffs due to timely or spatial distances of group members we design and test a provision mechanism which utilizes rank competition to mitigate free riding in impure public goods in our rank order voluntary contribution mechanism rank order vcm group members compete via observable contributions for a larger share of the public good high contributors receive preferential access a larger share while low contributors receive restricted access a lower share in a laboratory experiment rank order vcm elicits median contributions equal to the full endowment throughout the finitely played games with constant groups in the control treatment with randomly assigned ranks the contributions are significantly lower and decline over time we thus provide evidence of rank competition in situations where discriminatory access to public goods is possible being efficiency enhancing

unraveling the effects of payments for ecosystem services on motivations for collective action this paper addresses the differential impacts on decisions towards collective action in the context of payments for ecosystem services pes where individual and collective rewards are conditional on a minimum collective conservation level being achieved interactions between the different reward types farmers social preferences social ties and communication are identified a field game experiment is conducted with andean farmers in peru and framed around their decisions to conserve agrobiodiversity as an impure public good the main results are that pes schemes could be effective in motivating collective action for agrobiodiversity conservation and that individual rewards are likely to be more effective and less sensitive to social factors than collective rewards the latter might have a positive effect on conservation when they are shared within socially closely related groups or in situations where communication and deliberation about collective action are possible

morally motivated self regulation 2 this paper focuses on self regulation motivated by altruistic moral concerns the context is one in which individuals can voluntarily self regulate in the presence of opportunities to free ride on the self regulation of their trading partners moral preferences can mitigate free riding but moral preferences can be limited in the sense that they may be weaker the greater the socioeconomic distance from a trading partner and can depend on whether others are expected to reciprocate the scope of self regulation can be increased by moral suasion but individuals can also form organizations to reduce free riding this paper characterizes the scope of self regulation as a function of the form and strength of moral preferences and explains the effectiveness of organizations in expanding that scope moral preferences can be conditional on the actions of others or limited by socioeconomic distance a citizen thus may self regulate when interacting with someone close but not with someone far away moral preferences can also be conditional or unconditional unconditional moral preferences are independent of the action of others whereas with conditional preferences a citizen is more willing to self regulate if other citizens are expected to reciprocate 3

social learning and voluntary cooperation among like minded people many people contribute to public goods but stop doing so once they experience free riding we test the hypothesis that groups whose members know that they are composed only of likeminded cooperators are able to maintain a higher cooperation level than the most cooperative randomly composed groups our experiments confirm this hypothesis we also predict that groups of like minded free riders do not cooperate yet we find a high level of strategic cooperation that eventually col lapses our results underscore the importance of group composition and social learning by heterogeneously motivated agents to understand the dynamics of cooperation and free riding

anyone for higher speed limits self interested and adaptive political preferences swedish survey evidence indicates that variables reflecting self interest are important in explaining people s preferred speed limits and that political preferences adapt to technological development drivers who believe they drive better than the average driver as well as drivers of cars that are newer and hence safer bigger and with better highspeed characteristics prefer higher speed limits in contrast elderly people prefer lower speed limits furthermore people report that they themselves vote more sociotropically than they believe others vote on average indicating that we may vote less sociotropically than we believe ourselves one possible reason for such self serving biases is that people desire to see themselves as socially responsible

securing property rights a dilemma experiment in austria mexico mongolia south korea and the united states abstract secure property rights result from a combination of public enforcement private protective measures and voluntary norm compliance we conduct a laboratory experiment to study how culture interacts with institutions in shaping individuals behaviors and group outcomes in a property rights dilemma the experiment is conducted in five countries austria mexico mongolia south korea and the united states we find that the security of property varies with the experimentally available institutions and country level indicators such as trust and quality of government subjects from countries with higher levels of trust are more likely to abstain initially from theft devote more resources to production and support funding public protection of property through taxation our findings highlight the relevance of cultural and institutional factors and their interaction in addressing the collective action problem of safeguarding property rights

strategic behavior in repeated voluntary contribution experiments abstract we conduct a repeated vcm voluntary contribution mechanism experiment using the strategy method and compare contribution behavior in a partner and a stranger matching in both a cold and a hot setting where the latter differs from the former by allowing participants to revise their strategies in each round irrespective of whether the setting is hot or cold we find that partners provide higher initial contributions than strangers in the cold setting without revision possibility partners contribute more on average but do not react differently to past contributions by others than strangers in the hot setting the dynamic contribution plans of strangers are somewhat upward shifted furthermore the contributions of partners decrease more strongly than those of strangers over time in a hot setting the reason for this effect lies in the fact that partners react much more strongly to negative experiences than strangers our design and results contribute to explaining the mixed evidence in the literature on partner versus stranger comparisons and allow us to understand under which conditions commitment can be conducive or harmful to achieving and sustaining higher levels of contribution

informative price advertising in a sequential search model the purpose of this paper is to study the role and implications of price advertising when shopping trips are costly to consumers to do so we introduce advertising into an optimal sequential search model information about prices is both gathered by consumers and disseminated by firms consumers search sequentially and stores advertise with various intensity when it is in their interest to do so our model has a unique equilibrium exhibiting priee dispersion the model generates predictions about the shape of the price distribution and firms advertising behavior we explore the effects of entry and find that when initial advertising costs at zero level of effort are precisely zero entry drives the equilibrium to the perfectly competitive outcome however when initial marginal advertising costs are positive entry drives prices higher and while the informed consumers almost surely locate competitive prices welfare does not necessarily increase finally we compare the effectiveness of the two informational channels when advertising costs shrink prices become competitive however when search costs shrink prices remain bounded above marginal production costs

advocacy and political convergence under preference uncertainty we study the formation of advocacy groups and how they can impact policy outcomes by revealing information about voters preferences to uninformed political candidates we conduct a laboratory experiment based on a two candidate spatial electoral competition setting where the policy preferences of voters are initially unknown and change over time in the control treatment candidates learn about the preferred policy of the median voter through the voting outcome of elections in the advocacy treatments voters can organize themselves into advocacy groups in order to reveal their policy preferences we find that voters often overcome the collective action problem of forming an advocacy group in fact we observe the formation of both informative advocacy groups which convey new information and uninformative advocacy groups which do not overall advocacy groups significantly speed up the convergence to the preferred policy of the median voter however advocacy does not lead to higher earnings as the gains from faster convergence are offset by the costs of group formation

strategic thinking in public goods games with teams abstract 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

price matching guarantees as a direct signal of low prices if consumers believe that stores offering price matching guarantees pmgs charge low prices high search cost consumers will purchase from pmg stores this leads pmg stores demand to be less pric

consumer privacy and marketing avoidance a static model we introduce the concept of marketing avoidance consumer efforts to conceal themselves and to deflect marketing the setting is one in which sellers market some item through solicitations to potential consumers who differ in their benefit from the item and suffer harm from receiving solicitations concealment by one consumer induces sellers to shift solicitations to other consumers whereas deflection does not solicitations cause two externalities direct harm on consumers and the indirect cost of consumer concealment and deflection we find that in markets where the marginal cost of solicitation is sufficiently low efforts by low benefit consumers to conceal themselves will increase the cost effectiveness of solicitations and lead sellers to market more however concealment by high benefit consumers leads sellers to market less furthermore concealment by low benefit consumers increases direct privacy harm and consumer welfare is higher with deflection than concealment finally it is optimal to impose a charge on solicitations

choice set heterogeneity and the role of advertising an analysis with micro and macro data abstract the authors show how to use microlevel survey data from a tracking study on brand awareness in conjunction with data on sales and advertising expenditures to improve the specification estimation and interpretation of aggregate discrete choice models of demand in a departure from the commonly made full information assumption they incorporate limited information in the form of choice sets to reflect that consumers may not be aware of all available brands at purchase time they find that both the estimated brand constants and the price coefficient are biased downward when consumer heterogeneity in choice sets is ignored these biased estimates can lead firms to make costly price setting mistakes in addition the tracking data enable the authors to identify separately two processes by which advertising influences market shares they find that advertising has a direct effect on brand awareness inclusion in choice set in addition to its effect on consumer preferences increase in utility this

nonlinear behavior of the socio economic dynamics for lake eutrophication control abstract to succeed in combating lake eutrophication cooperation of local inhabitants small factories and farmers in reducing phosphorus discharge is very important but the willingness of each player to cooperate would depend on the cooperation of other players and on the level of environmental concern of the society in general here we study the integrated dynamics of people s choice of behavior and the magnitude of eutrophication assumptions are there are a number of players who choose between alternative options a cooperative and environment oriented option is more costly than the other the decision of each player is affected by social pressure as well as by economical cost of the options the lake pollution increases with the total phosphorus released and a high pollution level in the lake would enhance the social pressure the model includes a positive and a negative feedback loops which create diverse dynamical behavior the model often shows bistability having an equilibrium with a high level of cooperation among people and clean water and the other equilibrium with low cooperation and polluted water which are simultaneously stable the model also shows fluctuation between a high and a low levels of cooperation in alternating years cycle with a longer periodicity or chaotic fluctuation conservatism of people stabilizes the system and sometimes helps maintaining cooperation the system may show unexpected parameter dependence the improved phosphorus removing efficiency might make water more polluted if it causes the decline in the environmental concern and cooperation among people

rational cooperation in the finitely repeated prisoner s dilemma experimental evidence this paper presents experiments designed to examine the sequential equilibrium reputation hypothesis in the finitely repeated prisoner s dilemma the authors test the hypothesis by controlling the subjects ability to build reputations and by manipulating their beliefs that their opponent is irrational or altruistic the responses of subjects strongly support the sequential equilibrium prediction the results also suggest an important role for homemade altruism that is a natural tendency to cooperate that subjects bring to the experiment from the outside the authors find that there may be no difference between the beliefs that an opponent is altruistic and the actual chance it is so copyright 1993 by royal economic society

the impact of information provision on agglomeration bonus performance an experimental study on local networks the agglomeration bonus is an incentive mechanism to induce adjacent landowners to spatially coordinate their land use for the delivery of ecosystem services from farmland this paper uses laboratory experiments to explore the performance of the agglomeration bonus in achieving the socially optimal land management configuration in a local network environment where the information available to subjects varies and the strategic setting is unfavorable for efficient coordination the experiments indicate that if subjects are informed about both their direct and indirect neighbors actions they are more likely to produce the socially optimal configuration thus effectiveness of the policy can be improved by implementing information dissemination exercises among landowners however given the adverse strategic setting increased game experience leads to coordination failure and optimal land choices only at the localized level independent of the information available to subjects thus success of the agglomeration bonus scheme on real landscapes will have to take account of the roles of both information and experience on participant behavior

inter team contests with power differential abstract we investigate the impact of asymmetry on behavior in inter team contests in asymmetric environments one team has a greater probability of winning given the same contribution level unfair contests or has a lower cost of contributing uneven contests we explore how such asymmetries impact behavior asking how being advantaged or disadvantaged influences contributions we find both advantaged and disadvantaged teams contribute much more than theory predicts but in such a way that ex post winning probabilities of the contests are consistent with theoretical predictions at the individual level contributions are predicted by beliefs about own team and opponent team contributions the determinants of contribution by members of the disadvantaged team differ depending on the nature of asymmetry contributions by the disadvantaged team members are responsive to beliefs about contribution by opponents in unfair contests while in uneven contests they are responsive to beliefs about the contribution by teammates

collusion under yardstick competition an experimental study abstract the effectiveness of relative performance evaluation schemes such as yardstick competition can be undermined by collusion the degree to which the regulated agents manage to collude will be affected by the particulars of the scheme we hypothesize that in a repeated game setting schemes will be more prone to collusion the smaller are the rents to the agents in case they behave noncooperatively we illustrate the relevance of this hypothesis by means of an economic experiment in which we compare the efficiency of two performance evaluation schemes

participation and commitment in voluntary coalitions to provide public goods this paper reports experimental evidence on the voluntary formation of coalitions to provide a public good participation and commitment in a coalition are either exogenously imposed or endogenously determined by the players themselves we find larger voluntary participation rates when commitments in the coalition are endogenously determined using a minimum contribution rule rather than exogenously determined however due to a trade off between participation and commitment coalitions with voluntary participation are less effective in facilitating cooperation compared to when all players are forced to participate this paper therefore confirms the rather pessimistic conclusions from coalition formation theories

cooperation and norm enforcement the individual level perspective abstract we explore the relationship between individuals disposition to cooperate and their inclination to engage in peer punishment as well as their relative importance for mitigating social dilemmas using a modified strategy method approach we identify individual punishment patterns and link them with individual cooperation patterns classifying n 628 subjects along these two dimensions documents that cooperation and punishment patterns are aligned for most individuals however the data also reveal a sizable share of free riders that punish pro socially and conditional cooperators that do not engage in punishment analyzing the interplay between types in an additional experiment we show that pro social punishers are important for achieving cooperation incorporating information on punishment types explains large amounts of the between and within group variation in cooperation

characterizing social value of information abstract this paper characterizes the social value of information in bayesian games with symmetric quadratic payoff functions and normally distributed public and private signals the main result provides a necessary and sufficient condition for welfare to increase with public or private information in so doing we represent welfare as a linear combination of the variance of a common term in an equilibrium strategy and that of an idiosyncratic term which are referred to as the common variance and the idiosyncratic variance of actions respectively the ratio of their coefficients is a key parameter in our condition if the coefficient of the common variance is relatively large welfare necessarily increases but if it is relatively small welfare can decrease using our condition we find eight types of games with different welfare effects of information

loopholes undermine donation an experiment motivated by an organ donation priority loophole in israel article i nfo giving registered organ donors priority on organ waiting lists as has been implemented in israel and singapore pro vides an incentive for registration and has the potential to increase the pool of deceased donor organs however the implementation of a priority rule might allow for loopholes as is the case in israel in which an individual can reg ister to receive priority but avoid ever being in a position to donate organs we experimentally investigate how such a loophole affects donation and find that the majority of subjects use the loophole when available the existence of a loophole completely eliminates the increase in donation generated by the priority rule when information about loophole use is made public subjects respond to others use of the loophole by withholding donation such that the priority system with a loophole generates fewer do nations than an allocation system without priority 2013 published by elsevier b v