Past Talks s2: Fall 2007
'Science of Liberty', Fall 2007
Beliefs and Voting Decisions: A Test of the Pivotal Voter Model
Speaker: Dr. John Duffy, the University of Pittsburgh
Professor Duffy is a highly accomplished experimental economist, and Director of the Pittsburgh Experimental Economics Laboratory. He is interested in combining laboratory procedures with agent based simulation procedures, and has a chapter on this topic in Volume 2 of the Handbook of Computational Economics.
When: Friday, November 30, 4:30pm-6:00pm, Reception to follow.
Where: Room 555, Truland Building, Arlington Campus
Abstract
We report results from a laboratory experiment testing the basic hypothesis imbedded in various rational voter models that there is a direct correlation between the strength of an individual's belief that his/her vote will be pivotal and the likelihood that individual incurs the cost to vote. This belief is typically unobservable. In one of our experimental treatments we elicit these subjective beliefs using a proper scoring rule that induces truthful revelation of beliefs. This allows us to directly test the pivotal voter model. We find that a higher subjective probability of being pivotal increases the likelihood that an individual votes, but the probability thresholds used by subjects are not as crisp as the theory would predict. There is some evidence that individuals learn over time to adjust their beliefs to be more consistent with the historical frequency of pivotalness. However, many subjects keep substantially overestimating their probability of being pivotal.
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Exploring the link of ecological rationality between ICES and ABC
Speaker: Dr. Shabnam Mousavi, Max Planck Institute for Human Development
When: Friday, November 16, 4pm
Where: Room 555, Truland Building, Arlington Campus
Abstract
It has been observed in labs and in the field that people use rules of thumb (heuristics) to solve their decision making problems. A specific heuristic is invoked when its corresponding triggering conditions arise in the environment. Heuristics are successful if they conform to the structure of the environment in which the problem exists. An efficient mechanism of matchmaking between heuristic strategies and certain environmental structures is embedded in our adaptive capabilities. The science of heuristics studies the function of these simple rules, specifies where they work, and inquires into their limits. I present some findings of the fast and frugal heuristics program that illustrate how process models are developed in this tradition. In addition, I discuss some possibilities for the way in which the research agendas of 'reconciling constructivist and ecological rationality' and 'developing the science of fast and frugal heuristics' can inform and enhance one another. Both of these programs share a notion of ecological rationality as the degree of adaptation to the environment.
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Name-your-own-price Mechanisms: Revenue Gain or Drain?
Speaker: Dr. Artie Zillante, University of North Carolina Charlotte
When: Friday, November 9, 4pm
Where: Room 555, Truland Building, Arlington Campus
Abstract
The surge in online pricing mechanisms such as Priceline.comi's "name your own price" (NYOP) leaves open an empirical question of why firms would deviate from the standard practices of posting a take-it-or-leave-it ofer. Presumably firms find this sales method more profitable, despite some theoretical arguments that claim that a posted-price is always at least as good at generating revenue as any other mechanism. We use laboratory experiments to compare the NYOP mechanism with the standard posted-price mechanism. We find that using an NYOP mechanism can increase profit and consumer surplus when consumers are certain about the good they will receive, but when consumers are uncertain about the good there is no significant change in profit and a decrease in consumer surplus.
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Exchange Asymmetries Incorrectly Interpreted as Evidence of Endowment Effect Theory and Prospect Theory?
Speaker: Dr. Kathryn Zeiler
When: Tuesday, November 6, noon
Where: Room 215 in the Law School, Arlington Campus
Abstract
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Recall Errors in Surveys
Speaker: Dr. Joachim Winter, University of Munich
When: Friday, November 2nd, 4:00pm
Where: Room 555 in the Truland Building, Arlington Campus
Abstract
This paper considers measurement errors from a different perspective. Concentrating on errors that are caused by the insufficient ability of individuals to acquire, process and recall information, we devise a structural model for the response behavior of individuals in surveys. Our aims are twofold: Using nonseparable models, we first explore the consequences of such a modeling approach for key econometric questions like the identification of marginal effects and economic restrictions. We establish that under general conditions recall measurement errors are likely to exhibit nonstandard behavior, in particular be nonclassical and differential, and we provide means to deal with this situation. Moreover, we obtain surprising findings indicating that conventional wisdom about measurement errors may be misleading in many economic applications. For instance, under certain conditions left hand side and right hand side errors will be equally problematic. The second aim of this paper is to provide a formal framework for understanding the actual response behavior of respondents in surveys. Specifically, we provide formal arguments and explanations for the frequently encountered substantial effects of the design of a survey. Also, we suggest a list of issues that should be considered when eliciting a survey to avoid adverse effects. Finally, we apply the main concepts put forward in this paper to real world data and to a controlled experiment, and find evidence that underscores the importance of focusing on individual response behavior, as well as taking the design of a survey seriously.
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Using Experimental Economics to Measure the Effects of A Natural Educational Experiment on Altruism
Speaker: Dr. Robert Slonim, Case Western Reserve University
When: Friday, October 26th, 10:30am - 11:30am
Where: Room 555 in the Truland Building, Arlington Campus
Abstract
Economic research examining how educational intervention programs affect primary and secondary schooling focuses largely on test scores although the interventions can affect many other outcomes. This paper examines how an educational intervention, a voucher program, affected students' altruism. The voucher program used a lottery to allocate scholarships among low-income applicant families with children in K-8th grade. By exploiting the lottery to identify the voucher effects, and using experimental economic methods, we measure the effects of the intervention on children�s altruism. We also measure the voucher program�s effects on parents' altruism and several academic outcomes including test scores. We find that the educational intervention positively effects students' altruism towards charitable organizations but not towards their peers. We fail to find statistically significant effects of the vouchers on parents' altruism or test scores.
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Then and Now: Reality and Perceptions in the Evolution of Online and Offline Retail Pricing
Speaker: Dr. Ellen Garbarino, Case Western Reserve University
When: Friday, October 26th, 2:00pm - 3:00pm
Where: Room 555 in the Truland Building, Arlington Campus
Abstract
This paper examines the evolution of online retail through objective prices and consumers?price perceptions. Objective data from 2000-2006 are generally consistent with price penetration and offer only weak support for transactions cost effects, with online prices being lower than offline prices but the gap narrowing substantially over time. Longitudinal consumer perceptions show online prices are thought to be lower than offline prices, but not as much lower as they actually are, and that perceptions have become more accurate as the market matured.
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The Bad and the Worse: Distributive Justice and Neural Encoding of Equity and Efficiency
Speaker: Dr. Ming Hsu, University of Illinois at Urbana-Champaign
When: Friday, October 26th, 4:00pm - 5:00pm
Where: Room 555 in the Truland Building, Arlington Campus
Abstract
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Are Smarter Groups More Cooperative? Evidence from Prisoner's Dilemma Experiments, 1959-2003
Speaker: Dr. Garett Jones
When: Friday, October 5th, 4:00pm
Where: Room 555 in the Truland Building, Arlington Campus
Abstract
Are more intelligent groups better at cooperating? A meta-study of repeated prisoner's dilemma experiments run at numerous universities suggests that students cooperate 5% to 8% more often for every 100 point increase in the school's average SAT score. This result survives a variety of robustness tests. Axelrod (1984) recommends that the way to create cooperation is to encourage players to be patient and perceptive; experimental evidence suggests that more intelligent groups implicitly follow this advice.
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Money, Happiness, and Aspirations: An Experimental Study
Speaker: Dr. Mike McBride
When: Friday, September 28th, 4:00pm
Where: Room 555 in the Truland Building, Arlington Campus
Abstract
The past decade has witnessed an explosion of interest in the scientific study of happiness. Economists, in particular, find that happiness increases in income but decreases in income aspirations, and this work prompts examination of how aspirations form and adapt over time. This paper presents results from the first experimental study of how multiple factors�past payments, social comparisons, and expectations�influence aspiration formation and reported satisfaction. I find that expectations and social comparisons significantly affect reported satisfaction, and that subjects care relatively more about social comparisons once they have achieved a satisfactory outcome. These findings support an aspirations-based theory of happiness.
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"Did the Soviets Collude? A Statistical Analysis of Championship Chess 1940-64"
Speaker: Dr. John Nye
When: Friday, September 21th, 4:00pm
Where: Room 555 in the Truland Building, Arlington Campus
Abstract
We expand the set of outcomes considered by the tournament literature to include draws and use games from post-war chess tournaments to see whether strategic behavior can be important in such scenarios. In particular, we examine whether players from the former Soviet Union acted as a cartel in international all-play-all tournaments ?intentionally drawing against one another in order to focus effort on non-Soviet opponents ?to maximize the chance of some Soviet winning. Using data from international qualifying tournaments as well as USSR national tournaments, we consider several tests for collusion. Our results are consistent with Soviet draw-collusion and inconsistent with Soviet competition. Simulations of the period�s five premier international competitions (the FIDE Candidates tournaments) suggest that the observed Soviet sweep was a 75%-probability event under collusion but only a 25%-probability event had the Soviet players not colluded.
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"For Love or Money? Comparing the Effects of Non-Pecuniary and Pecuniary Incentive Schemes in the Workplace"
Speaker: Dr. Omar Al-Ubaydli
When: Friday, September 7th, 4:00pm
Where: Room 555 in the Truland Building, Arlington Campus
Abstract
Understanding the most efficient set of incentives to motivate agents remains a cornerstone of economics. The economics literature has traditionally focused on pecuniary incentive schemes, but recently a burgeoning line of work reminds us that non-pecuniary incentives can be powerful motivators. We conduct a field experiment in a naturally-occurring work environment that compares outcomes across a myriad of incentive schemes. Using treatments that include appeals to both positive and negative reciprocity as well as piece-rate schemes, we are able to measure the effect of each side-by-side within an environment that our theories purport to explain. Consonant with theory, we find evidence across the various treatments that workers tend to focus their effort on more easily measured and rewarded tasks at the expense of imprecisely measured tasks. Our findings have practical implications for the optimal design of incentive schemes, and shed light on the explanatory power of extant theoretical models.
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