How to Induce Contributions to Public Goods
In the Absence of Enforcement
Researchers have found
that voting can help increase voluntary contributions to a public
good—provided enforcement through a third party. Not all collective
agreements, however, have guaranteed third-party enforcement (e.g.,
Kyoto). We design an experiment to explore whether a voting rule with
and without a punishment mechanism increases contributions to a public
good. Our results suggest that voting by itself does not increase
cooperation, but if voters can punish violators, contributions increase
significantly. [more]
The Influence of Beliefs and Risk
Preferences on Bargaining Outcomes
This paper reports data from a controlled
bargaining experiment where risk preferences and beliefs are both
measured in order to assess their relative importance in bargaining
outcomes. We find that the effects of optimism dominate those of
risk-aversion. Optimistic bargainers are significantly more likely to
dispute and have aggressive final bargaining positions. Dispute rates
are not statistically affected by risk preferences, but there is some
evidence that risk aversion leads to less aggressive bargaining
positions and lower payoff outcomes. A key implication is that increased
settlement rates are more likely achieved by minimizing impasse
uncertainty (to limit the potential for optimism) rather than maximizing
uncertainty (to weaken the reservation point of risk-averse bargainers),
as has been argued in the dispute resolution literature. [more]
Does Rank-order Grading Improve Student
Performance?
A unique classroom experiment explores the
potential of using rank-order grading to improve student learning and
performance and reveals that student performance is significantly
improved when facing a grading system based on student ranking
(norm-reference grading) rather than performance standards
(criterion-reference grading). The improved outcomes from rank-order
grading largely arise among the high performers, but not at the expense
of low performers. Results indicate rank-ordering may eliminate the
incentive for high performing students to ‘stop’ once they achieve a
stated objective, while not diminishing the incentive for lower
performing students. [more]
Hardnose the Dictator
We
offer experimental
evidence that fairness can be rejected as a non-trivial factor in a
relevant setting—when people act over earned money. In our experiments,
people bargaining over earned money adhere to game-theoretic
predictions at higher rates than previously reported. And people
bargaining over earned money in isolation exhibit self-interested
behavior in 95 percent of bargains. When assets are legitimized with
effort and strategic concerns are controlled with isolation, the
other-regarding behavior that permeates the literature surrendered to
self-interested rationality. [more]
Does the Market Induce Rationality at the
Individual Level?
We report results of
experiments designed to test whether the rationality that markets induce
can spill over to nonmarket settings; and whether any spillovers that
occur are due to changes in preference or to revisions in stated
values. Our results suggest rationality spillovers exist.
Market and nonmarket choices are not autonomous. Once a person’s
rationality is induced in a marketlike setting, he or she can transfer
that rationality to nonmarket settings. [more]
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