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experiment

Author(s): 
Toshiji Kawagoe and Yusuke Narita
Date: 
Sun, 2010-11-07
Abstract: 
 In this paper, we experimentally investigate the guilt aversion hypothesis using a trust game with hidden action and pre-play communication. For this purpose, we develop a new, modified version of guilt aversion. It is shown that this modified version is consistent with all extant experimental results in the literature and cannot be rejected by any of them. We then design an experiment that can test the modified version as well as the original version of the guilt aversion hypothesis. In contrast to the prediction of the hypothesis, it is found that the correlation between elicited beliefs and (trustful or trustworthy) behavior is almost zero even in an environment with pre-play communication. Thus, our result provides a clear case against the guilt aversion hypothesis.

 

Author(s): 
Toshiji Kawagoe and Hirokazu Takizawa
Date: 
Fri, 2008-10-24
Abstract: 
The centipede game is one of the most celebrated examples of the paradox of backward induction. Experiments of the centipede game have been conducted in various settings: two-person games with linearly increasing payoffs (McKelvey and Palfrey, 1992), two-person games with constant-sum payoffs (Fey, McKelvey and Palfrey, 1996) and three-person games (Rapoport et al. 2003). The deviations from the subgame-perfect equilibrium prediction observed in laboratories have so far been attributed to some kind of fairness concern or altruism of the subjects. This paper attempts to offer another explanation for the observed deviations by using level-k analysis, a non-equilibrium model of strategic thinking. We show that level-k analysis gives consistently good predictions for the results of experimental centipede games. The results suggest that experimental results of centipede games be explained without invoking fairness or altruism.
Author(s): 
Naoko Nishimura, Timothy N. Cason, Tatsuyoshi Saijo, Yoshikazu Ikeda
Date: 
Mon, 2007-10-01
Abstract: 

The paper presents a complete information model of bidding in second price sealed bid and ascending price (English) auctions, in which potential buyers know the unit valuation of other bidders and may spitefully prefer that their rivals earn a lower surplus. Bidders with spiteful preferences should overbid in equilibrium when they know their rival has a higher value than their own, and bidders with a higher value underbid to "counter" spite the overbidding of the lower value bidders. The model also predicts different bidding behavior in second price as compared to ascending price auctions. The paper also presents experimental evidence broadly consistent with the model. In the complete information environment, lower value bidders overbid more than higher value bidders, and they overbid more frequently in the second price auction than in the ascending price auction. Overall, the lower value bidder submits bids that exceed value about half the time. These patterns are not found in the incomplete information environment, consistent with the model.

Author(s): 
Yasuyo Hamaguchi, Toshiji Kawagoe and Aiko Shibata
Date: 
Sat, 2007-09-01
Abstract: 

Antitrust authorities of many countries have been trying to establish appropriate competition policies based on economic analysis. Recently an anti-cartel policy called a "leniency program" has been introduced in many countries as an effective policy to dissolve cartels. In this paper, we studied several kinds of leniency programs through laboratory experiments. We experimentally controlled for three factors: 1) cartel size: the number of cartel members in a group, small (two-person) or large (seven-person), 2) fine schedule: the number of firms that are given reduced fines, and 3) type of immunity: a reduced fine is given to self-reporting firm, or a reward is given to self-reporting firm. The experimental results showed that (1) an increase in the number of cartel members in a group increased the number of cartels dissolved, (2) changing the fine schedule had no significant effect both in the two-player case and in the seven-player case, and (3) positive enforcement such as giving a reward for a self-reporting firm in a courageous leniency program has great impact on dissolving cartel activities.

Author(s): 
Shunichiro Sasaki and Toshiji Kawagoe
Date: 
Wed, 2007-08-01
Abstract: 

In the theoretical assumption of informational cascades, private signals and predecessors' actions are equivalently informative before informational cascades, but are not once informational cascades have started. This experimental study tests this assumption by measuring the informativeness of private signals and predecessors' actions for human subjects in and out of informational cascades. We observed that subjects in informational cascades do not extract much information from predecessors' actions, indicating that they recognize other subjects' cascading behaviors, that subjects rely more on their private signals than on predecessors' actions even when both of them are equivalently informative, and that subjects cannot estimate posterior beliefs precisely in a Bayesian way due to cognitive biases such as anchoring and adjustment or conservatism.

Author(s): 
Toshiji Kawagoe and Hirokazu Takizawa
Date: 
Wed, 2007-08-01
Abstract: 

We conduct experiments of a cheap-talk game with incomplete information in which one sender type has an incentive to misrepresent her type. Although that Sender type mostly lies in the experiments, the Receiver tends to believe the Sender's messages. This confirms "truth bias" reported in communication theory in a one-shot, anonymous environment without nonverbal cues. These results cannot be explained by existing refinement theories, while a bounded rationality model explains them under certain conditions. We claim that the theory for the evolution of language should address why truthful communication survives in the environment in which lying succeeds.

Author(s): 
Hakan Holm and Toshiji Kawagoe
Date: 
Fri, 2008-02-01
Abstract: 

This paper investigates face-to-face lying and beliefs associated with it. In experiments in Sweden and Japan, subjects answer questions about personal characteristics, play a face-to-face sender-receiver game and participate in an elicitation of lie-detection beliefs. The previous finding of too much truth-telling (compared to the equilibrium prediction) also holds in the face-to-face setting. A new result is that although many people claim that they are good at lie-detection, few reveal belief in this ability when money is at stake. Correlations between the subjects' characteristics and their behavior and performances in the game are also explored.

Author(s): 
Toshiji Kawagoe and Hirokazu Takizawa
Date: 
Mon, 2008-03-10
Abstract: 

We present the experimental results of cheap-talk games with private information. We systematically compare various equilibrium refinement theories and bounded rationality models such as level-k analysis in explaining our experimental data. As in the previous literature, we find that when interests between sender and receiver are aligned, informative communication arises frequently. While babbling equilibrium play is observed more frequently in conflictive interest cases, a substantial number of players show a tendency to choose truth-telling and credulous play. We also find that level-k analysis outperforms equilibrium refinement theories in explaining this phenomenon. Our results also confirm the existence of the “truth bias” and “truth-detection bias” reported in communication theory.