Fall 2018

CESS Experimental Economics Seminar

(all seminars take place at 19 W 4th street, room 517)

 

Upcoming Seminars (CESS Weekly Seminars will resume in Spring 2019)

March 21 – Charlie Sprenger (University of California, San Diego)

Title: TBA

March 28 – Johanna Mollerstrom (George Mason University)

Title: TBA

April 4 – Charles Noussair (University of Arizona)

Title: TBA

April 11 – Olivier Armantier (Federal Reserve Bank)

Title: TBA

April 18 – Rachel Kranton (Duke University)

Title: TBA

May 2 – Yoram Halevy (University of Toronto)

Title: TBA

May 9 – Lise Vesterlund (Carnegie Mellon University)

Title: TBA

 

Fall 2018 Seminars

 

Weekly Seminar: Sevgi Yuksel, “How Do People Choose Between Biased Information Sources? Evidence from a Laboratory Experiment” (Gary Charness, Ryan Oprea, Sevgi Yuksel) (Thursday, December 13, 2018)

We report an experiment designed to measure how (and how well) subjects choose between biased sources of instrumentally valuable information. Subjects choose between two information sources with opposing biases in order to inform their guesses of a binary state. By varying the nature of the bias, we vary whether it is optimal to consult sources biased towards or against subjects’ prior beliefs. We find that subjects frequently choose sub-optimal information sources, and that these mistakes can be described by a handful of well-defined decision rules. Most common among these is a confirmation-seeking rule that guides subjects to systematically choose information sources that are biased towards their priors. Analysis of post-experiment survey questions suggest that subjects follow these rules intentionally and find them normatively appealing. Combined with incentivized belief data and post-experiment cognitive tests, this suggests that mistakes like confirmation-seeking are driven by fundamental errors in reasoning about the informativeness of biased information sources.

Weekly Seminar: Florian Ederer, “The Persistent Power of Promises” (Thursday, November 8, 2018)

This paper investigates how the passage of time affects trust, trustworthiness, and cooperation. We use a hybrid lab and online experiment to provide the first evidence for the persistent power of communication. Even when 3 weeks pass between messages and actual choices, communication raises cooperation, trust, and trustworthiness by about 50 percent. Lags between the beginning of the interaction and the time to respond do not substantially alter the trustworthiness of the responder. Our results further suggest that the findings of the large experimental literature on trust that focuses on laboratory scenarios, in which senders are forced to choose their actions immediately after communicating with recipients, may translate to more ecologically valid settings in which individuals choose actions outside the lab and long after they initially made promises.


Weekly Seminar: Daniel Csaba, “Attentional Complements” (Thursday, November 1, 2018)

There is ever growing economic interest in how limited attention affects behavior and therefore what choice reveals about preferences. I study how attentional constraints alter patterns of substitution in demand. In particular, I show that goods that are substitutes in utility may behaviorally appear as complements due to limits on attention. I label this phenomenon “attentional complementarity”. Adopting the framework of rational inattention I decompose the attentional problem highlighting the channels that influence substitution patterns under general attentional constraints. I conduct experimental tests of predictions of the model by using a cognitively demanding task as a proxy for costly attention.

Weekly Seminar: Axel Ockenfels, “Engineering Trust Among Strangers” (Thursday, October 25, 2018)

The science of norm enforcement, informed by theory and laboratory research, suggests that altruistic punishment is a key determinant of cooperation. This talk summarizes previous and current studies to show how this line of research can help to better understand eBay reputation building behavior, and how it can help to design digital feedback and conflict resolution institutions that more effectively promote trust and cooperation.

Weekly Seminar: Dan Friedman, “Price Dispersion and Cycles: Theory and Experiment” (Tim Cason and Ed Hopkins) (Thursday, October 11, 2018)

We report a continuous time laboratory experiment studying the classic Burdett and Judd (1983) model, which features a unique Nash equilibrium (NE) that has dispersed prices. Adaptive dynamics predict that the NE is stable for one parameter set we use, and unstable for another parameter set. We find that time average dispersions are close to the NE distribution for the stable parameter set, but skew towards prices higher than NE for the unstable parameter set. We offer an empirical definition of price cycles in terms of changes over time in robust measures of central tendency (median) and dispersion (interquartile range). By that definition, the data exhibit persistent cycles in both treatments, with larger cycle amplitudes for the unstable parameters.

Weekly Seminar: Gary Charness, “Incentivizing Exercise Improves Academic Performance” (Alexander W. Cappelen, Gary Charness, Mathias Ekstrom, Uri Gneezy, Bertil Tungodden) (Thursday, September 27, 2018)

In a large randomized controlled trial, we test the hypothesis that incentives for physical activity can improve academic performance. We found strong support for this hypothesis: University students who were incentivized to go to the gym had a significant improvement in academic performance, by, on average, 0.15 standard deviations compared to a control group that did not receive any incentives. The success of this indirect incentive for academic performance emphasizes the importance of non-cognitive skills in achieving academic goals. Students who were incentivized to exercise report improved self-control and a healthier life-style.  Overall, the study demonstrates that incentivizing exercise can be an important tool in improving educational achievements.

Weekly Seminar: Natalie Lee, “Feigning Ignorance for Long-term Gains: Theory and Experiment” (Thursday, September 13, 2018)

In many strategic situations such as military conflicts, market competition and insider trading, a player might be able to observe the other player’s move before making his own. This possibility of spying, or observability of moves, creates uncertainty over the order of moves in games. I study a particular strategic tension observability creates in dynamic games: a spying player might have incentives to “play dumb”. That is, the spying player might not myopically best respond to the other player’s observed action earlier in the game so that he can manipulate the other’s suspicion or lack of it for higher future payoffs. I model this situation with 2-period dynamic games in which a 2´2 game is played in each period. First, I characterize the conditions under which the spying player might or might not want to raise the other player’s suspicion. Then I find conditions under which the spying player plays dumb in the perfect Bayesian equilibrium. I design and conduct a laboratory experiment to test the theoretical predictions. The spying players rarely play dumb even when the theory predicts it. Data suggest that the lack of dumb playing might be because the other player’s deviations from “playing dumb” equilibria make playing dumb unprofitable.
 

Weekly Seminar: Ernst Fehr, “The Dynamics of Norm Formation and Norm Decay” (Thursday, September 6, 2018)

Ernst Fehr has been Professor of Microeconomics and Experimental Economics at the University of Zurich since 1994. He served as director of the Institute for Empirical Research in Economics and chairman of the Department of Economics at the University of Zurich from 1999 – 2015. He currently serves as director of the UBS International Center of Economics in Society. He has also been a Global Distinguished Professor at New York University since 2011 and was an affiliated faculty member of the Department of Economics at the Massachusetts Institute of Technology from 2003 to 2011. He is a former president of the Economic Science Association and of the European Economic Association, an honorary member of the American Academy of Arts and Sciences, and John Kenneth Galbraith Fellow of the American Academy of Political and Social Sciences.