Ananish Chaudhuri

Social Learning and Norms in a Public Goods Experiment with Inter-Generational Advice

We adopt an inter-generational approach to the public goods game where one generation of subjects leave advice for the succeeding generation via free form messages. Such advice can be private knowledge (advice left by one player in generation t is given only to her immediate successor in generation t+1), almost common knowledge (advice left by players of generation t is made available to all members of generation t+1) and common knowledge (where the advice from the preceding generation is not only made public but also read aloud by the experimenter). We find that when advice is common knowledge it generates a process of social learning and norm creation that leads to high contributions over time and also mitigates problems of free riding. Such high contributions are sustained by advice that is generally exhortative, suggesting high contributions, which in turn create optimistic beliefs, especially among conditional co-operators, about the contributions to be made by other subjects. Our results suggest that socially connected communities may be able to achieve high contributions to a public good even in the absence of any punishment opportunities of norm violators.

Do Attitudes Towards Corruption Differ Across Cultures? Experimental Evidence from Australia, India, Indonesia andSingapore

This paper examines cultural differences in attitudes towards corruption by analysing individual-decision making in a corrupt experimental environment. Attitudes towards corruption play a critical role in the persistence of corruption. Our experiments differentiate between the incentives to engage in corrupt behaviour and the incentives to punish corrupt behaviour and allow us to explore whether, in environments characterized by lower levels of corruption, there is both a lower propensity to engage in corrupt behaviour and a higher propensity to punish corrupt behaviour. Based on experiments run in Australia (Melbourne), India (Delhi), Indonesia (Jakarta) and Singapore, we find that there is more variation in the propensities to punish corrupt behaviour than in the propensities to engage in corrupt behaviour across cultures. The results reveal that the subjects in India exhibit a higher tolerance towards corruption than the subjects in Australia while the subjects in Indonesia behave similarly to those in Australia. The subjects in Singapore have a higher propensity to engage in corruption than the subjects in Australia. We also vary our experimental design to examine the impact of a more effective punishment system and the effect of the perceived cost of bribery.

Gender differences in trust and reciprocity in repeated gift exchange games

We explore gender differences in trust and reciprocity using the Berg et al. (1995) trust game and the Fehr et al. (1997) gift exchange game. Our study differs from previous ones in that subjects play the stage game repeatedly with random re-matching of players. In the trust game, contrary to prior studies that report men are more trusting, we find no strong gender differences in trust, although we corroborate prior findings that women are more reciprocal. In the gift exchange game, we again find no significant gender differences in trust, but women appear to be less reciprocal than men.

The Role of Framing, Inequity and History in a Corruption Game: Some Experimental Evidence

We investigate the role of framing, inequity in initial endowments and history in shaping behavior in a corrupt transaction by extending the one-shot bribery game introduced by Cameron et al. (2009) to a repeated game setting. We find that the use of loaded language significantly reduces the incidence of bribery and increases the level of punishment. Punishment of bribery leads to reduced bribery in future. The evidence suggests that this game captures essential features of a corrupt transaction, over and above any sentiments of inequity aversion or negative reciprocity However, showing subjects the history of past play has little effect on the level of corruption.

Recent Advances in Experimental Studies of Social Dilemma Games

I provide a broad overview of the findings reported in the articles submitted for this special volume on experimental studies of social dilemma problems. I start by providing a synopsis of where current research stands on this topic. Then I go on to discuss the specific papers and how those papers extend our knowledge in this area and add value to the current state of the art.

Reflections of a journal editor

This is my last issue as the editor of this journal. From 2011 the editorial reins of this journal will pass on to the capable hands of Professor Mark Holmes of the University of Waikato. I am sure that the journal will continue to thrive under his leadership. In spite of the progress we have made in the last few years, a number of significant challenges remain and I wish Mark all the very best. I have had an interesting and instructive four years at the helm of this journal. This has been a time for significant changes. During this period we have found a professional publisher in Taylor & Francis, which currently publishes the journal under its most well-known imprint, Routledge. We have moved from two issue per year to three and hope to move to a steady-state of four issues per year in the near future. We have adopted the on-line Manuscript Central software for article submissions and refereeing. This has streamlined and quickened the entire process. All the articles, starting from the first issue in 1966, are now available on-line. Current issues are published on-line almost a month prior to being published in hard copy. The journal has a new cover-design. Finally, there has been a spectacular improvement in the journal’s profile and an upward movement in its ranking on various lists. It would be remiss of me if I did not thank the people who put their faith and the journal’s fate in my hands. These include Mary Hedges, Stephen Knowles, Kirdan Lees, Dorian Owen, Grant Scobie and Frank Scrimgeour; especially Frank, who handed over the job to a man in very low spirits with a complicated compound fracture in his right leg. I am particularly thankful to Leonie Pope (of the University of Waikato) who did all our typesetting prior to our move to Routledge and did so with infinite patience and fortitude. Dan Trinder, Philip Angell and Alec Dubber at Routledge’s London office agreed to take on the journal when other publishers passed. They have been tremendously supportive and have gone to great lengths to promote and publicize the journal. Rachael Lamney has been unstinting with her time in teaching me and others how to use the editorial software. Catherine Raw at Taylor & Francis’s Melbourne office did a superb job of handling all aspects of the journal’s production, and with Catherine now gone, Sianan Healy brings the same conscientiousness and dedication to the job. A large number of international scholars have devoted time and energy to guiding the journal by agreeing to serve on the journal’s editorial board. And a number of young economists have put in a lot of hard yards by handling papers for the journal as associate editors. New Zealand Economic Papers Vol. 44, No. 3, December 2010, 211–215

On the long-run efficacy of punishments and recommendations in a laboratory public goods game

We use decision-making experiments with human participants to study cooperation in a laboratory public goods game. Such games pose a conflict between cooperating, which is socially optimal and free-riding, which promotes individual self-interest. Prior research emphasizes the need for de-centralized peer-to-peer punishments as an evolutionarily stable response to the problem of free-riding, especially where interactions occur over long horizons. We show that a simple exhortative message appealing to participants’ goodwill can achieve high rates of cooperation in social dilemmas played over many rounds, even in the absence of punishments for free-riding.

The Darwin economy

The idea that competition and the consequent creative destruction are fundamental to the success and indeed the very existence of our market system is a truism in economics. Under this view, competition leads to better decision making and greater efficiency; the firms that excel, prosper; the rest perish. However, as economists we also know the limits of competition and the fact that markets do fail, at times due to the presence of externalities and public goods. But what if there is a cause of market failure rooted in the very nature of the competition that characterizes a substantial amount of contemporary economic transactions? What if the nature of the competition that is routinely played out in the present day market-place has a very different flavor to it and resembles more the Darwinian struggle of the animal world, where mutations that confer individual benefits can be detrimental to the group as a whole? This is the fundamental question posed by Robert Frank is his new book The Darwin economy. In this book, Frank connects two inter-linked arguments in order to confront the economic maladies plaguing the United States and the nature of the current discourse about how to address them. Given the economic and intellectual influence of the US, the debate has implications for the rest of the world. He argues that just as externalities and public goods can cause markets to fail, so can the supposedly Darwinian nature of the competition that characterizes the present day marketplace. The first idea is the one already alluded to above: the fact that much of the competition in contemporary economies bears greater resemblance to the Darwinian struggle for reproductive success than the creative destruction visualized by Smith or Schumpeter. The second point takes off from the first and relies on the mounting behavioral evidence that rather than absolute outcomes it is our relative standing visà-vis our peers that are equally, if not more, important. Taken together, these two facts can lead to persistent market failures along with other factors that often cause market failures, such as externalities and the presence of non-excludable and nonrival public goods. Frank uses the evolution of elephant seals as an example. Bulls of the species often weigh as much as six thousand pounds, more than five times as much as the average female. During the mating season pairs of mature bulls engage in ferocious and bloody battles with one another for the ultimate prize, access to females. But while being larger than rivals makes it easier to prevail in battles and thereby enjoy greater reproductive success, such prodigious size is a drawback for the bulls as a whole since it makes them much more vulnerable to predators such as sharks. If it were possible to reduce the size of each bull by half, everyone would be better off since it is relative and not absolute size that matters in gaining access to females and New Zealand Economic Papers Vol. 46, No. 2, August 2012, 185–188

To free ride or not to free ride? Role of patterning and feedback in the public goods game

We study a public goods game where subjects get feedback either continually or intermittently. We find that the intermittent feedback helps to mitigate problems of free riding because subjects in this treatment focus more on a string of choices rather than deciding on a case by case basis as in the continuous feedback treatment. JEL Classification: C72, C91, C92 PsycINFO Classification: 2343, 3020