Angela Sutan

Cheating and Loss Aversion: Do People Cheat More to Avoid a Loss?

Does the extent of cheating depend on a proper reference point? We use a real-effort matrix task that implements a two (gain versus loss frame) times two (monitored performance versus unmonitored performance) between-subjects design with 600 experimental participants to examine whether the extent of cheating is reference dependent. Self-reported performance in the unmonitored condition is significantly higher than actual performance in the monitored condition-a clear indication of cheating. However, the level of cheating is by far higher in the loss frame than in the gain frame under no monitoring. The fear of a loss seems to lead to more dishonest behavior than the lure of a gain.

The Impact of Envy-Related Behaviors on Development

Envy is a complex emotion that influences the behavior of envious and envied individuals. Because envy can imply ill will, discontent or dislike of the envied individual who possesses something that the envious individual desires, or aspiration to emulate the envied position, it can lead the envious individual to undertake costly efforts to reduce the gap between the envied situation and his own situation. The envious individual can seek either to damage or match the situation enjoyed by the envied individual. In return, the envied individual can adopt either envy-appeasing strategies or envy-arousing strategies. We argue that these costly envy-related behaviors impede or stimulate economic development.

Please do not pirate it, you will rob the poor! An experimental investigation on the effect of charitable donations on piracy

Producers in the recording industry frequently market products for which a part of the proceeds goes to charitable causes. We investigate whether a corporate pledge to donate a portion of profits to a charitable cause will decrease the extent to which customers illegally obtain that companys products. Donations to charitable causes may increase the moral intensity of piracy (robbing the poor rather than robbing the rich) and consequently may reduce the willingness to pirate. This rationale is empirically tested through a dual empirical strategy, that is, a market survey and a laboratory experiment. We show that market piracy decreases when a very low or very high donation mechanism is implemented. Nevertheless, for intermediate levels of transfer, piracy increases again.

Trust and Financial Trades: Lessons from an Investment Game Where Reciprocators can Hide Behind Probabilities

This paper shows that if a very small, exogenously given probability of terminating the exchange is introduced in an elementary investment game, more reciprocators will choose the defection strategy. Everything happens as if they “hide behind probabilities” in order to break the trust relationship. Investors do not alter their behavior in a significant way, at least not for a very small external risk. Financial assets all come with a predetermined and contractual probability that by the time when the buyer has to receive the reward for his investment, “bad luck” might have brought the asset value down to zero. In the light of the experimental findings, such trades would not provide a favorable environment for building trust.

How Can Positional Concerns Prevent the Adoption of Socially Desirable Innovations

We study the role of positional concerns in explaining the (non-) diffusion of profitable and environmentally friendly innovations in situations where there is no conventional prisoner dilemma. Based on anecdotal evidence from farming activities, we introduce the concept of negative positional goods, that is, goods that destroy status in a given reference group, and show how interactions between status concerns and profitability can lead to unexpected outcomes. Several policy implications are drawn.

Escaping the Zero‐Sum Game of Positional Races

Positional races are frequently described as zero‐sum games implying that winners are exactly offset by losers. From the social welfare viewpoint, these races are wasteful. We develop several mechanisms allowing individuals to cope with the zero sum nature of rank games and possibly increase their happiness. We provide evidence to support the relevance of these mechanisms in real world settings. Several policy implications are drawn.

Taking the Well-being of Future Generations Seriously : Do People Contribute More to Intra-temporal or Inter-temporal Public Goods?

We investigate the dynamics of cooperation in public good games when contributions to the public good are immediately redistributed across contributors (intra-temporal transfers) and when contributions to the public good by the current group are transferred over time to a future group (inter-temporal transfers). We show that people are more cooperative in inter-temporal contexts than in intra-temporal contexts. We also find that subjects invest more on average in public goods when they know in advance their inheritance from the past.

Why Do We Guess Better in Negative Feedback Situations

We here introduce a beauty contest game with negative feedback and interior equilibrium in a multi-period experiment. This game is isomorphic to classical BCG but fit economic situations such as crop production or professional investment better. The game is still being analysed from the eductive point of view and with respect to the attempt to establish a typology of players according to their depths of reasoning. Our main contribution to the understanding of this game is the formalization of the process by which the information is processed. Using the Shannon entropy criterion, we evaluated information and made a link between the Sperber analysis of reflective and intuitive beliefs and numerical psychological research (Dehaene, 1993). Information that players take into account in their choices is denoted useful information. As this depends on the exploitation of the strategy interval, it will be higher in BCG- than in BCG+ in the first iterations, because strategies are numbers that are naturally scanned several times. As argued by Sperber (1997), there is a point in the reasoning process starting from which reflective beliefs become intuitive. In order to determine the exact location of the specific point from which players in the BCG- can jump to the REE, we assume that sophisticated reasoning is costly. Therefore, an agent stops calculating at step k which is obtained by the intersection between his marginal cost function and his marginal benefit (information) function. However, there are individuals who are not able to reach that point, because their cognitive constraint is saturated beforehand. There are also individuals for whom the cognitive constraint is saturated for a value higher that k, but who stop at step k because, given the structure of the population, they can win the game at a smaller cost. Therefore, a guess in this game corresponds to the solution of the system comprising these two constraints. For our experiments, we found a depth of reasoning smaller than 3, which can, however, be optimal. Results show that the k-step thinking with k

DO WE NEED MORE TIME TO GIVE LESS? EXPERIMENTAL EVIDENCE FROM TUNISIA: Do We Need More Time to Give Less?

Using a laboratory dictator game in Tunisia, we investigate whether the donation level is influenced by the time allotted to take the giving decision. We found that when participants have more time to decide, they give less compared to a situation where they have less time to take their decision. Some policy and managerial implications are drawn.

Lying about Delegation

This paper reports results from a three-player variant of the ultimatum game in which the Proposer can delegate to a third party his decision regarding how to share his endowment with a Responder with a standard veto right. However, the Responder cannot verify whether the delegation is effective or the third party merely plays a “scapegoat” role while the decision is made by the Proposer himself. In this imperfect information setting, the Proposer can send an unverifiable message declaring his delegation strategy. The most interesting strategy is “false delegation”, in which the Proposer makes the decision but claims to have delegated it. In our sample, the recourse to false delegation is significant, and a significant number of potential Delegates accept serving in the scapegoat role. However, there are many honest Proposers, and 20% of all Delegates will refuse to be the accomplices of a dishonest Proposer. Responders tend to more readily accept poor offers in a setup that permits lying about delegation; the acceptance rate of the poor offer is the highest when Delegates can refuse the scapegoat role.