Ernesto Reuben

Enforcement of Contribution Norms in Public Good Games with Heterogeneous Populations

Economic and social interaction takes place between individuals with heterogeneous characteristics. We investigate experimentally the emergence and informal enforcement of different contribution norms to a public good in homogeneous and different heterogeneous groups. When punishment is not allowed all groups converge towards free-riding. With punishment, contributions increase and differ distinctly across groups and individuals with different induced characteristics. We show econometrically that these differences are not accidentally but enforced by punishment. The enforced contribution norms are related to fairness ideas of equity regarding the contributions but not regarding the earnings. Individuals with different characteristics tacitly agree on the norm to be enforced, even if this leads to large payoff differences. Our results also emphasize the role of details of the environment that may alter focal contribution norms in an important way.

How stereotypes impair women’s careers in science

Significance Does discrimination contribute to the low percentage of women in mathematics and science careers? We designed an experiment to isolate discrimination’s potential effect. Without provision of information about candidates other than their appearance, men are twice more likely to be hired for a mathematical task than women. If ability is self-reported, women still are discriminated against, because employers do not fully account for men’s tendency to boast about performance. Providing full information about candidates’ past performance reduces discrimination but does not eliminate it. We show that implicit stereotypes (as measured by the Implicit Association Test) predict not only the initial bias in beliefs but also the suboptimal updating of gender-related expectations when performance-related information comes from the subjects themselves. Women outnumber men in undergraduate enrollments, but they are much less likely than men to major in mathematics or science or to choose a profession in these fields. This outcome often is attributed to the effects of negative sex-based stereotypes. We studied the effect of such stereotypes in an experimental market, where subjects were hired to perform an arithmetic task that, on average, both genders perform equally well. We find that without any information other than a candidate’s appearance (which makes sex clear), both male and female subjects are twice more likely to hire a man than a woman. The discrimination survives if performance on the arithmetic task is self-reported, because men tend to boast about their performance, whereas women generally underreport it. The discrimination is reduced, but not eliminated, by providing full information about previous performance on the task. By using the Implicit Association Test, we show that implicit stereotypes are responsible for the initial average bias in sex-related beliefs and for a bias in updating expectations when performance information is self-reported. That is, employers biased against women are less likely to take into account the fact that men, on average, boast more than women about their future performance, leading to suboptimal hiring choices that remain biased in favor of men.

Competition, Cooperation, and Collective Choice

The ability of groups to implement efficiency-enhancing institutions is emerging as a central theme of research in economics. This paper explores voting on a scheme of intergroup competition which facilitates cooperation in a social dilemma situation. Experimental results show that the competitive scheme fosters cooperation. Competition is popular but the electoral outcome depends strongly on specific voting rules of institutional choice. If the majority decides, competition is almost always adopted. If likely losers from competition have veto power, it is often not, and substantial gains in efficiency are foregone.

On the Escalation and De-Escalation of Conflict

We introduce three variations of the Hirshleifer-Skaperdas conflict game to study experimentally the effects of post-conflict behavior and repeated interaction on the allocation of effort between production and appropriation. Without repeated interaction, destruction of resources by defeated players can lead to lower appropriative efforts and higher overall efficiency. With repeated interaction, appropriative efforts are considerably reduced because some groups manage to avoid fighting altogether, often after substantial initial conflict. To attain peace, players must first engage in costly signaling by making themselves vulnerable and by forgoing the possibility to appropriate the resources of defeated opponents.

Taste for Competition and the Gender Gap Among Young Business Professionals

Using an incentivized measure of test for competition, this paper investigates whether this taste explains subsequent gender differences in earnings and industry choice in a sample of high-ability MBA graduates. We find that “competitive” individuals earn 9% more than their less competitive counterparts do. Moreover, gender differences in taste for competition explain around 10% of the overall gender gap. We also find that competitive individuals are more likely to work in high-paying industries nine years later, which suggests that the relation between taste for competition and earnings persists in the long run. Lastly, we find that the effect of taste for competition emerges over time when MBAs and firms interact with each other.

Redistributive Politics and Market Efficiency: An Experimental Study

We study the interaction between competitive markets that produce large but unequally distributed welfare gains and elections through which the poor majority can redistribute income away from the rich minority. In our simple laboratory democracy, subjects first earn their income by trading in a double auction market and thereafter vote on redistributive policies in two-candidate elections. In addition, in one of the treatments subjects can attempt to influence the candidates’ policy choices by transferring money to them. We observe very high levels of redistribution – even when transfers to candidates are possible – with little effect on market efficiency. Overall, the experimental results are explained by our equilibrium predictions.

Human cooperation by lethal group competition

Why humans are prone to cooperate puzzles biologists, psychologists and economists alike. Between-group conflict has been hypothesized to drive within-group cooperation. However, such conflicts did not have lasting effects in laboratory experiments, because they were about luxury goods, not needed for survival (“looting”). Here, we find within-group cooperation to last when between-group conflict is implemented as “all-out war” (eliminating the weakest groups). Human subjects invested in helping group members to avoid having the lowest collective pay-off, whereas they failed to cooperate in control treatments with random group elimination or with no subdivision in groups. When the game was repeated, experience was found to promote helping. Thus, not within-group interactions alone, not random group elimination, but pay-off-dependent group elimination was found to drive within-group cooperation in our experiment. We suggest that some forms of human cooperation are maintained by multi-level selection: reciprocity within groups and lethal competition among groups acting together.

Everyone is a Winner: Promoting Cooperation through Non-Rival Intergroup Competition

In this paper, we study the effectiveness of intergroup competition in promoting cooperative behavior. We focus on intergroup competition that is non-rival in the sense that everyone can be a winner. This type of competition does not give groups an incentive to outcompete others. However, in spite of this fact, we find that intergroup competition produces a universal increase in cooperation. Furthermore, in settings where there are strong incentives to compete, intergroup competition benefits a majority of individuals.

Can We Teach Emotional Intelligence

We conduct a field experiment to test whether (and how) emotional intelligence can be taught effectively in a short course. We randomly assign MBA students to an emotional intelligence course, a resiliency course, and a “placebo” course. We compare their emotional intelligences, as measured by the MSCEIT, before and after the sixteen-hour course. We find that students in the emotional intelligence course increase their MSCEIT score by 5 standard score points, students in the resiliency course by 4 standard score points, while students in the placebo course show no change. Furthermore, in the emotional intelligence course this improvement is positively related to class attendance. Students who never missed class increase their MSCEIT score by 10 standard score points.

Conditional Cooperation: Disentangling Strategic from Non-Strategic Motivations

We use a novel experimental design to examine the role of reputational concerns in explaining conditional cooperation in social dilemmas. By using the strategy method in a repeated sequential prisoners’ dilemma in which the probabilistic end is known, we can distinguish between strategically and non-strategically motivated cooperation. Second movers who are strong reciprocators ought to conditionally cooperate with first movers irrespective of whether the game continues or not. In contrast, strategically motivated second movers conditionally cooperate only if the game continues and they otherwise defect. Experimental results, with two different subject pools, indicate reputation building is used around 30% of the time, which accounts for between 50% and 75% of all realized cooperative actions. The percentage of strong reciprocators varied between 6% to 23%.