Friederike Mengel

(Anti-) Coordination in Networks

We study (anti-) coordination problems in networks in a laboratory experiment. Partici- pants interact with their neighbours in a fixed network to play a bilateral (anti-) coordination game. Our main treatment variable is the extent to which players are heterogeneous in the number of connections (neighbors) they have. Other network characteristics are held constant across treatments. We find the following results. Heterogeneity in the number of connections dramatically improves the rate of successful coordination. In addition, even though there is a multiplicity of Nash equilibria theoretically, a very sharp selection is observed empirically: the most connected player can impose her preferred Nash equilibrium almost always and observed Nash equilibria are such that all links are coordinated. As a second treatment variation we let agents decide endogenously on the amount of information they would like to have and find that local (endogenous) information is equally efficient in ensuring successful coordination as full information. We provide an intuitive explanation of these facts which is supported by our data.

An experiment on learning in a multiple games environment

We study how players learn to make decisions if they face many different games. Games are drawn randomly from a set of either two or six games in each of 100 rounds. If either there are few games or if extensive summary information is provided (or both) convergence to the unique Nash equilibrium generally occurs. Otherwise this is not the case. We demonstrate that there are learning spillovers across games but participants learn to play strategically equivalent games in the same way. Our design and analysis allow us to distinguish between different sources of complexity and theoretical models of categorization.(This abstract was borrowed from another version of this item.)

Learning Across Games

This paper studies the learning process carried out by two agents who are involved in many games. As distinguishing all games can be too costly (require too much reasoning resources) agents might partition the set of all games into categories. Partitions of higher cardinality are more costly. A process of simultaneous learning of actions and partitions is presented and equilibrium partitions and action choices characterized. Learning across games can destabilize strict Nash equilibria even for arbitrarily small reasoning costs and even if players distinguish all the games at the stable point. The model is also able to explain experimental findings from the travelerʼs dilemma and deviations from subgame perfection in bargaining games.

Learning by (limited) forward looking players

A uniaxially oriented, polyolefin film is prepared by melt blending a mixture of a polyolefin, an inert filler, a processing aid such as calcium stearate, and optionally a stabilizer, maintaining the moisture level in the melt blend below 700 ppm, casting a film, and uniaxially stretching the film at least about 2 times its original casting dimensions in one direction until the film has a sufficient number of elongated, narrow shaped, microporous voids in order to create a CO2 and O2 permeance in the range of 5,000 to 10,000,000 cc/1002-atm-day. Such a film is used in a controlled atmosphere packaging container as a panel in a window for a controlled flow or flux of CO2 and O2 through its wall in an otherwise gas impermeable container.

Limited memory can be beneficial for the evolution of cooperation

In this study we analyze the effect of working memory capacity on the evolution of cooperation and show a case in which societies with strongly limited memory achieve higher levels of cooperation than societies with larger memory. Agents in our evolutionary model are arranged on a network and interact in a prisoners dilemma with their neighbors. They learn from their own experience and that of their neighbors in the network about the past behavior of others and use this information when making their choices. Each agent can only process information from her last h interactions. We show that if memory (h) is too short, cooperation does not emerge in the long run. A slight increase of memory length to around 5-10 periods, though, can lead to largely cooperative societies. Longer memory, on the other hand, is detrimental to cooperation in our model.

Extrapolation in games of coordination and dominance solvable games

We study extrapolation between games in a laboratory experiment. Participants in our experiment first play either the dominance solvable guessing game or a Coordination version of the guessing game for five rounds. Afterwards they play a 3x3 normal form game for ten rounds with random matching which is either a game solvable through iterated elimination of dominated strategies (IEDS), a pure Coordination game or a Coordination game with pareto ranked equilibria. We find strong evidence that participants do extrapolate between games. Playing a strategically different game hurts compared to the control treatment where no guessing game is played before and in fact impedes convergence to Nash equilibrium in both the 3x3 IEDS and the Coordination games. Playing a strategically similar game before leads to faster convergence to Nash equilibrium in the second game. In the Coordination games some participants try to use the first game as a Coordination device. Our design and results allow us to conclude that participants do not only learn about the population and/or successful actions, but that they are also able to learn structural properties of the games.

Growth and Inequality in Public Good Games

In a novel experimental design we study dynamic public good games in which wealth is allowed to accumulate. More precisely each agents income at the end of a period serves as her endowment in the following period. In this setting growth and inequality arise endogenously allowing us to address new questions regarding their interplay and effect on cooperation levels. We find that average cooperation levels in this setting are high (between 20-60% of endowments) and that amounts contributed do not decline over time. Introducing the possibility of punishment leads to lower group income, but less inequality within groups. In both treatments (with and w/o punishment) inequality and group income are positively correlated for poor groups (with below median income), but negatively correlated for rich groups (with above median income). There is very strong path dependence: inequality in early periods is strongly negatively correlated with group income in later periods. These results give new insights into why people cooperate and should make us rethink previous results from the literature on repeated public good games regarding the decay of cooperation in the absence of punishment.

Natural disasters and indicators of social cohesion

Do adversarial environmental conditions create social cohesion? We provide new answers to this question by exploiting spatial and temporal variation in exposure to earthquakes across Chile. Using a variety of methods and controlling for a number of socio-economic variables, we find that exposure to earthquakes has a positive effect on several indicators of social cohesion. Social cohesion increases after a big earthquake and slowly erodes in periods where environmental conditions are less adverse. Our results contribute to the current debate on whether and how environmental conditions shape formal and informal institutions.

On the evolution of coarse categories

We compare the evolutionary fitness of different cultures (or populations), where we think of culture as partitioning a set of decision situations into categories of situations treated the same. Information about optimal behavior in each category is passed on via a process of noisy cultural transmission. We show that coarse partitions (distinguishing less situations) can provide higher evolutionary fitness even if there are no explicit costs to holding finer partitions.

Common value elections with private information and informative priors: theory and experiments

We study efficiency and information aggregation in common value elections with contin-uous private signals and informative priors. We show that small elections are not generally efficient and that there are equilibria where some voters vote against their private signal even if it provides useful information and abstention is allowed. This is not the case in large elections, where the fraction of voters who vote against their private signal tends to zero. In an experiment, we then study how informativeness of priors and private signals impact efficiency and information aggregation in small elections. We find that there is a substantial amount of voting against the private signal. Moreover, while most experimental elections are efficient, we find that it is not generally the case that better private information leads to better decisions.