Håkan J. Holm

Gender Based Focal Points

The subjects behaved significantly more “hawkish” in an experimental battle of the sexes game when the co-player was a woman compared to when it was a man. Discrimination helped the parties to coordinate and increase the average earnings in the subject group of mixed sex, compared to the unisex groups.

Deciding for Others Reduces Loss Aversion

We study risk taking on behalf of others, both with and without potential losses. A large-scale incentivized experiment is conducted with subjects randomly drawn from the Danish population. On average, decision makers take the same risks for other people as for themselves when losses are excluded. In contrast, when losses are possible, decisions on behalf of others are more risky. Using structural estimation, we show that this increase in risk stems from a decrease in loss aversion when others are affected by their choices.

Entrepreneurs Under Uncertainty: An Economic Experiment in China

This study reports findings from the first large-scale experiment investigating whether entrepreneurs differ from other people in their willingness to expose themselves to various forms of uncertainty. A stratified random sample of 700 chief executive officers from the Yangzi delta region in China is compared to 200 control group members. Our findings suggest that in economic decisions, entrepreneurs are more willing to accept strategic uncertainty related to multilateral competition and trust. However, entrepreneurs do not differ from ordinary people when it comes to nonstrategic forms of uncertainty, such as risk and ambiguity. This paper was accepted by John List, behavioral economics.

Risk Aversion Relates to Cognitive Ability: Fact or Fiction?

Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation might be spurious. We recruit a large subject pool drawn from the general Danish population for our experiment. By presenting subjects with choice tasks that vary the bias induced by random choices, we are able to generate both negative and positive correlations between risk aversion and cognitive ability. Structural estimation allowing for heterogeneity of noise yields no significant relation between risk aversion and cognitive ability. Our results suggest that cognitive ability is related to random decision making rather than to risk preferences.

Transparency preference and economic behavior

It is shown that decision makers guided by Popperian epistemology will have a preference for transparency, even in situations where standard economic theory provides no rationale for such a preference. This provides a Popperian resolution of the Ellsberg paradox, and a rationale for suspicion in experiments as well as in economic life.

Genetic information and investment in human capital

In a game of incomplete information we analyze the consequences of giving an employer access to imperfect genetic information about his employees. The employer chooses whether to invest in the employee and the employee chooses a life style. We derive the condition for markets of information services to exist and the conditions for when it is beneficial to the various parties. In one specification of the game, the mere introduction of the information service may change the employees choice of health behavior, which means that the value of genetic information may be negative to the employer.

Speech is Silver; Silence is Golden

This paper experimentally investigates free-riding behavior on communication cost in a coordination game and finds strong indications of such free-riding. Firstly, the subjects wait for others to send a message when communication is costly, which does not happen when communication is costless. Secondly, the proportion of games where no communication or one-way communication takes place is much higher when communication is costly compared to when it is free.

Double-blind in light of the internet: A note on author anonymity

This paper analyses the credibility of author anonymity that is provided by a double-blind review process. It is argued that authors have strong incentives to disseminate information about their papers before publication. A sample from two economics journals, both using double-blind review processes, provides evidence that author-revealing information of most accepted papers is available on the Internet before the review process is finished. The difficulty and cost of identifying authors of unpublished manuscripts from which author identity has been stripped, were examined in an experiment where subjects were paid according to their identification performance. The vast majority of authors could be identified within 60Â s.

Collective Trust Behavior

This paper investigates trust in situations, where decision-makers are large groups and the decision-mechanism is collective, by developing a game to study trust behavior. Theories from behavioral economics and psychology suggest that trust in such situations may differ from individual trust. Experimental results here reveal a large difference in trust but not in trustworthiness between the individual and collective setting. Furthermore, an artefactual field experiment captures the determinants of collective trust behavior among two cohorts in the Swedish population. One result is that beliefs about the other and the own group are strongly associated with collective trustworthiness and trust behavior.

Can Economics Explain Where All-Inclusive Deals are Offered?

This paper investigates why all-inclusive travel packages are offered at some hotels but not at others. Using the theory of transaction cost, it is argued that all-inclusive contracts mitigate a hold-up problem and that the severity of this problem varies with regard to the hotels distance from the resort centre. This hypothesis is tested empirically against data from 3,798 hotel offers and is strongly supported. Additionally, some country-specific mechanisms related to the general price level and the degree of corruption are analysed. Countries with all-inclusive offers are characterized by a low price level and high corruption.