Jonathan H.W. Tan

Which is the More Predictable Gender? Public Good Contribution and Personality

Personality questionnaires have been used and can be used to predict behavior in economic settings. Using two sets of state-of-the-art measures from personality psychology (the Big Six) and social psychology (Social Value Orientation), we find that the behavior of men is predictable in the first half of a public good contribution experiment, whereas that of women is not. This result agrees with the reinterpretation of Carol Gilligans (1982) view that women are more sensitive to the context in which decisions are made.

On the Beliefs Off the Path: Equilibrium Refinement Due to Quantal Response and Level-K

This paper studies the relevance of equilibrium and nonequilibrium explanations of behavior, with respects to equilibrium refinement, as players gain experience. We investigate this experimentally using an incomplete information sequential move game with heterogeneous preferences and multiple perfect equilibria. Only the limit point of quantal response (the limiting logit equilibrium), and alternatively that of level-k reasoning (extensive form rationalizability), restricts beliefs off the equilibrium path. Both concepts converge to the same unique equilibrium, but the predictions differ prior to convergence. We show that with experience of repeated play in relatively constant environments, subjects approach equilibrium via the quantal response learning path. With experience spanning also across relatively novel environments, though, level-k reasoning tends to dominate.

Game Harmony: A Behavioral Approach to Predicting Cooperation in Games

Game harmony describes how harmonious (non-conflictual) or disharmonious (conflictual) the interests of players are in a game, as embodied in the game’s raw payoffs. It departs from the traditional game-theoretic approach in that it is a non-equilibrium behavioral approach which can be psychologically founded. We experimentally test the predictive power of basic game harmony measures on a variety of well-known 2×2 games and randomly-generated 2×2 and 3×3 generic games. Our findings support its all rounded predictive power. Game harmony provides an alternative tool that is both powerful and parsimonious, as it does not require information on a subject’s degree of rationality, social preferences, beliefs and perceptions.

The Enthusiastic Few, Peer Effects and Entrapping Bandwagons

We study an economic setting where, due to payoff externalities such as peer effects or network externalities, the enthusiasm of the few entraps others to join an activity or club. Our experimental results largely support the model and its theoretical prediction of entrapment. Subjects choose to join 81% of the time. Overall 89% of the observations are consistent with quantal response equilibrium play. Entrapment indeed occurs; aggregate welfare is lower in most treatments than if no one were to join and, if welfare is measured purely in terms of individual payoffs, also lower than if everyone were to join.