Lisa Bruttel

Finitely repeated prisoners’ dilemma experiments without a commonly known end

Using a symmetric two-player prisoners’ dilemma as base game, each player receives a signal for the number of rounds to be played with the same partner. One of these signals is the true number of rounds R while the other is R − 5. Thus both players know that the game has a finite end. They both know that the opponent knows this, but the finite end is not commonly known. As a consequence, both mutual defection and mutual cooperation until the second last round are subgame perfect equilibrium outcomes. We find experimental evidence that many players do in fact cooperate beyond their individual signal round.

Gender differences in the response to decision power and responsibility: Framing effects in a dictator game

This paper studies the effects of two different frames on decisions in a dictator game. Before making their allocation decision, dictators read a short text. Depending on the treatment, the text either emphasizes their decision power and freedom of choice or it stresses their responsibility for the receiver’s payoff. Including a control treatment without such a text, three treatments are conducted with a total of 207 dictators. Our results show a different reaction to these texts depending on the dictator’s gender. We find that only men react positively to a text that stresses their responsibility for the receiver, while only women seem to react positively to a text that emphasizes their decision power and freedom of choice.

The Limits of Buyer Power: Experimental Evidence

This paper studies the behavior of buyers confronting an incumbent monopolist and a potential market entrant in a repeated trade situation. In the experiment, buyers have two possibilities to demand lower prices in future trade periods. First, they can withhold demand. Second, they can voluntarily pay a higher price to the entrant in order to encourage future re-entry. Both these forms of buyer behavior occur in the experiment. They are less frequent when the number of buyers is large as opposed to small. A control treatment tests to what extent such behavior can be attributed to strategic motives.

Asymmetric voluntary cooperation: a repeated sequential best-shot experiment

This paper tests the robustness of voluntary cooperation in a sequential best shot game, a public good game in which the maximal contribution determines the level of public good provision. Thus, efficiency enhancing voluntary cooperation requires asymmetric behavior whose coordination is more difficult. Nevertheless, we find robust cooperation irrespective of treatment-specific institutional obstacles. To explain this finding, we distinguish three behavioral patterns aiming at both, voluntary cooperation and (immediate) payoff equality.

The Effects of Recommended Retail Prices on Consumer and Retailer Behaviour

This paper presents results from an experiment on the effects of recommended retail prices on consumer and retailer behaviour. We present evidence that recommended retail prices, despite their non†binding nature, influence consumers’ willingness to pay by setting a reference point. At a given price, consumers buy more the higher the recommended retail price is, and their demand drops at prices above the recommended retail price, even when it is entirely uninformative about the value of the product. Retailers in this study are subject to similar anchoring effects, but they do not anticipate consumers’ behaviour well and are thus not able to exploit their behavioural biases.

Richard H. Thaler — Wirtschaftsnobelpreisträger 2017

ZusammenfassungDer diesjährige Nobelpreisträger Richard H. Thaler ist einer breiteren Öffentlichkeit vor allem durch sein mit Cass R. Sunstein gemeinsam verfasstes Buch zum Nudging bekannt geworden. Tatsächlich hat er in den vergangenen 40 Jahren die Entwicklung der Verhaltensökonomie entscheidend mitgeprägt und vorangebracht. Thaler hat die Annahmen hinter dem Modell des Homo oeconomicus untersucht und die Abweichungen menschlichen Verhaltens von den Rationalitätsannahmen auf zwei wesentliche Ursachen zurückgeführt: kognitive Einschränkungen und Mängel bei der Selbstkontrolle. Neben den Rationalitätsannahmen beziehen sich seine Forschungen aber auch auf Überlegungen zur Grundhaltung von Wirtschaftssubjekten gegenüber anderen und deren Auswirkungen auf ihr wirtschaftliches Handeln.AbstractRichard H. Thaler was awarded this year’s Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel “for his contributions to behavioural economics”. He studied systematic departures of human behaviour from the standard “homo oeconomicus” assumption. His famous work on boundedly rational behaviour considers both cognitive limitations and limited self-control. The cognitive limitations he studied are in particular the endowment effect, i.e. the observation that individuals assign a higher value to an object if they possess it, and mental accounting, a collection of theories regarding how individuals think about money. Furthermore, he provided path-breaking evidence on the nature of social preferences, which laid the groundwork for the development of several widely used economic theories incorporating altruism, fairness and reciprocity.