Matteo Ploner

On the Social Dimension of Time and Risk Preferences: An Experimental Study

We report on an experiment designed to explore the interrelation of other-regarding concerns with attitudes towards risk and delay when the latter have a social dimension, i.e., pertain to ones own and another persons payoffs. For this sake, we compare evaluations of several prospects, each of which allocates either certain or risky and either immediate or delayed payoffs to the actor and to another participant. We find that individuals are mainly self-oriented as to social allocation of risk and delay, although they are other-regarding with respect to expected payoff levels.

Is Satisficing Absorbable? An Experimental Study

We experimentally investigate whether the satisficing approach is absorbable, that is, whether it still applies when participants become aware of it. In a setting where an investor decides between a riskless bond and either one or two risky assets, we familiarize participants with the satisficing calculus applied to specific portfolio selection tasks. After experimenting with this calculus repeatedly, participants can either continue using it or select their portfolio freely. The results reveal some absorbability of the satisficing approach in the simpler two-state setting, whereas more complexity renders the satisficing heuristics more difficult and their absorption less likely.

Community projects: An experimental analysis of a fair implementation process

We define and experimentally test a public provision mechanism that meets three basic ethical requirements and allows community members to influence, via monetary bids, which of several projects is implemented. For each project, participants are assigned personal values, which can be positive or negative. We provide either public or private information about personal values. This produces two distinct public provision games, which are experimentally implemented and analyzed for various projects. In spite of the complex experimental task, participants do not rely on bidding their own personal values as an obvious simple heuristic whose general acceptance would result in fair and efficient outcomes. Rather, they rely on strategic underbidding. Although underbidding is affected by projects’ characteristics, the provision mechanism mostly leads to the implementation of the most efficient project.

The Impact of Payoff Interdependence on Trust and Trustworthiness

Abstract In one-shot investment games where each player’s payoff is a convex combination of own and other’s profit, we measure trust by the amount given to the trustee and trustworthiness by the amount returned to the trustor by the trustee. Does the degree of payoff interdependence increase both trust and trustworthiness or one but not the other or neither of them? According to our experimental data, trust remains unaffected by the extent of interdependence whereas trustworthiness reacts positively to it.

Are conditional cooperators willing to forgo efficiency gains? Evidence from a public goods experiment

We use a two-person public goods experiment to investigate how much agents value conditional cooperation when symmetric positive contributions entail efficiency losses. Asymmetric marginal per capita returns allow only the high-productivity player to increase group payoffs when contributing positive amounts. Asymmetric contributions, however, yield unequal individual payoffs. To assess a priori cooperative preferences, we measure individual ‘value-orientations’ by means of the decomposed game technique. We find that contributions remain negligible throughout the experiment, suggesting that people are not willing to contribute positive amounts if this may lead to damage efficiency.

Let Me See You! A Video Experiment on the Social Dimension of Risk Preferences

Previous studies have shown that decision makers are less other-regarding when their own payoff is risky than when it is sure. Empirical observations also indicate that people care more about identifiable than unidentifiable others. In this paper, we report on an experiment designed to explore whether rendering the other identifiable - via a short speechless video - can affect the relation between other-regarding concerns and attitudes toward social risk. For this sake, we elicit risk attitudes under two treatments differing in whether the actor can see the other or not. We find that seeing the other does not affect behavior significantly: regardless of the treatment, individuals are mainly self-oriented as to social allocation of risk, though they are other-regarding with respect to expected payoff levels.

Mentally perceiving how means achieve ends

Mental modeling ranges from pure categorization, for example, of linguistic concepts, to cognitive representation of complex decision tasks involving stochastic uncertainty and strategic interaction. In the tradition of consequentialistic bounded rationality, we assume to choose among choice alternatives by anticipating their likely implications. Such deliberation basically requires causal relationships linking own choices (means) and determinants beyond own control, such as chance events and choices by others (scenarios), to the relevant outcome variables (ends). We suggest a general framework of mental representation whose aspects are illustrated for stochastic choice and strategic interaction tasks. We also discuss how this framework can be experimentally implemented, showing how experimental research can shed light on mental modeling and—more generally—cognitive processes, in addition to eliciting the usual choice data.

Motives of sanctioning: Equity and emotions in a public good experiment with punishment

We study conditional cooperation based on a sequential two-person linear public good game in which a trusting first contributor can be exploited by a second contributor. After playing this game the first contributor is allowed to punish the second contributor. The consequences of sanctioning depend on the treatment: whereas punishment can reduce inequality in one treatment, it only creates another inequality in the other. To capture the effect of delay on punishment both treatments are run once with immediate and once with delayed punishment. Moreover, to investigate the effect of pure voice, all four treatments are also run in a virtual condition with no monetary consequences of punishment. Results show the emergence across all conditions of a strong norm of conditional cooperation. Punishment is generally low, it is higher when not delayed and it is not used to reduce inequality in payoffs. The main motive of sanctioning appears to be the need to punish a violation of the reciprocity norm, irrespective of monetary consequences.

Reacting to Unfairness: Group Identity and Dishonest Behavior

We experimentally investigate whether individuals are more likely to engage in dishonest behavior after having experienced unfairness perpetrated by an individual with a salient group identity. Two individuals generate an endowment together, but only one can decide how to share it. They either share the same group identity or have distinct group identities. Then, they approach a task in which they can opportunistically engage in dishonest behavior. Our results show that when individuals share the same group identity, unfair distributive decisions do not trigger a dishonest reaction. In contrast, when different group identities coexist, dishonest behavior is observed as a reaction to unfairness.

Buying and Selling Risk -- An Experiment Investigating Evaluation Asymmetries

Experimental studies of the WTP-WTA gap avoid social trading by implementing an incentive compatible mechanism for each individual trader. We compare a traditional random price mechanism and a novel elicitation mechanism preserving social trading, without sacrificing mutual incentive compatibility. Furthermore, we focus on risky goods - binary monetary lotteries - for which asymmetries in evaluations are more robust with respect to experimental procedures. For both elicitation mechanisms, the usual asymmetry in evaluation by sellers and buyers is observed. An econometric estimation sheds new light on its causes: potential buyers are over-pessimistic and systematically underweight the probability of a good outcome.