Matthias Sutter

Deception Through Telling the Truth?! Experimental Evidence From Individuals and Teams

Informational asymmetries abound in economic decision making and often provide an incentive for deception through telling a lie or misrepresenting information. In this paper I use a cheap-talk sender-receiver experiment to show that telling the truth should be classified as deception too if the sender chooses the true message with the expectation that the receiver will not follow the sender?s (true) message. The experimental data reveal a large degree of ?sophisticated? deception through telling the truth. The robustness of my broader definition of deception is confirmed in an experimental treatment where teams make decisions.

Communication, cooperation and collusion in team tournaments--An experimental study

We study the effects of communication in an experimental tournament between teams. When teams, rather than individuals, compete for a prize there is a need for intra-team coordination in order to win the inter-team competition. Introducing communication in such situations may have ambiguous effects on effort choices. Communication within teams may promote higher efforts by mitigating the internal free-rider problem. Communication between competing teams may lead to collusion, thereby reducing efforts. In our experiment we control the channels of communication by letting subjects communicate through an electronic chat. We find, indeed, that communication within teams increases efforts and communication between teams reduces efforts. We use team members’ dialogues to explain these effects of communication, and check the robustness of our results.

Bargaining outside the lab – a newspaper experiment of a three-person ultimatum game

5,132 readers of the German weekly, Die Zeit, participated in a three-person bargaining experiment. In our data analysis we focus on (1) the influence of age, gender, profession and medium chosen for participation and (2) the external validity of student behaviour (inside and outside the lab). We find that older participants and women care more about equal distributions and that Internet users are more self-regarding than those using mail or fax. Decisions made by students in the lab are rather similar to those made by participants in the newspaper experiment, indicating a high degree of external validity of student data.

Leading by Example in a Public Goods Experiment with Heterogeneity and Incomplete Information.

We study the effects of leadership on the private provision of a public good when group members are heterogeneously endowed. Leadership is implemented as a sequential public goods game where one group member contributes first and all the others follow. Our results show that the presence of a leader increases average contribution levels but less so than in case of homogeneous endowments. Leadership is almost ineffective, though, if participants do not know the distribution of endowments. Granting the leaders exclusion power does not lead to significantly higher contributions.

Individual Behavior and Group Membership: Comment

Charness et al. (2007b) have shown that group membership has a strong effect on individual decisions in strategic games when group membership is salient through payoff commonality. In this comment, I show that their findings also apply to nonstrategic decisions, even when no outgroup exists, and I relate the effects of group membership on individual decisions to joint decision making in teams. I find in an investment experiment that individual decisions with salient group membership are largely the same as team decisions. This finding bridges the literature on team decision making and on group membership effects. (JEL D71, D82, Z13)

Causes, consequences, and cures of myopic loss aversion: an experimental investigation

We examine in an experiment the causes, consequences and possible cures of myopic loss aversion (MLA) for investment behaviour under risk. We find that both, investment horizons and feedback frequency contribute almost equally to the effects of MLA. Longer investment horizons and less frequent feedback lead to higher investments. However, when given the choice, subjects prefer on average shorter investment horizons and more frequent feedback. Exploiting the status quo bias by setting a long investment horizon or low feedback frequency as a default turns out to be a successful behavioural intervention that increases investment levels.

Affirmative action policies promote women and do not harm efficiency in the laboratory.

Girl Power The potential of affirmative action policies to reduce overall outcomes because of lower individual performance has been discussed widely and at length. But do quotas or preferential treatment of applicants alter the pool of candidates? Balafoutas and Sutter (p. 579; see the Perspective by Villeval) used an existing laboratory-based task to assess the change in composition of winning candidates and the overall outcome as a function of three affirmative action policies. Policies designed to encourage more women to enter a competitive environment served to recruit enough high-performing individuals to ensure that the efficiency in performing the task was preserved. Beaman et al. (p. 582, published online 12 January) examined the effects of a constitutionally mandated reservation of village-council and council-leader positions for women in West Bengal after two election cycles (1998 and 2003). The program appeared to narrow the gender gap in aspirations of parents for their children and of children for themselves; in addition, teenage girls spent more time in school and less on household chores. Beliefs and attitudes changed only after the second set of elections—that is, after a longer exposure to female role models—complementing the more rapid policy changes instituted by women council leaders after the first round of elections. Increasing the representation of competition-averse individuals does not alter overall output. Gender differences in choosing to enter competitions are one source of unequal labor market outcomes concerning wages and promotions. Given that studying the effects of policy interventions to support women is difficult with field data because of measurement problems and potential lack of control, we evaluated, in a set of controlled laboratory experiments, four interventions: quotas, where one of two winners of a competition must be female; two variants of preferential treatment, where a fixed increment is added to women’s performance; and repetition of the competition, where a second competition takes place if no woman is among the winners. Compared with no intervention, all interventions encourage women to enter competitions more often, and performance is at least equally good, both during and after the competition.

Fairness in the Mail and Opportunism in the Internet: A Newspaper Experiment on Ultimatum Bargaining

Abstract On 11 May 2001, readers of the Berliner Zeitung were invited to participate in an ultimatum bargaining experiment played in the strategy vector mode: each participant chooses not only how much (s)he demands of the DM1,000 pie but also which of the nine possible offers of DM100, 200,y, 900 (s)he would accept or reject. In addition, participants were asked to predict the most frequent type of behavior. Three randomly selected proposer-responder pairs were rewarded according to the rules of ultimatum bargaining and three randomly chosen participants of those who predicted the most frequent type of behavior received a prize of DM500. Decisions could be submitted by mail, fax or via the internet. Behavior is described, statistically analyzed and compared to the usual laboratory ultimatum bargaining results.

Psychological Pressure in Competitive Environments: New Evidence from Randomized Natural Experiments

Dynamic competitive settings may create psychological pressure when feedback about the performance of competitors is provided before the end of the competition. Such psychological pressure could produce a first-mover advantage, despite a priori equal winning probabilities. Using data from a randomized natural experiment-penalty shootouts in soccer-we reexamine evidence by Apesteguia and Palacios-Huerta [Apesteguia J, Palacios-Huerta I (2010) Psychological pressure in competitive environments: Evidence from a randomized natural experiment. Amer. Econom. Rev. 100(5):2548-2564]. They report a 21-percentage-point advantage for first movers over second movers in terms of winning probabilities. Extending their sample of 129 shootouts to 540, we fail to detect any significant first-mover advantage. Our results are fully consistent with recent evidence from other sports contests.

Competition Between Organizational Groups: Its Impact on Altruistic and Antisocial Motivations

Firms are often organized into groups. Group membership has been shown empirically to have positive effects, in the form of increased prosocial behavior toward in-group members. This includes an enhanced willingness to engage in altruistic punishment of inefficient defection. Our paper provides evidence of a dark side of group membership. In the presence of cues of competition between groups, a taste for harming the out-group emerges: punishment ceases to serve a norm enforcement function, and instead, out-group members are punished harder and regardless of whether they cooperate or defect. Our results point to a mechanism that might help explain previous mixed results on the social value of punishment, and they contribute to understanding the sources of conflict between groups. They also point to an important trade-off for firms: introducing competition enhances within-group efficiency but also generates costly between-group conflict. This paper was accepted by Teck Ho, decision analysis.