Miguel A. Fonseca

Excess Capacity and Pricing in Bertrand-Edgeworth Markets: Experimental Evidence

We conduct experiments testing the relationship between excess capacity and pricing in repeated Bertrand-Edgeworth duopolies and triopolies. We systematically vary the experimental markets between low excess capacity (suggesting monopoly) and no capacity constraints (suggesting perfect competition). Controlling for the number of firms, higher production capacity leads to lower prices. However, the decline in prices as industry capacity rises is less pronounced than predicted by Nash equilibrium, and a model of myopic price adjustments has greater predictive power. With higher capacities, Edgeworth-cycle behavior becomes less pronounced, causing lower prices. Evidence for tacit collusion is limited and restricted to low-capacity duopolies.

Mergers, Asymmetries and Collusion: Experimental Evidence

We analyse the impact of mergers in experimental Bertrand-Edgeworth oligopolies. Treatment variables are the number of firms (two, three) and the distribution of industry capacity (symmetric, asymmetric). Consistent with a dynamic collusion model, we find that, even though they are more concentrated, asymmetric markets exhibit lower prices than symmetric markets with the same number of firms. Consistent with the static Nash prediction, duopolies charge higher prices than triopolies when we control for (a)symmetry. The overall impact of a merger (which comprises both fewer firms and an asymmetry) is anti-competitive but the price increase is not significant. Copyright

Endogenous timing in duopoly: experimental evidence

In this paper we experimentally investigate the extended game with observable delay of Hamilton and Slutsky (Games Econ.Beh., 1990).Firms bindingly announce a production period (one out of two periods) and then they produce in the announced sequence.Theory predicts simultaneous production in period one but we find that a substantial proportion of subjects choose the second period.

Working With Subgroup Identities to Build Organizational Identification and Support for Organizational Strategy: A Test of the ASPIRe Model

A growing body of evidence indicates that organizational identification underpins a range of important organizational outcomes. However, to date, the literature has provided little empirically grounded guidance for organizations that are trying to develop organizational identification among their employees. In this article, the authors aim to address this lacuna by testing the effectiveness of the ASPIRe (Actualizing Social and Personal Identity Resources) model—a model that specifies a sequence of structured activities designed to use subgroup identities as a platform for building organizational identification—in a bespoke workshop delivered to senior military health services personnel. As predicted by the ASPIRe model, participants reported increased levels of subgroup and organizational identification as a result of the workshop and were also more supportive of the organization’s strategy.

Religious fragmentation, social identity and cooperation: Evidence from an artefactual field experiment in India

We study the role of village-level religious fragmentation on intraand inter-group cooperation in India. We report on data on two-player Prisoners’ Dilemma and Stag Hunt experiments played by 516 Hindu and Muslim participants in rural India. Our treatments are the identity of the two players and the degree of village-level religious heterogeneity. In religiously-heterogeneous villages, cooperation rates in the Prisoners’ Dilemma, and to a lesser extent the Stag Hunt game, are higher when subjects of either religion play with a fellow in-group member than when they play with an out-group member or with someone whose identity is unknown. Interestingly, cooperation rates among people of the same religion are significantly lower in homogeneous villages than in fragmented villages in both games. JEL – classification numbers: C93, D03, H41

Do Behavioral Nudges in Prepopulated Tax Forms Affect Compliance? Experimental Evidence with Real Taxpayers

Defaults, in the form of prepopulated fields within the tax form, have been identified as potential mechanisms that tax authorities can use to reduce noncompliance. They achieve this by simplifying the process of filing taxes, thus reducing the scope for errors. However, defaults may increase the scope for evasion if set incorrectly. The authors report experimental data on the effect of correct and incorrect defaults. They find that prepopulating tax returns is a worthwhile policy only if it is done with highly reliable information. Setting default levels that underestimate taxpayers’ true tax liability leads to significant drops in compliance and tax revenue. The authors also study whether nudges that contain messages with descriptive norms about compliance can mitigate the adverse effect of prepopulated returns with incorrect values. Nudges that react to inputs from the taxpayer effectively raise compliance, whereas static nudges do not. This result demonstrates the limits to the applicability of nudges in a public policy sphere as well as possible adverse effects resulting from poor implementation.

Learning through Simultaneous Play: Evidence from Penny Auctions

This paper contributes to the emerging empirical literature on penny auctions, a particular type of all-pay auctions. We focus on the potential learning effects that bidders may experience over time but also (and particularly) across auctions as a result of their auction participation. Using detailed bid-level information, we find that, similarly to earlier literature, bidders suffer from a sunk cost fallacy, whereby their probability of dropping out of an auction is decreasing in the number of bids they have already placed in that auction. Although we do find that learning through repeated participation alleviates the sunk cost fallacy, participation in simultaneous penny auctions emerges as a much more effective learning mechanism, ultimately contributing toward bidders earning higher individual surpluses. [ABSTRACT FROM AUTHOR]

Efficiency Gains from Pre-Investment Resource Queues: Coordinating Investment Under Resource Uncertainty

Farmers make investments before knowing how much water they will receive later in the season. The costs of the inefficiently high or low investment that may result can be significant. A spot market that efficiently allocates water once quantity is realized is unlikely to coordinate simultaneous efficient investments earlier in the season. This paper compares pre-established queues to a post-investment-and-resource-realization market in coordinating investment whose productivity depends on having the uncertain resource.