Rachel Croson

Partners and strangers revisited

Abstract This study replicates Andreonis (Journal of Public Economics, 1988, 37, 291–304) public goods experiments. The results are not consistent with simple learning, but are compatible with strategies, unlike Andreonis original experiment. An investigation of the variance of contributions provides an organizing explanation of previous results.

Step returns in threshold public goods: A meta- and experimental analysis

One important determinant of voluntary contributions to public goods is the value of the public good relative to that of the forgone private good. Isaac, Walker and Thomas (1984) formalized this relation in the Marginal Per Capita Return (MPCR) and demonstrated its influence on the provision of linear public goods. This paper develops a parallel concept, in the context of a threshold public good, the Step Return (SR). After providing a meta-analysis of the effect of SR in previous experiments, we compare contributions in threshold public goods games with low, medium and high SRs. Results show that subjects respond to the SR in this setting just as they respond to the MPCR in the linear public goods setting: higher SRs lead to more contributions.

Information in ultimatum games: An experimental study

Abstract This study reports on an experiment using variations of the ultimatum game. The experiment controls the amount and type of information known to the responder in the game. In two treatments, she knows both the absolute (money) and relative (fairness) payoffs from an offer. In the other two, she knows either only the absolute or only the relative payoffs. The predictions of four models for these treatments are tested: subgame-perfection, Boltons comparative equilibrium, Ochs and Roths absolute threshold, and Ochs and Roths percentage threshold hypothesis.

Alternative rebate rules in the provision of a threshold public good: An experimental investigation

Abstract This study reports the effects of rebate rules on voluntary contributions to a threshold public good. Rebate rules specify how excess contributions, over the threshold amount are distributed. We examine three rebate rules experimentally: a no rebate policy where excess contributions are discarded, a proportional rebate policy where excess contributions are rebated proportionally to an individuals contribution, and a utilization rebate policy where excess contributions provide some continuous public good. Significantly more Nash equilibrium outcomes are observed under the no rebate treatment than under either of the other two. Interestingly, the variance of contributions differs significantly between rebate treatments.

Cheap talk in bargaining experiments: Lying and threats in ultimatum games

In most models of bargaining, costless and unverifiable lies about private information and incredible threats about future actions are considered cheap talk and do not impact outcomes. In practice, however, this type of talk is often an integral part of bargaining. This experiment examines the impact of cheap talk in an ultimatum bargaining setting with two-sided imperfect information. In contrast to previous work, the experiment provides an opportunity for deceptions to be revealed and punished. Results show that lies about private information and (incredible) threats of future actions do influence bargaining outcomes (offers and responses) in both the short- and long-term.

Identity congruency effects on donations

This article describes several field and laboratory experiments that investigate an identity congruency effect on donations. Experiment 1 is a field experiment showing that consumers give more money to a public radio station if they are told that a previous donor who shares their identity also made a large contribution. This effect is more likely to occur when consumers have high collective-identity esteem (measured in Experiment 2a) and when attention is focused on others (manipulated in Experiment 2b). The authors measure these two moderators simultaneously and observe and replicate a three-way interaction. Again, the identity congruency effect is the strongest when consumers have high collective-identity esteem and when attention is focused on others (Experiment 3a and Experiment 3b). These results provide a novel understanding of the causes of the identity congruency effect on donations. The authors conclude with a discussion of the theoretical and substantive implications of these findings.

Experimental Economics and Supply-Chain Management

One area in which experimental economics methods have been used to study operations problems is supply-chain management. We survey results from a series of human experiments based on the popular beer distribution game and find cognitive limitations on the part of managers, in particular an underweighting of the supply line. We suggest mechanisms that may alleviate this bias, including sharing inventory and point-of-sale data, and reducing ordering and shipping delays. Our research provides managerial lessons and identifies supply-chain issues that need further experimental study.

Look at me when you say that: an electronic negotiation simulation

This article extends the growing body of research on computer-mediated communication to a negotiations setting. The author compares face-to-face negotiation outcomes with computermediated negotiation outcomes using an integrative (win-win) negotiation. There were two main results of interest. First, computer-mediated final agreements are somewhat more integrative than those negotiated face-to-face, suggesting there is no efficiency loss from negotiating long distance using information technology. Second, computer-mediated agreements tend to be significantly more equal than face-to-face agreements.

Overconfidence in Newsvendor Orders: An Experimental Study

Previous studies have shown that individuals make suboptimal decisions in a variety of supply chain and inventory settings. We hypothesize that one cause is that individuals are overconfident (in particular, overprecise) in their estimation of order variation. Previous work has shown theoretically that underestimating the variance of demand causes orders to deviate from optimal in predictable ways. We provide two experiments supporting this theoretical link. In the first, we elicit the precision of each individuals beliefs and demonstrate that overprecision significantly correlates with order bias. We find that overprecision explains almost one-third of the observed ordering mistakes and that the effect of overprecision is robust to learning and other dynamic considerations. In the second, we introduce a new technique to exogenously reduce overprecision. We find that participants randomly assigned to this treatment demonstrate less overprecision and less biased orders than do those in a control group. This paper was accepted by Peter Wakker, decision analysis.

The Effect of Incomplete Information in a Threshold Public Goods Experiment

Fiscal stress and decreasing government budgets have led to renewed interest in voluntary contributions for the funding of public goods. This paper experimentally examines the Provision Point Mechanism (PPM), a voluntary contribution mechanism for the funding of lumpy public goods. Previous research has demonstrated the effectiveness of this mechanism at providing public goods, however all were conducted in an environment of complete information, which fails to capture the uncertainties of the real world. This study tests the efficacy of the PPM in informationally limited settings. We find no significant differences in the rate of successful provisions or level of group contributions when subjects have limited information about the valuations of others than when they have complete information.