Sabine Kröger

On Representative Trust

This paper combines an economic experiment with survey data to investigate determinants of trust and trustworthiness in the Dutch society. We contrast the inferences which can be made on the trust propensity using stated and revealed measures and we test for participation bias in our experiment. We find that middle aged and educated individuals trust relatively more but are relatively less trustworthy. The effect of age and religion on trust is shown to depend heavily on whether experimental or survey trust measures are used. We find no evidence of participation bias in any experimental decisions.

Flexible Approximation of Subjective Expectations Using Probability Questions

We propose a flexible method to approximate the subjective cumulative distribution function of an economic agent about the future realization of a continuous random variable. The method can closely approximate a wide variety of distributions while maintaining weak assumptions on the shape of distribution functions. We show how moments and quantiles of general functions of the random variable can be computed analytically and/or numerically. We illustrate the method by revisiting the determinants of income expectations in the United States. A Monte Carlo analysis suggests that a quantile-based flexible approach can be used to successfully deal with censoring and possible rounding levels present in the data. Finally, our analysis suggests that the performance of our flexible approach matches that of a correctly specified parametric approach and is clearly better than that of a misspecified parametric approach.

You May Have To Do It Again, Rocky! - An Experimental Analysis of Bargaining with Risky Joint Profits

We present an experimental study of a risky sequential bargaining to model negotiations in risky joint ventures that proceed through multiple stages.Our example is the production of a movie that may give rise to a sequel, so actors and producers negitiate sequentially.We compare the predictions of alternative theoretical approaches to understanding such a game.The game theoretic solution predicts (assuming risk neutrality) that actors are willing to accept wages below their outside option for first films in order to capture the gains from winning lucrative sequel contracts.This prediction is strongly rejected by the data.The data are better explained by either equity theory (equal splits) or by a game theoretic model where actors have uncertain risk aversion.The parameters of the game are calibrated to match data on 99 movies for 1989 available from a case study.

Bargaining under large risk – an experimental analysis

We experimentally study behavior in bargaining situations under large risks. To implement realistic risks involved in the field, we calibrate the experimental parameters from an environment involving substantial variation in profits, the motion picture industry. The leading example is the production of a movie that may give rise to a sequel, so actors and producers negotiate sequentially. We analyze the data in light of alternative behavioral approaches to understanding bargaining behavior under large risk.