Tom Wilkening

The Lure of Authority: Motivation and Incentive Effects of Power

Authority and power permeate political, social, and economic life, but empirical knowledge about the motivational origins and consequences of authority is limited. We study the motivation and incentive effects of authority experimentally in an authority-delegation game. Individuals often retain authority even when its delegation is in their material interest – suggesting that authority has non-pecuniary consequences for utility. Authority also leads to over-provision of effort by the controlling parties, while a large percentage of subordinates under-provide effort despite pecuniary incentives to the contrary. Authority thus has important motivational consequences that exacerbate the inefficiencies arising from suboptimal delegation choices.

Evaluating the impact of visualization of wildfire hazard upon decision-making under uncertainty

ABSTRACT The paper investigates whether the methods chosen for representing uncertain geographic information aid or impair decision-making in the context of wildfire hazard. Through a series of three human subject experiments, utilizing 180 subjects and employing increasingly difficult tasks, this research evaluates the effect of five different visualizations and a text-based representation on decision-making under uncertainty. Our quantitative experiments focus specifically on the task of decision-making under uncertainty, rather than the task of reading levels of uncertainty from the map. To guard against the potential for generosity and risk seeking in decision-making under uncertainty, the experimental design uses performance-based incentives. The experiments showed that the choice of representation makes little difference to performance in cases where subjects are allowed the time and focus to consider their decisions. However, with the increasing difficulty of time pressure, subjects performed best using a spectral color hue-based representation, rather than more carefully designed cartographic representations. Text-based and simplified boundary encodings were among the worst performers. The results have implications for the performance of decision-making under uncertainty using static maps, especially in the stressful environments surrounding an emergency.

The Role of Bounded Rationality and Imperfect Information in Subgame Perfect Implementation - An Empirical Investigation

In this paper we conduct a laboratory experiment to test the extent to which Moore and Repullos subgame perfect implementation mechanism induces truth-telling in practice, both in a setting with perfect information and in a setting where buyers and sellers face a small amount of uncertainty regarding the goods value. We find that Moore-Repullo mechanisms fail to implement truth-telling in a substantial number of cases even under perfect information about the valuation of the good. This failure to implement truth-telling is due to beliefs about the irrationality of ones trading partner. Therefore, although the mechanism should - in theory - provide incentives for truth-telling, many buyers in fact believe that they can increase their expected monetary payoff by lying. The deviations from truth-telling become significantly more frequent and more persistent when agents face small amounts of uncertainty regarding the goods value. Our results thus suggest that both beliefs about irrational play and small amounts of uncertainty about valuations may constitute important reasons for the absence of Moore-Repullo mechanisms in practice.

Regulatory Fog: The Informational Origins of Regulatory Persistence

Compared with other types of policy, regulation is very persistent, even when inefficient. We propose an explanation for regulatory persistence based on regulatory fog,the phenomenon by which regulation obscures information about the e ects of deregulation. We construct a dynamic model of regulation in which the underlying need for regulation varies stochastically, and regulation undermines the regulators ability to observe the state of the world. Compared to the full-information benchmark, regulation is highly persistent, often lasting inde nitely. The regulatory fog e ect is robust to a broad range of partially informative policies and can be quite detrimental to social welfare.