Walid Hichri

Dynamic Voluntary Contributions to a Discrete Public Good: Experimental Evidence

We experiment a mechanism for the provision of a discrete public good where individuals are allowed to update upwards their contribution during a fixed time interval. Experimental evidence shows that subjects increase their contributions in order to finance the cost of the good. The public good is financed more frequently when its cost is low relative to the social ability to pay.

Interior collective optimum in a voluntary contribution to a public-goods game

This study shows a public good experiment with four different treatments. The payoff function is chosen so that the Nash equilibrium (NE) and the collective optimum (CO) are both in the interior of the strategy space. This study tries to test the effect of varying the level of the collective optimum, which changes the ‘social dilemma’, involved in the decision as to how much to contribute to the public good. The results show that contributions increase with the level of the interior CO. There is overcontribution in comparison to the NE and undercontribution in comparison to the CO. But contributions are as far from the CO as the level of the former increases. An overcontribution index that takes into account the effective contribution relative to both the NE and the CO, shows that subjects adopt a constant behaviour while passing from one treatment to another: they contribute a constant share of the CO.

The individual behaviour in a public goods game

Generally, with a standard linear public goods game, one observes at the aggregate level that contributions lay between the Nash equilibrium and the social optimum and decrease over time with and end-effect. The purpose of this paper is to see whether these general aggregate results remain available at the group and at the individual levels.At this purpose, six groups of four persons were formed and made to play a public goods game. At the aggregate level, it was found that obtained results corresponded almost to the standard experimental findings in the literature.Using the classification by Isaac, Walker and Thomas ({dy1984}), it was found that at the group level only two groups adopted the standard behaviour and only two groups presented a behaviour similar to what it was obtained at the aggregate level.At the individual level, contributions over time of each subject to the group were compared to the aggregate results and classified into types. Only in one of the six groups individuals adopted an homogeneous behaviour, meantime in the other five groups individuals conducted different behaviours.

Horizontal merger in bilaterally duopolistic industries with differentiated products

The purpose of this paper is to focus on the strategic decision as to whether or not merger is profitable according to the degree of final product differentiation in bilaterally duopolistic industries. We find that, under some conditions on the factor of substitution, a horizontal merger is profitable.

Threshold of Preference for Collusion and Interconnection Fees in Different Market Structures: the Tunisian Mobile Market Case

We present a Cournot model that compares the critical threshold of collusion in Duopoly and Oligopoly Markets where the actors are private, mixed or public. We assume that the incentive critical threshold for collusion depends on the interconnection fees. The different threshold values calculated in each Market structure are then estimated, using the OLS method, with variables related to the Tunisian market structures and prices. The Econometric estimation of the different threshold values is consistent with our theoretical results. Our findings can be used by the decision makers to control collusion, by acting on the level of interconnection fees for each market structure and by implementing the suitable market liberalization policies in this sector. (This abstract was borrowed from another version of this item.)

The Reform of European Securities Settlement Systems: Towards an Integrated Financial Market

The European Central Bank (ECB) will offer to banks in 2013 an european shared platform for securities settlement, named TARGET 2 Securities (T2S), in order to open the national financial markets. The financial crisis did not change the ECB agenda. This paper develops a spatial competition model to understand the impact of this new organisation on european post-trading services. We analyse the incentives of the Central Securities Depositaries (CSD) to move to T2S when they become competitors in the market for settlement services and remain in a monopoly position for depository services. Settlement and depository services are complementary goods, because banks have to pay for these two services to buy or sell a security. We show that such a reform should induce a decrease in the settlement price and more generally in post-trading prices, but that prices depend strongly on market organisation. Under certain conditions, partial adhesion would make prices increase. This configuration appears as a Nash equilibrium. As CSDs are free to adhere to T2S, the ECB might be forced to regulate.

Dissertation abstract: Contribution to a public good - Theoretical analysis and experimental evidence

The work undertook is located between Public Economic Theory and Experimental Economics. The object of the thesis consists in analysing the aggregate behavior and the individual heterogeneity in a voluntary contribution game. The thesis defended here is that overcontribution in comparison to the Nash equilibrium of the game, can not be explained neither by judgement errors, nor by the information on the individual behaviour of the members in a one given group. The level of contribution observed remains nevertheless inferior to the one simulated using the E.W.A. learning model.The dissertation is composed of three parts and six chapters. The first chapter expresses the various theoretical mechanisms of production of a public good, while the second one presents an overview of the experimental literature using voluntary contribution mechanisms.The second part carries on the introduction of an interior solution in a public good game in order to distinguish an explanation of overcontribution in terms of mistakes or strategies. While chapter three presents the most important works in literature that use an interior solution, the fourth chapter constitutes a personal contribution consisting in an experiment with an interior optimum. Our main result is that individuals contribute a constant part of their social optimum and that overcontribution is not explained by error. We test then the simple learning model R.L. using the observed data on the aggregate level. This model predicts well the observed behaviour.The third part is composed of two experiments where the environment of players is modified. We introduce in chapter five promises as cheap talk and find that they increase contributions at the aggregate level. In chapter six, various conditions of information on individual contributions are tested. The parameter tested is the level of information on “neighbours” contributions given to players. One of the treatments presents full information about individual contributions of the members of the group, while this information is incomplete in the other treatments. Our results show that information has no effect on the level of contribution. We simulate then the EWA learning model both at the aggregate and the individual levels and compare the simulated data to the experimental one. These simulations predict a level of contribution that is higher that the one observed in the experiment.

Individual strategies and aggregate behavior in a public-goods experiment

Our aim is to see whether the general result of a decreasing over contribution over time in a public goods game is still available at the group and at the individual levels. We find that individuals are heterogeneous and that they interact differently.