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Saliency of Outside Options in the Lost Wallet Game

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Author Info
James C. Cox
Maroš Servátka () (University of Canterbury)
Radovan Vadovic

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Abstract

This paper reports an experiment designed to shed light on an empirical puzzle observed by Dufwenberg and Gneezy (2000) that the size of the foregone outside option by the first mover does not affect the behavior of the second mover in a lost wallet game. Our conjecture was that the original protocol may not have made the size of the forgone outside option salient to second movers. Therefore, we change two features of the Dufwenberg and Gneezy protocol: (i) instead of the strategy method we implement a direct response method (sequential play) for the decision of the second mover; and (ii) we use paper money certificates that are passed between the subjects rather than having subjects write down numbers representing their decisions. We observe that our procedure yields qualitatively the same result as the Dufwenberg and Gneezy experiment, i.e., the second movers do not respond to the change in the outside option of the first movers.

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File URL: http://www.econ.canterbury.ac.nz/RePEc/cbt/econwp/0903.pdf
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Publisher Info
Paper provided by University of Canterbury, Department of Economics in its series Working Papers in Economics with number 09/03.

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Length: 15 pages
Date of creation: 10 Jan 2009
Date of revision:
Handle: RePEc:cbt:econwp:09/03

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Related research
Keywords: Experimental economics; Lost wallet game; Outside option;

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Find related papers by JEL classification:
C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Dufwenberg, Martin & Gneezy, Uri, 2000. "Measuring Beliefs in an Experimental Lost Wallet Game," Games and Economic Behavior, Elsevier, vol. 30(2), pages 163-182, February. [Downloadable!] (restricted)
  2. James C. Cox & Daniel Friedman & Vjollca Sadiraj, . "Revealed Altruism," Experimental Economics Center Working Paper Series 2006-09, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University, revised Jul 2007. [Downloadable!]
    Other versions:
  3. Maroš Servátka & Radovan Vadovic, 2008. "Does Fairness of the Outside Option Matter?," Working Papers in Economics 08/06, University of Canterbury, Department of Economics. [Downloadable!]
  4. Cox, James C. & Friedman, Daniel & Gjerstad, Steven, 2007. "A tractable model of reciprocity and fairness," Games and Economic Behavior, Elsevier, vol. 59(1), pages 17-45, April. [Downloadable!] (restricted)
    Other versions:
  5. Oxoby, Robert J. & McLeish, Kendra N., 2004. "Sequential decision and strategy vector methods in ultimatum bargaining: evidence on the strength of other-regarding behavior," Economics Letters, Elsevier, vol. 84(3), pages 399-405, September. [Downloadable!] (restricted)
  6. Brandts, Jordi & Guth, Werner & Stiehler, Andreas, 2006. "I want YOU! An experiment studying motivational effects when assigning distributive power," Labour Economics, Elsevier, vol. 13(1), pages 1-17, February. [Downloadable!] (restricted)
  7. Cooper, David J. & Van Huyck, John B., 2003. "Evidence on the equivalence of the strategic and extensive form representation of games," Journal of Economic Theory, Elsevier, vol. 110(2), pages 290-308, June. [Downloadable!] (restricted)
  8. Charness, Gary & Haruvy, Ernan & Sonsino, Doron, 2007. "Social distance and reciprocity: An Internet experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 63(1), pages 88-103, May. [Downloadable!] (restricted)
  9. Armin Falk & Michael Kosfeld, . "The Hidden Costs of Control," IEW - Working Papers iewwp250, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  10. Jeannette Brosig & Joachim Weimann & Chun-Lei Yang, 2003. "The Hot Versus Cold Effect in a Simple Bargaining Experiment," Experimental Economics, Springer, vol. 6(1), pages 75-90, June. [Downloadable!] (restricted)
  11. James C. Cox & Cary A. Deck, 2005. "On the Nature of Reciprocal Motives," Economic Inquiry, Oxford University Press, vol. 43(3), pages 623-635, July. [Downloadable!] (restricted)
  12. Guth, Werner & Huck, Steffen & Muller, Wieland, 2001. "The Relevance of Equal Splits in Ultimatum Games," Games and Economic Behavior, Elsevier, vol. 37(1), pages 161-169, October. [Downloadable!] (restricted)
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