Social Learning of Efficiency Enhancing Trade With(out) Market Entry Costs - An experimental study
AbstractWe investigate experimentally whether entry costs have an impact on the evolution of cooperation in a social dilemma game. In particular, subjects repeatedly play the so-called takeover game with anonymous partners randomly drawn from a fixed population of participants. The game represents a social dilemma because selfishly rational players can fail to make efficient trades due to information asymmetries. In order to create a potential for social learning, we provide subjects with feedback about average results in the population. Our interest lies in observing the extent to which cooperative behaviors facilitating trade are adopted. Our main conjecture is that market entry costs inspire more trade. This is only partly confirmed by the data.
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Bibliographic InfoPaper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number 2006-36.
Length: 40 pages
Date of creation: Jan 2007
Date of revision:
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-03 (All new papers)
- NEP-CBE-2007-03-03 (Cognitive & Behavioural Economics)
- NEP-EXP-2007-03-03 (Experimental Economics)
- NEP-IND-2007-03-03 (Industrial Organization)
- NEP-SOC-2007-03-03 (Social Norms & Social Capital)
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