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Overcoming Incentive Constraints? The (In-)effectiveness of Social Interaction

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Author Info
Dirk Engelmann
Veronika Grimm

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Abstract

We experimentally study behavior in a simple voting game where players have private information about their preferences. With random matching, subjects overwhelmingly follow the dominant strategy to exaggerate their preferences. Applying the linking mechanism suggested by Jackson and Sonnenschein (2005) captures nearly all achievable efficiency gains. Repeated interaction leads to significant gains in truthful representation and efficiency only if players can choose their partners.

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Publisher Info
Paper provided by University of Cologne, Department of Economics in its series Working Paper Series in Economics with number 22.

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Date of creation: 28 Feb 2006
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Handle: RePEc:kls:series:0022

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Related research
Keywords: Experimental Economics; Mechanism Design; Implementation; Linking; Bayesian Equilibrium; Efficiency;

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Find related papers by JEL classification:
A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
D64 - Microeconomics - - Welfare Economics - - - Altruism
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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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. Kaplan, Todd & Ruffle, Bradley, 2007. "Which way to cooperate," MPRA Paper 3381, University Library of Munich, Germany. [Downloadable!]
  2. Dirk Engelmann & Urs Fischbacher, 2003. "Indirect Reciprocity and Strategic Reputation Building in an Experimental Helping Game," CERGE-EI Working Papers wp215, The Center for Economic Research and Graduate Education - Economic Institute, Prague. [Downloadable!]
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  3. Esther Hauk & Rosemarie Nagel, 2000. "Choice of Partners in Multiple Two-person Prisoner's Dilemma Games: An Experimental Study," Economics Working Papers 487, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
  4. Cooper, Russell & DeJong, Douglas V. & Forsythe, Robert & Ross, Thomas W., 1996. "Cooperation without Reputation: Experimental Evidence from Prisoner's Dilemma Games," Games and Economic Behavior, Elsevier, vol. 12(2), pages 187-218, February. [Downloadable!] (restricted)
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  5. Coricelli, Giorgio & Fehr, Dietmar & Fellner, Gerlinde, 2004. "Partner Selection in Public Goods Experiments," Economics Series 151, Institute for Advanced Studies. [Downloadable!]
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  6. Casella, Alessandra, 2002. "Storable Votes," CEPR Discussion Papers 3508, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  7. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June. [Downloadable!] (restricted)
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Cited by:
(explanations, 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. Hitoshi Matsushima & Koichi Miyazaki & Nobuyuki Yagi, 2006. "Role of Linking Mechanisms in Multitask Agency with Hidden Information," CIRJE F-Series CIRJE-F-401, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  2. Friederike Mengel & Veronika Grimm, 2007. "Cooperation In Viscous Populations - Experimental Evidence," Working Papers. Serie AD 2007-17, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
    Other versions:
  3. Kaplan, Todd & Ruffle, Bradley, 2007. "Which way to cooperate," MPRA Paper 3381, University Library of Munich, Germany. [Downloadable!]
  4. Casella, Alessandra & Palfrey, Thomas R. & Riezman, Raymond, 2006. "Minorities and storable votes," Working Papers 1261, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
    Other versions:
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