What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis
AbstractIn experiments based on the Beard and Beil (1994) game, second movers very often fail to select the decision that maximizes both players payoff. This note reports on a new experimental treatment, in which we neutralize the potential effect of inequality aversion on the likelihood of this behavior. We show this behavior is robust to this change, even after allowing for repetition-based learning.
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Bibliographic InfoPaper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number 11036.
Length: 10 pages
Date of creation: Jun 2011
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Coordination failure; laboratory experiments; aversion to inequality.;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-27 (All new papers)
- NEP-CBE-2011-07-27 (Cognitive & Behavioural Economics)
- NEP-EVO-2011-07-27 (Evolutionary Economics)
- NEP-EXP-2011-07-27 (Experimental Economics)
- NEP-GTH-2011-07-27 (Game Theory)
- NEP-UPT-2011-07-27 (Utility Models & Prospect Theory)
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