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Asymmetry, uncertainty, and limits in a binary choice experiment with positive spillovers

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  • Sorensen, Andrea Lockhart

Abstract

This study examines behavior in binary choice games designed to characterize individual vaccination decisions. Subjects make decisions from a menu of one-shot games, deciding in each between a certain payoff option and an option with payoffs decreasing in the number of individuals that choose it. The certain payoff option represents the decision to vaccinate. The uncertain payoff option represents the decision not to vaccinate and potentially get sick, with one's likelihood of illness increasing with the number of unvaccinated individuals. Both symmetric and asymmetric treatments are considered with probabilistic and non-probabilistic payoffs. In some sessions, a theoretically non-binding limit on the certain payoff option is imposed, representing a limited stock of a vaccine. The results suggest that for symmetric, non-probabilistic treatments, subjects behave close to the inefficient equilibrium prediction, representing undervaccination. Subjects behave more efficiently for probabilistic treatments and asymmetric treatments with non-binding limits, representing an increase in vaccination following the announcement of a vaccine limit.

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  • Sorensen, Andrea Lockhart, 2015. "Asymmetry, uncertainty, and limits in a binary choice experiment with positive spillovers," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 43-55.
    • Handle: RePEc:eee:jeborg:v:116:y:2015:i:c:p:43-55
    DOI: 10.1016/j.jebo.2015.03.021
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    Cited by:

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    2. Andrea Sorensen, 2018. "Creating a Domain of Losses in the Laboratory: Effects of Endowment Size," Games, MDPI, vol. 9(1), pages 1-14, March.

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    More about this item

    Keywords

    Externality; Binary choice; Laboratory experiment;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • D6 - Microeconomics - - Welfare Economics
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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