IDEAS home Printed from https://ideas.repec.org/a/gam/jgames/v9y2018i3p51-d159254.html
   My bibliography  Save this article

Voluntary Leadership and Asymmetric Endowments in the Investment Game

Author

Listed:
  • Fabian Kleine

    (Universität Erfurt, Professur für Quantitative Methoden der Empirischen Sozialforschung and CEREB (Center for Empirical Research in Economics and Behavioral Sciences), Nordhäuser Str. 63, D-99089 Erfurt, Germany)

  • Manfred Königstein

    (Universität Erfurt, Professur für Angewandte Mikroökonomie and CEREB, Nordhäuser Str. 63, D-99089 Erfurt, Germany)

  • Balázs Rozsnyói

    (Center for Empirical Research in Economics and Behavioral Sciences, Nordhäuser Str. 63, D-99089 Erfurt, Germany)

Abstract

We experimentally investigate variants of the investment game by Berg, Dickhaut, and McCabe (1995), in which one of the two players decides who are first mover and second mover. It has been shown by Kleine, Königstein, and Rozsnyói (2014) that voluntary leadership increases both investment and backtransfer. We interpret voluntary leadership as a signal of cooperation that stimulates reciprocal cooperation. If a relatively rich player takes the lead (putting himself/herself under investment risk) this should be seen as a less strong signal of cooperation than taking the lead among equally endowed players. Indeed, we show that under asymmetric endowments, voluntary leadership has a weaker effect than under symmetric endowments.

Suggested Citation

  • Fabian Kleine & Manfred Königstein & Balázs Rozsnyói, 2018. "Voluntary Leadership and Asymmetric Endowments in the Investment Game," Games, MDPI, vol. 9(3), pages 1-21, July.
    • Handle: RePEc:gam:jgames:v:9:y:2018:i:3:p:51-:d:159254
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2073-4336/9/3/51/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2073-4336/9/3/51/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Guth, Werner & Levati, M. Vittoria & Sutter, Matthias & van der Heijden, Eline, 2007. "Leading by example with and without exclusion power in voluntary contribution experiments," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1023-1042, June.
    2. Miguel Fonseca & Wieland Müller & Hans-Theo Normann, 2006. "Endogenous timing in duopoly: experimental evidence," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(3), pages 443-456, October.
    3. Utteeyo Dasgupta & Arjun Menon, 2011. "Trust and Trustworthiness among Economics Majors," Economics Bulletin, AccessEcon, vol. 31(4), pages 2799-2815.
    4. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
    5. Ben Greiner, 2015. "Subject pool recruitment procedures: organizing experiments with ORSEE," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 1(1), pages 114-125, July.
    6. Huck, Steffen & Muller, Wieland & Normann, Hans-Theo, 2002. "To Commit or Not to Commit: Endogenous Timing in Experimental Duopoly Markets," Games and Economic Behavior, Elsevier, vol. 38(2), pages 240-264, February.
    7. M. Vittoria Levati & Matthias Sutter & Eline van der Heijden, 2007. "Leading by Example in a Public Goods Experiment with Heterogeneity and Incomplete Information," Journal of Conflict Resolution, Peace Science Society (International), vol. 51(5), pages 793-818, October.
    8. Cox, James C., 2004. "How to identify trust and reciprocity," Games and Economic Behavior, Elsevier, vol. 46(2), pages 260-281, February.
    9. James Cox, 2009. "Trust and reciprocity: implications of game triads and social contexts," New Zealand Economic Papers, Taylor & Francis Journals, vol. 43(2), pages 89-104.
    10. Dufwenberg, Martin & Kirchsteiger, Georg, 2004. "A theory of sequential reciprocity," Games and Economic Behavior, Elsevier, vol. 47(2), pages 268-298, May.
    11. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    12. Ananish Chaudhuri & Lata Gangadharan, 2007. "An Experimental Analysis of Trust and Trustworthiness," Southern Economic Journal, John Wiley & Sons, vol. 73(4), pages 959-985, April.
    13. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    14. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    15. Reuben, Ernesto & Riedl, Arno, 2013. "Enforcement of contribution norms in public good games with heterogeneous populations," Games and Economic Behavior, Elsevier, vol. 77(1), pages 122-137.
    16. Chaudhuri, Ananish & Khan, Sarah & Lakshmiratan, Aishwarya & Py, Anne-Laure & Shah, Lisa, 2003. "Trust and Trustworthiness in a Sequential Bargaining Game," Working Papers 160, Department of Economics, The University of Auckland.
    17. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    18. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 817-869.
    19. Sean Collins, 2016. "Relay the Right Way: Harnessing Heterogeneity in Sequential Team Production," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 37(6), pages 407-423, September.
    20. Emrah Arbak & Marie-Claire Villeval, 2013. "Voluntary leadership: motivation and influence," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(3), pages 635-662, March.
    21. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    22. Zacharias Maniadis & Fabio Tufano & John A. List, 2014. "One Swallow Doesn't Make a Summer: New Evidence on Anchoring Effects," American Economic Review, American Economic Association, vol. 104(1), pages 277-290, January.
    23. Wing Tung Au & Man Wing Chung, 2007. "Effect of Order of Contribution in a Sequential Public Goods Dilemma," Group Decision and Negotiation, Springer, vol. 16(5), pages 437-449, September.
    24. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
    25. Theo Offerman & Joep Sonnemans & Gijs Van De Kuilen & Peter P. Wakker, 2009. "A Truth Serum for Non-Bayesians: Correcting Proper Scoring Rules for Risk Attitudes ," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1461-1489.
    26. Dannenberg, Astrid & Riechmann, Thomas & Sturm, Bodo & Vogt, Carsten, 2007. "Inequity Aversion and Individual Behavior in Public Good Games: An Experimental Investigation," ZEW Discussion Papers 07-034, ZEW - Leibniz Centre for European Economic Research.
    27. Daniele Nosenzo & Martin Sefton, 2011. "Endogenous Move Structure and Voluntary Provision of Public Goods: Theory and Experiment," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(5), pages 721-754, October.
    28. Xiao, Erte & Bicchieri, Cristina, 2010. "When equality trumps reciprocity," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 456-470, June.
    29. Utteeyo Dasgupta & Wafa Hakim Orman, 2014. "Does Heterogeneity Help in Overcoming the Public Goods Dilemma in a Sequential Contribution Environment?," Group Decision and Negotiation, Springer, vol. 23(5), pages 1219-1239, September.
    30. Ananish Chaudhuri & Lata Gangadharan, 2007. "An Experimental Analysis of Trust and Trustworthiness," Southern Economic Journal, John Wiley & Sons, vol. 73(4), pages 959-985, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kleine, Fabian & Königstein, Manfred & Rozsnyói, Balázs, 2014. "Voluntary leadership in an experimental trust game," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 442-452.
    2. Calabuig, Vicente & Fatas, Enrique & Olcina, Gonzalo & Rodriguez-Lara, Ismael, 2016. "Carry a big stick, or no stick at all," Journal of Economic Psychology, Elsevier, vol. 57(C), pages 153-171.
    3. Daniel Woods & Maroš Servátka, 2019. "Nice to you, nicer to me: Does self-serving generosity diminish the reciprocal response?," Experimental Economics, Springer;Economic Science Association, vol. 22(2), pages 506-529, June.
    4. Rodriguez-lara, Ismael, 2015. "Equal distribution or equal payoffs? Reciprocity and inequality aversion in the investment game," MPRA Paper 63313, University Library of Munich, Germany.
    5. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    6. Ismael Rodriguez-Lara, 2018. "No evidence of inequality aversion in the investment game," PLOS ONE, Public Library of Science, vol. 13(10), pages 1-16, October.
    7. Charness, Gary & Naef, Michael & Sontuoso, Alessandro, 2019. "Opportunistic conformism," Journal of Economic Theory, Elsevier, vol. 180(C), pages 100-134.
    8. Cox, James C., 2010. "Some issues of methods, theories, and experimental designs," Journal of Economic Behavior & Organization, Elsevier, vol. 73(1), pages 24-28, January.
    9. Engelmann, Dirk & Fischbacher, Urs, 2009. "Indirect reciprocity and strategic reputation building in an experimental helping game," Games and Economic Behavior, Elsevier, vol. 67(2), pages 399-407, November.
    10. Peeters, Ronald & Vorsatz, Marc, 2021. "Simple guilt and cooperation," Journal of Economic Psychology, Elsevier, vol. 82(C).
    11. Weiwei Tasch & Daniel Houser, 2018. "Social Preferences and Social Curiosity," Working Papers 1067, George Mason University, Interdisciplinary Center for Economic Science.
    12. Ola Kvaløy & Miguel Luzuriaga, 2014. "Playing the trust game with other people’s money," Experimental Economics, Springer;Economic Science Association, vol. 17(4), pages 615-630, December.
    13. Felix Koelle, 2012. "Heterogeneity and Cooperation in Privileged Groups: The Role of Capability and Valuation on Public Goods Provision," Cologne Graduate School Working Paper Series 03-08, Cologne Graduate School in Management, Economics and Social Sciences.
    14. Gago, Andrés, 2021. "Reciprocity and uncertainty: When do people forgive?," Journal of Economic Psychology, Elsevier, vol. 84(C).
    15. Gächter, Simon & Kölle, Felix & Quercia, Simone, 2022. "Preferences and perceptions in Provision and Maintenance public goods," Games and Economic Behavior, Elsevier, vol. 135(C), pages 338-355.
    16. Becker, Johannes & Hopp, Daniel & Süß, Karolin, 2020. "How altruistic is indirect reciprocity? - Evidence from gift-exchange games in the lab," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224592, Verein für Socialpolitik / German Economic Association.
    17. Yola Engler & Rudolf Kerschbamer & Lionel Page, 2018. "Why did he do that? Using counterfactuals to study the effect of intentions in extensive form games," Experimental Economics, Springer;Economic Science Association, vol. 21(1), pages 1-26, March.
    18. Yola Engler & Rudolf Kerschbamer & Lionel Page, 2018. "Why did he do that? Using counterfactuals to study the effect of intentions in extensive form games," Experimental Economics, Springer;Economic Science Association, vol. 21(1), pages 1-26, March.
    19. Jeongbin Kim & Louis Putterman & Xinyi Zhang, 2019. ""Trust, Beliefs and Cooperation: Excavating a Foundation of Strong Economics," Working Papers 2019-10, Brown University, Department of Economics.
    20. Kamas, Linda & Preston, Anne, 2012. "Distributive and reciprocal fairness: What can we learn from the heterogeneity of social preferences?," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 538-553.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jgames:v:9:y:2018:i:3:p:51-:d:159254. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.