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Payoff Calculator Data: An Inexpensive Window into Decision Making

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  • Jordi Brandts
  • David J. Cooper

Abstract

Payoff calculators provide a source of information about subjects’ decision making process that is cheap, frequently available, and rarely used. We study data from an experiment designed to look at a difficult coordination problem. The experiments were *not* designed to study payoff calculator use; the payoff calculator was included as a tool for helping subjects to understand the payoffs. Our goal is to show that data about payoff calculator usage can yield useful insights about subjects’ decision making. The main issue in the game is whether players will successful coordinate, and, if so, whether they coordinate at an efficient equilibrium or a safe one. We find that initial searches using the calculator have predictive power for the total surplus and probability of coordinating for a pair in the long run. Specifically, searches consistent with the efficient equilibrium reduce total surplus and the probability of coordinating. These conclusions remain true after controlling for a pair’s initial outcomes, indicating that the data about calculator searches has predictive power beyond the pairs’ initial outcomes.

Suggested Citation

  • Jordi Brandts & David J. Cooper, 2016. "Payoff Calculator Data: An Inexpensive Window into Decision Making," Working Papers 903, Barcelona Graduate School of Economics.
  • Handle: RePEc:bge:wpaper:903
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    References listed on IDEAS

    as
    1. Till Requate & Israel Waichman, 2011. "“A profit table or a profit calculator?” A note on the design of Cournot oligopoly experiments," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 36-46, March.
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    Keywords

    Coordination; experiments; Organizations; asymmetric Information;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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