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What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis

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Abstract

In 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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  • Nicolas Jacquemet & Adam Zylbersztejn, 2011. "What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis," Documents de travail du Centre d'Economie de la Sorbonne 11036, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    • Handle: RePEc:mse:cesdoc:11036
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    Cited by:

    1. Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2016. "Cognitive ability and the effect of strategic uncertainty," Theory and Decision, Springer, vol. 81(1), pages 101-121, June.
    2. Jacquemet Nicolas & Zylbersztejn Adam, 2013. "Learning, Words and Actions: Experimental Evidence on Coordination-Improving Information," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 13(1), pages 215-247, July.
    3. Nicolas Jacquemet & Stéphane Luchini & Jason F. Shogren & Adam Zylbersztejn, 2018. "Coordination with communication under oath," Experimental Economics, Springer;Economic Science Association, vol. 21(3), pages 627-649, September.
    4. Gueye, Mamadou & Quérou, Nicolas & Soubeyran, Raphael, 2020. "Social preferences and coordination: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 26-54.
    5. Colin F. Camerer & Gideon Nave & Alec Smith, 2019. "Dynamic Unstructured Bargaining with Private Information: Theory, Experiment, and Outcome Prediction via Machine Learning," Management Science, INFORMS, vol. 65(4), pages 1867-1890, April.
    6. repec:hal:pseose:halshs-00845123 is not listed on IDEAS
    7. Vincent Théroude & Adam Zylbersztejn, 2017. "Cooperation in a risky world," Working Papers halshs-01443917, HAL.
    8. repec:hal:pseose:halshs-01261036 is not listed on IDEAS
    9. repec:hal:pseose:hal-01359231 is not listed on IDEAS
    10. Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2013. "Bounded Rationality and Strategic Uncertainty in a Simple Dominance Solvable Game," Economics Discussion / Working Papers 13-14, The University of Western Australia, Department of Economics.
    11. Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2016. "Fluid intelligence and cognitive reflection in a strategic environment: evidence from dominance-solvable games," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01359231, HAL.
    12. Vincent Théroude & Adam Zylbersztejn, 2017. "Cooperation in a risky world," Working Papers 1704, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.

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    More about this item

    Keywords

    Coordination failure; laboratory experiments; aversion to inequality;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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