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

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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File URL: ftp://mse.univ-paris1.fr/pub/mse/CES2011/11036.pdf
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Paper 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.

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Length: 10 pages
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:mse:cesdoc:11036
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Keywords: Coordination failure; laboratory experiments; aversion to inequality.;

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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; Information and Knowledge; Communication; Belief; Unawareness

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  30. Nicolas Jacquemet & Adam Zylbersztejn, 2013. "Learning, Words and Actions: Experimental Evidence on Coordination-Improving Information," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00845123, HAL.
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Cited by:

  1. 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.
  2. Nobuyuki Hanaki & Nicolas Jacquemet & Stéphane Luchini & Adam Zylbersztejn, 2016. "Cognitive ability and the effect of strategic uncertainty," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01261036, HAL.
  3. Nicolas Jacquemet & Adam Zylbersztejn, 2010. "Learning, words and actions: experimental evidence on coordination-improving information," Documents de travail du Centre d'Economie de la Sorbonne 10064, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  4. Nicolas Jacquemet & Stéphane Luchini & Jason Shogren & Adam Zylbersztejn, 2015. "Coordination with Communication under Oath," Post-Print halshs-01232565, HAL.
  5. Nicolas Jacquemet & Adam Zylbersztejn, 2013. "Learning, Words and Actions: Experimental Evidence on Coordination-Improving Information," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00845123, HAL.

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