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Business Drinking: Evidence from A Lab-in-the-Field Experiment

Author

Listed:
  • Daniel Houser

    (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)

  • Jianxin Wang

    (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)

Abstract

Although alcohol consumption is an important component of business negotiations across many cultures, this behavior remains unmodeled. Here, we develop a theory that combines guilt-aversion with a canonical alcohol myopia framework. Our GAAM (guilt aversion and alcohol myopia) model predicts that intoxication increases promise-making, but has no effect on promise-breaking. We test these predictions using a prisoner’s dilemma game with pre-play communication in a lab-in-the-field experiment. Among males, we find behavior consistent with predictions. We do not observe intoxication to impact female promise-making or promise-breaking behaviors, consistent with previous empirical findings that females are relatively insensitive to alcohol-induced myopia.

Suggested Citation

  • Daniel Houser & Jianxin Wang, 2021. "Business Drinking: Evidence from A Lab-in-the-Field Experiment," Working Papers 1074, George Mason University, Interdisciplinary Center for Economic Science.
    • Handle: RePEc:gms:wpaper:1074
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    References listed on IDEAS

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    1. Justus Haucap & Annika Herr, 2014. "A note on social drinking: In Vino Veritas," European Journal of Law and Economics, Springer, vol. 37(3), pages 381-392, June.
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    13. Cortés Aguilar Alexandra & Antonio M. Espín & Filippos Exadaktylos & Oyediran Olusegun A. & Palacio García, Luis Alejandro & Antonios Proestakis, 2012. "The separate effects of self-estimated and actual alcohol intoxication on risk-taking: A field experiment," ThE Papers 10/24, Department of Economic Theory and Economic History of the University of Granada..
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    Cited by:

    1. Brañas-Garza, Pablo & Cabrales, Antonio & Mateu, Guillermo & Sánchez, Angel & Sutan, Angela, 2023. "Social interaction and negotiation outcomes: An experimental approach," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 102(C).
    2. Deck, Cary & Pate, Jennifer, 2022. "High time to study the relationship between marijuana use and economic behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 1-14.

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    More about this item

    Keywords

    : business drinking; communication; guilt aversion; alcohol myopia; gender difference;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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