Renegotiation Proofness and Climate Agreements: Some Experimental Evidence

The notion of renegotiation-proof equilibrium has become a cornerstone in non-cooperative models of international environmental agreements. Applying this solution concept to the infinitely repeated N-person Prisoners' Dilemma generates predictions that contradict intuition as well as conventional wisdom about public goods provision. This paper reports the results of an experiment designed to test two such predictions. The first is that the higher the cost of making a contribution, the more cooperation will materialize. The second is that the number of cooperators is independent of group size. Although the experiment was designed to replicate the assumptions of the model closely, our results lend very little support to the two predictions.

The Theory of Full International Cooperation: An Experimental Evaluation

The concept of renegotiation-proof equilibrium has become a cornerstone in recent game theoretic reasoning about the stability of international environmental agreements. Applying this solution concept to a linear version of the infinitely repeated N-person Prisoners’ Dilemma, Scott Barrett has been able to derive a number of interesting (and sometimes provocative) predictions about international cooperation to curb climate change. This paper reports the results of a laboratory experiment designed to test two central predictions from Barrett’s model. The first prediction says that the higher the cost of making a contribution, the more cooperation will materialize. The second claims that the number of cooperators is independent of group size. The experiment was designed to replicate the assumptions of Barrett’s model closely. We find that the experimental confrontation lends very little support to the two predictions

Are Nurses More Altruistic than Real Estate Brokers?

We report results from a dictator game experiment with nurse students and real estate broker students as dictators, and Amnesty International as the recipient. Although brokers contributed substantial amounts, nurses contributed significantly more, on average 76 percent of their endowment. In a second part, subjects chose between a certain repetition of the experiment and a 50-50 chance of costly exit. About one third of the brokers and half of the nurses chose the exit option. While generosity was indeed higher among nurses, even when taking exits into account, the difference cannot readily be attributed to different degrees of altruism.dictator game, exit option, generosity, occupational differences

Self-serving dictators

We provide experimental evidence of self-serving fairness ideals in a dictator game design that includes treatments where funds can be transferred in two ways to the one player and in one way to the other. Two methods for transferring funds to the recipient produce the same results as the regular dictator game. However, two methods for transferring funds to the dictator reduce her generosity significantly. Hence, the fairness ideal adopted by dictators appears to be equal share per individual in the former case (as in the regular dictator game), and equal share per transfer method in the latter case

Group size effects in two repeated game models of a global climate agreement

What levels of total abatement can one hope for in a global climate agreement? Some potential answers to this question are provided by game theory. This working paper contains a critical discussion of two (prominent) game models that answer the question quite pessimistically. Both models take the n-person, infinitely repeated prisoner's dilemma game as their point of departure. The first model is a full information model and utilizes the notion of a weakly renegotiation proof equilibrium. This results in the (maybe counterintuitive) prediction that an agreement that can provide high utility to the group will attract less total abatement than an agreement that can only provide low utility to the group. The second model assumes imperfect public information and utilizes the notion of a trigger level equilibrium. This results in the (more intuitive) prediction that the level of total abatements will increase with improved verification techniques, for a given player set. Still the level of total abatements decrease with an increasing player set, for a given verification technique. Empirical implications of the two models are identified, and it is argued that one should confront these with experimentally generated data in order to discriminate between the models. One reason for this is that historical data on abatement efforts in a global climate agreement do not exist since no such agreement has entered into force yet

The Theory of Full International Cooperation: An Experimental Evaluation

The concept of renegotiation-proof equilibrium has become a cornerstone in recent game theoretic reasoning about the stability of international environmental agreements. Applying this solution concept to a linear version of the infinitely repeated N-person Prisoners’ Dilemma, Scott Barrett has been able to derive a number of interesting (and sometimes provocative) predictions about international cooperation to curb climate change. This paper reports the results of a laboratory experiment designed to test two central predictions from Barrett’s model. The first prediction says that the higher the cost of making a contribution, the more cooperation will materialize. The second claims that the number of cooperators is independent of group size. The experiment was designed to replicate the assumptions of Barrett’s model closely. We find that the experimental confrontation lends very little support to the two predictions

Ongoing quest for QWERTY

First, we replicate the remarkable result of Hossain & Morgan (AER 2009), in which subjects in an experimental market tip almost perfectly to the superior platform even if an inferior platform enjoys initial monopoly. Next, we show that this result disappear when seemingly innocent increases in out-of-equilibrium payoffs are introduced. The inflated payoffs do not alter payoff- or risk-dominance relations, and does not impact on players' security levels. We conclude that the need for a theory of equilibrium selection cannot be bypassed by appealing to the realities of the (experimental) market place

Can exit prizes induce lame ducks to shirk less? Experimental evidence

Elected representatives serving their final period face only weak incentives to provide costly effort. However, overlapping generations (OLG) models suggest that exit prizes sustained by trigger strategies can induce representatives in their final period to provide such effort. We evaluate this hypothesis using a simple OLG public good experiment, the central treatment being whether exit prizes are permitted. We find that a significantly higher number of subjects in their final period contribute when exit prizes are permitted. However, this result does not originate from use of trigger strategies. More likely explanations include gift-exchange and focal-point effects

When does informal enforcement work?

This is the accepted, refereed and final manuscript to the articleWe study experimentally how enforcement influences public goods provision when subjects face two free-rider options that roughly parallel the nonparticipation and noncompliance options available for countries in relation to multilateral environmental agreements (MEAs). Our results add to the MEA literature in two ways. First, they suggest that compliance enforcement will fail to enhance compliance in the absence of participation enforcement. Second, they indicate that compliance enforcement will boost compliance significantly in the presence of participation enforcement. Our results also add to the experimental literature on public goods provision, again in two ways. First, they reveal that previous experimental findings of enforcement boosting cooperation are valid only in settings with forced (or enforced) participation. Second, they show that subjects’ willingness to allocate costly punishment points is significantly stronger when the enforcement system permits punishment of both types of free riding than when it permits punishment of only one type.2, forfatterversjo

Can Paying Politicians Well Reduce Corruption? The Effects of Wages and Uncertainty on Electoral Competition

We investigate the effects of wages and uncertainty on political corruption as measured by rent-taking. First, our laboratory data show that contrary to standard theory, rent-taking is not independent of, but decreases with wages in the absence of popularity shocks. Second, the orthodox view that rent-taking is greater in the presence of popularity shocks, given wages, is not necessarily true. Third, we find that in the presence of popularity or ideological shocks rent-taking is increasing in the variance of the shock for given wages, and is decreasing in wages for a given variance of the shock. While our third finding is in line with the directional predictions of the Nash equilibria, the deviation from Nash is large when the variance of the popularity shock is high and wages are low. We show that the deviations can be explained using a Quantal Response Equilibrium approach and taking risk-attitudes into account.acceptedVersio