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10 important questions on Articles - Levit and list

Model of utility with wealth and morality:

Utility-maximizing individual faces a choice regarding a single action. The choice of action affects agent’s utility through two channels:
(1) effect on individual’s wealth;
(2) effect of moral cost of benefit associated with the action. Decisions which are immoral, antisocial impose costs on decision maker.

This scrutiny (“controle”) will exaggerate the importance of pro-social behaviours. There is strong evidence for social preferences. In an experiment of baseball card traders, the experiment took place in the natural environment: sports-card show. People didn’t know they were being scrutinized.

This scrutiny (“controle”) will exaggerate the importance of pro-social behaviours. There is strong evidence for social preferences. In an experiment of baseball card traders, the experiment took place in the natural environment: sports-card show. People didn’t know they were being scrutinized.

Lab: strong evidence for social preferences

sellers offered higher quality levels to buyers who offered higher prices, although sellers were not obligated by the rules of the game to do so.

Field: when sellers believed there would be no future interaction, little statistical relationship between price and quality emerged;

only when there were reputational consequences to a seller, was high quality provided. The social preferences from the lab were weakened in the field.

Anonymity: In the lab, two forms of anonymity:

(1) anonymity between experimenter and subject;
(2) anonymity among subjects.

Context: Actions people take are affected by relational situations:

social norms, frames, past experiences. Experimental investigator lacks complete control over the full context within which the subject makes decisions. Experimentalists know that context in their instructions influence subject behaviour. In experiments, subtle manipulations have drastic effects on actions → calling a game a “community” or “Wall Street” game change rates of defection in prisoners’ dilemmas; using terms like “opponents” or “partners”.

Stakes: model: in games that have both a morality and a wealth component, financial concerns are of

increasing prominence as the stakes rise. Evidence is only partially consistent with this: in dictator games, a large increase in stakes leads to a less-than-proportionate increase in money transferred. However, a $1 offer in a $5 game is rejected more often than a $100 offer in a $500 game.

Artificial restrictions on choice sets and time horizons: In the experiment, the researcher creates rules and defines the set of actions the subject is allowed to take. In real-time environments, the choice set is often

limitless. pro-social behaviour might be observed less frequently in markets merely because people can avoid situations where they must make costly contributions to signal their generosity. Lab experiments often restrict the response mode to a single dimension, whereas real world settings involve multiple response modes.

What factor(s) influence pro-social behaviour in experiments, and in which settings is it likely that pro-social actions are understated?

• 1) the presence of moral and ethical considerations; 2) the nature and extent of scrutiny of one's actions by others; 3) the context in which the decision is embedded; 4) self-selection of the individuals making the decisions; and 5) the stakes of the game.

For which class of economic laboratory experiments could the results on behaviour more readily be extrapolated to the real world?

Experiments that do not trade-off morality and wealth, i.e. where there is no inherent conflict between moral choice and the wealth maximizing choice caused by scrutiny. E.g. certain experiments exploring general economic theory, Bayesian updating, risk and uncertainty, psychological phenomena such as loss aversion, hyperbolic discounting, impersonal auctions, market experiments where the demand and cost functions are unknown—many of the above concerns, such as scrutiny effects, become inconsequential.

The question on the page originate from the summary of the following study material:

Games and Information An Introduction to Game Theory | 9781405136662 | Eric Rasmusen

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Articles - Levit and list

10 important questions on Articles - Levit and list

Model of utility with wealth and morality:

Lab: strong evidence for social preferences

Field: when sellers believed there would be no future interaction, little statistical relationship between price and quality emerged;

Anonymity: In the lab, two forms of anonymity:

Context: Actions people take are affected by relational situations:

Stakes: model: in games that have both a morality and a wealth component, financial concerns are of

Artificial restrictions on choice sets and time horizons: In the experiment, the researcher creates rules and defines the set of actions the subject is allowed to take. In real-time environments, the choice set is often

What factor(s) influence pro-social behaviour in experiments, and in which settings is it likely that pro-social actions are understated?

For which class of economic laboratory experiments could the results on behaviour more readily be extrapolated to the real world?

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