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New Developments in Experimental Economics
The use of experimental approaches in economics is growing at a remarkable rate and the technique is increasingly recognised as an important research tool with wide-ranging applications. Set against the rapid pace and wide scope of experimental research, this two-volume work provides a valuable overview of advances in key research areas over the last decade. The coverage ranges from new work in traditional areas of application (choice, markets and games) to innovative applications of experiments at the interface of economics and neuroscience. The editors, both internationally renowned for their research in experimental economics, have drawn together a fascinating collection which provides broad insight into a field which is reshaping conventional understandings of what economics is, and how economies work. The collection will provide a valuable reference of interest to new students of experimental economics and to postgraduates and professional economists seeking to broaden and deepen their knowledge of new developments.
More Information
Critical Acclaim
Contributors
Contents
More Information
The use of experimental approaches in economics is growing at a remarkable rate and the technique is increasingly recognised as an important research tool with wide-ranging applications. Set against the rapid pace and wide scope of experimental research, this two-volume work provides a valuable overview of advances in key research areas over the last decade. The coverage ranges from new work in traditional areas of application (choice, markets and games) to innovative applications of experiments at the interface of economics and neuroscience. The editors, both internationally renowned for their research in experimental economics, have drawn together a fascinating collection which provides broad insight into a field which is reshaping conventional understandings of what economics is, and how economies work. The collection will provide a valuable reference of interest to new students of experimental economics and to postgraduates and professional economists seeking to broaden and deepen their knowledge of new developments.
Critical Acclaim
‘Experimental and behavioral economics have greatly enriched how people do and should think about economic phenomena. This book provides a wonderful up-to-date collection of many of the best papers in these fields. They are a “must read” for all who take economics seriously. Read and enjoy!’
– Robin Hogarth, Universitat Pompeu Fabra, Spain
‘These leading scholars have put together a provocative and broad set of readings that will take the reader to the frontier of this discipline.’
– John List, University of Chicago, NBER and RFF, US
– Robin Hogarth, Universitat Pompeu Fabra, Spain
‘These leading scholars have put together a provocative and broad set of readings that will take the reader to the frontier of this discipline.’
– John List, University of Chicago, NBER and RFF, US
Contributors
61 articles, dating from 1998 to 2005
Contributors include: K. Binmore, C. Camerer, J. Hey, J. Kagel, G. Loomes, C.R. Plott, A.E. Roth, R. Selten, V.L. Smith, R. Sugden
Contributors include: K. Binmore, C. Camerer, J. Hey, J. Kagel, G. Loomes, C.R. Plott, A.E. Roth, R. Selten, V.L. Smith, R. Sugden
Contents
Contents:
Volume I
Acknowledgements
Foreword John D. Hey
Introduction Enrica Carbone and Chris Starmer
PART I INDIVIDUAL BEHAVIOUR
A Endowments and Experience
1. Charles R. Plott and Kathryn Zeiller (2005), ‘The Willingness to Pay-Willingness to Accept Gap, the “Endowment Effect,” Subject Misconceptions, and Experimental Procedures for Eliciting Valuations’
2. John A. List (2003), ‘Does Market Experience Eliminate Market Anomalies?’
3. Jack L. Knetsch, Fang-Fang Tang and Richard H. Thaler (2001), ‘The Endowment Effect and Repeated Market Trials: Is the Vickrey Auction Demand Revealing?’
4. Graham Loomes, Chris Starmer and Robert Sugden (2003), ‘Do Anomalies Disappear in Repeated Markets?’
B Dynamic Aspects of Choice
5. Robin P. Cubitt, Chris Starmer and Robert Sugden (1998), ‘Dynamic Choice and the Common Ratio Effect: An Experimental Investigation’
6. Daniel Read (2001), ‘Is Time Discounting Hyperbolic or Subadditive?’
7. Glenn W. Harrison, Morten I. Lau and Melonie B. Williams (2002), ‘Estimating Individual Discount Rates in Denmark: A Field Experiment’
8. Enrica Carbone and John D. Hey (2004), ‘The Effect of Unemployment on Consumption: An Experimental Analysis’
9. T. Parker Ballinger, Michael G. Palumbo and Nathaniel T. Wilcox (2003), ‘Precautionary Saving and Social Learning Across Generations: An Experiment’
PART II GAMES
A Cognition and Learning
10. Ido Erev and Alvin E. Roth (1998), ‘Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria’
11. Colin Camerer and Teck-Hua Ho (1999), ‘Experience-Weighted Attraction Learning in Normal Form Games’
12. Miguel Costa-Gomes, Vincent P. Crawford and Bruno Broseta (2001), ‘Cognition and Behavior in Normal-Form Games: An Experimental Study’
13. Antoni Bosch-Domènech, José G. Montalvo, Rosemarie Nagel and Albert Satorra (2002), ‘One, Two, (Three), Infinity,…: Newspaper and Lab Beauty-Contest Experiments’
14. Ken Binmore, John McCarthy, Giovanni Ponti, Larry Samuelson and Avner Shaked (2002), ‘A Backward Induction Experiment’
B Other Regarding Preferences
15. James Andreoni and John Miller (2002), ‘Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism’
16. Joseph Henrich, Robert Boyd, Samuel Bowles, Colin Camerer, Ernst Fehr, Herbert Gintis and Richard McElreath (2001), ‘In Search of Homo Economicus: Behavioral Experiments in 15 Small-Scale Societies’
17. Armin Falk, Ernst Fehr and Urs Fischbacher (2003), ‘On the Nature of Fair Behavior’
18. Kenneth Clark and Martin Sefton (2001), ‘The Sequential Prisoner’s Dilemma: Evidence on Reciprocation’
19. Klaus Abbink, Bernd Irlenbusch and Elke Renner (2000), ‘The Moonlighting Game: An Experimental Study on Reciprocity and Retribution’
20. Ernst Fehr and Simon Gächter (2000), ‘Cooperation and Punishment in Public Goods Experiments’
PART III MARKETS
A Bubbles, Herds and Cascades
21. Vivian Lei, Charles N. Noussair and Charles R. Plott (2001), ‘Nonspeculative Bubbles in Experimental Asset Markets: Lack of Common Knowledge of Rationality vs. Actual Irrationality’
22. Markus Nöth and Martin Weber (2003), ‘Information Aggregation with Random Ordering: Cascades and Overconfidence’
23. Boğaçhan Çelen and Shachar Kariv (2004), ‘Distinguishing Informational Cascades from Herd Behavior in the Laboratory’
24. Dorothea Kübler and Georg Weizsäcker (2004), ‘Limited Depth of Reasoning and Failure of Cascade Formation in the Laboratory’
B Auctions
25. John H. Kagel and Dan Levin (2001), ‘Behavior in Multi-Unit Demand Auctions: Experiments with Uniform Price and Dynamic Vickrey Auctions’
26. Ken Binmore and Paul Klemperer (2002), ‘The Biggest Auction Ever: The Sale of the British 3G Telecom Licences’
27. Klaus Abbink, Bernd Irlenbusch, Paul Pezanis-Christou, Bettina Rockenbach, Abdolkarim Sadrieh and Reinhard Selten (2005), ‘An Experimental Test of Design Alternatives for the British 3G/UMTS Auction’
28. Alvin E. Roth and Axel Ockenfels (2002), ‘Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet’
29. Dan Ariely, Axel Ockenfels and Alvin E. Roth (2005), ‘An Experimental Analysis of Ending Rules in Internet Auctions’
Name Index
Volume II
Acknowledgements
An introduction by the editors to both volumes appears in Volume I
PART I METHODOLOGY
A Philosophical Perspectives
1. Vernon L. Smith (2002), ‘Method in Experiment: Rhetoric and Reality’
2. Francesco Guala (1998), ‘Experiments as Mediators in the Non-Laboratory Sciences’
3. Francesco Guala (1999), ‘The Problem of External Validity (Or “Parallelism”) in Experimental Economics’
4. Robin Cubitt (2005), ‘Experiments and the Domain of Economic Theory’
5. Robert Sugden (2005), ‘Experiments as Exhibits and Experiments as Tests’
B Incentives
6. Colin F. Camerer and Robin M. Hogarth (1999), ‘The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework’
7. Daniel Read (2005), ‘Monetary Incentives, What Are They Good For?’
8. Charles A. Holt and Susan K. Laury (2002), ‘Risk Aversion and Incentive Effects’
9. Rafael Tenorio and Timothy N. Cason (2002), ‘To Spin or Not to Spin? Natural and Laboratory Experiments from The Price is Right’
10. Steven J. Kachelmeier and Kristy L. Towry (2005), ‘The Limitations of Experimental Design: A Case Study Involving Monetary Incentive Effects in Laboratory Markets’
PART II NEUROECONOMICS
11. Colin Camerer, George Loewenstein and Drazen Prelec (2005), ‘Neuroeconomics: How Neuroscience Can Inform Economics’
12. Hans C. Breiter, Itzhak Aharon, Daniel Kahneman, Anders Dale and Peter Shizgal (2001), ‘Functional Imaging of Neural Responses to Expectancy and Experience of Monetary Gains and Losses’
13. Kip Smith, John Dickhaut, Kevin McCabe and José V. Pardo (2002), ‘Neuronal Substrates for Choice Under Ambiguity, Risk, Gains, and Losses’
14. Ming Hsu, Meghana Bhatt, Ralph Adolphs, Daniel Tranel and Colin F. Camerer (2005), ‘Neural Systems Responding to Degrees of Uncertainty in Human Decision-Making’
15. Samuel M. McClure, David I. Laibson, George Loewenstein and Jonathan D. Cohen (2004), ‘Separate Neural Systems Value Immediate and Delayed Monetary Rewards’
16. Kevin McCabe, Daniel Houser, Lee Ryan, Vernon Smith and Theodore Trouard (2001), ‘A Functional Imaging Study of Cooperation in Two-Person Reciprocal Exchange’
17. Alan G. Sanfey, James K. Rilling, Jessica A. Aronson, Leigh E. Nystrom and Jonathan D. Cohen (2003), ‘The Neural Basis of Economic Decision-Making in the Ultimatum Game’
PART III MACROECONOMICS
18. Peng Lian and Charles R. Plott (1998), ‘General Equilibrium, Markets, Macroeconomics and Money in a Laboratory Experimental Environment’
19. Arno Riedl and Frans van Winden (2001), ‘Does the Wage Tax System Cause Budget Deficits? A Macro-Economic Experiment’
20. John Duffy and Jack Ochs (1999), ‘Emergence of Money as a Medium of Exchange: An Experimental Study’
21. Gabriele Camera, Charles Noussair and Steven Tucker (2003), ‘Rate-of-Return Dominance and Efficiency in an Experimental Economy’
22. Ernst Fehr and Jean-Robert Tyran (2001), ‘Does Money Illusion Matter?’
23. Vivian Lei and Charles N. Noussair (2002), ‘An Experimental Test of an Optimal Growth Model’
PART IV FIELD EXPERIMENTS
24. Glenn W. Harrison and John A. List (2004), ‘Field Experiments’
25. Michael S. Haigh and John A. List (2005), ‘Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis’
26. Werner Güth, Carsten Schmidt and Matthias Sutter (2003), ‘Fairness in the Mail and Opportunism in the Internet: A Newspaper Experiment on Ultimatum Bargaining’
27. Bruno S. Frey and Stephan Meier (2004), ‘Social Comparisons and Pro-social Behavior: Testing “Conditional Cooperation” in a Field Experiment’
28. Adriaan R. Soetevent (2005), ‘Anonymity in Giving in a Natural Context – A Field Experiment in 30 Churches’
29. Richard H. Thaler and Shlomo Benartzi (2004), ‘Save More Tomorrow™: Using Behavioral Economics to Increase Employee Saving’
30. Uri Gneezy and Aldo Rustichini (2004), ‘Gender and Competition at a Young Age’
31. John A. List (2004), ‘The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field’
Name Index
Volume I
Acknowledgements
Foreword John D. Hey
Introduction Enrica Carbone and Chris Starmer
PART I INDIVIDUAL BEHAVIOUR
A Endowments and Experience
1. Charles R. Plott and Kathryn Zeiller (2005), ‘The Willingness to Pay-Willingness to Accept Gap, the “Endowment Effect,” Subject Misconceptions, and Experimental Procedures for Eliciting Valuations’
2. John A. List (2003), ‘Does Market Experience Eliminate Market Anomalies?’
3. Jack L. Knetsch, Fang-Fang Tang and Richard H. Thaler (2001), ‘The Endowment Effect and Repeated Market Trials: Is the Vickrey Auction Demand Revealing?’
4. Graham Loomes, Chris Starmer and Robert Sugden (2003), ‘Do Anomalies Disappear in Repeated Markets?’
B Dynamic Aspects of Choice
5. Robin P. Cubitt, Chris Starmer and Robert Sugden (1998), ‘Dynamic Choice and the Common Ratio Effect: An Experimental Investigation’
6. Daniel Read (2001), ‘Is Time Discounting Hyperbolic or Subadditive?’
7. Glenn W. Harrison, Morten I. Lau and Melonie B. Williams (2002), ‘Estimating Individual Discount Rates in Denmark: A Field Experiment’
8. Enrica Carbone and John D. Hey (2004), ‘The Effect of Unemployment on Consumption: An Experimental Analysis’
9. T. Parker Ballinger, Michael G. Palumbo and Nathaniel T. Wilcox (2003), ‘Precautionary Saving and Social Learning Across Generations: An Experiment’
PART II GAMES
A Cognition and Learning
10. Ido Erev and Alvin E. Roth (1998), ‘Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria’
11. Colin Camerer and Teck-Hua Ho (1999), ‘Experience-Weighted Attraction Learning in Normal Form Games’
12. Miguel Costa-Gomes, Vincent P. Crawford and Bruno Broseta (2001), ‘Cognition and Behavior in Normal-Form Games: An Experimental Study’
13. Antoni Bosch-Domènech, José G. Montalvo, Rosemarie Nagel and Albert Satorra (2002), ‘One, Two, (Three), Infinity,…: Newspaper and Lab Beauty-Contest Experiments’
14. Ken Binmore, John McCarthy, Giovanni Ponti, Larry Samuelson and Avner Shaked (2002), ‘A Backward Induction Experiment’
B Other Regarding Preferences
15. James Andreoni and John Miller (2002), ‘Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism’
16. Joseph Henrich, Robert Boyd, Samuel Bowles, Colin Camerer, Ernst Fehr, Herbert Gintis and Richard McElreath (2001), ‘In Search of Homo Economicus: Behavioral Experiments in 15 Small-Scale Societies’
17. Armin Falk, Ernst Fehr and Urs Fischbacher (2003), ‘On the Nature of Fair Behavior’
18. Kenneth Clark and Martin Sefton (2001), ‘The Sequential Prisoner’s Dilemma: Evidence on Reciprocation’
19. Klaus Abbink, Bernd Irlenbusch and Elke Renner (2000), ‘The Moonlighting Game: An Experimental Study on Reciprocity and Retribution’
20. Ernst Fehr and Simon Gächter (2000), ‘Cooperation and Punishment in Public Goods Experiments’
PART III MARKETS
A Bubbles, Herds and Cascades
21. Vivian Lei, Charles N. Noussair and Charles R. Plott (2001), ‘Nonspeculative Bubbles in Experimental Asset Markets: Lack of Common Knowledge of Rationality vs. Actual Irrationality’
22. Markus Nöth and Martin Weber (2003), ‘Information Aggregation with Random Ordering: Cascades and Overconfidence’
23. Boğaçhan Çelen and Shachar Kariv (2004), ‘Distinguishing Informational Cascades from Herd Behavior in the Laboratory’
24. Dorothea Kübler and Georg Weizsäcker (2004), ‘Limited Depth of Reasoning and Failure of Cascade Formation in the Laboratory’
B Auctions
25. John H. Kagel and Dan Levin (2001), ‘Behavior in Multi-Unit Demand Auctions: Experiments with Uniform Price and Dynamic Vickrey Auctions’
26. Ken Binmore and Paul Klemperer (2002), ‘The Biggest Auction Ever: The Sale of the British 3G Telecom Licences’
27. Klaus Abbink, Bernd Irlenbusch, Paul Pezanis-Christou, Bettina Rockenbach, Abdolkarim Sadrieh and Reinhard Selten (2005), ‘An Experimental Test of Design Alternatives for the British 3G/UMTS Auction’
28. Alvin E. Roth and Axel Ockenfels (2002), ‘Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet’
29. Dan Ariely, Axel Ockenfels and Alvin E. Roth (2005), ‘An Experimental Analysis of Ending Rules in Internet Auctions’
Name Index
Volume II
Acknowledgements
An introduction by the editors to both volumes appears in Volume I
PART I METHODOLOGY
A Philosophical Perspectives
1. Vernon L. Smith (2002), ‘Method in Experiment: Rhetoric and Reality’
2. Francesco Guala (1998), ‘Experiments as Mediators in the Non-Laboratory Sciences’
3. Francesco Guala (1999), ‘The Problem of External Validity (Or “Parallelism”) in Experimental Economics’
4. Robin Cubitt (2005), ‘Experiments and the Domain of Economic Theory’
5. Robert Sugden (2005), ‘Experiments as Exhibits and Experiments as Tests’
B Incentives
6. Colin F. Camerer and Robin M. Hogarth (1999), ‘The Effects of Financial Incentives in Experiments: A Review and Capital-Labor-Production Framework’
7. Daniel Read (2005), ‘Monetary Incentives, What Are They Good For?’
8. Charles A. Holt and Susan K. Laury (2002), ‘Risk Aversion and Incentive Effects’
9. Rafael Tenorio and Timothy N. Cason (2002), ‘To Spin or Not to Spin? Natural and Laboratory Experiments from The Price is Right’
10. Steven J. Kachelmeier and Kristy L. Towry (2005), ‘The Limitations of Experimental Design: A Case Study Involving Monetary Incentive Effects in Laboratory Markets’
PART II NEUROECONOMICS
11. Colin Camerer, George Loewenstein and Drazen Prelec (2005), ‘Neuroeconomics: How Neuroscience Can Inform Economics’
12. Hans C. Breiter, Itzhak Aharon, Daniel Kahneman, Anders Dale and Peter Shizgal (2001), ‘Functional Imaging of Neural Responses to Expectancy and Experience of Monetary Gains and Losses’
13. Kip Smith, John Dickhaut, Kevin McCabe and José V. Pardo (2002), ‘Neuronal Substrates for Choice Under Ambiguity, Risk, Gains, and Losses’
14. Ming Hsu, Meghana Bhatt, Ralph Adolphs, Daniel Tranel and Colin F. Camerer (2005), ‘Neural Systems Responding to Degrees of Uncertainty in Human Decision-Making’
15. Samuel M. McClure, David I. Laibson, George Loewenstein and Jonathan D. Cohen (2004), ‘Separate Neural Systems Value Immediate and Delayed Monetary Rewards’
16. Kevin McCabe, Daniel Houser, Lee Ryan, Vernon Smith and Theodore Trouard (2001), ‘A Functional Imaging Study of Cooperation in Two-Person Reciprocal Exchange’
17. Alan G. Sanfey, James K. Rilling, Jessica A. Aronson, Leigh E. Nystrom and Jonathan D. Cohen (2003), ‘The Neural Basis of Economic Decision-Making in the Ultimatum Game’
PART III MACROECONOMICS
18. Peng Lian and Charles R. Plott (1998), ‘General Equilibrium, Markets, Macroeconomics and Money in a Laboratory Experimental Environment’
19. Arno Riedl and Frans van Winden (2001), ‘Does the Wage Tax System Cause Budget Deficits? A Macro-Economic Experiment’
20. John Duffy and Jack Ochs (1999), ‘Emergence of Money as a Medium of Exchange: An Experimental Study’
21. Gabriele Camera, Charles Noussair and Steven Tucker (2003), ‘Rate-of-Return Dominance and Efficiency in an Experimental Economy’
22. Ernst Fehr and Jean-Robert Tyran (2001), ‘Does Money Illusion Matter?’
23. Vivian Lei and Charles N. Noussair (2002), ‘An Experimental Test of an Optimal Growth Model’
PART IV FIELD EXPERIMENTS
24. Glenn W. Harrison and John A. List (2004), ‘Field Experiments’
25. Michael S. Haigh and John A. List (2005), ‘Do Professional Traders Exhibit Myopic Loss Aversion? An Experimental Analysis’
26. Werner Güth, Carsten Schmidt and Matthias Sutter (2003), ‘Fairness in the Mail and Opportunism in the Internet: A Newspaper Experiment on Ultimatum Bargaining’
27. Bruno S. Frey and Stephan Meier (2004), ‘Social Comparisons and Pro-social Behavior: Testing “Conditional Cooperation” in a Field Experiment’
28. Adriaan R. Soetevent (2005), ‘Anonymity in Giving in a Natural Context – A Field Experiment in 30 Churches’
29. Richard H. Thaler and Shlomo Benartzi (2004), ‘Save More Tomorrow™: Using Behavioral Economics to Increase Employee Saving’
30. Uri Gneezy and Aldo Rustichini (2004), ‘Gender and Competition at a Young Age’
31. John A. List (2004), ‘The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field’
Name Index