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Book part
Publication date: 18 December 2016

David J. Cooper and John P. Lightle

We augment a standard bilateral gift-exchange game to allow employees to communicate their gratitude for, or disapproval toward, the wage assigned to them by their…

Abstract

We augment a standard bilateral gift-exchange game to allow employees to communicate their gratitude for, or disapproval toward, the wage assigned to them by their manager. This provides employees with a means of reciprocation or emotion expression toward the employee which is not available in a standard gift-exchange game and may substitute for the higher-than-equilibrium efforts commonly seen in this environment. We find that employees express gratitude or disapproval according to the wage received, but these messages are not a substitute for monetary reciprocation as the relationship between wages and effort is unchanged. These results suggest that employees view the messages as a form of emotional expression independent from rewarding or punishing managers. Average wage levels are little affected by allowing messages, although wages do fall more over time in the absence of messages and individual managers’ wage choices are affected by the messages they receive.

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Experiments in Organizational Economics
Type: Book
ISBN: 978-1-78560-964-0

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Book part
Publication date: 13 October 2015

Catherine C. Eckel, Haley Harwell and José Gabriel Castillo G.

This paper replicates four highly cited, classic lab experimental studies in the provision of public goods. The studies consider the impact of marginal per capita return…

Abstract

This paper replicates four highly cited, classic lab experimental studies in the provision of public goods. The studies consider the impact of marginal per capita return and group size; framing (as donating to or taking from the public good); the role of confusion in the public goods game; and the effectiveness of peer punishment. Considerable attention has focused recently on the problem of publication bias, selective reporting, and the importance of research transparency in social sciences. Replication is at the core of any scientific process and replication studies offer an opportunity to reevaluate, confirm or falsify previous findings. This paper illustrates the value of replication in experimental economics. The experiments were conducted as class projects for a PhD course in experimental economics, and follow exact instructions from the original studies and current standard protocols for lab experiments in economics. Most results show the same pattern as the original studies, but in all cases with smaller treatment effects and lower statistical significance, sometimes falling below accepted levels of significance. In addition, we document a “Texas effect,” with subjects consistently exhibiting higher levels of contributions and lower free-riding than in the original studies. This research offers new evidence on the attenuation effect in replications, well documented in other disciplines and from which experimental economics is not immune. It also opens the discussion over the influence of unobserved heterogeneity in institutional environments and subject pools that can affect lab results.

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Replication in Experimental Economics
Type: Book
ISBN: 978-1-78560-350-1

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Book part
Publication date: 13 October 2015

James C. Cox and Duncan James

This study first replicates, then perturbs, the centipede game as implemented by McKelvey and Palfrey (1992). It is thus both a replication study and an original research…

Abstract

This study first replicates, then perturbs, the centipede game as implemented by McKelvey and Palfrey (1992). It is thus both a replication study and an original research study. We use controlled laboratory experiments, with computer interfaces for each treatment, anonymous round-robin matching among the subjects across rounds, multiple (10) rounds within each treatment, and incremental changes between adjacent treatments allowing for an assessment of effects at the margin of different game configurations. We find unraveling to the subgame perfect equilibrium somewhat faster than did McKelvey and Palfrey (1992), when using their exact design. Perturbations to that design show that setting non-taker payoffs to zero induces earlier unraveling, as does the use of higher stakes (as in Murphy, Rapoport, and Parco (2006), and Rapoport, Stein, Parco, and Nicholas (2003), respectively). Other, subsequent perturbations show: that there is at most a subtle effect associated with using a 10-second timer with a default move, relative to untimed active moves; and that clock format versus tree format has a minimal effect in common information, unchanging payoff-parameterization environments. We verify the robustness of some key past findings in real-time games. We also explore in a common information environment, the effect of design features previously used in independent private values settings; here we find new evidence that features which might modulate information acquisition and/or processing in an independent private values setting may not restrict behavior in a common information setting.

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Replication in Experimental Economics
Type: Book
ISBN: 978-1-78560-350-1

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Article
Publication date: 18 June 2021

Lucy F. Ackert, Li Qi and Wenbo Zou

This study aims to report on experimental asset markets designed to examine the impact of a levy on trade, as well as the taxation authority’s ability to raise tax revenue…

Abstract

Purpose

This study aims to report on experimental asset markets designed to examine the impact of a levy on trade, as well as the taxation authority’s ability to raise tax revenue when markets are subject to mispricing. Some have suggested that a transaction tax will discourage irrational speculation and lead to more efficient markets, but others argue that a higher cost of trading will prove to be an impediment to trade with no useful outcomes.

Design/methodology/approach

The authors’ goal is to provide insight on the impact of a transaction tax in a very specific asset market. The authors chose this design because the robustness of the bubble and crash pattern points to an environment that is particularly appropriate for the study of the effectiveness of a transaction tax in promoting efficient pricing. Furthermore, in a laboratory, the authors can control for extraneous factors that are problematic in the study of naturally occurring environments.

Findings

The authors examine whether a securities transaction tax promotes efficiency in markets that are prone to mispricing and find little evidence that a tax on trade will reduce speculation.

Research limitations/implications

This study’s experimental environment is, of course, an abstraction of naturally occurring markets and it may be that the model excludes important aspects.

Social implications

The authors find that a tax on financial transactions allows the taxation authority to raise significant revenue with little impact on pricing or trading volume.

Originality/value

To the best of the authors’ knowledge, this study is the first systematic examination of a transaction tax on outcomes in a market that is prone to mispricing.

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Journal of Financial Economic Policy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1757-6385

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Article
Publication date: 17 June 2021

Divya Aggarwal, Uday Damodaran, Pitabas Mohanty and D. Israel

This study examines individual ambiguity attitudes alone and in groups by leveraging the descriptive model of anchoring and adjustment on decision-making under ambiguity…

Abstract

Purpose

This study examines individual ambiguity attitudes alone and in groups by leveraging the descriptive model of anchoring and adjustment on decision-making under ambiguity. The study extends Ellsberg's probability ambiguity to outcome ambiguity and examines decisions made under both ambiguities, at different likelihood levels and under the domain of gains and losses.

Design/methodology/approach

The methodology selected for this study is a two-stage within-subject lab experiment, with participants from different Indian universities. Each participant made 12 lottery decisions at the individual level and at individuals in the group level.

Findings

The results show that ambiguity attitudes are not universal in nature. Ambiguity seeking as a dominant choice was observed at both the individual level and at individual in the group level. However, the magnitude of ambiguity seeking or ambiguity aversion contingent upon the domain of gains and losses differed widely across the individual level and at individuals in the group level.

Research limitations/implications

The study enables to contribute toward giving a robust descriptive explanation for individual behavior in real-world applications of finance. It aims to provide direction for theoretical normative models to accommodate heterogeneity of ambiguity attitudes.

Originality/value

The study is novel as it examines a two-dimensional approach by representing ambiguity in probability and in outcomes. It also analyzes whether decisions under ambiguity vary when individuals make decisions alone and when they make it in groups.

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Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

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Book part
Publication date: 13 October 2015

Xu Jiang, Radhika Lunawat and Brian Shapiro

We replicate and extend the social history treatment of the Berg, Dickhaut, and McCabe (1995) investment game, to further document how the reporting of financial history…

Abstract

We replicate and extend the social history treatment of the Berg, Dickhaut, and McCabe (1995) investment game, to further document how the reporting of financial history influences how laboratory societies organize themselves over time. We replicate Berg et al. (1995) by conducting a No History and a Financial History session to determine whether a report summarizing the financial transactions of a previous experimental session will significantly reduce entropy in the amounts sent by Investors and returned by Stewards in the investment game, as Berg et al. (1995) found. We extend Berg et al. (1995) in two ways. First, we conduct a total of five sessions (one No History and four Financial History sessions). Second, we introduce Shannon’s (1948) measure of entropy from information theory to assess whether the introduction of financial transaction history reduces the amount of dispersion in the amounts invested and returned across generations of players. Results across sessions indicate that entropy declined in both the amounts sent by Investors and the percentage returned by Stewards, but these patterns are weaker and mixed compared to those in the Berg et al. (1995) study. Additional research is needed to test how initial conditions, path dependencies, actors’ strategic reasoning about others’ behavior, multiple sessions, and communication may mediate the impact of financial history. The study’s multiple successive Financial History sessions and entropy measure are new to the investment game literature.

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Replication in Experimental Economics
Type: Book
ISBN: 978-1-78560-350-1

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Article
Publication date: 20 October 2020

Yaron Lahav and Shireen Meer

In this paper, we study the effect of induced positive and negative moods on traders' willingness to trade (pay and accept) in experimental asset markets.

Abstract

Purpose

In this paper, we study the effect of induced positive and negative moods on traders' willingness to trade (pay and accept) in experimental asset markets.

Design/methodology/approach

We conduct experimental asset markets where subjects undergo a mood induction procedure prior to trade. After the subjects are induced with either negative or positive affect, they can trade an experimental asset with a known stream of dividends for a known number of periods.

Findings

We first show that both positive and negative affects are associated with larger positive deviations from fundamental values. We also show that when subjects are induced with positive mood, they bid higher prices but for fewer units of the stock. On the supply side, positive affect is associated with higher prices and quantities, and consequently in higher willingness to offer. Finally, we use our experimental data to test existing theories on mood effect. We find that negative affect is related to momentum trading, while positive affect is associated with information processing.

Originality/value

To our knowledge, this is the first work that studies the effect of mood on traders' behavior, rather than market outcomes.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

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Article
Publication date: 27 June 2019

Andreas Oehler, Florian Wedlich, Stefan Wendt and Matthias Horn

The purpose of this study is to analyze whether differences in market-wide levels of investor personality influence experimental asset market outcomes in terms of limit…

Abstract

Purpose

The purpose of this study is to analyze whether differences in market-wide levels of investor personality influence experimental asset market outcomes in terms of limit orders, price levels and price bubbles.

Design/methodology/approach

Investor personality is determined by a questionnaire. These data are combined with data from 17 experimental asset markets. Two approaches are used to estimate market-wide levels of investor personality. First, the market-wide average of each personality trait is determined; second, the percentage of individuals with comparable personality in a market is computed. Overall, 364 undergraduate business students participated in the questionnaire and the experimental asset markets.

Findings

Limits and transaction prices are higher in markets with higher mean values in participants’ extraversion and openness to experience and lower mean values in participants’ agreeableness and neuroticism. In markets with lower mean values of subjects’ openness to experiences more overpriced transactions are observed. In markets with a higher proportion of extraverted subjects and a lower proportion of neurotic subjects higher limits and transaction prices are observed. Bubble phases last longer in markets with a higher proportion of extraverted and a lower proportion of neurotic subjects.

Originality/value

Overall, the findings suggest that market-wide personality levels influence market outcomes. As a consequence, market-wide levels of personality help to explain prices in auctions with limited number of participants. Additionally, studies that analyze the influence of subjects’ characteristics, including risk aversion, emotional states or overconfidence, on market outcomes should also consider personality traits as potential underlying factor.

Details

Studies in Economics and Finance, vol. 38 no. 3
Type: Research Article
ISSN: 1086-7376

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Article
Publication date: 28 January 2020

Huijun Gan, Dongsheng Yu, Dongkun Li and He Cheng

The purpose of this paper is to construct a flux-controlled memcapacitor (MC) emulator without grounded restriction with the binary operation ability. The active…

Abstract

Purpose

The purpose of this paper is to construct a flux-controlled memcapacitor (MC) emulator without grounded restriction with the binary operation ability. The active first-order low-pass filter (LPF) and high-pass filter (HPF) circuits are constructed by replacing the capacitor with MC.

Design/methodology/approach

The output saturation of the active device is innovatively adopted to realize the binary operation of MC with two memcapacitance values. By applying the direct current control voltage together with the input signal, the memcapacitance can be controlled, and hence, cut-off frequency of the filters can be adjusted without changing the circuit structure.

Findings

Experiments and simulation results show that the new filter has good frequency selectivity. Both LPF and HPF can change the cut-off frequency by changing the positive and negative control voltage. The experimental and simulation results are in good agreement with the theoretical analysis, which proves the feasibility and validity of the emulator and the filters.

Originality/value

These MC emulators are simple and easy to physically fabricate, which have been increasingly used for experiment. It also provide an effective reference for device miniaturization and low power consumption.

Details

Circuit World, vol. 46 no. 2
Type: Research Article
ISSN: 0305-6120

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Article
Publication date: 1 April 1993

Chiranjeev S. Kohli and Lance Leuthesser

Product positioning is a crucial component of competitive marketingstrategy. Perceptual mapping techniques are frequently used to aidmanagers in making product positioning…

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Abstract

Product positioning is a crucial component of competitive marketing strategy. Perceptual mapping techniques are frequently used to aid managers in making product positioning decisions. Presents an overview of perceptual mapping, explains the conceptual foundation, and compares three widely used techniques – factor analysis, discriminant analysis, and multidimensional scaling. Highlights differences in these analytical techniques, with implications for marketing managers.

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Journal of Product & Brand Management, vol. 2 no. 4
Type: Research Article
ISSN: 1061-0421

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