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Departures from self-interest in economic experiments have recently inspired models of " social preferences ". We design a range of simple experimental games that test these theories more directly than existing experiments. Our experiments show that subjects are more concerned with increasing social welfare—sacrificing to increase the payoffs for all(More)
We used functional MRI (fMRI) to investigate human mental processes in a competitive interactive setting--the "beauty contest" game. This game is well-suited for investigating whether and how a player's mental processing incorporates the thinking process of others in strategic reasoning. We apply a cognitive hierarchy model to classify subject's choices in(More)
I analyse the equilibrium and welfare properties of an economy characterised by uncertainty and payoff externalities, in a general model which nests several applications. Agents receive a private signal and an endogenous public signal, which is a noisy aggregate of individual actions. I analyse how endogenous public information, which causes an information(More)
  • Martin Dufwenberg, Tobias Lindqvist, Evan Moore, We, Dan Friedman, Steve Gjerstad +9 others
  • 2005
History contains many colorful examples where speculative trade in some commodity or financial asset generated a phase of rapidly increasing prices, followed by a sudden collapse (see, e.g., Edward Chancellor, 1999, or Charles Kindleberger, 2001). One famous case cited by many economists (see Peter Garber, 2000, pp. 127–31, for references) is the Dutch "(More)
When does a common group identity improve efficiency in coordination games? To answer this question, we propose a group-contingent social preference model and derive conditions under which social identity changes equilibrium selection by changing the potential function. We test our predictions in the minimum effort game in the laboratory under parameter(More)
The standard framework to analyze games with incomplete information models players as if they form beliefs about their opponents' beliefs about their opponents' beliefs and so on, that is, as if players have an infinite depth of reasoning. This strong assumption has nontrivial implications, as is well known. This paper therefore generalizes the type spaces(More)
Eye tracking is used to investigate the procedures used in choice problems between two lotteries. Eye movement patterns in problems where the deliberation process is clearly identified are used to make inferences in problems where the deliberation process is less straightforward. The data provide little support for the hypothesis that decision makers use(More)
900 Consider the problem of a consumer in a modern supermarket. The typical store sells more than 40,000 items, and in many product categories it offers hundreds of options (for a recent review see Simona Botti and Sheena S. Iyengar 2006). The typical consumer is also time constrained and cannot afford to spend too much time making each selection. To solve(More)
This paper studies the effect of introducing costly partner selection for the voluntary contribution to a public good. Subjects participate in six sequences of five rounds of a two-person public good game in partner design. At the end of each sequence, subjects can select a new partner out of six group members. Uni-directional and bidirectional partner(More)
In this paper we study learning and cooperation in repeated prisoners' dilemmas experiments. We compare interaction neighbourhoods of different size and structure , we observe choices under different information conditions, and we estimate parameters of a learning model. We find that naive imitation, although a driving force in many models of spatial(More)