L4: Cross cultural differences and bargaining with competition Flashcards
Is it possible to normalise the findings of UGs across countries and cultures?
Possibly; depends if different cultures have different concepts of what is ‘fair’ and what is not
Explain the experiment used by Roth et al. (1991)?
UG: Experiment carried out in 4 countries: Israel, Japan, Yugoslavia and the US
10 pairs of Ps and Rs, each P interacted with each R so by end had been 10 rounds of play
All games played with 1000 tokens then converted afterwards to money
Explain 2 problems Roth et al. (1991) encountered and how they solved them?
1) Language issues: rules may have diff. interpretations
solved by translating from english and then back to english
2) Experimenter effects: diff. people running it may lead to behav. differences
solution: ran by same experimenters, all in Pittsburgh
4 main findings of Roth et al. (1991)?
1) Offers look roughly same in all countrys (modal between 40&50%)
2) Rejection offers roughly constant across countries (30%)
3) Within a country, probability offer is rejected is inversely proportional to the size of the offer
4) Higher disagreement rates NOT observed in countries with lower offers
What did Heinrich et al (2001) aim to do?
Find out whether economic and social environments shape behaviour, and if so, which ones are involved?
How did Heinrich et al (2001) conduct their experiment?
Used 15 small scale economies, did experiments using PGG, UG and DG to analyse behaviour
What did Heinrich et al (2001) find?
1) Canonical model(?) is not supported in any society
2) Large variation in mean offers across societies (range from 26% to 58%)
3) Rejection rates also more variable than previously observed
Explain what two dimensions Heinrich et al (2001) believed explained the variations between groups?
1) Payoffs to Co-operation (PC):
How important and how large are a group’s payoff from co-operation in economic production
Why? Higher PC will increase sharing behaviour in UG
2) Market Integration (MI):
How much do people rely on market exchange in their daily lives?
Idea: more people experience market interactions, more they will experience sharing principles
Econometric analysis confirms these both explain behaviour in the UG
Explain contribution 2 of Roth et al. (1991)?
Looking at how competition on the proposer side affects bargaining behaviour (same 4 countries)
What games are used in contribution 2 of Roth et al. (1991)?
UG and multiperson market behaviour game (MMB)
Explain how the MMB game works in contribution 2 of Roth et al. (1991)?
n-1 proposers simultaneously propose a share s to the responder
responder can accept or reject highest offer s’ (randomly selected if more than one s’)
If accepts, gets s’ and P gets 1-s’, if rejects all get zero
Main findings of contribution 2 of Roth et al. (1991)?
1) Market data:
in every country the observed market outcomes converge quickly to the market equilibrium and do not deviate once it has been observed
2) Bargaining data:
in every country the observed bargaining outcomes are significantly different from the perfect-equilibrium predictions. Proposals are much nearer the middle of the range
What did Fischbacher, Fong and Fehr (JEBO, 2009) examine?
Games with responder competition
3 treatments in Fischbacher, Fong and Fehr (JEBO, 2009)?
1) standard UG
2) Responder competition with 2 responders (RC2)
3) “” 5 responders (RC5)
Explain how responder competition works?
Proposer selects how to split money between themself and a responder. If all reject, everyone receives zero, if one accepts they receive and P does too, if more than one accepts there is random selection between all accepting Rs
