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ESHPM - Jaar 3 > Minor - Week 3 > Flashcards

Minor - Week 3 Flashcards

1
Q

game

A

Situation where participants payoff depend also on their rivals decision

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2
Q

Strategic interaction

A

Optimal decisions will depend on the other in the game
- Sequentiel; other goes first
- simultanious; together not knowing other will do

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3
Q

Dominant strategies

A

Strategy if, no matter what the other player does it generates the highest pay off
- Best response for the player no matter others choose
- Be aware no interaction

  • Dominant strategy always choose this one, rational
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4
Q

Dominated strategy

A

Worse strategy
A strategy is dominated if there is another strategy that always gives a better outcome, no matter what the other player does.

  • There is another strategy
  • Rational player never choose this
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5
Q

Nash equilibrium

A

I’m doing the best I can given what you are doing. You’re doing the best you can given what I am doing
- Interaction

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6
Q

Prisoners dilemma

A
  • Risk of remain silent is to high (40 years)
  • Both suspects rational, choose to minimalize sentance
  • Can’t speak to each other
  • Dominant strategy is confess, because you have 0 years then
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7
Q

Be aware prisoner dilemma and other games

A
  • Less is better with prisoners dilemma
  • Otherwise highest payout
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8
Q

control mechanism nash eq

A

Try to shift the payment to see if there is another higher outcome

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9
Q

Sequential decisions

A
  • Work from last decision backwards towards first decision
  • Dictator game and ultimatum game
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10
Q

Ultimatum game

A

2 players
- 1 get 10
- Has to make an offer to player two
- Reject or accept

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11
Q

Question ultimatum game

A

What would player 2 accept
- All offers above 0
- 0 he is different between accepting and not accepting

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12
Q

Dictator game

A

Player 1 can offer money
player 2 nothing to say

  • Best offer to player 2 –> nothing
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13
Q

Reasons why not given low amount of money even if this was the most rational option?

A

Fairness; People care about outcome relative to others

Reciprocity; people seem to desire reciprocity (other does good or bad to me than i want to do the same)

Negative response by lower offers, fear of rejection, increase offer

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14
Q

Characteristics of goods

A

Excludeable

Rival in consumption

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15
Q

Excludable

A

Person can be prevented form using it
: ice cream cones, wireless internet access
: FM radio signals, national defense

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16
Q

Rival in consumption

A

Onced use there is less for others
Rival: ice cream cones
Not rival: an MP3 file of a popular song

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17
Q

Four different kinds of goods

A

Private goods
public goods
common resources
natural monopolies

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18
Q

private goods

A

excludable, rival in consumption
VB; food

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19
Q

Public goods

A

not excludable, not rival
- National defence

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20
Q

common resources

A

rival but not excludable
- Fish

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21
Q

Natural monopolies

A

excludable but not rival
vb; cable tv

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22
Q

Externalities which goods

A
  • Common resources
  • Public goods

Something of value no price attached, can lead to not efficiënt use. Lead to overuse or underuse which harms society
- Use policy to correct market failures

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23
Q

Public goods and problem

A

Free rider problem
- Firms are not willing, everyone use but no payment
- Goods not provided: good is not produced, even if buyers collectively value
the good higher than the cost of providing it.
- Government intervention needed

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24
Q

Free rider

A

Peron who recieves the benefits of a good but avoids paying for it

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25
Health as a good
- Rival; you posesses it not anyone alse - Exclusive; yes others may not benefit from your good health (productivity) Health is not a public good but a private good
26
Healthcare as a good
- Excludable; Yes, not paying - Rival; yes treating you can not treat anyone else Private good
27
common resources
Not excludable but rival - Ocean fishing Litte incentive to produce for firms Cannot prevent freeriders Rival in consumption; government need to step in and avoid overuse
28
Tragedy of commons
- Common resources more used than socially diserable Tragedy due to externality - People neglect this external costs, resulting in overuse of in this case land
29
Examples of common resources
- Clean air and water - Congested roads - Wildlife - Virus free environment
30
Core policy use by common resources and public goods
ensuring collective action to facilitate production and acces to goods which are largely non- excludable and non-rival in consumption
31
Public and common goods
public is under provision common overuse
32
Pricing and quantity
- Lower prices increases consumption (quantity) - Higher pays leads to more demand for labour and effort
33
Social norms sorts
Descriptive norms Injunctive/ prescriptive norms
34
Descriptive norms
beliefs about what others actually do - Commonly done
35
Injunctive norms
beliefs about others think we should do - Socially acceptable
36
Which norm is more likely to affect behavior
Bicchieri & Xiao (2009) - Discriptive Stok, de Ridder, de Vet & de Wit - Descriptive What people actually do around is stronger incentive for behavior
37
Contradicting theather and law of demand
When something is free high quantity is expected But social norms
38
Market norms and social norms
- Market norms; introduce cost benefit thinking with a budget, taking much more - Social norms; drive behavior and norms when there is no price tag and taking less
39
pay enough or don't pay at all
- Low payments for task (cost beneift thinking and effort reduces) - Non- financial rewards also social norm thinking
40
Power of free
Without financial rewards we are more likely to base our decisions on social norms Well-known in marketing, giving away something for free creates a feeling of reciprocity (Cialdini, 1993)
41
Making something free
- Changes people preferences (even when there is a transaction to be made) - Free does not mean an increase in quantuty
42
Meaningfull and meaningless jobs
- Payment but also meaningness added to work - Less meaning less effort Pay not the only thing driving more labour
43
IKEA effect
cognitive bias; a cognitive bias in which consumers place a disproportionately high value on products they partially create - Working hard on something increases you appreciation - Willingness to pay increases as you made it yourself - Own labour leads to increased value up to pair with expert
44
Labour supply - rational perspective
Pay more employees work harder More work requires more compensation
45
What explains IKEA effect
Cognitive dissonance - justification of behavior; gap between actions and thoughts - After actions you beliefs change - IKEA; actions already must be nice Completion; you succeed in your task you like it more
46
Homo economicus behavior does not only respond to price changes but also to:
- Social norms (descriptive) - Monetary incentives can change behavior such that increasing pay decreases effort (boring task and Israeli study); too low pay - We change our preferences at prices around zero
47
zero price effect
- Something is free changes peoples preferences - Chocolate bars - Also when transaction cost with free has to be made
48
Variables
- Independent variable - Dependent variable
49
Independent variable
- exposure variable - manipulated variable Manipulated by scientist
50
Dependent variable
- Outcome variable - Response variable
51
different types of hypotheses testing
- interviews - participant observations - observational data - survey research - experiments; can find a causal effect
52
experiments
- sample of population - control over extraneous variables - Manipulation of independent variables - Random assignments (true effect of intervention, not the cause of chance as the chances are the same)
53
When not use experiments
- Unethical questions; hunger and mortality - natural variation; sex varies naturally, you cant have control over it, cant manipulate sex Relies on natural variation
54
population, element, sample and census Rotterdam
pop; All people in Rotterdam Census; all people in rotterdam included Element; one person in rotterdam Sample; part of people in rotterdam
55
Questions before assuming causality
- Is sample representive? - Could the effect have occured by chance?
56
Sampling techniques
- Simple random sampling - stratified sampling - Convenience sampling - quota sampling
57
Simple random sampling
Each member of population has equal chance of being sampled Probability sampling; every member same chance
58
Simple random sampling pro and cons
Pro; - Most likely to lead to a representative sample Cons: - Expensive and might be impossible to obtain full list op population - list must be kept up to date - Responses rate might below and cause issues
59
Stratified Random Sampling
- Focuses on strata - Selection of individuals still random - random sampling within strata, group represents parts of population - Randomization within strata Non probability sampling; not every member same chance
60
Stratified Random Sampling pro and cons
- Allows more targeted sampling and can be utilized to directly compare strata (at a small loss of representativeness) Cons: * Similar practical issues as with random sampling * Only representative if response rates are acceptable (at least we now know where they are centered
61
Convenience sampling
Use a sample that is conveniently reached and available - During classes - Recruitment - Asking on campus
62
Convenience sampling pro and cons
Pro: * Simple, quick and easy way of sampling * Often in universities systems are in place to facilitate this form of sampling cons * Serious issues with generalizing to populations (i.e. very likely a overrepresentation of some groups) External validity not good * Example: a) Newspaper polling their readers, b) recruitment via own social media, c) university labs
63
Quota Sampling
Quota based on knowlegde of the proportion in the population randomly assigning people to strata and then a convience sample - Not random - Strata - Convience sample
64
Quota Sampling pro and cons
pros * Simple, quick and easy way of sampling * Allows gathering a sample that is representative-like cons; * Non-random sampling still could have error
65
condition
A condition is a specific part of an experiment where the effect of the independent variable on the dependent variable is tested or measure
66
between subjects
Condition assigned to one group and compare the outcomes - There are different groups !
67
Within subjects
Each subjects complete multipele conditions - One group to condition A and then move to B
68
Between subjects
- No learning effects - Shorter sessions - Easier to set up and randomize
69
Within subjects
- Possible learning effects - Fewer respondents needed - Fewer noise (random error)
70
control condition
- No manipulation of independent variable
71
Condition assignment
- Chance of aspects must be the same - So there is no noise - Purely the effect of the intervention
72
Internal validity
Experiment proves that the changes in the independent variable are really causing the changes in the dependent variable, - High experimental control - Reliable measures - good data quality LAB
73
External validity
means how well the results of an experiment can be applied to or generalized to real-world situations or other groups of people. - Representative samples - Dynamic context
74
Conventional lab experiment
* a conventional lab experiment is one that employs a standard subject pool of students, an abstract framing, and an imposed set of rules We invite students to the lab, and they receive the instructions
75
Artefactual field experiment
an artefactual field experiment is the same as a conventional lab experiment but with a non-standard subject pool (real people), but lab Representative Tilburg citizens are recruited at the municipality center, invited to a lab on site and asked to read the instructions on site
76
Framed field experiment
a framed field experiment is the same as an artefactual field experiment but with field context in either the commodity, task, or information set that the subjects can use - Other environment, but awareness of experiment
77
Natural field experiment
is the same as a framed field experiment but where the environment is one where the subjects naturally undertake these tasks and where the subjects do not know that they are in an experiment. not knowing experiment
78
From field to lab
- subject (from students to real individuals) - Environment (lab to home) - Awareness of experiment)

ESHPM - Jaar 3 (9 decks)

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