Roman Sheremeta

This experimental study compares sequential and simultaneous multi-battle election contests. We find substantial evidence of a “New Hampshire effect” in the sequential contests, ie the winner of the first battle wins the overall contest with much higher probability than the loser of the first battle. However, contrary to theory, sequential contest generate substantially higher expenditure than simultaneous contest. This is mainly because losers of the first battle do not decrease their expenditure in the second battle; and winners of the ...

ABSTRACT We designed an experiment to study behavior in information transmission games where underwriters have economic incentives to deceive and investors have incentives to avoid deception. Theory predicts that investors should not be able to glean information from the underwriters’ reports, and thus investment decisions should be based solely on the investment’s fundamental risk. To test this prediction we elicited choices from risky gambles constructed to be mathematically equivalent to the information setting if the underwriters’ reports had no information content. Participants acted simultaneously as underwriters and investors in one-shot information transmission games. Our findings indicate that underwriters acted deceptively, while investors invested conditional on the underwriters’ reports. Moreover, investors invested significantly more often when the expected return from the investment was relatively high. We observed that investors both gleaned and gambled, and those who gleaned earned higher payoffs.

Many economic interactions are characterized by “all or nothing” action spaces that may limit a demonstrable index of trust and, therefore, the propensity to reciprocate. In two experimental trust games, the action space governing investments was manipulated to examine the effects on investments and reciprocity. In the continuous game the investor could invest any amount between $0 and $10, while in the binary game the investor could invest either $0 or $10. In both games, the trustee received the tripled investment and then could return any amount back to the investor. Investors invested significantly more in the binary game than in the continuous game. However, higher investments in the binary game did not lead to more reciprocity. To the contrary, conditional on investment of $10, on average trustees returned significantly less in the binary game than in the continuous game.

Abstract: We compare the determinants of individual giving between two countries, Spain and the US, which differ in their redistribution policies and their beliefs over the causes of poverty. By varying the information about the determinants of income, we find that, although overall giving is similar in both countries when subjects know the actual role of luck and effort, Spanish subjects give more when they are uninformed compared to American subjects. Using elicited beliefs, we find that this is due to Spanish subjects associating ...

We compare the determinants of individual giving between two countries, Spain and the US, which differ in their redistribution policies and their beliefs over the causes of poverty. By varying the information about the determinants of income, we find that, although overall giving is similar in both countries when subjects know the actual role of luck and effort, Spanish subjects

We study how salient group identity, created through competition between students from different universities, as well as differences in the value of winning impact competitive behavior. Our experiment employs a simple all-pay auction within and between two university subject pools. We find that when competing against their peers, students within the lower tier university bid more aggressively than students within the top-tier university. Also, students from the lower tier university, in particular women, bid more aggressively when competing against students from the top-tier university. These findings, interpreted through a theoretical model incorporating both group identity and differential value of winning, suggest that students at the lower tier university have a stronger group identity as well as higher desire to win.

Experimental studies suggest that women are less competitive than men because they avoid tournament payment schemes. However, women also bid more aggressively in auctions, suggesting greater competitiveness. We design an all-pay auction experiment that rules out confounds, such as risk aversion, which would decrease entry into tournaments and also increase bids in auctions. The design, based on the predictions of a simple game theoretic model, requires revealing the gender of the opponent. Using this design, we find that women only bid higher than men when competing against other women, ruling out gender specific factors unrelated to strategic considerations. Our findings suggest that women have a higher value of winning which may not be reflected in tournament entry decisions, but may be important when bidding in auctions.