ABSTRACT This paper assesses an extension of the method for graphical causal inference proposed b... more ABSTRACT This paper assesses an extension of the method for graphical causal inference proposed by Spirtes et al. and Pearl to nonlinear settings. We propose nonparametric tests for conditional independence based on kernel density estimation and study their relative performance in a Monte Carlo study. Our method outperforms Fischer’s z test for nonlinear settings while subject to the so-called curse of dimensionality. We do show, however, how the latter can be overcome by using local bootstrapping.
Research on individual concerns about procedural fairness has focussed on two aspects so far. Fir... more Research on individual concerns about procedural fairness has focussed on two aspects so far. First, on whether the mechanism determining an allocation matters when judging fairness, and second, on whether players' intentions do so. This paper inquires to what extent procedural fairness can be deflned in terms of reciprocity, that is, to which extent the fairness of a procedure may be expressed as the kindness of an opponent's act of choosing that procedure when the choice was left to her. Subsequently, we experimentally explore subjects' willingness to pay for changing the procedure when they expect intentions and outcomes to be equally fair across procedures. We thus rule out reciprocity motives and motives for equalizing expected payofis. We show that individuals display procedural preferences beyond the reasons discovered so far.
The winner's curse is a well-known deviation from rational self-interest in decision-making u... more The winner's curse is a well-known deviation from rational self-interest in decision-making under asymmetric information. Yet, most prominent explanations for the curse have experimentally been ruled out so far. In particular, the curse did neither seem to emanate from a lack of experience with a given task (Grosskopf et al. 2007), nor from the complexity of the decision task, nor level-k thinking, nor a disability to infer information from others' actions (Charness and Levin 2009), (Ivanov et al. 2010). This paper elicits individuals' sensitivity to incur a winner's curse in a common-value auction where the explanations above do not apply, tracks down the potential source of the curse, and tests to what extent individuals' cursedness evolves (Fudenberg 2006). It finds that the curse is tightly associated with a relatively stable individual characteristic - individuals' personality traits. Personality traits explain individuals' initial cursedness, and al...
We study individuals who can nudge themselves out of, or opt into a set of rules which either all... more We study individuals who can nudge themselves out of, or opt into a set of rules which either allows them to spy on an opponent, or to sabotage an opponent, or to fabricate payoff-relevant information on the opponent s moves. In an experiment, we observe significant altruism under rules which allow for fabrication and sabotage, but not under rules which allow for spying. We provide direct evidence that this altruism emanates from an ethical concern about the rules of the game. How individuals deal with this concern whether they prefer to nudge themselves into fabrication-free, spying-free, or sabotage-free rules, or whether they assume the power to fabricate or sabotage to compensate their opponent for the rules of the game by giving all payoff away varies along with individuals attitudes toward power.
Charitable donations are often made through intermediaries who can fund themselves from these sam... more Charitable donations are often made through intermediaries who can fund themselves from these same donations. Donors who purchase charitable output through an intermediary incur a principal-agent problem with unobservable prices. We compare charitable giving in an experiment with and without intermediation. Overall, donors give less when an intermediary is introduced, a decision which can only be partly explained by donors’ beliefs about the price of charitable output. However, this overall result can be attributed to only 41 per-cent of all donors. 59 per-cent of all donors in fact give as much or more with than without intermediation. Responses to intermediation can be explained by characteristics of donors’ moral judgment.
Theoretically and experimentally, we generalize the analysis of acquiring a company (Samuelson an... more Theoretically and experimentally, we generalize the analysis of acquiring a company (Samuelson and Bazerman 1985) by allowing for competition of both, buyers and sellers. Naivety of both is related to the idea that higher prices exclude worse qualities. While competition of naive buyers increases prices, competition of naive sellers promotes effciency enhancing trade. Our predictions are tested experimentally.
Do individuals choose how to a solve a dynamic game or is their mode of reasoning a type-like pre... more Do individuals choose how to a solve a dynamic game or is their mode of reasoning a type-like predisposition? We show experimentally that an individual’s propensity to forwardly or backwardly induct is a function of (i) her belief whether an opponent’s previous action was a trembling hand mistake or a rational choice, and (ii) her personality. In a two-stage game, the individual observes an action of a computerized opponent (stage 1) before both interact (stage 2). The opponent chooses rationally most of the time and makes random choices with a small commonly known likelihood. Hence, the opponent’s action in stage 1 discloses with some probability the opponent’s type (choice) in stage 2. The individual can either believe that (i) the opponent chose randomly in stage 1, or that (ii) the opponent made a rational choice. An individual rationally responds to this belief if she solves stage 2 by backwards induction in the first, and by forward induction in the second case.
ABSTRACT This paper assesses an extension of the method for graphical causal inference proposed b... more ABSTRACT This paper assesses an extension of the method for graphical causal inference proposed by Spirtes et al. and Pearl to nonlinear settings. We propose nonparametric tests for conditional independence based on kernel density estimation and study their relative performance in a Monte Carlo study. Our method outperforms Fischer’s z test for nonlinear settings while subject to the so-called curse of dimensionality. We do show, however, how the latter can be overcome by using local bootstrapping.
Research on individual concerns about procedural fairness has focussed on two aspects so far. Fir... more Research on individual concerns about procedural fairness has focussed on two aspects so far. First, on whether the mechanism determining an allocation matters when judging fairness, and second, on whether players' intentions do so. This paper inquires to what extent procedural fairness can be deflned in terms of reciprocity, that is, to which extent the fairness of a procedure may be expressed as the kindness of an opponent's act of choosing that procedure when the choice was left to her. Subsequently, we experimentally explore subjects' willingness to pay for changing the procedure when they expect intentions and outcomes to be equally fair across procedures. We thus rule out reciprocity motives and motives for equalizing expected payofis. We show that individuals display procedural preferences beyond the reasons discovered so far.
The winner's curse is a well-known deviation from rational self-interest in decision-making u... more The winner's curse is a well-known deviation from rational self-interest in decision-making under asymmetric information. Yet, most prominent explanations for the curse have experimentally been ruled out so far. In particular, the curse did neither seem to emanate from a lack of experience with a given task (Grosskopf et al. 2007), nor from the complexity of the decision task, nor level-k thinking, nor a disability to infer information from others' actions (Charness and Levin 2009), (Ivanov et al. 2010). This paper elicits individuals' sensitivity to incur a winner's curse in a common-value auction where the explanations above do not apply, tracks down the potential source of the curse, and tests to what extent individuals' cursedness evolves (Fudenberg 2006). It finds that the curse is tightly associated with a relatively stable individual characteristic - individuals' personality traits. Personality traits explain individuals' initial cursedness, and al...
We study individuals who can nudge themselves out of, or opt into a set of rules which either all... more We study individuals who can nudge themselves out of, or opt into a set of rules which either allows them to spy on an opponent, or to sabotage an opponent, or to fabricate payoff-relevant information on the opponent s moves. In an experiment, we observe significant altruism under rules which allow for fabrication and sabotage, but not under rules which allow for spying. We provide direct evidence that this altruism emanates from an ethical concern about the rules of the game. How individuals deal with this concern whether they prefer to nudge themselves into fabrication-free, spying-free, or sabotage-free rules, or whether they assume the power to fabricate or sabotage to compensate their opponent for the rules of the game by giving all payoff away varies along with individuals attitudes toward power.
Charitable donations are often made through intermediaries who can fund themselves from these sam... more Charitable donations are often made through intermediaries who can fund themselves from these same donations. Donors who purchase charitable output through an intermediary incur a principal-agent problem with unobservable prices. We compare charitable giving in an experiment with and without intermediation. Overall, donors give less when an intermediary is introduced, a decision which can only be partly explained by donors’ beliefs about the price of charitable output. However, this overall result can be attributed to only 41 per-cent of all donors. 59 per-cent of all donors in fact give as much or more with than without intermediation. Responses to intermediation can be explained by characteristics of donors’ moral judgment.
Theoretically and experimentally, we generalize the analysis of acquiring a company (Samuelson an... more Theoretically and experimentally, we generalize the analysis of acquiring a company (Samuelson and Bazerman 1985) by allowing for competition of both, buyers and sellers. Naivety of both is related to the idea that higher prices exclude worse qualities. While competition of naive buyers increases prices, competition of naive sellers promotes effciency enhancing trade. Our predictions are tested experimentally.
Do individuals choose how to a solve a dynamic game or is their mode of reasoning a type-like pre... more Do individuals choose how to a solve a dynamic game or is their mode of reasoning a type-like predisposition? We show experimentally that an individual’s propensity to forwardly or backwardly induct is a function of (i) her belief whether an opponent’s previous action was a trembling hand mistake or a rational choice, and (ii) her personality. In a two-stage game, the individual observes an action of a computerized opponent (stage 1) before both interact (stage 2). The opponent chooses rationally most of the time and makes random choices with a small commonly known likelihood. Hence, the opponent’s action in stage 1 discloses with some probability the opponent’s type (choice) in stage 2. The individual can either believe that (i) the opponent chose randomly in stage 1, or that (ii) the opponent made a rational choice. An individual rationally responds to this belief if she solves stage 2 by backwards induction in the first, and by forward induction in the second case.
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Papers by Nadine Chlaß