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Item type:Publication, Access status: with files , Bilateral communication in procurement auctionsWe ask how buyers can make use of bilateral communication in a procurement set- ting with moral hazard. We focus on a setting where buyers and potential sellers can exchange cheap-talk messages before trading and where the seller is determined via a buyer-determined procurement auction. In this type of auction, buyers can freely choose among bidders based on bidders' observable characteristics and the prices they ask for. In a controlled laboratory experiment, we found that buyers use free- form text messages to make requests and to reduce social distance. The relationship between the offers sellers make and the messages they send is mediated by buyers' requests. But, in general, buyers may increase their profits by choosing sellers who promise high quality or large profits. Furthermore, despite the cheap-talk nature of requests, buyers in our experiment increase their profits by specifically demanding high quality or large profits.Publicationtype: Journal Article79 68 - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Access status: with files , CO2 emission reduction : real public good provision by large groups in the laboratory(Elsevier, 2022-08); ; ; ; Public good experiments are usually conducted in the laboratory using the voluntary contribution mechanism (VCM). We use a real public good (CO2 emission rights) with comparatively large groups (up to 60 subjects) and compare the results with corresponding experiments based on the VCM. Our treatment variations include group size and the feedback that subjects receive after each round. Our data reveal that, in contrast to the VCM, subjects dealing with a real public good relate their decisions to those of their group members in the lab only in the first rounds and do not change their contributions thereafter. These observations suggest that, when faced with a real public good, subjects use the whole group, including “players” outside the lab, as a main reference point. In this way, contributions made to the real public good in the lab tend to depend on the salience of mutual cooperation benefits existing outside the lab. Our findings help to understand the transferability of previous laboratory research on the VCM to real public good provision.Publicationtype: Journal ArticleScopus© Citations 1 124 254 - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Access status: with files , Public good provision by large groups : the logic of collective action revisited(Elsevier, 2019-06-06); ; ; ; The organization of collective action is extremely important for societies. A main reason is that many of the key problems societies face are public good problems. We present results from a series of laboratory experiments with large groups of up to 100 subjects. Our results demonstrate that large groups, in which the impact of an individual contribution (MPCR) is almost negligible, are able to provide a public good in the same way as small groups in which the impact of an individual contribution is much higher. Nevertheless, we find that small variations in MPCR in large groups have a strong effect on contributions. We develop a hypothesis concerning the interplay between MPCR and group size, which is based on the assumption that the salience of the advantages of mutual cooperation plays a decisive role. This hypothesis is successfully tested in a second series of experiments. Since Mancur Olson's “Logic of collective action” it is a commonly held belief that in large groups the prospects of a successful organization of collective actions are rather bad. Our results, however, suggest that the chance to successfully organize collective action of large groups and to solve important public good problems is much higher than previously thought.Publicationtype: Journal ArticleScopus© Citations 25 98 241 - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Access status: with files , The role of communication content and reputation in the choice of transaction partners : a study based on field and laboratory dataWe study the effects of communication content and its interaction with reputation on the choice of transaction partners in markets with moral hazard. We find that buyers’ choices of sellers are influenced by prices and reputation information as well as by sellers’ messages: buyers prefer sellers who make specific promises. If specific promises are infeasible, buyers prefer sellers whose arguments reduce the social distance. These observations do not depend on the availability of reputation information. We also find that, if specific promises are feasible, buyers’ profits do not significantly differ from hypothetical profits realized under a correct expectations rule.Publicationtype: Journal ArticleScopus© Citations 5 81 143 - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Access status: with files , Exploring the capability to reason backwards : an experimental study with children, adolescents, and young adultsThis is the first study investigating the development of the capability to reason backwards in children, adolescents, and young adults aged 6 to 23 under controlled laboratory conditions. The experimental design employs a modified version of the race game. As in the original game, subjects need to apply backward analysis in order to solve the games. We find that subjects' capability to reason backwards improves with age, but that this process systematically differs across genders. Our repetition of the games indicates that differences exist also in learning between age groups and across genders.Publicationtype: Journal ArticleScopus© Citations 12 138 157 - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Access status: with files , Does truth win when teams reason strategically?We study behavior in the race game with the aim of assessing whether teams can create synergies. The race game has the advantage that the optimal strategy depends neither on beliefs about other players nor on distributional or efficiency concerns. Our results reveal that teams not only outperform individuals but that they can also beat the "truth-wins" benchmark. In particular, varying the length of the race game we find that the team advantage increases with the complexity of the game.Publicationtype: Journal ArticleScopus© Citations 3 64 141 - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Access status: with files , Reputation and mechanism choice in procurement auctions : an experimentWe experimentally study the role of reputation in procurement using two common mechanisms: price-based and buyer-determined auctions. While buyers are bound to buy from the lowest bidder in price-based auctions, they can choose between bidders in buyer-determined auctions. Only the latter buyers can consider the reputation of bidders. We find that bidders supply higher quality in buyer-determined auctions leading to higher market efficiencies in these auctions. Accordingly, buyers prefer the buyer-determined auction over the price-based auction, while only half of the bidders do so. A more detailed analysis of buyers' and bidders' behavior and profits provides insights into their mechanism choice. © 2012 Production and Operations Management Society.Publicationtype: Journal ArticleScopus© Citations 16 70 246 - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Access status: without files , Laying off or not? the Influence of framing and economics education(The Economics Network, 2010); ; ; ; Ariel Rubinstein’s (2006) sceptical comment on the study of economics hits a nerve with many economists who worry that what they teach and the way in which they teach may indoctrinate students. Rubinstein conducted a survey in which students had to decide whether to lay off workers, and thus meet a company’s goal of making high profits, or to fire less, which results in lower profits. In his survey, it turned out that economists put, on average, a much higher weight on the company’s profit than non-economists. Rubinstein’s conjecture is that economics students’‘views on economic issues are influenced by the way we teach, perhaps without them even realizing it’.This is a serious accusation and our immediate response to his article was astonishment. Is the way we teach really flawed? There are some big clouds of doubt that make us reluctant to follow Rubinstein’s recommendation to consider changing our teaching methods.Publicationtype: Journal Article109 2