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Fairness versus efficiency
(2018)
We investigate in a laboratory experiment whether procedural fairness concerns affect how well individuals are able to solve a coordination problem in a two-player Volunteer's Dilemma. Subjects receive external action recommendations, either to volunteer or to abstain from it, in order to facilitate coordination and improve efficiency. We manipulate the fairness of the recommendation procedure by varying the probabilities of receiving the disadvantageous recommendation to volunteer between players. We find evidence that while recommendations improve overall efficiency regardless of their implications for expected payoffs, there are behavioural asymmetries depending on the recommendation: advantageous recommendations are followed less frequently than disadvantageous ones and beliefs about others' actions are more pessimistic in the treatment with recommendations inducing unequal expected payoffs.
Cooperation is — despite not being predicted by game theory — a widely documented aspect of human behaviour in Prisoner’s Dilemma (PD) situations. This article presents a comparison between subjects restricted to playing pure strategies and subjects allowed to play mixed strategies in a one-shot symmetric PD laboratory experiment. Subjects interact with 10 other subjects and take their decisions all at once. Because subjects in the mixed-strategy treatment group are allowed to condition their level of cooperation more precisely on their beliefs about their counterparts’ level of cooperation, we predicted the cooperation rate in the mixed-strategy treatment group to be higher than in the pure-strategy control group. The results of our experiment reject our prediction: even after controlling for beliefs about the other subjects’ level of cooperation, we find that cooperation in the mixed-strategy group is lower than in the pure-strategy group. We also find, however, that subjects in the mixedstrategy group condition their cooperative behaviour more closely on their beliefs than in the pure-strategy group. In the mixed-strategy group, most subjects choose intermediate levels of cooperation.
This paper studies the effects of two different frames on decisions in a dictator game. Before making their allocation decision, dictators read a short text. Depending on the treatment, the text either emphasizes their decision power and freedom of choice or it stresses their responsibility for the receiver’s payoff. Including a control treatment without such a text, three treatments are conducted with a total of 207 dictators. Our results show a different reaction to these texts depending on the dictator’s gender. We find that only men react positively to a text that stresses their responsibility for the receiver, while only women seem to react positively to a text that emphasizes their decision power and freedom of choice.