13 results
Contributors
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- By Mitchell Aboulafia, Frederick Adams, Marilyn McCord Adams, Robert M. Adams, Laird Addis, James W. Allard, David Allison, William P. Alston, Karl Ameriks, C. Anthony Anderson, David Leech Anderson, Lanier Anderson, Roger Ariew, David Armstrong, Denis G. Arnold, E. J. Ashworth, Margaret Atherton, Robin Attfield, Bruce Aune, Edward Wilson Averill, Jody Azzouni, Kent Bach, Andrew Bailey, Lynne Rudder Baker, Thomas R. Baldwin, Jon Barwise, George Bealer, William Bechtel, Lawrence C. Becker, Mark A. Bedau, Ernst Behler, José A. Benardete, Ermanno Bencivenga, Jan Berg, Michael Bergmann, Robert L. Bernasconi, Sven Bernecker, Bernard Berofsky, Rod Bertolet, Charles J. Beyer, Christian Beyer, Joseph Bien, Joseph Bien, Peg Birmingham, Ivan Boh, James Bohman, Daniel Bonevac, Laurence BonJour, William J. Bouwsma, Raymond D. Bradley, Myles Brand, Richard B. Brandt, Michael E. Bratman, Stephen E. Braude, Daniel Breazeale, Angela Breitenbach, Jason Bridges, David O. Brink, Gordon G. Brittan, Justin Broackes, Dan W. Brock, Aaron Bronfman, Jeffrey E. Brower, Bartosz Brozek, Anthony Brueckner, Jeffrey Bub, Lara Buchak, Otavio Bueno, Ann E. Bumpus, Robert W. Burch, John Burgess, Arthur W. Burks, Panayot Butchvarov, Robert E. Butts, Marina Bykova, Patrick Byrne, David Carr, Noël Carroll, Edward S. Casey, Victor Caston, Victor Caston, Albert Casullo, Robert L. Causey, Alan K. L. Chan, Ruth Chang, Deen K. Chatterjee, Andrew Chignell, Roderick M. Chisholm, Kelly J. Clark, E. J. Coffman, Robin Collins, Brian P. Copenhaver, John Corcoran, John Cottingham, Roger Crisp, Frederick J. Crosson, Antonio S. Cua, Phillip D. Cummins, Martin Curd, Adam Cureton, Andrew Cutrofello, Stephen Darwall, Paul Sheldon Davies, Wayne A. Davis, Timothy Joseph Day, Claudio de Almeida, Mario De Caro, Mario De Caro, John Deigh, C. F. Delaney, Daniel C. Dennett, Michael R. DePaul, Michael Detlefsen, Daniel Trent Devereux, Philip E. Devine, John M. Dillon, Martin C. Dillon, Robert DiSalle, Mary Domski, Alan Donagan, Paul Draper, Fred Dretske, Mircea Dumitru, Wilhelm Dupré, Gerald Dworkin, John Earman, Ellery Eells, Catherine Z. Elgin, Berent Enç, Ronald P. Endicott, Edward Erwin, John Etchemendy, C. Stephen Evans, Susan L. Feagin, Solomon Feferman, Richard Feldman, Arthur Fine, Maurice A. Finocchiaro, William FitzPatrick, Richard E. Flathman, Gvozden Flego, Richard Foley, Graeme Forbes, Rainer Forst, Malcolm R. Forster, Daniel Fouke, Patrick Francken, Samuel Freeman, Elizabeth Fricker, Miranda Fricker, Michael Friedman, Michael Fuerstein, Richard A. Fumerton, Alan Gabbey, Pieranna Garavaso, Daniel Garber, Jorge L. A. Garcia, Robert K. Garcia, Don Garrett, Philip Gasper, Gerald Gaus, Berys Gaut, Bernard Gert, Roger F. Gibson, Cody Gilmore, Carl Ginet, Alan H. Goldman, Alvin I. Goldman, Alfonso Gömez-Lobo, Lenn E. Goodman, Robert M. Gordon, Stefan Gosepath, Jorge J. E. Gracia, Daniel W. Graham, George A. Graham, Peter J. Graham, Richard E. Grandy, I. Grattan-Guinness, John Greco, Philip T. Grier, Nicholas Griffin, Nicholas Griffin, David A. Griffiths, Paul J. Griffiths, Stephen R. Grimm, Charles L. Griswold, Charles B. Guignon, Pete A. Y. Gunter, Dimitri Gutas, Gary Gutting, Paul Guyer, Kwame Gyekye, Oscar A. Haac, Raul Hakli, Raul Hakli, Michael Hallett, Edward C. Halper, Jean Hampton, R. James Hankinson, K. R. Hanley, Russell Hardin, Robert M. Harnish, William Harper, David Harrah, Kevin Hart, Ali Hasan, William Hasker, John Haugeland, Roger Hausheer, William Heald, Peter Heath, Richard Heck, John F. Heil, Vincent F. Hendricks, Stephen Hetherington, Francis Heylighen, Kathleen Marie Higgins, Risto Hilpinen, Harold T. Hodes, Joshua Hoffman, Alan Holland, Robert L. Holmes, Richard Holton, Brad W. Hooker, Terence E. Horgan, Tamara Horowitz, Paul Horwich, Vittorio Hösle, Paul Hoβfeld, Daniel Howard-Snyder, Frances Howard-Snyder, Anne Hudson, Deal W. Hudson, Carl A. Huffman, David L. Hull, Patricia Huntington, Thomas Hurka, Paul Hurley, Rosalind Hursthouse, Guillermo Hurtado, Ronald E. Hustwit, Sarah Hutton, Jonathan Jenkins Ichikawa, Harry A. Ide, David Ingram, Philip J. Ivanhoe, Alfred L. Ivry, Frank Jackson, Dale Jacquette, Joseph Jedwab, Richard Jeffrey, David Alan Johnson, Edward Johnson, Mark D. Jordan, Richard Joyce, Hwa Yol Jung, Robert Hillary Kane, Tomis Kapitan, Jacquelyn Ann K. Kegley, James A. Keller, Ralph Kennedy, Sergei Khoruzhii, Jaegwon Kim, Yersu Kim, Nathan L. King, Patricia Kitcher, Peter D. Klein, E. D. Klemke, Virginia Klenk, George L. Kline, Christian Klotz, Simo Knuuttila, Joseph J. Kockelmans, Konstantin Kolenda, Sebastian Tomasz Kołodziejczyk, Isaac Kramnick, Richard Kraut, Fred Kroon, Manfred Kuehn, Steven T. Kuhn, Henry E. Kyburg, John Lachs, Jennifer Lackey, Stephen E. Lahey, Andrea Lavazza, Thomas H. Leahey, Joo Heung Lee, Keith Lehrer, Dorothy Leland, Noah M. Lemos, Ernest LePore, Sarah-Jane Leslie, Isaac Levi, Andrew Levine, Alan E. Lewis, Daniel E. Little, Shu-hsien Liu, Shu-hsien Liu, Alan K. L. Chan, Brian Loar, Lawrence B. Lombard, John Longeway, Dominic McIver Lopes, Michael J. Loux, E. J. Lowe, Steven Luper, Eugene C. Luschei, William G. Lycan, David Lyons, David Macarthur, Danielle Macbeth, Scott MacDonald, Jacob L. Mackey, Louis H. Mackey, Penelope Mackie, Edward H. Madden, Penelope Maddy, G. B. Madison, Bernd Magnus, Pekka Mäkelä, Rudolf A. Makkreel, David Manley, William E. Mann (W.E.M.), Vladimir Marchenkov, Peter Markie, Jean-Pierre Marquis, Ausonio Marras, Mike W. Martin, A. P. Martinich, William L. McBride, David McCabe, Storrs McCall, Hugh J. McCann, Robert N. McCauley, John J. McDermott, Sarah McGrath, Ralph McInerny, Daniel J. McKaughan, Thomas McKay, Michael McKinsey, Brian P. McLaughlin, Ernan McMullin, Anthonie Meijers, Jack W. Meiland, William Jason Melanson, Alfred R. Mele, Joseph R. Mendola, Christopher Menzel, Michael J. Meyer, Christian B. Miller, David W. Miller, Peter Millican, Robert N. Minor, Phillip Mitsis, James A. Montmarquet, Michael S. Moore, Tim Moore, Benjamin Morison, Donald R. Morrison, Stephen J. Morse, Paul K. Moser, Alexander P. D. Mourelatos, Ian Mueller, James Bernard Murphy, Mark C. Murphy, Steven Nadler, Jan Narveson, Alan Nelson, Jerome Neu, Samuel Newlands, Kai Nielsen, Ilkka Niiniluoto, Carlos G. Noreña, Calvin G. Normore, David Fate Norton, Nikolaj Nottelmann, Donald Nute, David S. Oderberg, Steve Odin, Michael O’Rourke, Willard G. Oxtoby, Heinz Paetzold, George S. Pappas, Anthony J. Parel, Lydia Patton, R. P. Peerenboom, Francis Jeffry Pelletier, Adriaan T. Peperzak, Derk Pereboom, Jaroslav Peregrin, Glen Pettigrove, Philip Pettit, Edmund L. Pincoffs, Andrew Pinsent, Robert B. Pippin, Alvin Plantinga, Louis P. Pojman, Richard H. Popkin, John F. Post, Carl J. Posy, William J. Prior, Richard Purtill, Michael Quante, Philip L. Quinn, Philip L. Quinn, Elizabeth S. Radcliffe, Diana Raffman, Gerard Raulet, Stephen L. Read, Andrews Reath, Andrew Reisner, Nicholas Rescher, Henry S. Richardson, Robert C. Richardson, Thomas Ricketts, Wayne D. Riggs, Mark Roberts, Robert C. Roberts, Luke Robinson, Alexander Rosenberg, Gary Rosenkranz, Bernice Glatzer Rosenthal, Adina L. Roskies, William L. Rowe, T. M. Rudavsky, Michael Ruse, Bruce Russell, Lilly-Marlene Russow, Dan Ryder, R. M. Sainsbury, Joseph Salerno, Nathan Salmon, Wesley C. Salmon, Constantine Sandis, David H. Sanford, Marco Santambrogio, David Sapire, Ruth A. Saunders, Geoffrey Sayre-McCord, Charles Sayward, James P. Scanlan, Richard Schacht, Tamar Schapiro, Frederick F. Schmitt, Jerome B. Schneewind, Calvin O. Schrag, Alan D. Schrift, George F. Schumm, Jean-Loup Seban, David N. Sedley, Kenneth Seeskin, Krister Segerberg, Charlene Haddock Seigfried, Dennis M. Senchuk, James F. Sennett, William Lad Sessions, Stewart Shapiro, Tommie Shelby, Donald W. Sherburne, Christopher Shields, Roger A. Shiner, Sydney Shoemaker, Robert K. Shope, Kwong-loi Shun, Wilfried Sieg, A. John Simmons, Robert L. Simon, Marcus G. Singer, Georgette Sinkler, Walter Sinnott-Armstrong, Matti T. Sintonen, Lawrence Sklar, Brian Skyrms, Robert C. Sleigh, Michael Anthony Slote, Hans Sluga, Barry Smith, Michael Smith, Robin Smith, Robert Sokolowski, Robert C. Solomon, Marta Soniewicka, Philip Soper, Ernest Sosa, Nicholas Southwood, Paul Vincent Spade, T. L. S. Sprigge, Eric O. Springsted, George J. Stack, Rebecca Stangl, Jason Stanley, Florian Steinberger, Sören Stenlund, Christopher Stephens, James P. Sterba, Josef Stern, Matthias Steup, M. A. Stewart, Leopold Stubenberg, Edith Dudley Sulla, Frederick Suppe, Jere Paul Surber, David George Sussman, Sigrún Svavarsdóttir, Zeno G. Swijtink, Richard Swinburne, Charles C. Taliaferro, Robert B. Talisse, John Tasioulas, Paul Teller, Larry S. Temkin, Mark Textor, H. S. Thayer, Peter Thielke, Alan Thomas, Amie L. Thomasson, Katherine Thomson-Jones, Joshua C. Thurow, Vzalerie Tiberius, Terrence N. Tice, Paul Tidman, Mark C. Timmons, William Tolhurst, James E. Tomberlin, Rosemarie Tong, Lawrence Torcello, Kelly Trogdon, J. D. Trout, Robert E. Tully, Raimo Tuomela, John Turri, Martin M. Tweedale, Thomas Uebel, Jennifer Uleman, James Van Cleve, Harry van der Linden, Peter van Inwagen, Bryan W. Van Norden, René van Woudenberg, Donald Phillip Verene, Samantha Vice, Thomas Vinci, Donald Wayne Viney, Barbara Von Eckardt, Peter B. M. Vranas, Steven J. Wagner, William J. Wainwright, Paul E. Walker, Robert E. Wall, Craig Walton, Douglas Walton, Eric Watkins, Richard A. Watson, Michael V. Wedin, Rudolph H. Weingartner, Paul Weirich, Paul J. Weithman, Carl Wellman, Howard Wettstein, Samuel C. Wheeler, Stephen A. White, Jennifer Whiting, Edward R. Wierenga, Michael Williams, Fred Wilson, W. Kent Wilson, Kenneth P. Winkler, John F. Wippel, Jan Woleński, Allan B. Wolter, Nicholas P. Wolterstorff, Rega Wood, W. Jay Wood, Paul Woodruff, Alison Wylie, Gideon Yaffe, Takashi Yagisawa, Yutaka Yamamoto, Keith E. Yandell, Xiaomei Yang, Dean Zimmerman, Günter Zoller, Catherine Zuckert, Michael Zuckert, Jack A. Zupko (J.A.Z.)
- Edited by Robert Audi, University of Notre Dame, Indiana
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- The Cambridge Dictionary of Philosophy
- Published online:
- 05 August 2015
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- 27 April 2015, pp ix-xxx
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Can More Be Less? An Experimental Test of the Resource Curse
- Omar Al-Ubaydli, Kevin McCabe, Peter Twieg
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- Journal of Experimental Political Science / Volume 1 / Issue 1 / Spring 2014
- Published online by Cambridge University Press:
- 20 August 2014, pp. 39-58
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Several scholars have argued that abundant natural resources can be harmful to economic performance under bad institutions and helpful when institutions are good. These arguments have either been theoretical or based on naturally occurring variation in natural resource wealth. We test this theory by using a laboratory experiment to reap the benefits of randomized control. We conduct this experiment in a virtual world (Second Life™) to make institutions more visceral. We find support for the theory.
NEUROECONOMICS AND THE ECONOMIC SCIENCES
- Kevin A. McCabe
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- Journal:
- Economics & Philosophy / Volume 24 / Issue 3 / November 2008
- Published online by Cambridge University Press:
- 01 November 2008, pp. 345-368
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Neuroeconomics is the newest of the economic sciences with a focus on how the embodied human brain interacts with its institutional and social environment to make economic decisions. This paper presents an overview of neuroeconomics methods and reviews a number of results in this emerging field of study.
Scarcity begets addiction
- Giorgio A. Ascoli, Kevin A. McCabe
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- Journal:
- Behavioral and Brain Sciences / Volume 29 / Issue 2 / April 2006
- Published online by Cambridge University Press:
- 05 April 2006, p. 178
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As prototypical incentive with biological meaning, food illustrates the distinction between money as tool and money as drug. However, consistent neuroscience results challenge this view of food as intrinsic value and opposite to drugs of abuse. The scarce availability over evolutionary time of both food and money may explain their similar drug-like non-satiability, suggesting an integrated mechanism for generalized reinforcers.
5 - Preferences, Property Rights, and Anonymity in Bargaining Games
- Vernon L. Smith, University of Arizona
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- Bargaining and Market Behavior
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- 29 October 2009
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- 12 June 2000, pp 90-126
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Summary
The ethnologist, Diamond Jenness, who was asked by the Canadian government in 1913 to join Stefansson's Arctic expedition to study Eskimos for three years, records the following in his diary:
Not all the cabins that stood empty had been vacated until the next winter … and from two poles dangled a score or more fox skins. It was the latter that particularly caught my attention. Here were what amounted to a year's earnings exposed wide open to the heavens, where the first passerby could appropriate them at his leisure. In reality, of course, they were as safe as in Brower's storeroom, for with a population so small, everyone always knew who was living where, and a pilferer had little or no chance of escaping detection.… honesty comes much more easily in a tiny community than it does in a great city, where misconduct always hopes that the multitude of alien tracks will cover up its own footprints. (Jenness, 1957, pp. 128–9)
Noncooperative, nonrepeated game theory is about strangers with no shared history, like the residents of Jenness' “great city.”They meet, interact strategically in their individual self interests according to well specified rules and payoffs, and never meet again.These stark conditions are necessary to ensure that the noncooperative, nonrepeated game theoretic prediction for the interaction is not part of a sequence with a past and a future.Thus, repeated games are analyzed differently because now strangers can potentially cooperate by developing their own history and future.
9 - Behavioral Foundations of Reciprocity: Experimental Economics and Psychology
- Vernon L. Smith, University of Arizona
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- Bargaining and Market Behavior
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- 29 October 2009
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- 12 June 2000, pp 177-200
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Theorists have long studied the fundamental problem that cooperative, socially efficient outcomes generally cannot be supported as equilibria in finite games. The puzzle is the occurrence of cooperative behavior in the absence of immediate incentives to engage in such behavior. For example, in two-person bargaining experiments, where noncooperative behavior does not support efficient outcomes, we observe more cooperative behavior and greater efficiency than such environments are expected to produce. Similarly, in public good experiments with group size varying from 4 to 100, people tend to achieve much higher payoff levels than predicted by noncooperative theory. Moreover, examples of the achievement of cooperative behavior by decentralized means have a long history in the human experience. Anthropological and archeological evidence suggests that sharing behavior is ubiquitous in tribal cultures that lack markets,monetary systems, or other means of storing and redistributing wealth (see, e.g., Cosmides and Tooby, 1987, 1989; Isaac, 1978; Kaplan and Hill, 1985b; Tooby and De Vore, 1987; Trivers, 1971).
In this paper we draw together theoretical and experimental evidence from game theory, evolutionary psychology, and experimental economics that provides the basis for developing a reciprocity framework for understanding the persistence of cooperative outcomes in the face of contrary individual incentives. Repeated game theory with discounting or infinite time horizons allows for cooperative solutions but does not yield conditions for predicting them (Fudenberg and Tirole, 1993). Recent research in evolutionary psychology (Cosmides and Tooby, 1987, 1989, 1992) suggests that humans may be evolutionarily predisposed to engage in social exchange using mental algorithms that identify and punish cheaters.
8 - Game Theory and Reciprocity in Some Extensive Form Experimental Games
- Vernon L. Smith, University of Arizona
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- Bargaining and Market Behavior
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- 29 October 2009
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- 12 June 2000, pp 152-176
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We use variations on a relatively transparent, two-person extensive form bargaining game to examine principles of self-evident play (Kreps, 1990a) using experimental analysis. Our game is transparent if players can be expected to understand the relationship between the possible sequences of plays with their counterparts and the resulting payoffs that can be achieved. However, how to develop strategy for a relatively transparent game may not be self-evident because it requires players to be confident about their counterparts' actions and reactions. So, when are players likely to be mutually confident?
Evolutionary psychology provides one approach to answering this question. Hoffman et al. (1996b) and the references therein give a more extended discussion of the role of evolutionary psychology in explaining many economics experiments that exhibit anomalous behavior relative to standard theory. Even though economic theory assumes that individuals employ general purpose consciously cognitive algorithms to optimize gains in any situation, evolutionary psychology assumes that individuals deploy domain-specific cognitive algorithms, with different algorithms being used for different situations, often in nonconscious ways. Economic theory disciplines our thinking by requiring behaviors that maximize individual utility, whereas evolutionary psychology disciplines our thinking by requiring blue-prints for behavioral activity that can be adapted under natural selection. Of course the relative value of these blueprints from nature depends on their subsequent development by cultural interaction (nurture) and a continuing evaluation of behavioral success through experience.
In this chapter, we address the following question: Can we use principles from game theory, experimental economics, and evolutionary psychology to better understand what is self-evident to players playing our extensive form games?
I. Principles of Behavior
The fundamental principles which underpin the propositions we examine experimentally can be stated as follows:…
6 - Social Distance and Other-Regarding Behavior in Dictator Games
- Vernon L. Smith, University of Arizona
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- Bargaining and Market Behavior
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- 29 October 2009
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- 12 June 2000, pp 127-138
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In this chapter, we ask if instructional and procedural manipulation can be used in a systematic way to understand the social norms that have been said to be the cause of deviations from game theoretic predictions in dictator and other games. We find that such manipulations, intended to affect subjects' degree of social distance from the experimenter and assumed to affect expectations of reciprocity, play a key role in determining and understanding behavior.
Dictator games with and without monetary rewards have been compared by Forsythe et al. (1994; hereafter FHSS). In this game, a subject and his or her anonymous counterpart in another room “has been provisionally allocated” $10. The subject's task is to decide how to “divide” the $10; the counterpart has no recourse but must accept the allocation. These phrases appearing in quotation marks constitute the exact language that appears in the instructions to the subjects. As we shall see, this language is not entirely benign. It was first used by Kahneman et al. (1986, pp. 105–6; hereafter KKT); and FHSS desired to stay close to this originating study to examine its replicability and the effect of reward variations in this version of the game.
Dictator games are an interesting vehicle for studying the meaning and interpretation of fairness. The dictator game controls for strategic behavior in the ultimatum game where the fairness interpretation first emerged prominently. In the ultimatum game, player 1 offers any amount of the $10 to player 2. If player 2 accepts, the $10 is divided according to the terms of the offer; if player 2 rejects, each player gets 0.
17 - An Experimental Examination of the Walrasian Tâtonnement Mechanism
- Vernon L. Smith, University of Arizona
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- Book:
- Bargaining and Market Behavior
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- 29 October 2009
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- 12 June 2000, pp 381-406
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Joyce (1984) reports the results of experiments with a Walrasian tâtonnement auction that show that the mechanism is stable, exhibits strong convergence properties, and generates efficiencies that average better than 97%. He also found that when subjects could see part of the order flow (excess demand), prices tended to be lower. His experiments consisted of a stationary environment where subjects were provided single unit supply and demand functions.We assess the robustness of his results in a more general multiunit per subject setting; and we systematically investigate the effect of various rules about order flow information and message restriction rules on the performance of the Walrasian mechanism.
Our experiments are motivated by several considerations.
1. When there are both buyers and sellers in the market, each of which has one unit to buy or sell, the only Nash equilibria of the Walrasian tâtonnement mechanism are those that support the competitive equilibrium outcome. Furthermore, a Walrasian tâtonnement process can be designed that has a dominant strategy equilibrium where each participant reveals value or cost (see McAfee, 1992). The design imposes constraints on participant messages; specifically, at the announced price at t, if excess demand is positive (negative), any seller (buyer) not registering a sell (buy) order at t cannot register an order at time t + 1. Without this improvement rule, the dominant strategy equilibrium outcome no longer exists.But even with this improvement rule, the dominant strategy revelation property does not hold when demands and supplies are multiunit, since a participant may influence price without being entirely out of the market.
7 - On Expectations and the Monetary Stakes in Ultimatum Games
- Vernon L. Smith, University of Arizona
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- Book:
- Bargaining and Market Behavior
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- 29 October 2009
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- 12 June 2000, pp 139-151
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In an ultimatum game, player 1 makes an offer of $X from a total of $M to player 2. If player 2 accepts the offer, then player 1 is paid $(M − X) and player 2 receives $X; if player 2 rejects the offer, each gets zero. In the ultimatum game experiments reported in the literature, M is typically not more than $10 (see Forsythe et al., 1994, hereafter FHSS; Hoffman et al., 1994, hereafter HMSS, and the literature cited therein). We report new results for 50 bargaining pairs in which M = $100 and compare them with previous outcomes from 48 pairs with M = $10. The need for an examination of the effect of increased stakes on ultimatum bargaining is suggested by a literature survey of the effect of varying the stakes in a wide variety of decision-making and market experiments over the last 33 years (Smith and Walker, 1993b). Many cases were found in which the predictions of theory were improved when the monetary rewards were increased.There were also cases in which the level of monetary rewards had no effect on the results. Consequently, it is necessary to examine the stakes question on a case-by-case basis. The previously reported effect of instructional changes, which define different institutional contexts, on ultimatum game outcomes, and the effect of stakes reported here, suggest a game formulation that explains changes in the behavior of both players as a result of changes in the instructional treatments. We formulated such a model and indicate how it might be further tested.
I. Theory and Previous Results
Suppose the payoffs and individual rationality of the players are common knowledge.
5 - The individual versus the aggregate
- Edited by Robert H. Ashton, Duke University, North Carolina, Alison Hubbard Ashton, Duke University, North Carolina
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- Book:
- Judgment and Decision-Making Research in Accounting and Auditing
- Published online:
- 03 May 2010
- Print publication:
- 29 September 1995, pp 102-134
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Introduction
To what degree do individual decision biases affect aggregate behavior? This question was introduced, and “answered, ” in the accounting literature twenty years ago when Gonedes and Dopuch (1974) argued that market efficiency necessarily precluded any impact of individual bias on aggregate capital–market behavior (that is, price). We know now that this claim need not be true. Recent advances in both theoretical and empirical research open the door for the influence of individual bias on aggregate–level behavior in capital markets as well as other aggregate settings. Experimental methods enhance our ability to pinpoint when biases do occur, measure the cost of bias, and examine what factors extinguish biases. In this chapter, we review the historical development of the issue of individual and aggregate behavior and develop a framework to systematically advance our knowledge in this area.
Since no generally accepted theory linking individual behavior to aggregate level behavior exists, we develop a framework enumerating the observable factors that distinguish individual decision–making settings from aggregate decision–making settings. Since these factors transcend theoretical paradigms, they form the basis for dialog between those that draw theory from economics and those that draw theory from psychology. In the spirit of enhancing such a dialog, we use this framework to examine several streams of research, and begin to address how changes in observable factors affect aggregate behavior.
In examining these settings, we ask not only whether individual biases persist at the aggregate level, but also whether aggregate settings introduce “new” biases of their own.
31 - Designing ‘Smart’ Computer-Assisted Markets
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- By Kevin A. McCabe, Stephen J. Rassenti, Economic Science Laboratory, University of Arizona, Tucson, AZ 85721, USA
- Vernon L. Smith, University of Arizona
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- Book:
- Papers in Experimental Economics
- Published online:
- 06 July 2010
- Print publication:
- 29 November 1991, pp 678-702
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We study a sealed bid-offer auction market for simultaneously pricing natural gas at each delivery outlet, source, and on all pipelines that connect sources with delivery points. Wholesale buyers submit location-specific bid schedules for amounts of delivered gas at corresponding prices. Wellhead owners submit location-specific offer schedules for amounts of produced gas they are willing to sell at corresponding offer prices. Pipeline owners submit leg-specific schedules of transportation capacity they are willing to commit at corresponding prices. A computer algorithm maximizes total gains from exchange based on the submitted bids and offers and determines allocations and non-discriminatory prices at all nodes.
As a consequence of technological economies of scale in pipeline transportation, natural gas has been considered a classic case of natural monopoly. But entry, growth and development in the industry in the United States has yielded more than one pipeline in most producing fields. Similarly most wholesale markets are served by at least two pipelines [Norman (1987)]. The concept of natural monopoly is a static concept; i.e. given any level of demand, declining long run marginal planning cost implies that one pipeline - a very large one, if demand is high – yields the least-cost solution to satisfying that demand. But in fact demand is cyclical and tends to grow over time, and new gas wells and gas fields develop over time.
‘Was Juvenal a Structuralist?‘ a Look at Anachronisms in Literary Criticism
- Kevin McCabe
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- Journal:
- Greece & Rome / Volume 33 / Issue 1 / April 1986
- Published online by Cambridge University Press:
- 07 September 2009, pp. 78-84
- Print publication:
- April 1986
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Oliver Goldsmith once wrote that the cultural history of a civilization can be divided into three periods: ‘its commencement, or the age of poets; its maturity, or the age of philosophers; and its decline, or the age of critics.’ Goldsmith went on to argue that the increase of critics is a natural result of the spread of learning, but, at the same time, invariably contributes to its decline. This is because critics represent a lower common denominator in literary taste than the poet or the philosopher, and because they approach culture in a more mechanical or hidebound manner. Goldsmith defines critics as ‘all such as judge by rule, and not by feelings’. He looks back to the days of King William and Queen Anne, and suggests that the decline in letters evident in his own day is partly attributable to the prevalence of criticism: