infonet-economy

We study a new equilibrium concept in non-cooperative games, where players follow a behavioral rule called best-reply matching. Under this rule a player matches the probability of playing a pure strategy to the probability that this strategy is a best reply. Kosfeld, Droste, and Voorneveld [Games and Economic Behavior 40 (2002) 270] show that best-reply matching equilibria are…

One of the most basic questions in economics concerns the effects of competition onnmarket prices. We show that the neglect of both fairness concerns and decision errors prevents ansatisfactory understanding of how competition affects prices. We conducted experiments whichndemonstrate that the introduction of even a very small amount of competition to a bilateralnexchange situation…

We study the role of whistleblowing in the following inspection game. Two agents who compete for a prize can either behave legally or illegally. After the competition, a controller investigates the agents’ behavior. This inspection game has a unique (Bayesian) equilibrium in mixed strategies. We then add a whistleblowing stage, where the controller asks the loser to blow the whistle…

I consider the problem of evaluating the effect of a health care reform on the demand for doctor visits when the effect is potentially different in different parts of the outcome distribution. Quantile regression is a useful technique for studying such heterogeneous treatment effects. Recent progree has been made to extend such methods to applications with a count dependent variable…

Based on an experimental analysis of a simple monetary economy we argue that a monetarynsystem is more stable than one would expect from individual rationality. We show thatnpositive reciprocity stabilizes the monetary system, provided every participant considers thenfeedbacks of his choice to the stationary equilibrium. If however the participants do not playnstationary strategies…

This paper shows that a stock market is evolutionary stable if andnonly if stocks are evaluated by expected relative dividends. Any othernmarket can be invaded by portfolio rules that will gain market wealthnand hence change the valuation. In the model the valuation of assetsnis given by the wealth average of the portfolio rules in the market. Thenwealth dynamics is modelled as a…

This study reports data from a field experiment that was nconducted to investigate the relevance of gift-exchange for charitable ngiving. Roughly 10,000 solicitation letters were sent to potential donors nin the experiment. One third of the letters contained no gift, one third ncontained a small gift and one third contained a large gift. Whether a npotential donor received a letter…

Terrorism will be high on the political agenda for many years to come. Various policies are open to a government fighting terrorism but, in any case, considerable costs are involved. In the competition for politicalnsupport, the costs and benefits of anti-terrorism policies will be debated. Better information about terrorism and its consequences can improve policy outcome if there is…

This paper reports on a re-evaluation of the German health care reform of 1997. A previous evaluation found a limited effect of a 4.4 percent reduction of the number of doctor visits in a sample of pharmacy customers. The re-evaluation based on a representative household survey, the German Socio-Economic Panel, yields a much larger effect. The paper uses this case study to discuss…