Accepted and Published Papers:

Information Transmission under the Shadow of the Future: An Experiment

(with Emanuel Vespa).

Paper (April, 2019), accepted at American Economic Journal: Microeconomics

We experimentally examine how information transmission functions in an ongoing relationship. Where the one-shot cheap-talk literature documents substantial over-communication and preferences for honesty, in our repeated setting the outcomes are more consistent with uninformative babbling outcomes. This is particularly surprising as honest revelation is supportable as an equilibrium outcome in our repeated setting. We show that inefficient outcomes are driven by a coordination failure on how to distribute the gains from information sharing. However, when agents can coordinate on the payment of an "information rent," honest revelation emerges.

Experimenting with Incentives for Information Transmission: Quantity Versus Quality

(with Jonathan Lafky)

Paper, Journal of Economic Behavior and Organization, January 2020, 169: p.314-31

People share their experiences of goods and services online, through reviews, ratings and endorsements on social networks, potentially generating welfare-improving information that can help subsequent consumers make better, more informed decisions. While the economics literature has focused on questions of alignment and the intensive quality of provided information, another tension is extensive: in the absence of an incentive, many might choose not to provide information at all. We study three different incentives that encourage information transmission on the extensive margin, examining the tradeoffs between the quality and quantity of information. Our findings indicate substantial efficiency gains can be made relative to no incentives, even when the incentives damage the preference alignment between those sending and receiving information. In particular, our results point to a partially aligned incentive (similar to a referral or sales commission) as robustly encouraging the provision of information while not producing substantial reductions in quality.

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Appendix

Instructions

Experimenter Demand Effects

(with Jon De Quidt) and Lise Vesterlund

Chapter in Handbook of research methods and applications in experimental economics (eds. A Schram & A Ule), Edward Elgar

A study's internal and external validity is threatened by experimenter demand effects. This threat is taken seriously by experimental economists, who have developed a number of best practices to suppress or eliminate the potential role of such effects. We outline these best practices and review the literature to show that they are followed in the vast majority of published work. This adherence to best practice likely contributes to the limited evidence of experimenter demand effects uncovered in the literature. Specifically, we are not aware of examples where demand effects have been shown to influence the qualitative inference from a study. While good design goes a long way towards reducing the potential for experimenter demand effects, a complementary option, presented in our final section, is to derive bounds on the effect.

Experimenting with the Transition Rule in Dynamic Games

(with Emanuel Vespa)

Quantitative Economics, November 2019, 10(4): p.1825-49 (open access)

In dynamic environments where the strategic setting evolves across time, the specific rule governing the transitions can substantially alter the incentives agents face. This is particularly true when history-dependent strategies are used. In a laboratory study, we examine whether subjects respond to the transition rule and internalize its effects on continuation values. Our main comparison is between an endogenous transition where future states directly depend on current choices, and exogenous transitions where the future environment is random and independent of actions. Our evidence shows that subjects readily internalize the effect of the dynamic game transition rule on their incentives, in line with history-dependent theoretical predictions.

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Code and Data supplement

Instructions and Screenshots

Precursor Working Paper: Experimenting with Equilibrium Selection in Dynamic Games

Paper (June 2017)

A Proposal to Organize and Promote Replications

(with Lucas Coffman, Muriel Niederle)

American Economic Review (Papers and Proceedings), May 2017, 107(5), pp.41-45

We make a two-pronged proposal to (i) strengthen the incentivizes for replication work and (ii) better organize and draw attention to the replications that are conducted. First we propose that top journals publish short "replication reports." These reports could summarize novel work replicating an existing high-impact paper, or they could highlight a replication result embedded in a wider-scope published paper.  Second, we suggest incentivizing replications with the currency of our profession: citations.  Enforcing a norm of citing replication work alongside the original would provide incentives for replications to both authors and journals.

Assessing the Rate of Replication in Economics

(with James Berry,Lucas Coffman, Rania Gihleb, Douglas Hanley)

American Economic Review (Papers and Proceedings), May 2017, 107(5), pp. 27-31

We assess the rate of replication for empirical papers in the 2010 American Economic Review. Across seventy empirical papers, we find that 29 percent have one or more citation that partially replicates the original result. While only a minority of papers has a published replication, a majority (sixty percent) have either a replication, robustness test or an extension. Surveying authors within the literature we find substantial uncertainty over the number of extant replications.

At-will Relationships: How an Option to Walk Away Affects Cooperation and Efficiency

(with Hong Wu).

Games and Economic Behavior, March 2017, 102: p.487-507 .

We theoretically and experimentally examine the effects from adding a simple, empirically relevant action to a repeated partnership, the option to walk away. Manipulating both the value of the outside option, and its relative distribution among the partners, we examine the behavior of human subjects in a repeated prisoners' dilemma. In particular, we examine the degree of cooperation and the form of punishments used. Our findings indicate that cooperation rates are broadly unaffected by the value of the common outside option, but that the selection of supporting punishments - in-relationship defections or walking-away - are dictated by individual rationality. In contrast to the symmetric results, when outside options for partners are asymmetric we find stark selection effects over cooperation, with the potential for very high and very low efficiency, dependent on the precise division rule.

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InstructionsSummary Handout

Clearinghouses for Two-Sided Matching: An Experimental Study

(with Federico Echenique, Leeat Yariv)

Quantitative Economics, July 2016, 7(2): p.449-82 (open access)

We experimentally study the Gale and Shapley (1962) mechanism, utilized in a wide set of applications, most prominently the National Resident Matching Program (NRMP). Several insights come out of our analysis: First, only 48% of our observed outcomes are stable. Among those, a large majority culminates at the receivers-optimal stable matching. Second, receivers rarely truncate their true preferences; it is the proposers who do not make offers in order of their preference, frequently skipping potential partners. Third, market characteristics affect behavior: both the cardinal representation and core size influence whether laboratory outcomes arestable. We conclude by using our controlled results to shed light on a number of stylized facts we derive from new NRMP survey and outcome data, and to explain the small cores previously documented for the NRMP.

The Slider Task: An Example of Restricted Inference on Incentive Effects

(with Felipe Araujo, Erin Carbone, Lynn Connell-Price, Marli Dunietz, Ania Jaroszewicz, Rachel Landsman, Diego Lamé, Lise Vesterlund and Stephanie Wang)

Paper (April 2016), Journal of Economic Science Association, 2016, 2(1), p.1-12 (lead article).

Real-effort experiments are frequently used when examining a response to incentives. For a real-effort task to be well suited for such an exercise its measureable output must be sufficiently elastic over the incentives considered. The popular slider task in Gill and Prowse (2012) has been characterized as satisfying this requirement, and the task is increasingly used to investigate the response to incentives. However, a between-subject examination of the slider task's response to incentives has not been conducted. We provide such an examination with three different piece-rate incentives: half a cent, two cents, and eight cents per slider completed. We find only a small increase in performance: despite a 1,500 percent increase in the incentives, output only increases by 5 percent. With such an inelastic response we caution that for typical experimental sample sizes and incentives the slider task is unlikely to demonstrate a meaningful and statistically significant performance response.

Communication With Multiple Senders: An Experiment

Quantitative Economics, March 2016, 7(1): p.1-36 (open access), (lead article)

(with Emanuel Vespa).

We implement multi-sender cheap talk in the laboratory. While full-information transmission is not theoretically feasible in the standard one-sender one-dimension model, in this setting with more senders and dimensions, full revelation is generically a robust equilibrium outcome. Our experimental results indicate that fully revealing outcomes are selected in particular settings, but that partial-information transmission is the norm. We uncover a number of behavioral patterns: Senders follow exaggeration strategies, qualitatively similar to those predicted by a special case for the fully revealing equilibrium. Receivers on the other hand follow differing heuristics depending on the senders' biases, which are not always sequentially rational. When full revelation is observed it is largely due to the intersection of the receiver heuristics with the equilibrium response.

Additional details:

Supplementary Material to QE version

Working Paper (September 2011) , additional results on treatments with non-full-rank bias matrices will be reported in an (in preparation) companion paper: Competition and Communication: An Experiment.. Link to journal page is here.

A Field Study on Matching with Network externalities

American Economic Review, August 2012, 102(5): p.1773-1804 (lead article)

(with Mariagiovanna Baccara, Ayse Imrohoroglu, Leeat Yariv.)

We study the effects of network externalities on a unique matching protocol for faculty in a large U.S. professional school to offices in a new building. We collected institutional, web, and survey data on faculty's attributes and choices. We first identify the different layers of the social network: institutional affiliation, coauthorships, and friendships. We demonstrate and quantify the effects of network externalities on choices and outcomes. Furthermore, we disentangle the different layers of the social network and quantify their relative impact. Finally, we assess the matching protocol from a welfare perspective. Our study suggests the importance and feasibility of accounting for network externalities in general assignment problems and evaluates a set of techniques that can be employed to this end.

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Working PaperWeb Appendices

A game theoretic approach to multimodal communication

Behavioral Ecology and Sociobiology, 2013, 69(9), p.1399-1415

(with Mark Dean, and James Higham.)

Over the last few decades the animal communication community has become increasingly aware that much communication occurs using multiple signals in multiple modalities. The majority of this work has been empirical, with less theoretical work on the advantages conferred by such communication. In the present paper we ask: Why should animals communicate with multiple signals in multiple modalities? To tackle this question we use game theoretic techniques, and highlight developments in the economic signaling literature that might offer insight into biological problems. We start by establishing a signaling game, and investigate signal honesty under two prevailing paradigms of honest communication--costly signaling and cheap talk. In both paradigms, without further constraint, it is simple to show that anything that can be achieved with multiple signals can be achieved with one. We go on to investigate different sets of possible constraints that may make multiple signals and multimodal signals in particular more likely to evolve. We suggest that constraints on cost functions and bandwidths, orthogonal noise across modalities, strategically distinct modes, multiple qualities, multiple signalers, and multiple audiences, all provide biologically plausible scenarios that theoretically favor multiple and multimodal signaling.