Browsing by Author "Sutter, Matthias"

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The Economics of Credence Goods: On the Role of Liability, Verifiability, Reputation and Competition
(2009-03-02T15:16:20Z) Dulleck, Uwe; Kerschbamer, Rudolf; Sutter, Matthias
Credence goods markets are characterized by asymmetric information between sellers and consumers that may give rise to inefficiencies, such as under- and overtreatment or market break-down. We study in a large experiment with 936 participants the determinants for efficiency in credence goods markets. While theory predicts that either liability or verifiability yields efficiency, we find that liability has a crucial, but verifiability only a minor effect. Allowing sellers to build up reputation has little influence, as predicted. Seller competition drives down prices and yields maximal trade, but does not lead to higher efficiency as long as liability is violated.
Gender, Competition and the Efficiency of Policy Intervention
(2010-05-18T11:26:09Z) Balafoutas, Loukas; Sutter, Matthias
Recent research has shown that women shy away from competition more often than men. We evaluate experimentally three alternative policy interventions to promote women in competitions: Quotas, Preferential Treatment, and Repetition of the Competition unless a critical number of female winners is reached. We find that Quotas and Preferential Treatment encourage women to compete significantly more often than in a control treatment, while efficiency in selecting the best candidates as winners is not worse. The level of cooperation in a post-competition teamwork task is even higher with successful policy interventions. Hence, policy measures promoting women can have a double dividend.
Group Decision Making Under Risk: An experiment with student couples
(2011-12) He, Haoran; Martinsson, Peter; Sutter, Matthias; Dept of Economics, University of Gothenburg
In an experiment, we study risk-taking of cohabitating student couples, finding that couples’ decisions are closer to risk-neutrality than single partners’ decisions. This finding is similar to earlier experiments with randomly assigned groups, corroborating external validity of earlier results.
Guilt from Promise-Breaking and Trust in Markets for Expert Services – Theory and Experiment
(2010-03-17T12:55:30Z) Beck, Adrian; Kerschbamer, Rudolf; Qiu, Jianying; Sutter, Matthias
We examine the influence of guilt and trust on the performance of credence goods markets. An expert can make a promise to a consumer first, whereupon the consumer can express her trust by paying an interaction price before the expert's provision and charging decisions. We argue that the expert's promise induces a commitment that triggers guilt if the promise is broken, and guilt is exacerbated by higher interaction prices. An experiment qualitatively confirms our predictions: (1) most experts make the predicted promise; (2) proper promises induce consumer-friendly behavior; and (3) higher interaction prices increase the commitment value of proper promises.
Household decision making and the influence of spouses’ income, education, and communist party membership: A field experiment in rural China
(2009-04-20T11:58:30Z) Carlsson, Fredrik; Martinsson, Peter; Qin, Ping; Sutter, Matthias
We study household decision making in a high-stakes experiment with a random sample of households in rural China. Spouses have to choose between risky lotteries, first separately and then jointly. We find that spouses’ individual risk preferences are more similar the richer the household and the higher the wife’s relative income contribution. A couple’s joint decision is typically determined by the husband, but women who contribute relatively more to the household income, women in high-income households, women with more education than their husbands, and women with communist party membership have a stronger influence on the joint decision.
Household Decision Making in Rural China: Using Experiments to Estimate the Influences of Spouses
(2010-08) Carlsson, Fredrik; He, Haoran; Martinsson, Peter; Qin, Ping; Sutter, Matthias
Many economic decisions are made jointly within households. This raises the question about spouses’ relative influence on joint decisions and the determinants of relative influence. Using a controlled experiment (on inter-temporal choice), we let each spouse first make individual decisions and then make joint decisions with the other spouse. We use a random parameter probit model to measure the relative influence of spouses on joint decisions. In general, husbands have a stronger influence than wives. However, in richer households and when the wife is older than the husband, we find a significantly stronger influence of the wife on joint decisions.
Psychological pressure in competitive environments: Evidence from a randomized natural experiment: Comment
(2010-03-31T11:49:30Z) Kocker, Martin G.; Lenz, Marc V.; Sutter, Matthias
Apesteguia and Palacios-Huerta (forthcoming) report for a sample of 129 shootouts from various seasons in ten different competitions that teams kicking first in soccer penalty shootouts win significantly more often than teams kicking second. Collecting data for the entire history of six major soccer competitions we cannot replicate their result. Teams kicking first win only 53.4% of 262 shootouts in our data, which is not significantly different from random. Our findings have two implications: (1) Apesteguia and Palacios-Huerta’s results are not generally robust. (2) Using specific subsamples without a coherent criterion for data selection might lead to non-representative findings.
Searching for a better deal - on the influence of group decision making, time pressure and gender in a search experiment
(2008-04-07T13:39:21Z) Ibanez, Marcela; Czermak, Simon; Sutter, Matthias
We study behavior in a search experiment where sellers receive randomized bids from a computer. At any time, sellers can accept the highest standing bid or ask for another bid at positive costs. We find that sellers stop searching earlier than theoretically optimal. Inducing a mild form of time pressure strengthens this finding in the early periods. There are marked gender differences. Men search significantly shorter than women. If subjects search in groups of two subjects, there is no difference to individual search, but teams of two women search much longer than men and recall more frequently.
Social preferences during childhood and the role of gender and age - An experiment in Austria and Sweden
(2010-11) Martinsson, Peter; Nordblom, Katarina; Rützler, Daniela; Sutter, Matthias
We examine social preferences of Swedish and Austrian children and adolescents using the experimental design of Charness and Rabin (2002). We find that difference aversion decreases while social-welfare preferences increase with age.
Social preferences in childhood and adolescence - A large-scale experiment
(2010-06) Sutter, Matthias; Feri, Francesco; Kocher, Martin G.; Martinsson, Peter; Nordblom, Katarina; Rützler, Daniela
Social preferences have been shown to be an important determinant of economic decision making for many adults. We present a large-scale experiment with 883 children and adolescents, aged eight to seventeen years. Participants make decisions in eight simple, one-shot allocation tasks, allowing us to study the distribution of social preference types across age and across gender. Our results show that when children and teenagers grow older, inequality aversion becomes a gradually less prominent motivating force of allocation decisions. At the same time, efficiency concerns increase in importance for boys, and maximin-preferences turn more important in shaping decisions of girls.
Strategic Sophistication of Individuals and Teams in Experimental Normal-Form Games
(2010-02-01T15:03:21Z) Sutter, Matthias; Czermak, Simon; Feri, Francesco
We present an experiment on strategic thinking and behavior of individuals and teams in oneshot normal-form games. Besides making choices, decision makers have to state their firstand second-order beliefs. We find that teams play the Nash strategy significantly more often, and their choices are more often consistent by being a best reply to first order beliefs. We identify the complexity of a game and the payoffs in equilibrium as determining the likelihood of consistent behavior according to textbook rationality. Using a mixture model, the estimated probability to play strategically is 62% for teams, but only 40% for individuals.