Research projects in Economics
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Since 2010, 16 studies have been conducted in the Lab with over 1600 participants.
 
2016
LYING ABOUT DELEGATION
Angela Sutan and Radu Vranceanu, Journal of Economic Behavior and Organisation, Volume 121, Janv 2016, pp 29-40

This paper reports results from a three-player variant of the ultimatum game in which the Proposer can delegate to a third party his decision regarding how to share his endowment with a Responder with a standard veto right. However, the Responder cannot verify whether the delegation is effective or the third party merely plays a “scapegoat” role, while the decision is made by the Proposer himself. In this uncertain attribution setting, the Proposer can send an unverifiable message declaring his delegation strategy. One possible strategy is “false delegation”, in which the Proposer makes the decision but claims to have delegated it. In our sample, the recourse to false delegation is significant, and a significant number of potential Delegates accept serving in the scapegoat role. However, there are many honest Proposers, and 20% of all Delegates will refuse to be the accomplices of a dishonest Proposer. Responders tend to more readily accept poor offers in a setup that permits lying about delegation; the acceptance rate of the poor offer is the highest when Delegates can refuse the scapegoat role.

Keywords: Delegation of responsibility; Uncertain attribution; Communications strategy; Ultimatum game; Dishonesty

2015


  • DO PEOPLE CONTRIBUTE MORE IN INTRA-TEMPORAL OR INTER-TEMPORAL PUBLIC GOODS?
    Gilles Grolleau, Angela Sutan and Radu Vranceanu, Research in Economics, Available online 1 June 2015
    doi:10.1016/j.rie.2015.05.001

    We introduce a dynamic public goods game, where an individual's investment in the public good at a given round provides benefits to other individuals in the next round, and the individual himself benefits from investments in the public good made by his current group members in the previous round. Subjects turn out to be more generous in this inter-temporal context, than in a standard public goods experiment where contributions and transfers are exchanged at the same period. Furthermore, when known, benefits from the past investment are positively related to the individual's current investment in the public good. 

    Keywords: Dynamic public goods; Inter-temporal transfers; Voluntary contribution mechanism; Contribution vs. investment



    EXPERIMENTAL EVIDENCE ON GENDER INTERACTION IN LYING BEHAVIOR
    Seeun Jung and Radu Vranceanu 

    The paper reports results from an Ultimatum Game experiment with asymmetric information where Proposers can send to Responders misleading information about their endowment. We allow for all possible gender combinations in the ProposerResponder pairs. Proposer messages that underestimate the actual amount are quite widespread. The frequency of lying is slightly higher in mixed groups. Conditional on lying, men tend to state bigger lies than women. On the other hand, women tend to tell smaller lies when paired with men, than when paired with women. In general, women present higher acceptance rates than men. 

    Keywords: Gender studies, Ultimatum Game, Asymmetric information, Lies, Extensive vs. intensive margin. 



    GENDER INTERACTION IN TEAMS: EXPERIMENTAL EVIDENCE ON PERFORMANCE AND PUNISHMENT BEHAVIOR
    Seeun Jung and Radu Vranceanu 

    This paper reports results from a real-effort experiment in which men and women are paired to form a two-member team and asked to execute a real-effort task. Each participant receives an equal share of the team’s output. Workers who perform better than their partner can punish him/her by imposing a fine. We manipulate the teams’ gender composition (man-man, man-woman, and woman-woman) to analyze whether an individual’s performance and sanctioning behavior depends on his/her gender and the gender interaction within the team. The data show that, on average, men perform slightly better than women. A man’s performance will deteriorate when paired with a woman, while a woman’s performance will improve when paired with a woman. When underperforming, women are sanctioned more often and more heavily than men; if sanctioned, men tend to improve their performance, while women’s performance does not change. 

    Keywords: Gender studies, Real-effort task, Team production, Performance, Punishment, Discrimination



    "FACTA NON VERBA": AN EXPERIMENT ON PLEDGING AND GIVING
    Gilles Grolleau, Gillermo Mateu, Angela Sutan and Radu Vranceanu

    Abstract: This paper builds an experiment to investigate whether asking people to state how much they will donate to a charity (to pledge) can increase their actual donation. Individuals’ endowment is either certain or a random variable. We study different types of pledges, namely private, public and irrevocable ones, which differ in individual cost of not keeping a promise. Public pledges appear to be associated to lower donation levels. Irrevocable pledges ensure an amount of donations equal to donations in absence of pledges. Moreover, a significant number of individuals keep their promises, in presence of either private or public pledges. A higher risk attached to the endowment increases donations. 

    Keywords: Charity giving, Pledge, Commitment, Communication, Experiments. 



    GROUP GENDER COMPOSITION, TOLERANCE TO RISK AND ECONOMIC PERFORMANCE: NEW EVIDENCE FROM AN ORIGINAL BUSINESS GAME
    Karine Lamiraud and Radu Vranceanu
    Presented to the Annual Conference of the European Economic Association, Toulouse 24-28 August 2014
    Guidelines

    Since the “governance crisis” of the early 2000s, the relationship between the gender composition of executive boards and firms’ economic performance has become a topical research question. This paper investigates this relationship using data collected in 2012 and 2013 from an original business game developed at the ESSEC Business School. Company boards are simulated by groups of five students selected at random. We manipulate the gender composition to allow for all possible gender combinations. All-women groups are associated with poorer economic performance compared with other groups (mixed-gender and all-men). This is explained to a large extent by the differences between groups in the average tolerance to risk, which increases with the number of men in each group, all-men groups having the highest tolerance to risk. However, when controlling for average tolerance to risk, the performance advantage of all-men groups disappears and mixed-gender groups with a majority of women present the best economic performance. For these groups, a “risk shift” mechanism is at play, as they take risks beyond what their total tolerance to risk as a group would suggest.




  • 2014

  • EXPERIMENTAL EVIDENCE ON THE "INSIDIOUS" IllIQUIDITY RISK
  • Damien Besancenot and Radu Vranceanu, Research in EconomicsVolume 68, Issue 4, December 2014, p. 315–323

  • In the contemporary financially globalized world, illiquidity turned out to be a major factor of instability. In this paper we report on players' behavior in a coordination game with imperfect information, designed with the aim of bringing additional insights on the illiquidity risk, and its interaction with insolvency. There is a risky individual's investment project that can be implemented only if a critical number of investors agree to participate. Results of this elementary experiment confirm the insidious nature of the illiquidity risk: as long a first illiquidity default does not occur, investors do not seem able to fully internalize it. After several defaults, agents coordinate on a default probability above which they refuse to participate to the market. This default probability is not zero, as it could be in a perfect information set-up with multiple equilibria, but is lower than without the coordination constraint.

  • Keywords: Coordination game, Illiquidity vs. insolvency, Threshold strategy, Experimental economics, Risk.



  • TEAM PRODUCTION WITH PRODUCTION WITH PUNISHMENT OPTION : INSIGHTS FROM A REAL-EFFORT EXPERIMENT
  • Radu Vranceanu, Fouad El Ouardighi  and Delphine Dubart
  • Managerial and Decision Economics (2014)                                                                                                                                                        
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  • Experimental instructions

  • https://hal-essec.archives-ouvertes.fr/hal-00857364/document                                                                                                                                                                         This paper analyzes the consequences of allowing for punishment in a real-effort pair production experiment. The behavior of the best performer in the team differs on whether he or she can impose a sanction on the less performing partner. When sanctions are not allowed, good performers reduce their effort in response to the advantageous difference in scores; when they can impose sanctions, their change in effort is no longer related to the difference in scores. To some extent, a sanction mechanism allows good performers to focus on their own performance. In the case of costless sanctions, not sanctioning a partner who under-performs, what we refer to as forgiveness, prompts the latter to improve his or her performance, but applying the sanction has a stronger push effect.



  • 2013

    THE VALUE OF LIES IN AN ULTIMATUM GAME WITH IMPERFECT INFORMATION
    Damien Besancenot, Delphine Dubart and Radu Vranceanu
    Journal of Economic Behavior and Organization93 (2013) 239–247
    Humans often lie strategically. We study this problem in an ultimatum game with an informed proposer and an uninformed responder, where the former can send an unverifiable statement about his endowment. A simple message game with heterogenous players with respect to lying costs shows that in equilibrium liars should understate their endowment. The second part of the paper reports on an experiment testing this game. On average, 88.5% of the proposers understate the actual endowment by 20.5%. Regression analysis shows that a one-euro gap between the actual and declared amounts prompts proposers to reduce their offer by 19 cents on average. However, responders’ decision to accept/reject the offer does not depend on the message. It results a net welfare loss specific to such a ”free-to-lie” environment.

    Keywords
  • Ultimatum game
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  • Asymmetric information
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  • Lying costs
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  • Strategic lies
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  • Deception
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  • Welfare loss



  • CAN RUMORS AND OTHER UNINFORMATIVE MESSAGES CAUSE ILLIQUIDITY? 
  • Radu Vranceanu, Damien Besancenot and Delphine Dubart
  • ESSEC WORKING PAPER 1309

  • This paper analyzes whether false information, rumors and other uninformative messages can cause illiquidity. In the model, a group of investors are invited to participate to a high-yield collective project. The project succeeds only if a minimum participation rate is reached. Before taking their decision investors receive an uninformative but emotion loaded message. If investors believe that the message has an impact on the beliefs of the others, the problem can be analyzed as a typical global game. We solve the model for the critical message separating the success / fail states of the project. It turns out that lesser investors will participate to the collective project when they receive a negative message as compared to the case when they receive a positive message. Predictions of the theoretical model are corroborated by data provided by an Online and a Lab experiment. Insights apply to contagion and market manipulation episodes. 

    Keywords: Illiquidity; Rumors; Market panic; Global games; Strategic uncertainty.



  • 2012

    TRUST AND FINANCIAL TRADES: LESSONS FROM AN INVESTMENT GAME WHERE RECIPROCATORS CAN HIDE BEHIND PROBABILITIES
    Radu Vranceanu, Angela Sutan, Delphine Dubart
    Journal of Socio-Economics, Volume 41, Issue 1, January 2012, pp. 72-78

    In this paper we show that if a very small, exogenously given probability of terminating the exchange is introduced in an elementary investment game, reciprocators play more often the defection strategy. Everything happens as if they "hide behind probabilities" in order to break the trust relationship. Investors do no not seem able to internalize the reciprocators’ change in behavior. This could explain why trades involving an exogenous risk of value destruction, such as financial transactions, provide an unfavorable environment for trust-building.



    THE VALUE OF LIES IN A POWER-TO-TAKE GAME WITH IMPERFECT INFORMATION
    Damien Besancenot, Delphine Dubart and Radu Vranceanu

    Humans can lie strategically in order to leverage on their negotiation power. For instance, governments can claim that a "scapegoat" third party is responsible for reforms that impose higher costs on citizens, in order to make the pill sweeter. This paper analyzes such communication strategy within a variant of the ultimatum game. The first player gets an endowment, and the second player can impose a tax on it. The former can reject the allocation submitted by the tax-setter. A third party is then allowed to levy its own tax, and its intake is private information to the tax-setter. In a frameless experiment, 65% of the subjects in the tax-setter role overstate the tax levied by the third party in order to manipulate taxpayer’s expectations and submit less advantageous offers; on average, for every additional currency unit of lie, measured by the gap between the claimed and the actual tax, they would reduce their offer by 0.43 currency units.

    Keywords: Ultimatum game, Taxation, Lies, Deception, Asymmetric information.



    2009

    UNE ECHELLE DE MESURE DE LA CONNAISSANCE EN RAISONNEMENT ECONOMQIUE ET RESULTATS D'UNE ENQUETE MENEE EN DECEMBRE 2009
    Radu Vranceanu, Maxime Laot, Delphine Dubart 
     
    We worked out a scale of economic reasoning skills with a macroeconomic and economic policy orientation. The test was administered via Internet in December 2009, and led to collection of 1542 complete questionnaires. The average rate of correct answers is relatively high, to 71%. The knowledgability of economic principles is positively related to general education, training in economics, personal interest for economics and recourse to economics in professional life.