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Choice experiments, a survey methodology in which consumers face a series of choice tasks requiring them to indicate their most preferred option from a choice set containing two or more options are used to generate estimates of consumer preferences to determine the appropriate allocation of public resources to competing projects or programs. The analysis of choice-experimental data typically relies on the assumptions that choices of the non-status quo option are demand-revealing and choices of the status quo option are not demand-revealing, but, rather, reflect an underlying behavioral bias in favor of the status quo. This paper reports the results of an experiment demonstrating that both of those assumptions are likely to be invalid. We demonstrate that choice experiments for a public good are vulnerable to the same types of strategic voting that affect other types of multiple-choice voting mechanisms. We show that owing to the mathematics of choice-set design, what actually is strategic voting often is misinterpreted as a behavioral bias for the status quo option. Therefore, we caution against using current choice-experimental methodologies to inform policy making about public goods. [ABSTRACT FROM AUTHOR]

We conduct a model validation analysis of several behavioral models of voter turnout, using laboratory data. We call our method of model validation concealedparameter recovery, where estimation of a model is done under a veil of ignorance about some of the experimentally controlled parameters—in this case voting costs. We use quantal response equilibrium as the underlying, common structure for estimation, and estimate models of instrumental voting, altruistic voting, expressive voting, and ethical voting. All the models except the ethical voting model recover the concealed parameters reasonably well. We also report the results of a counterfactual analysis based on the recovered parameters, to compare the policy implications of the different models about the cost of a subsidy to increase turnout. [ABSTRACT FROM AUTHOR]

An important part of the debate about self versus state-governance involves a discussion about enforcement mechanisms. While some scholars argue that private enforcement mechanisms work sufficiently well in supporting cooperation, others cite the downfalls of private mechanisms so as to legitimize government enforcement. This paper focuses on the interplay between government and private enforcement mechanisms. Using an experimental approach, we demonstrate two results. First, we show that government enforcement, in the form of a centralized monetary punishment in our experiment, can be useful if aligned with and implemented after a private form of enforcement, namely peer disapproval. However, our second result suggests that the removal of government enforcement leads to a substantial decrease in overall cooperation levels-cooperation levels are higher under private enforcement when subjects had never experienced government enforcement compared to when they had been exposed to government enforcement. Specifically, the removal of government enforcement undermines the power of the remaining private enforcement mechanism to affect the behavior of free-riders. [ABSTRACT FROM AUTHOR]

A contest is a situation in which individuals expend irretrievable resources to win valuable prize(s). 'Sabotage' is a deliberate and costly act of damaging a rival's likelihood of winning the contest. Sabotage can be observed in, e.g., sports, war, promotion tournaments, and political or marketing campaigns. In this article, we provide a model of, and different perspectives on, such sabotage activities and review the economics literature analyzing the act of sabotage in contests. We discuss the theories and evidence emphasizing the means of sabotage, why sabotage occurs, and the effects of sabotage on individual contestants and on overall welfare, with possible means of reducing sabotage. We note that most sabotage activities are aimed at the ablest contestant, the possibility of sabotage reduces productive effort exerted by the contestants, and sabotage may lessen the effectiveness of public policies, such as affirmative action, or information revelation in contests. We discuss the different policies a designer might use to counteract sabotage. We conclude by pointing out some areas of future research. [ABSTRACT FROM AUTHOR]

Most terrorist groups have limited lifespans. A number of scholars and casual observers have noted that terrorist organizations often are comprised of two types of participants: ideologues or 'true believers' dedicated to the group's cause, and mercenaries, who are adept at raising money through illegal means. The latter are interested primarily in their personal gains and have relatively little ideological commitment. Terrorist groups need both participants in order to function effectively. The purpose of the study is to understand the impact of communication on the compositions of terrorist groups. Three experimental treatments consider a coordination problem, and focus on the behavior of the mercenaries. Participants choose whether or not to participate in a terrorist attack. Payoffs are U-shaped in the number of participants, and increase with the number of successful attacks. The treatments allow communication between a leader and frontline fighters ('leader' treatment) or among the frontline fighters themselves ('communication' treatment). In the first treatment, a group leader can post messages to the members, which has a 19 % coordination success rate. For the communication treatment, all participants can post messages anonymously to each other, which yields a 27 % coordination success rate. By contrast, the baseline ('no communication' treatment) shows a success rate of 11 %. We conclude from our experimental evidence that disrupting communications among the frontline fighters is more effective in terminating terrorist organizations. [ABSTRACT FROM AUTHOR]

Comprehensive reforms often fail, despite being beneficial to society. Politicians may block comprehensive reforms in an attempt to form vote trading coalitions in which they benefit from a piecemeal reform at the expense of others. Because formal commitment devices for vote trading are frequently missing, trust and reciprocity among legislators can play an important role for vote trading. We investigate in a laboratory experiment whether legislators will impede comprehensive reforms in an attempt to form vote trading coalitions even if formal commitment devices for vote trading after reform failure are missing. We find that open ballots allow for vote trading without commitment, based on trust and reciprocity. In turn, legislators frequently reject efficient comprehensive reforms in such institutions. [ABSTRACT FROM AUTHOR]

We report the results of an experiment investigating the provision of a step-level collective good. This experiment compares the behavior of subjects in a public good game with the behavior of subjects in a club good game. In the club good game, players who do not contribute the membership fee are excluded from the consumption of the collective good. The introduction of a small membership fee has surprisingly strong effects: it increases the provision of the collective good, delays provision failures and increases the number of contributors. The experiment also reveals the limits of the introduction of a small fee. At a high threshold level, the membership fee no longer ensures successful provision. [ABSTRACT FROM AUTHOR]

We conduct an experiment to assess the effects of different decision rules on the costs of decision making in a multilateral bargaining situation. Specifically, we compare the amount of costly delay observed in an experimental bargaining game under majority and unanimity rule. Our main finding is that individual subjects are more likely to reject offers under unanimity rule. This higher rejection rate, as well as the requirement that all subjects agree, leads to more costly delay. This result provides empirical support for a classic argument in favor of less-than-unanimity decision rules put forth by Buchanan and Tullock (The calculus of consent: logical foundations of constitutional democracy, University of Michigan Press, Ann Arbor, ). [ABSTRACT FROM AUTHOR]

We conduct experiments to test the collective action dilemmas associated with defensive and proactive counterterror strategies. Defensive policies are associated with creating public 'bads' (e.g., a commons) whereas proactive policies are akin to the voluntary provision of public goods. When combined, the inefficiency of collective action is exacerbated, resulting in a situation known as a Prisoner's Dilemma squared (PD). Deterministic versus probabilistic equivalent versions of the associated externalities are compared within a laboratory setting. Experimental results reveal that the collective action problem associated with counterterror strategies is deepened in uncertain environments, and is indeed a robust regularity that is not easily overcome; as individuals gain more experience, they become even more self-interested. [ABSTRACT FROM AUTHOR]

While all-pay auctions are well researched experimentally, we do not have much laboratory evidence on wars of attrition. This paper tries to fill this gap. Technically, there are only a few differences between wars of attrition and all-pay auctions. Behaviorally, however, we find striking differences: As many studies, our experiment finds overbidding in all-pay auctions. In contrast, in wars of attrition we observe systematic underbidding. We study bids and expenditures in different experimental frames and matching procedures and tie in with the literature on stepwise linear bidding functions. [ABSTRACT FROM AUTHOR]

Most coalitions that form to increase contributions to a public good do not require full participation by all users of the public good, and therefore create incentives for free riding. If given the opportunity to opt out of a voluntary coalition, in theory, agents should try to be among the first to do so, forcing the remaining undecided agents to bear the cost of participating in the coalition. This study tests the predicted sequence of participation decisions in voluntary coalitions using real-time threshold public goods experiments. We find that subjects’ behavior is more consistent with the theoretical predictions when the difference in payoffs between coalition members and free-riding non-members is relatively large. [ABSTRACT FROM AUTHOR]

This paper uses a two-person linear voluntary contribution mechanism with stochastic marginal benefits from a public good to examine the effect of imperfect information on contributions. Estimates of individual risk preferences are obtained using data from second-price auctions over lotteries. The results show that limited information about the value of the public good significantly lowers average contributions in all periods but the last. Moreover, the results support the interpretation that subjects bid “as if” they were risk averse, and suggest that “as if” risk-averse behavior is negatively correlated with willingness to contribute. [ABSTRACT FROM AUTHOR]