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An experimental game depicting problems involved when donor organizations rely on local intermediaries to deliver benefits to target beneficiaries is presented. It involves scenarios in which intermediaries choose recipients and an uninformed donor performs random selection. Implications of experimental results to social funds, decentralization, and participatory projects are described.

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jebo.2004.12.007 Byline: Klaus Abbink (a), Jordi Brandts (b), Paul Pezanis-Christou (b) Keywords: Treasury; Spanish auctions; Discriminatory auctions; Uniform auctions; Multi-unit demand; Common values; Experimental economics Abstract: The Bank of Spain uses a unique auction format to sell government bonds that can be seen as a hybrid of a uniform and a discriminatory auction. For winning bids above the average winning bid, buyers are charged the average winning bid; otherwise they pay their respective bids. We use experiments to compare this auction format to the discriminatory format used in most other countries and to the uniform format. Our design is based on a common value model with multi-unit supply and 2-unit demand. The Spanish and the uniform auctions raise significantly higher revenue than the discriminatory auction. Author Affiliation: (a) School of Economics, The University of Nottingham, University Park, Nottingham, NG7 2RD, UK (b) Institut d'Analisi EconA[sup.2]mica CSIC, Campus UAB, 08193 Bellaterra, Spain Article History: Received 21 March 2003; Revised 19 September 2004; Accepted 13 December 2004

Microfinance programs provide poor people with small loans given to jointly liable self-selected groups. Follow-up loans provide incentives to repay. We experimentally investigate the influence of those features on strategic default. Each group member invests in an individual risky project, whose outcome is known only to the individual investor. Subjects decide whether to contribute to group repayment or not. Only those with successful projects can contribute. The experiment ends if too few repay. We investigate group size and social ties effects and observe robust high repayment rates. Group lending outperforms individual lending. Self-selected groups show high but less stable contributions. (JEL C90, H41, I38, O16, Z13), I. INTRODUCTION In recent years microfinance institutions (MFIs) have become one of the most important instruments in development policy. The idea of microfinance arose in the mid-1970s when Mohammad Yunus [...]

We study the relation between the number of firms and price-cost margins under price competition with uncertainty about competitors' costs. We report an experiment in which two, three, and four identical firms repeatedly interact in this environment. In line with the theoretical prediction, market prices decrease with the number of firms, but on average stay above marginal costs. Pricing is more aggressive than in equilibrium. Absolute and relative surplus increases with the number of firms. Total surplus is close to the equilibrium level, because enhanced consumer surplus through lower prices is counteracted by occasional displacements of the most cost-efficient firm. (JEL C90, C72, D43, D83, L13), I. INTRODUCTION In markets with posted price competition sellers independently choose prices, which are publicly communicated to buyers on a take-it-or-leave-it basis. Such posted pricing is common in retail markets [...]

In spring 2000, the British government auctioned off licences for Third Generation mobile telecommunications services. In the preparation of the auction, two designs involving each a hybrid of an English and a sealed-bid auction were considered by the government: A discriminatory and a uniform price variant. We report an experiment on these two designs, and also compare the results to those with a pore English auction. Both hybrids are similar in efficiency, revenue differences disappear as bidders get experienced. Compared to the discriminatory format, the pure English auction induces more entry. Keywords: Spectrum auctions; Incumbents; New entrants; UMTS; Experiments

The authors use the Fisherman's Game to reach four benchmarks. It is possible that further research on cooperation could explain the research results.

We introduce two variants of the one-shot joy-of-destruction minigame (mini-JOD). Two players are endowed with the same amount of money. They simultaneously decide whether or not to reduce the other player's payoff at an own cost. In one treatment there was a probability that nature would destroy the opponent's money anyway. We test whether this feature reduces the moral costs of nastiness, and find that destruction rates rise significantly, despite the absence of strategic reasons. (JEL C72, C91, D03), Antisocial behavior is ubiquitous in the real world. People suffer violence from perfect strangers or have their cars scratched and tires punctured. Computer viruses are circulated solely to do harm. [...]

We study escalation and aggression in an experimental first-strike game in which two participants play multiple rounds of a money-earning task. In each round, both players can spend money to accumulate weapons. The player with more weapons can spend money to strike against the other player, which almost totally eliminates the victim's earnings potential and removes their capacity to strike. Weapons can serve as a means of deterrence. In four treatments, we find that deterrence is strengthened if weapon stocking cannot be observed, that a balance of power is effective in maintaining peace, and that mutually beneficial trade decreases the risk of confrontation, but not necessarily the likelihood of costly arms races. [ABSTRACT FROM AUTHOR]