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Rankings are prevalent information and incentive tools in labor markets with strong competition for talent. In a dynamic model of multi-tasking and an accompanying experiment with financial professionals, we identify hidden ranking costs when performance in one task is incentivized and ranked while another prosocial task is not: (i) a ranking influences behavior if individuals lag behind: they spend more total effort and substitute effort in the prosocial task with effort in the ranked task; (ii) those ahead in the ranking spend less total effort and lower relative effort in the ranked task. Implications for incentive schemes are discussed.

Peer review is a well-established cornerstone of the scientific process, yet it is not immune to biases like status bias, which we explore in this paper. Merton described this bias as prominent researchers getting disproportionately great credit for their contribution, while relatively unknown researchers get disproportionately little credit [R. K. Merton, Science 159, 56–63 (1968)]. We measured the extent of this bias in the peer-review process through a preregistered field experiment. We invited more than 3,300 researchers to review a finance research paper jointly written by a prominent author (a Nobel laureate) and by a relatively unknown author (an early career research associate), varying whether reviewers saw the prominent author’s name, an anonymized version of the paper, or the less-well-known author’s name. We found strong evidence for the status bias: More of the invited researchers accepted to review the paper when the prominent name was shown, and while only 23% recommended “reject” when the prominent researcher was the only author shown, 48% did so when the paper was anonymized, and 65% did when the little-known author was the only author shown. Our findings complement and extend earlier results on double-anonymized vs. single-anonymized review [R. Blank, Am. Econ. Rev. 81, 1041–1067 (1991); M. A. Ucci, F. D’Antonio, V. Berghella, Am. J. Obstet. Gynecol. MFM 4, 100645 (2022)].

IntroductionThe use of quadriceps tendon–patellar bone (QTB) autograft for anterior cruciate ligament (ACL) reconstruction is gaining momentum. Yet, long-term results that compare this procedure with established methods are lacking. The aim of this study was to report and compare long-term results of ACL reconstruction using QTB autografts versus bone–patellar tendon–bone (BPTB) autografts, both anchored using a hardware-free press-fit fixation technique.Materials and methods60 athletes (Tegner score ≥6) with primary ACL rupture were prospectively randomized into two groups. 56 patients were evaluated after a mean duration of 12.2 ± 1.9 months (range 10–14) and 43 patients after 10.3 ± 0.2 years (range 10–11).ResultsOn final follow-up, 90% of patients scored very good and good results in the functional Lysholm score (mean 99 ± 7.1, range 74–100 points). Normal or almost normal IKDC score was reported by 84% of the patients (mean 97 ± 9.5, range 60–100 points). The activity level decreased in the Tegner score from median of 7 before injury to 6 after 10 years. The KT-1000 arthrometer showed a difference in the anterior translation of less than 3 mm (mean 1.0 ± 1.2, range − 1 to 5 mm) in 91% of the patients. Significant degeneration was radiologically detected in one patient per group. No tunnel widening was seen in any patient. Up to 97% of all patients were satisfied with the operative procedure. No significant differences were found in the mentioned parameters between the two groups and also in comparison with the 1-year results. The only significant difference was in the donor site morbidity. Significantly more patients in the BPTB group had complaints during kneeling both at 1 (p p = 0.019). Squatting was also subjectively more problematic in the BPTB group than in the QTB group both after 1 (p = 0.003) and 10 years (p = 0.046).ConclusionsThis study shows equally good functional, clinical and radiological long-term results for both hardware-free methods of ACL reconstruction. These results clinically confirm the safety of press-fit anchoring after 10 years. The failure rate in this study was very low, with only one re-rupture in 10 years. The increased donor site morbidity when using the BPTB autograft compared to the QTB autograft supports already reported data. It was also seen in this study for the implant-free press-fit techniques.Study designProspective and randomized, level of evidence 2.

We study decisions on welcoming or opposing welfare migration in a laboratory setting with two societies in which one subject can migrate from the poorer to the richer society, provided a majority in the richer society votes to allow that. In each society, subjects indicate their preference for a percentage contribution to a public pool. The median of these rates sets the contributions paid by everybody; a feature that results in high contribution rates with an average of 90%. Varying the multiplier with which contributions are magnified before redistribution to society members, and thus the expected gain/loss associated with migration, we find that subjects overwhelmingly welcome migrants if they expect an economic benefit, while most participants oppose migration if they would be negatively affected by it. Regarding participants' attitudes, we find that more altruistic people are more in favor of migration than more selfish people and that center right-wing oriented subjects propose lower contribution levels than center left-wing oriented subjects. We conclude that economic motives are a crucial factor for accepting or rejecting welfare migration. Therefore, a key to promoting acceptance of new migrants is to ensure and then communicate that their net effect on growth, society, and the public purse is positive.The online version contains supplementary material available at 10.1007/s43546-022-00356-6.

There is a heated debate on whether markets erode social responsibility and moral behavior. However, it is a challenging task to identify and measure moral behavior in markets. Based on a theoretical model, we examine in an experiment the relation between trading volume, prices and moral behavior by setting up markets that either impose a negative externality on third parties or not. We find that moral behavior reveals itself in lower trading volume in markets with a negative externality, while prices mostly depend on the market structure. We further investigate individual characteristics that explain trading behavior in markets with negative externalities.

In this paper we investigate the generalizability of the role of unequal opportunities and social group membership in redistributive preferences and examine the interaction between these two dimensions. We present results from a large-scale online experiment with more than 4,000 participants from Germany. The experiment consists of a real-effort task and a subsequent dictator game with native Germans and immigrants to Germany. We find that dictator transfers to the own group by native Germans and immigrants are higher under unequal opportunities than under equal opportunities. While we confirm the main findings reported in previous literature regarding the role of inequality of opportunity in redistribution for native Germans and immigrants, we find distinctively different patterns between both groups concerning the influence of social group membership and its interaction with unequal opportunities on redistribution. In particular, contrary to natives, immigrant dictators transfer more to in-group than to out-group receivers under unequal opportunities and do not compensate for unequal opportunities of out-group members. We conclude that in order to increase the understanding of patterns reported in the literature, it is crucial to also investigate the generalizability of findings to individuals from the general population and to explicitly cover participants such as immigrants who represent important parts of our society.

We investigate how the experience of extreme events, such as the COVID-19 market crash, influence risk-taking behavior. To isolate changes in risk taking from other factors, we ran controlled experiments with finance professionals in December 2019 and March 2020. We observe that their investments in the experiment were 12 percent lower in March 2020 than in December 2019, although their price expectations had not changed, and although they considered the experimental asset less risky during the crash than before. This lower perceived risk is likely due to adaptive normalization as the volatility during the shock is compared to volatility experienced in real markets (which was low in December 2019, but very high in March 2020). Lower investments during the crash can be supported by higher risk aversion, not by changes in beliefs.

Being able to replicate scientific findings is crucial for scientific progress1,2,3,4,5,6,7,8,9,10,11,12,13,14,15. We replicate 21 systematically selected experimental studies in the social sciences published in Nature and Science between 2010 and 201516,17,18,19,20,21,22,23,24,25,26,27,28,29,30,31,32,33,34,35,36. The replications follow analysis plans reviewed by the original authors and pre-registered prior to the replications. The replications are high powered, with sample sizes on average about five times higher than in the original studies. We find a significant effect in the same direction as the original study for 13 (62%) studies, and the effect size of the replications is on average about 50% of the original effect size. Replicability varies between 12 (57%) and 14 (67%) studies for complementary replicability indicators. Consistent with these results, the estimated true-positive rate is 67% in a Bayesian analysis. The relative effect size of true positives is estimated to be 71%, suggesting that both false positives and inflated effect sizes of true positives contribute to imperfect reproducibility. Furthermore, we find that peer beliefs of replicability are strongly related to replicability, suggesting that the research community could predict which results would replicate and that failures to replicate were not the result of chance alone.

With a large-scale online experiment with 1593 participants from the U.S. and the U.K. we explore whether and how people working in the finance industry and laypeople from the general population are influenced by information on other people’s forecasts when making forecasts on the future development of two indices and two stocks. We find that (i) laypeople’s forecasts are strongly influenced by information they get on other subjects’ forecasts, while financial professionals are much less influenced by information signals; (ii) signals by financial professionals influence all subject groups more than forecasts by laypeople; (iii) we observe a home bias in all subject groups, which can be mitigated by information signals; (iv) all subject groups expect lower forecast errors for financial professionals than for laypeople, hence we find evidence for trust in experts.

When the information of many individuals is pooled, the resulting aggregate often is a good predictor of unknown quantities or facts. This aggregate predictor frequently outperforms the forecasts of experts or even the best individual forecast included in the aggregation process (“wisdom of crowds”). However, an appropriate aggregation mechanism is considered crucial to reaping the benefits of a “wise crowd”. Of the many possible ways to aggregate individual forecasts, we compare (uncensored and censored) arithmetic and geometric mean and median, continuous double auction market prices and sealed bid-offer call market prices in a controlled experiment. We use an asymmetric information structure, where participants know different sub-sets of the total information needed to exactly calculate the asset value to be estimated. We find that prices from continuous double auction markets clearly outperform all alternative approaches for aggregating dispersed information and that information lets only the best-informed participants generate excess returns. Electronic supplementary material The online version of this article (10.1007/s10683-019-09631-0) contains supplementary material, which is available to authorized users.

Financial literacy and economic preferences are considered to be important drivers of health, income, and general well-being. We bridge the gap between studies on financial literacy and research on economic preferences by investigating how they interplay with each other and with the field behavior of adolescents. First, we report that financial literacy scores are positively associated with patience, male gender, and educational level of the father. Second, we observe that risky field behavior like smoking and gambling is positively associated with various measures of risk-tolerance, and negatively associated with patience. Finally, we discuss implications for financial education programs.

It is conjectured that one of the major ingredients of historic financial bubbles was the inflow of money in various forms. We run 36 laboratory asset markets to investigate the joint effect of cash inflow and trading horizon on price efficiency. We show that markets with cash inflow and long trading horizon exhibit bubbles and crashes. We also observe that markets with extended trading horizon but without cash inflow and markets with shorter trading horizon do not trigger bubbles. Finally, we report that beliefs about prices and, importantly, about (constant) fundamentals follow bubble patterns as well.

Due to the increased importance of revision ACL reconstruction, this study aims to evaluate the outcome 4 years after the surgery, compare two revision strategies and identify factors that influence the results. Seventy-nine patients who received a revision ACL reconstruction were retrospectively evaluated. All patients were assessed with an average follow-up of 4.4 years (range 3.3–5.5 years). The results of patients treated with a quadriceps autograft were compared with those treated with a hamstring autograft. Ninety-seven percent of patients had a KT-1000 side-to-side difference of ≤ 5 mm (mean 1.7 ± 2.0 mm). Pivot-shift test was absent or minor in 95%. In the SLTH-test, 70% of patients reached 90% of the contralateral side. The mean Lysholm score on follow-up was 83 ± 12 (56% excellent/good). The mean IKDC 2000 subjective evaluation score was 81 ± 14 (58% normal/almost normal). The median Tegner activity score was 6 (range 3–10), a median of 2 levels worse than before the first injury. Return to sport rate was 89% but only 34% of patients reached their pre-injury sport level. Most common cause for this reduction was fear of another injury. Three patients suffered a re-rupture. Patients with a hamstring autograft performed pivoting sports more often, but had worse pivot-shift results compared to those with a quadriceps autograft. No significant influence was seen for other parameters. Young, male patients with a high activity level and no chondral damage had the best results. Through revision ACL reconstruction, the goal of stabilizing the knee can be achieved in the majority of patients. However, a good function and a high activity level are significantly less common in these patients. The main reason for this is fear of a renewed ACL-injury. Both quadriceps and hamstring autografts were able to achieve a good outcome. Young, male, patients with a normal BMI, a high activity level and without cartilage damage seem to benefit the most from revision ACL surgery. The discrepancy between the good laxity restoration and the lower activity rate should therefore be a main point in clinical counseling when deciding for or against revision ACL-Reconstruction. III.

In laboratory experiments we explore the effects of communication and group decision making on investment behavior and on subjects’ proneness to behavioral biases. Most importantly, we show that communication and group decision making do not impact subjects’ overall proneness to the hot hand fallacy and to the gambler's fallacy. However, groups decide differently than individuals, as they rely significantly less on useless outside advice from “experts” and choose the risk-free option less frequently. Furthermore we document gender differences in investment behavior: groups of two female subjects choose the risk-free investment more often and are marginally more prone to the hot hand fallacy than groups of two male subjects.

We investigate the impact of cash and trader inflow on price efficiency in multi-period experimental asset markets. Implementing eight treatments with 672 subjects, we find that (i) the joint inflow of cash and traders triggers strong overvaluation and massive price run-ups (inflow-effect). Remarkably, the effect occurs in almost all of the 30 markets with joint cash and trader inflow and is very robust. The effect even prevails in markets with complete and symmetric fundamental information. We further show that (ii) in treatments with the joint inflow of cash and traders, prices crash to fundamentals towards maturity of the asset. The analysis of traders׳ beliefs reveals that (iii) despite fundamental values staying constant, beliefs about fundamentals co-move with upwardly trending prices. Finally, we report a speculative motive only among the optimists in treatments where we observe the inflow-effect.

We run laboratory experiments to analyze the impact of prior investment experience on price efficiency in asset markets. Before subjects enter the asset market they gain either no, positive, or negative investment experience in an investment game. To get a comprehensive picture about the role of experience we implement two asset market designs. One is prone to inefficient pricing, exhibiting bubble and crash patterns, while the other exhibits efficient pricing. We find that (i) both, positive and negative, experience gained in the investment game lead to efficient pricing in both market settings. Further, we show that (ii) the experience effect dominates potential effects triggered by positive and negative sentiment generated by the investment game. We conjecture that experiencing changing price paths in the investment game can create a higher sensibility on changing fundamentals (through higher salience) among subjects in the subsequently run asset market.

We use a laboratory experiment to study how forecasting contributes to mispricing. In the Baseline, we assign both the task of forecasting and the task of trading to the same subject. In treatment SamePay, we separate these tasks and assign them to two different subjects, who share the profits from trade. In treatment Accuracy, we pay forecasters according to the accuracy of their forecasts. We find that the separation of tasks induces some mispricing. Even worse, paying for accuracy reduces attention towards the fundamental value and generates major and persistent mispricing as well as trend extrapolation. We infer that it can be risky to incentivize only forecasting accuracy and not give forecasters the right “skin in the game”. Our findings are informative for tracing the sources of mispricing as well as for enhancing financial stability.

We investigate the influence of skewness in asset fundamentals on asset prices under different states of uncertainty in double-auction markets. Three different types of assets are considered: risky assets, ambiguous assets and assets where the fundamental value distribution can be learned by repeated sampling of realizations. We show that market prices for skewed assets initially differ from those of non-skewed assets for risky as well as for ambiguous assets. Because of learning, the difference in market prices mostly disappears towards the end of trading. When fundamentals are “learned” by experience sampling, prices of all assets, irrespective of skewness, are very efficient from the beginning. Thus, when probabilities are not described but experienced, subjects are better able to estimate the fundamental value of an asset.

We use computerized agents, which trade according to an active information processing strategy, to compare their returns to those of human subjects trading in the same market. All subjects are assigned to one of five information levels, each of which is populated by two human and two computerized traders. We find that the computerized traders earn higher returns than their human counterparts of the same information level for all but one of five information levels.

In this methodological study we analyze price adjustment processes in multi-period laboratory asset markets with five distinct fundamental value $$(\hbox {FV})$$ regimes in a unified framework. Minimizing the effect of between-treatment variations we run markets with deterministically decreasing, constant, randomly fluctuating and—as main innovation—markets with deterministically increasing $$\hbox {FV}$$ s. We find (i) efficient pricing in markets with constant $$\hbox {FV}$$ s, (ii) overvaluation in markets with decreasing $$\hbox {FV}$$ s, and (iii) undervaluation in markets with increasing $$\hbox {FV}$$ s. (iv) Markets with randomly fluctuating fundamentals show overvaluation when $$\hbox {FV}$$ s predominantly decline and undervaluation when $$\hbox {FV}$$ s are mostly upward-sloping. Finally, we document that (v) bid-ask spreads and volatility of price changes are positively correlated with mispricing across regimes. The main contribution of the paper is to provide clean comparisons between distinct $$\hbox {FV}$$ regimes, in particular between markets with increasing $$\hbox {FV}$$ s and other regimes.

How people are incentivized is one of the main drivers of how they behave. In laboratory asset markets we evaluate the impact of four trader incentive bonus, bonus with cap, linear, and penalty – on asset prices and trader behavior. We find that (i) an asset with identical expected dividend shows price levels which differ by more than 100 percent depending on the incentive scheme subjects face. In particular, prices of markets populated by subjects with bonus incentives show the highest prices, whereas those with penalty-like incentivized subjects exhibit the lowest. (ii) However, subjects act approximately rational as different incentives generate different optimal price levels. (iii) In markets where different subjects have different incentive schemes we find that those with bonus incentives exhibit a riskier investment behavior and prefer the riskier asset, whereas subjects with penalty incentives invest conservatively and mainly hold cash. Since we find no difference in risk attitude of subjects prior to the experiment, differences in investment behavior are induced by the applied incentives. Our results highlight that incentives on financial markets have a huge impact on asset prices and investment behavior.

We analyze the value of costly information in agent-based markets with nine distinct information levels. We use genetic programming where agents optimize how much information to buy and how to process it. We find that most agents first buy high information levels, but in equilibrium buy either complete or no information, with the respective shares depending on the information costs. When information is auctioned, markets are first inefficient, so agents raise their bids to buy the highest information levels, before they learn to bid amounts that they can cover with their trading profits. In equilibrium, markets are not fully efficient, but contain just enough noise to allow informed agents to earn their information costs.

In this paper we explore how decisions in a sequential three-person game are influenced by either dynamics of roles or group composition. In the game a dictator decides how much of his endowment to transfer to the recipient. The supervisor can punish the dictator and/or transfer to the recipient after learning about the dictator’s decision. We find that transfers by a dictator are highest and stable when the group of three is fixed, no matter whether roles change or not. There is limited support of a leading-by-example effect, that is, only when both role and group composition of subjects are fixed, supervisors give more the more dictators gave, and dictators transfer more in the next period the more supervisors gave in a period. Punishment partially has a disciplining effect on dictators. Finally, we observe that subjects’ actual actions are consistent with their beliefs and expectations.

Zusammenfassung Hintergrund Patellaluxationen und Subluxationen sind einer der Grunde fur den vorderen Knieschmerz. Die Elmslie-Trillat-Operation (Medialisierung der Tuberositas tibiae) ist aufgrund ihrer knochernen Invasivitat und der damit verbundenen langen Nachbehandlungszeit eine oft diskutierte Methode. Dennoch zeigen viele Studien sehr gute Ergebnisse nach dieser Operation. Material und Methoden Anhand einer 1-Jahres-Follow-up-Studie wurden 35 Patienten pra- und postoperativ klinisch und mit Hilfe validierter Fragebogen bezuglich Schmerz, Belastbarkeit, Sportfahigkeit und individueller Zufriedenheit untersucht. Ergebnisse Postoperativ besserten sich die Schmerzen um 55%, die Belastbarkeit stieg um 38,9%, die Sportfahigkeit um 38,2% und die individuelle Zufriedenheit um 76% an. Im Median besserte sich die Sportfahigkeit 5,3 Monate nach dem operativen Eingriff. Schlussfolgerung Die arthroskopisch kontrollierte Elmslie-Operation ist eine gute Operationsmethode bei Patellafehllauf, um Schmerzen zu reduzieren, die Belastbarkeit, die individuelle Zufriedenheit und die Sportfahigkeit zu verbessern. Evidenzebene Evidenzlevel III

The prediction of new product success is still a challenging task. Traditional market research tools are expensive, time consuming, and error prone. Prediction markets have been introduced as a viable alternative. Utilizing inputs from various participants in game-like environments, they have been shown to produce accurate results by combining dispersed knowledge via market-based aggregation mechanisms. While most previous studies use employees or experts as a sample, we test whether online consumer communities can be used to predict the sale of new skis via prediction markets. Sixty-two users took part in the study. The prediction market was open for 12 days before the main skiing season 2010/2011 began. The outcomes of the prediction markets were compared with the actual sales numbers provided by the ski producers. The mean average errors were between 2.74% and 9.09% in the four markets. Overall, it can be concluded that the prediction markets based on consumer communities produce accurate results.

In this paper we explore the influence of the possibility to short stocks and/or borrow money in laboratory markets. A key innovation of our study is that subjects can simultaneously trade two risky assets on two double-auction markets, allowing us to differentiate between assets with relatively high versus low capitalization. Divergence of opinions is created by providing each trader with noisy information on the intrinsic values of both assets. We find that when borrowing money or shorting stocks is restricted prices are systematically distorted. Specifically, stocks with high (low) capitalization are traded at lower (higher) prices than their fundamental value. Lifting the restrictions leads to more efficient prices and more liquidity, thereby also lowering volatility and bid-ask spreads.

To explore why bubbles frequently emerge in the experimental asset market model of Smith, Suchanek, and Williams (1988), we vary the fundamental value process (constant or declining) and the cash– to–asset value ratio (constant or increasing). We observe high mispricing in treatments with a declining fundamental value, while overvaluation emerges when coupled with an increasing C/A ratio. A questionnaire reveals that the declining fundamental value process confuses subjects, as they expect the fundamental value to stay constant. Running the experiment with a different context (“stocks of a depletable gold mine” instead of “stocks”) significantly reduces mispricing and overvaluation as it reduces confusion. (JEL C91, D14, G11, G12)

Highlights ► Using laboratory experiments we test the impact of a Tobin tax in two different market microstructures. ► We find that in markets without market makers an unilaterally imposed Tobin tax (i.e., a tax haven exists) increases volatility. ► In contrast, in markets with market makers we observe a decrease in volatility in unilaterally-taxed markets. ► An encompassing Tobin tax has no impact on volatility in either setting. ► Efficiency does not vary significantly across tax regimes., Trading in FX markets is dominated by two microstructures: exchanges with market makers and OTC-markets without market makers. Using laboratory experiments we test whether the impact of a Tobin tax is different in these two market microstructures. We find that (i) in markets without market makers an unilaterally imposed Tobin tax (i.e. a tax haven exists) increases volatility. (ii) In contrast, in markets with market makers we observe a decrease in volatility in unilaterally taxed markets. (iii) An encompassing Tobin tax has no impact on volatility in either setting. Efficiency does not vary significantly across tax regimes.

In 1988 Smith, Suchanek, and Williams (henceforth SSW) introduced a very influential model to test the efficiency of experimental asset markets. They and many subsequent studies observe that bubbles are robust to many treatment changes. Instead, bubbles are avoided only when subjects are experienced in the same setting, when the dividend-process is experienced by subjects beforehand, or when the fundamental value-process (FV) is presented in a well understandable context to reduce subjects’ confusion. We extend this line of research and show that even marginal changes in the experimental instructions/procedure can eliminate bubbles in the SSW-model. In particular, we show that mispricing is significantly reduced and overvaluation is eliminated completely (i) when the fundamental value process is displayed in a graph instead of a table or (ii) when subjects are asked about the current fundamental value at the beginning of each period. From a questionnaire conducted at the end of the experiment we infer that these treatment changes help to improve subjects’ understanding of the FV-process. We conclude that all bubble reducing factors have one common feature: they allow subjects to understand the non-intuitive declining FV-process of the SSW-model better and thus reduce subjects’ confusion about the FV-process.

Asymmetric distribution of information, while omnipresent in real markets, is rarely considered in experimental financial markets. We present results from experiments where subjects endogenously choose between five information levels (four of them costly). We find that (i) uninformed traders earn the highest net returns, while average informed traders always perform worst even when information costs are not considered; (ii) over time traders learn to pick the most advantageous information levels (full information or no information); and (iii) market efficiency decreases with higher information costs. These results are mostly in line with the theoretical predictions of Grossman and Stiglitz (Am. Econ. Rev. 70:393–408, 1980) and provide additional insights that studies with only two information levels cannot deliver.