As a stress test of experimenter demand effects, we run an experiment where subjects can physically destroy coupons awarded to them. About one subject out of three does. Giving money back to the experimenter is possible in a separate task but is more consistent with an experimenter demand effect than an explanation based on altruism towards the experimenter. A measure of sensitivity to social pressure helps predict destruction when social information is provided.

We consider the notions of static and dynamic reasonableness of requests by an authority in a trust game experiment. The authority, modeled as the experimenter, systematically varies the experimental norm of what is expected from trustees to return to trustors, both in terms of the level of each request and in terms of the sequence of the requests. Static reasonableness matters in a self-biased way, in the sense that low requests justify returning less, but high requests tend to be ignored. (...) Dynamic reasonableness also matters, in the sense that, if requests keep increasing, trustees return less compared to the same requests presented in random or decreasing order. Requests never systematically increase trustworthiness but may decrease it. (shrink)

We propose a triple test to evaluate the usefulness of behavioral economics models for public health policy. Test 1 is whether the model provides reasonably new insights. Test 2 is on whether these have been properly applied to policy settings. Test 3 is whether they are corroborated by evidence. We exemplify by considering the cases of social interactions models, self-control models and, in relation to health message framing, prospect theory. Out of these sets of models, only a correctly applied prospect (...) theory fully passes the tests at present. Specifically, in broad agreement with the evidence, a gain frame has positive implications for welfare encourages disease prevention activity, though this does not apply if the perceived probability of the bad health outcome is large enough. We see our tests as being useful to identify how much health policy weight policy makers should assign to specific behavioral economic models; they are also useful to verify what next steps would be most useful in further research. (shrink)

The conjunction fallacy occurs whenever probability compounds are thought of as more likely than its component probabilities alone. In the experiment we present, subjects chose between simple and compound lotteries after some practice. Depending on the condition, they were given more or less information about the nature of probability compounds. The conjunction fallacy was surprisingly robust. There was, however, a puzzling dissociation between verbal and behavioral learning: verbal responses were sensitive, but actual choices entirely insensitive, to the amount of verbal (...) instructions being provided. This might reflect a dichotomy between implicit and explicit learning. Caution must be exercised in generalizing results from what people say to what people do. (shrink)

This article examines, experimentally, whether inequality affects the social capital of trust in non-market and market settings. We consider three experimental treatments, one with equality, one with inequality but no knowledge of the income of other agents, and one with inequality and knowledge. Inequality, particularly when it is known, has a corrosive effect on trusting behaviours in this experiment. Agents appear to be less sensitive to known relative income differentials in markets than they are in the non-market settings, but trust (...) in markets appears generally more vulnerable to the introduction of inequality than in the non-market setting. (shrink)

This article examines, experimentally, whether inequality affects the social capital of trust in non-market and market settings. We consider three experimental treatments, one with equality, one with inequality but no knowledge of the income of other agents, and one with inequality and knowledge. Inequality, particularly when it is known, has a corrosive effect on trusting behaviours in this experiment. Agents appear to be less sensitive to known relative income differentials in markets than they are in the non-market settings, but trust (...) in markets appears generally more vulnerable to the introduction of inequality than in the non-market setting. (shrink)

We report the results of an experiment on how individual risk taking clusters together when subjects are informed of peers’ previous risk taking decisions. Subjects are asked how much of their endowment they wish to allocate in a lottery in which there is a 50% chance the amount they invest will be tripled and a 50% chance their investment will be lost. We use a 2 × 2 factorial design varying: (i) whether the subjects initially observed high or low investment (...) social anchors, (ii) whether information about the investment decisions of other subjects in their social group is provided. We find strong evidence that individuals' risk taking decisions are malleable to that of their peers, which in turn leads to social clustering of risk taking. Social anchors shape initial risk taking, with mean investment then converging to a high level across treatments. (shrink)

Many important regulatory decisions are taken by professionals employing limited and conflicting evidence. We conduct an experiment in a merger regulation setting, identifying the role of different standards of proof, volumes of evidence, cost of error and professional or lay decision making. The experiment was conducted on current practitioners from 11 different jurisdictions, in addition to student subjects. Legal standards of proof significantly affect decisions. There are specific differences because of professional judgment, including in how error costs and volume of (...) evidence are taken into account. We narrow the range of explanations for why professional decision making matters. (shrink)

We describe a first experiment on whether product complexity affects competition and consumers in retail markets. We are unable to detect a significant effect of product complexity on prices, except insofar as the demand elasticity for complex products is higher. However, there is qualified evidence that complex products have the potential to induce consumers to buy more than they would otherwise. In this sense, consumer exploitability in quantities cannot be ruled out. We also find evidence for shaping effects: consumers’ preferences (...) are shaped by past experience with prices, and firms may in principle exploit this to sell more. (shrink)

In an experiment on markets for services, we find that consumers are likely to stick to default tariffs and achieve suboptimal outcomes. We find that inattention to the task of choosing a better tariff is likely to be a substantial problem in addition to any task and tariff complexity effect. The institutional setup on which we primarily model our experiment is the UK electricity and gas markets, and our conclusion is that the new measures by the UK regulator Ofgem to (...) improve consumer outcomes are likely to be of limited impact. (shrink)

Rachlin rightly highlights behavioural reinforcement, conditional cooperation, and framing. However, genes may explain part of the variance in altruistic behaviour. Framing cannot be used to support his theory of altruism. Reinforcement of acts is not identical to reinforcement of patterns of acts. Further, many patterns of acts could be reinforced, and Rachlin's altruism is not the most likely candidate.

Self-experimentation is uncommon in the decision sciences, but mental experiments are common; for example, intuition and introspection are often used by theoretical economists as justifications for their models. While introspection can be useful for the generation of ideas, it can also be overused and become a comfortable illusion for the theorist and an obstacle for science.

Stanovich & West's target article undervalues the power of implicit learning (particularly reinforcement learning). Implicit learning may allow the learning of more rational responses–and sometimes even generalisation of knowledge–in contexts where explicit, abstract knowledge proves only of limited value, such as for economic decision-making. Four other comments are made.

Hertwig and Ortmann (H&O) rightly criticize the usage of deception. However, stationary replication may often have no ecological validity. Many economic experiments are not interactive; when they are, there is not much specifically validating H&O's psychological views on script enactment. Incentives in specific market structures may scaffold even zero rational decision-making, but this says very little about individual psychology.

Whether or not trait affiliation correlates with human behaviour needs investigating. One should be careful generalizing neuropsychological mechanisms for affiliation, and generalizing an analysis based on one or two neuropsychological mechanisms and mostly studies on rodents, to complex human social interactions. Serotonin is an example of a neurotransmitter playing an important role in cooperation and interacting with the dopaminergic system.

The beliefs, preferences, and constraints framework provides a language that economists, and possibly others, may largely share. However, it has got so many levels of indeterminacy that it is otherwise almost meaningless: when no evidence can ever be a problem for scientific construct Z, then there is a problem for Z, for nothing can also be considered supportive of Z. (Published Online April 27 2007).

A person is said to be ‘trust responsive’ if she fulfils trust because she believes the truster trusts her. The experiment we report was designed to test for trust responsiveness and its robustness across payoff structures, and to discriminate it from other possible factors making for trustworthiness, including perceived kindness, perceived need and inequality aversion. We elicit the truster’s confidence that the trustee will fulfil, and the trustee’s belief about the truster’s confidence after the trustee receives evidence relevant to this. (...) We find evidence of strong trust responsiveness. We also find that perceptions of kindness and of need increase trust responsiveness, and that they do so only in conjunction with trust responsiveness. (shrink)