This paper reports on an experimental test of the acceptability of the Principle of Accountability. This is a principle of social justice, and states, “individuals should be rewarded for factors under their control […], but not for factors outside their control” (Cappelen and Tungodden (2009)). We specifically ask for acceptability of the principle underlying it, rather than for particular rewards in particular instances. We carry out the test with both an Internal and an External Dictator, conducting a laboratory experiment with a total of 240 subjects. We find that there is broad, but not overwhelming support for the Principle. When the Principle is internally inconsistent no clear preference emerges, which is not surprising.

This paper identifies, and tests experimentally, a prediction of the Nash bargaining axioms that may appear counterintuitive. The context is a simple bargaining problem in which two players have to agree a choice from three alternatives. One alternative favours one player and a second favours the other. The third is an apparently reasonable compromise, but is in fact precluded as an agreed choice by the Nash axioms. Experimental results show that agreement on this third alternative occurs rather often. Our subjects’ behaviour could be interpreted as the paying of an irrationally high price, according to the Nash axioms, in order to reach a compromise agreement.

We construct two variants of a three-player one-shot corruption game, one in which reporting on bribers is cumbersome and one in which it is rewarded (profitable). Both variants feature a briber who can bribe or not, an official who can reciprocate or not and an inspector who can inspect or not. In the first variant, the official accepts the bribe by reciprocating or simply rejects the bribe by choosing not to reciprocate. In the second variant, the official either accepts and reciprocates or rejects and reports the bribe. Under successful inspection, offending players receive separate penalties, which can be varied asymmetrically. Under plausible assumptions about the values of payoff parameters, we obtain a mixed-strategy Nash equilibrium in both variants, akin to Tsebelis’ inspection game. We obtain two interesting results. First, marginally changing the penalties moves the equilibrium probabilities in both games in the same directions, suggesting robustness of the model. We find that larger penalties on the briber increase the overall probability of reciprocated bribery, that is, corruption, while larger penalties on the official decrease corruption. Second, when comparing the two models, we obtain the surprising result that the probability of reciprocated bribery (corruption) is higher in the variant where the official is rewarded for reporting on the briber. JEL: K42, H00, C72, O17

This paper reports an experiment designed to elicit social preferences over income compensation schemes, where income differences between subjects have two independent components: one due to chosen effort and the other due to random chance. These differences can be compensated through social dividends, according to principles chosen beforehand by subjects themselves from behind a stylised Rawlsian veil of ignorance, or outside the society on which the principles will be implemented. We test the attractiveness in particular of Luck Egalitarianism, compensating inequalities due to chance but not those due to choice. We find modest but not overwhelming support for these principles, suggesting that subjects’actual preferences are more complex.

We report the results of an experimental investigation of a key axiom of economic theories of dynamic decision making-namely, that agents plan. Inferences from previous investigations have been confounded with issues concerning the preference functionals of the agents. Here, we present an innovative experimental design which is driven purely by dominance: if preferences satisfy dominance, we can infer whether subjects are planning or not. We implement three sets of experiments: the first two (the Individual Treatments) in which the same player takes decisions both in the present and the future; and the third (the Pairs Treatment) in which different players take decisions at different times. The two Individual treatments differed in that, in one, the subjects played sequentially, while, in the other, the subjects had to pre-commit to their future move. In all contexts, according to economic theory, the players in the present should anticipate the decision of the player in the future. We find that over half the participants in all three experimental treatments do not appear to be planning ahead; moreover, their ability to plan ahead does not improve with experience, except possibly when we force subjects to pre-commit to their future decision. These findings identify an important lacuna in economic theories, both for individual behaviour and for behaviour in games.

This paper presents an Arrow-type result which can be simply demonstrated to hold within the standard domain of welfare economics: in the m×n Edgeworth box, a best allocation must assign all goods to a single individual.

This paper reports on an experiment designed to test whether pairs of individuals are able to exploit ex ante efficiency gains in the sharing of a risky financial prospect. Observations from a previous experiment had suggested a general rejection of efficiency in favour of ex post equality. The present experiment explores some possible explanations for this. The results indicate that fairness is not a significant consideration, but rather that having to choose between prospects diverts partners from allocating the chosen prospect efficiently.

This paper presents an Arrow-type result which can be simply demonstrated to hold within the standard domain of welfare economics: in the Edgeworth Box, a best allocation must assign all goods to (m×n) a single individual. Allowing the Social Welfare Function to take account of envy-freeness, or other related constructions, does not significantly resolve this problem.

There is now overwhelming experimental evidence that individuals systematically violate the axioms of Expected Utility theory. In reality, however, many economic decisions are taken by, or on behalf of, groups whose members have a joint stake in those decisions. This paper reports on an experiment in which pairs of individuals are tested for Common-Ratio inconsistencies. We find that the agreed choices of subject-pairs follow a pattern of inconsistency very close to that of individuals' choices. We also look for evidence that group participation increases the consistency of the individuals themselves. With one solitary exception, we find none.

Bulletin of Economic ResearchVolume 41, Issue 3 p. 213-217 A NOTE ON CONCAVITY AND SCALAR PROPERTIES IN PRODUCTION John Bone, John Bone University of YorkSearch for more papers by this author John Bone, John Bone University of YorkSearch for more papers by this author First published: July 1989 https://doi.org/10.1111/j.1467-8586.1989.tb00339.xAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Volume41, Issue3July 1989Pages 213-217 RelatedInformation

This paper analyses an indefinitely- repeated Cournot duopoly. Firms select simple dynamic decision rules which, taken together, comprise a first-order linear difference equation system. A boundedly-rational objective function is assumed, by which the firm's payoff is its profit at the point of convergence, if any. Stable Nash equilibria are characterised and located in output space, stability in this context being equivalent to subgame-perfection. Comparable results are derived for a conventional discounted-profit objective function, where this equivalence does not hold, but where stability may nevertheless be of intrinsic interest. In either context, stability is incompatible with joint profit maximisation.