Project Archives

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Census of Experimental Economics Syllabi // 2015 - 2016 // None

In late 2015 I polled ESA members for tips on how to teach upper division undergraduate Experimental Economics. I am grateful to the many respondents, who provided the trove of materials linked below. I am also grateful to Curtis Kephart for helping organize and post the material. At [this link](https://www.dropbox.com/sh/zu563tzbnjm9rz1/AADrxERym4Oql8VUXIrRPZpta?dl=0), you can find syllabi from more than 30 classes in experimental economics, mostly undergraduate, most of them recent. There seem to be two main approaches: > 1. Survey of findings from economics experiments. Many of these focus on behavioral econ issues. > 2. How to run an economics experiment. Substantive findings are illustrative and surveys are patchy; the focus is on methods and techniques. > Of course, most courses offer some mix of 1 and 2. My own mix tilts more towards 2.

Boiling the Frog Optimally: A Laboratory Experiment // 2011 - 2016 // HP Labs Open Innovation 2011

Internet content providers confront a tricky dilemma. Building original content is costly, but generating revenue to cover these costs is generally inconvenient for visitors (fees or distracting ads) & will reduce their numbers. Even if the proper tradeoff is identified, the question remains of how best to introduce the chosen inconvenience: all at once, or in small increments. One view is that website visitors are like <a href="http://en.wikipedia.org/wiki/Boiling_frog"> Quinn’s proverbial frogs</a>, and that very few of them will leave if the inconvenience is introduced sufficiently gradually. Another view notes the absence of scientific evidence for the frog proverb, and asserts that it is best to introduce inconvenience all at once. LEEPS Lab is investigating this question.

Economic Analysis of Recommender Systems // 2011 - 2016 // CCF-1101741

A recommender system takes on-line user histories and demographic information, and automatically creates personalized recommendations for goods and services. Already common for small items such as books and movies, such systems are destined to play an increasing role in the economy as new applications emerge such as sourcing or job search. This project will shed broader light on the economic benefits and costs that recommender systems bring to the market.

Gradient Dynamics as PDEs // 2007 - 2014 // None

Unfunded research. The payoff or fitness function in a population game defines a ``landscape,'' and each player adjusts her action to move up the payoff gradient. Consequently the landscape changes over time. We extend techniques from nonlinear partial differential equations to analyze the resulting dynamics, and present applications in biology, behavioral ecology, politics, economics, and finance.

Continuous Games // 2009 - 2013 // SES-0925039

We build a new computer platform, called Continuous Games (ConG), for studying strategic interaction in the laboratory. ConG focuses on continuous games - especially continuous time, but also continuous action sets and "large" player populations. Such continuous settings are often more realistic and easier to learn, and have novel theoretical properties that have never been tested empirically. We use ConG to study games of conflict (e.g., prisoner's dilemma and social dilemmas) and games of coordination in which theory predicts far more efficient behavior in continuous time than in discrete time, as well as to study games in which the unique mixed strategy equilibrium has proven elusive in discrete laboratory environments. We also examine a set of applied games-- such as strategic pricing, quantity setting and location choice -- for which continuous time settings are simply more realistic. The current version of ConG software is downloadable by request. Later it will be accessible via EconPort (a National Digital Library facility). Researchers can run many variants on our games merely by downloading the software and resetting the parameters. With a little programming, they also can run new and quite different continuous games. [test link](google.com)

Networked Markets // 2004 - 2010 // SBR-0351801

A central theoretical proposition in economics is that frictionless markets perform at 100% efficiency, and require only trivial links between buyers and sellers. Actual markets, however, face moderate to severe trading frictions, and rely on various sorts of buyer-seller links. We introduce two important frictions: possible cheating (e.g., a seller might ship an item of lower quality) and hidden trading opportunities (e.g., a buyer might not be aware of a low cost supplier). We will then introduce networks of links among traders, and examine the impact on market performance, including efficiency, prices, volume, and profit distribution. As suggested by ratings in on-line auctions or by the role of immigrant networks in international trade, the links among network members spread information, e.g., the identity of cheaters or the location of low cost sellers. Such links may boost market performance by fostering trust (based on reputation) and unifying trade. We will choose the network links in early series of experiments and allow traders to build their own networks in later series.

Landscape Dynamics // 2005 - 2009 // SES-0436509

Supported by NSF grant SES-0436509, this project demonstrates new techniques for social science models. The techniques include nonlinear partial differential equations and agent-based models. The primary application is to financial market dynamics (especially bubbles and crashes), with secondary applications including Downsian voting models and Veblen consumption dynamics. 'Adaptive landscape' is a classic metaphor in theoretical biology. The landscape is defined over an abstract space of potential biological traits, and successful species are represented by peaks, i.e., trait combinations that have the highest fitness. We develop the landscape idea mathematically, drawing on insights and techniques from dynamical systems theory, agent-based systems, evolutionary game theory, and fluid dynamics. The abstract space represents possible choices (in one or more dimensions) by individuals, and the social state is the distribution of actual choices. Then an individual's payoff is a landscape whose shape depends on the social state. Individuals respond to the landscape and seek higher payoff. As they do so, the distribution of choices changes in continuous time, and therefore the landscape also changes. New peaks representing high payoff can appear, and old peaks can disappear, or flatten into plateaus, or move. Thus an application produces a dynamic interplay between social state and landscape. Main website: http://www.vismath.org/research/landscapedyn

Social Preferences & Revealed Altruism // 2002 - 2007 // None

We introduce parametric and non-parametric models of other-regarding preferences, over my own payoff and others' payoffs. My preferences are systematically affected by my emotional state, which responds to relative status and to the kindness or unkindness of others' choices (``intentions''). The emotional state determines the marginal rate of substitution between my own and others' payoffs, and thus my subsequent choices. The models are applied to a variety of existing and new data sets. The Revealed Altruism paper is a copy of the Econometrica article. The Tractable Model paper is the penultimate version of the Games and Economic Behavior article.

Cyberspace Markets // 2000 - 2005 // IIS 9986651

Supported by NSF grant IIS 9986651 (2000-2003). Researched effective cyberspace markets. Measured effectiveness in terms of a market's ability to lead intelligent (but self-interested) traders quickly to efficient transactions and to encourage their participation. Methodologies: * theoretical models of market equilibrium and transient performance; * computer simulations of traders and their market interactions; * laboratory markets with human traders interacting with automated traders; and * statistical analysis of recent cyberspace activity.

Local Interactions // 1997 - 2001 // None

Latest works in economics have focused on local communities of interactions as a way to model sustainable cooperation - in Prisoner's Dilemma games - and relatively fast coordination on the risk-dominant equilibrium - in Coordination games. We tested in the laboratory some new network theories on how does the network architecture - the pattern of links between individuals - encourage coordination and cooperation. We implemented a computational model - in Swarm - to study how the pattern of relations linking financial institutions - the network - affects the diffusion of financial crises.

Customer Markets // 1997 - 2001 // SBR 9617917

Markets with switch costs and consequent buyer-seller attachments are called customer markets, following Okun (1981). Customer markets are interesting for three complementary reasons. First, they are pervasive in modern economics, with a major share of wholesale and intermediate transactions as well as labor and retail. Second, their performance characteristics may differ from auction markets. Third, they are not yet well understood, either theoretically or empirically. Supported by NSF grant SBR 9617917 (1997-2000) we use laboratory experiments to expand empirical knowledge of customer markets.

Optimal and Adaptive Learning Models // 1993 - 1997 // SBR-9310347

This grant funded a series of laboratory experiments of individual choice under uncertainty. The primary task, called medical diagnosis, presented the subject with binary-valued cues ("patient's symptoms") and asked for a binary or continuous response representing the more likely disease (or its probability). The results are reported in five academic papers: "Learning to Forecast Price," "Understanding Variability in Binary and Continuous Choice," "Monty Hall's Three Doors: Construction and Deconstruction of a Choice Anomaly," "Broadening the Tests of Learning Models," "A Comparison of Learning Models," We also report results in: Hugh M. Kelley and Daniel Friedman, "Learning to Forecast Rationally," in The Handbook of Experimental Economic Results, C. Plott and V. Smith (eds.) (2000), Elsevier Press, Amsterdam, forthcoming.

Price Formation and Learning // 1993 - 1996 // SBR-9223461

A series of laboratory experiments that examine price formation in double auction markets, with a focus on the dynamical processes which may lead to market equilibrium. The experiments feature random individual value and cost parameters independently drawn from known uniform distributions in each trading period.

Evolutionary Game Experiments // 1991 - 1993 // SES-9023945

An empirical study of the process by which Nash equilibrium (or other coherent behavior) may be achieved by intelligent self-interested agents in strategic interaction. We present populations of 6-24 undergraduate subjects with chosen payoff (or fitness) functions which embody interesting sorts of strategic interaction. Each subject faces a given payoff function and interacts anonymously with a fixed population of other subjects over 10-100 decision periods. Analysis compares actual time paths of population distributions to various theoretical time paths proposed by biologists and economists, including constant Nash equilibrium and refinements of Nash equilibrium.

Financial Market Mechanisms // 1988 - 1991 // IRI-8812789

Examined alternative electronic trading formats for asset markets, including clearinghouse (or call) and continuous double auction. Focused on the efficiency impact and allocation of surplus when different traders had different privileges, e.g., ability to post price offers. Anticipated (by too many years!) and tried to inform the move to electronic crossing networks, which now carry a large fraction of asset trading volume in the field.

Experimental Asset Markets // 1984 - 1987 // SES-8411382

Starting at UCLA in 1984, and continuing at UCSC in 1985, we constructed the world's first all-electronic asset trading platform. Traders received public and private information during trading periods. Lead programmers Hekke Ketola at UCLA and April Atwood at UCSC implemented the UNIX platform, which ran on a server in the PI's office over the campus network, and subjects used workstations in campus teaching labs.

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