Instructor:
Joseph Tao-yi Wang (王道一) E-mail:
josephw@ntu.edu.tw
Office: 社法學院研究大樓425室 Office
Phone: (02)2351-9641ext514
Class Time: Thursday,
9:10am-12:10pm at 社法13教室 Office
Hours: By email appointment
Class Webpage:
http://homepage.ntu.edu.tw/~josephw/experimental_spring2008.htm
Course Description:
This is a graduate level course on experimental
economics. The purpose is to
provide a thorough introduction to experimental economics so students can start
to perform their own research in this field. You will be expected to write a research
proposal by the end of the course.
Specific goals of this class include:
1.
Introduction
to experimental economics:
After the class, students are expected to name several experiments performed in
different fields of economics, and describe how the experimental results affirm
(or differ from) economic theory and/or field data. During class, students have to choose a
particular class topic, record the lecture and write a review.
2.
Experimental
methods: After the class,
students are expected to understand how to design and run an experiment, as
well as how to analyze the data they obtain. During class, students are expected to
write a research proposal that
a.
describes
a proposed experiment (with a sample instructions for subjects),
b.
why
should we care about this experiment,
c.
why
the experiment is designed this way (compared to other possible designs),
d.
expected
results, and,
e.
methods
to analyze the data (and possibly some simulation results).
3.
Evaluate the most current research: After the class, students are expected to develop the
ability to read recent journal articles in experimental economics, and evaluate
the quality of the papers. During
class, students are expected to read all assigned journal articles, write one
(referee) review report for them, and present the article in class.
References and Textbook:
The reading list (see below)
assigns journal articles. Basic
topics covered by these textbooks:
1.
Camerer,
Colin F. (2003), Behavioral Game Theory:
Experiments in Strategic Interaction, Princeton University Press (hereafter
BGT). Required reading
for the first 8 weeks, providing an introduction to experimental economics
& behavioral game theory.
2.
Kagel,
John and Alvin Roth, ed. (1995), Handbook of Experimental Economics, Princeton
University Press (hereafter HEE).
Comprehensive (but old) literature review on experimental
economics. Recommended to graduate
students as a background review.
3.
Holt,
Charles (2007), Markets, Games and Strategic Behavior, Addison-Wesley
(hereafter MGS). Most
up-to-date undergraduate textbook on experimental economics. Undergraduate students who take this
course can read this book in lieu of journal articles.
Assignments:
You need to hand in a midterm review report on a basic
topic (50%) and a final research proposal (50%). Class presentation of your research
proposal is highly recommended and earns extra credit. If you are a graduate student taking
this course, you will also have to review a journal article, write a referee
report and present the article in class.
Course outline:
Part A: Overview of Experimental Economics
1. Introduction: BGT,
2. Dictator,
Ultimatum and Trust Games:
BGT,
3.
Mixed-Strategy Equilibrium: BGT,
4.
Bargaining: BGT,
5.
Dominance-Solvable Games: BGT,
6.
Learning: BGT,
7.
Coordination: BGT,
8.
Signaling and Reputation: BGT,
9.
Individual Decision Making - Risk and Time; Neuroecnomics - fMRI: Handbook
of Psychophysiology, 3rd
ed.,
10.
Neuroeconomics –Eyetracking: Handbook
of Psychophysiology, 2nd
ed.,
11.
Auctions: Theory, Lab and Field: MGS,
Ch. 19-22, and HEE,
12. Field Experiments:
Duflo, Glennerster and Kremer
(2007), “Using Randomization in
Development Economics: A Toolkit,” forthcoming in Handbook of
Developmental Economics, Vol. 4.
* Market Experiments and IO, Experimental
Asset Markets and Bubbles: HEE,
Part B: Experimental Methods
a.
The Gold Standards: Basic Principles of Experimental Design
b.
Experimental Design:
i.
Goals
ii.
Control
iii. Programming the Experiment: z-Tree, the
Psychophysics Toolbox, etc.
iv.
Pre-testing: Simulation
v.
Pre-testing: Pilot Studies
c.
Running an Experiment:
i.
Giving Instructions and Comprehension Tests
ii.
The Experimental Session(s)
iii. Post-Experimental Surveys
i.
Handing out Payments
ii.
What if Something Unexpected Happens?
d.
Data Analysis:
i.
Summary Statistics
ii.
Regressions and other Basic Econometrics
iii. Maximum Likelihood Estimations: QRE,
Cognitive Hierarchy, level-k, EWA…
iv.
Out-of-Sample Prediction
v.
Handling Eyetracking Data: Time Series and Markov Switching Models
vi.
Handling fMRI Data: SPM2
Reading List: (* means required reading.)
[ 2 /21] Introduction: BGT,
Other References: HEE,
*Haile,
Hortacsu and Kosenok (2008), “On the Empirical Content of Quantal Response
Equilibrium,” American Economic Review, forthcoming.
Rabin
(2003), “The Nobel Memorial Prize for Daniel Kahneman,” Scandinavian Journal
of Economics, 105 (2), 157-182.
Bergstrom
(2003), “
McKelvey and
Palfrey (1995), “Quantal Response Equilibria for
McKelvey and
Palfrey (1998), “Quantal Response Equilibria for Extensive Form Games,” Experimental
Economics, 1, 9-41.
[ 3 / 13 ] Dictator,
Ultimatum and Trust Games:
BGT,
Other References: HEE,
*Knoch,
Pascual-Leone, Meyer, Treyer and Fehr (2006), “Diminishing
Reciprocal Fairness by Disrupting thr Right Prefrontal Cortex,” Science
314, 3 November 2006, 912-915. (TMS)
De Quervain,
Fischbacher, Treyer, Schellhammer, Schnyder, Buck, and Fehr (2004), “The
Neural Basis of Altruistic Punishment,” Science 305, 27 August
2004, 1254-1258. (PET)
[Presenter: 沈祥玲]
Kosfeld, Heinrichs, Zak, Fischbacher and Fehr (2005), “Oxytocin
increases Trust in Humans,” Nature 435, 2 June 2005, 673-676.
(Oxytocin)
[ 3 /27]
Mixed-Strategy Equilibrium: BGT,
Other References:
[Presenter: 王道一] *Ostling, Wang,
Chou and Camerer (2007), “Field and Lab Convergence
in Poison LUPI Games,” working paper.
Crawford and
Iriberri (2007), “Fatal Attaction: Salience, Naivete, and Sophistication in
Experimental ‘Hide-and-Seek’ Games,” American Economic Review, 97(5),
1731-1750.
[ 4 / 3 ]
Bargaining: BGT,
Other References: HEE,
[Presenter: 陳亮宇]
Johnson, Camerer, Sen and Rymon (2002), “Detecting Failures of Backward
Induction: Monitoring Information Search in Sequential Bargaining,” Journal
of Economic Theory,104 (1), 16-47.
[ 4 /10]
Dominance-Solvable Games: BGT,
Other References:
[Presenter: 陳俊廷] *Costa-Gomes and
Crawford (2006), “Cognition
and Behavior in Two-Person Guessing Games: An Experimental Study,” American
Economic Review, 96 (5), 1737-1768.
*Camerer, Ho and Chong (2004), “A Cognitive Hierarchy Model of Games,” Quarterly
Journal of Economics, 119(3),
861–898.
Holt and
Goeree (2004), “A
model of noisy introspection,” Games and Economic Behavior, 46 (2),
365-382.
Costa-Gomes, Crawford and Broseta (2001), “Cognition and Behavior in Normal-Form
Games: An Experimental Study,” Econometrica, 69 (5), 1193-1235.
[ 4 /24]
Learning: BGT,
Other References:
*Ho, Wang and Camerer (2008), “Individual Differences in EWA Learning
With Partial Payoff Information,” Economic Journal, 118, 37-59.
[Presenter: 王子豪]
*Ho, Camerer and Chong (2007), “Self-tuning
experience weighted attraction learning in games,” Journal of Economic
Theory, 133, 177-198.
*Wilcox (2006), “Theories of Learning in Games and Heterogeneity Bias,” Econometrica,
74 (5), 1271-1292.
Salmon (2001), “An Evaluation of Econometric Models of Adaptive
Learning,” Econometrica, 69 (6), 1597-1628.
Camerer and
Ho (1999), “Experience-weighted Attraction Learning in Normal Form Games”, Econometrica,
67(4), 827–874.
[ 5 / 1 ]
Coordination: BGT,
Other References: HEE,
[Presenter: 陳依依]
Weber (2006), “Managing Growth to Achieve
Efficient Coordination in Large Groups,” American Economic Review, 96(1),
114-126.
[ 5 /15]
Signaling and Reputation: BGT,
Other References:
[Presenter: 謝喻婷]
Bereby-Meyer, Yoella and Alvin E. Roth (2006), “The Speed of
Learning in Noisy Games: Partial Reinforcement and the Sustainability of
Cooperation,” American Economic Review, 96 (4), 1029-1042.
[ 5 /22]
Individual Decision Making - Risk and Time: HEE,
Other
References:
[Presenter: 林正峰] *Tanaka, Camerer and Nguyen (2007), “Risk and time
preferences: Experimental and household data from Vietnam,” revised and resubmitted to the American Economic Review.
*McClure, Ericson, Laibson, Loewenstein, and Cohen (2007) “Time Discounting for Primary Rewards.” Journal of Neuroscience, 27: 5796–5804.
Elaine
Liu (2008), “Time to
Change What to Sow: Risk Preferences and Technology Adoption Decisions of Cotton
Farmers in China,” job market paper.
[ 5 /29] Neuroeconomics – fMRI: Handbook of Psychophysiology, 3rd
ed., Ch. 2: Wager, Hernandez, Jonides and Lindquist (2007), “Elements of
functional Neuroimaging.” [筆記整理: 林承遠、陳伯瑜]
Other References:
*Kang, Hsu, Krajbich,
Loewenstein, McClure, Wang, and Camerer (2007), “The Hunger for Knowledge:
Neural Correlates of Curiosity,” working paper.
[Presenter: 蔡元棠]
*Hsu, Bhatt, Adolphs, Tranel and Camerer (2005), “Neural Systems Responding to
Degrees of Uncertainty In Human Decision Making,” Science, 310, 9 December
2005, 1624-1625. (Perspectives
by Rustichini.)
[Presenter: 陳瑀屏]
McClure, Laibson, Loewenstein and Cohen (2004), “Separate Neural Systems Value Immediate and Delayed
Monetary Rewards” Science
306, October 15 2004.
[ 6 / 5 ]
Neuroeconomics - Eyetracking: Handbook
of Psychophysiology, 2nd
ed.,
Other References:
*Wang,
Spezio and Camerer (2008), “Pinnochio’s Pupil:
Studying Truth-telling and Lying in Sender-Receiver Games”, working paper.
Gabaix,
Laibson, Moloche and Weinberg (2006), “Costly
Information Acquisition: Experimental Analysis of a Boundedly Rational
Model," American Economic Review, 96 (4), 1043-1068. (with Technical
Appendix)
[ 6 /12]
Field Experiments: [筆記整理: 陳政弘]
Duflo,
Glennerster and Kremer (2007), “Using
Randomization in Development Economics: A Toolkit,” forthcoming in Handbook
of Developmental Economics, Vol. 4, ed. by T. Schultz and John Strauss,
North-Holland.
Other References:
Duflo, Dupas
and Kremer (2007), “Peer Effects, Pupil-Teacher Ratios, and
Teacher Incentives: Evidence from a Randomized Evaluation in Kenya,” discussion
paper.
[Presenter: 陳政弘]
Karlan and List (2007), “Does
Price Matter in Charitable Giving?
Evidence from a Large-Scale Natural Field Experiment”, American
Economic Review, 97(5), 1774-1793.
Gneezy
and List (2006), “Putting
Behavioral Economics to Work: Testing for Gift Exchange in Labor Markets Using
Field Experiments,” Econometrica, 74(5), 1365-1384.
[Presenter: 林韋宇]
Bertrand and Mullainathan (2004), “Are
Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on
Labor Market Discrimination,” The American Economic Review, 94 (4),
991-1013.
[Opt.]
Market Experiments and IO, Experimental Asset Markets and Bubbles: HEE, Ch. 5-6
and MGS, Ch. 6-11, 34.
Other References:
Bossaerts, Plott and Zame (2007), “Prices and Portfolio
Choices in Financial Markets: Theory, Econometrics, Experiments,” Econometrica, 75 (4), 993–1038.
Snowberg,
Wolfers and Zitzewitz (2007), “Partisan
Impacts on the Economy: Evidence from Prediction Markets and Close Elections,” Quarterly Journal of
Economics, 122(2), 807-829.
[Presenter: 陳伯瑜] Hussam, Porter and Smith (2008), “Thar She Blows: Can Bubbles Be Rekindled with Experienced Subjects?”, American Economic Review, forthcoming.
[Opt.]
Auctions: Theory, Lab and Field: MGS,
Ch. 19-22, and HEE,
Other References:
[Presenter: 戴淯琮]
*Crawford and Iriberri (2007), “Level-k
Auctions: Can a Non-Equilibrium Model of Strategic Thinking Explain the
Winner's Curse and Overbidding in Private-Value Auctions?,” Econometrica
75(6), 1721–1770.
*Goeree and
Holt (2007), “Hierarchical Package Bidding: A Paper & Pencil Combinatorial
Auction”, working paper.