Kloosterman, Andrew and Schotter, Andrew.
Complementary Institutions and Economic Development: An Experimental Study Games and Economic Behavior, 2016, 99, pp. 186-205.
Directed Search with Heterogeneous Firms: An Experimental Study Experimental Economics, 2016, 19(1), pp. 51-66.
Public Information in Markov Games Journal of Economic Theory, 2015, 157, pp. 28-48.
A Simple Experimental Test of the Coase Conjecture: Fairness in Dynamic Bargaining
(joint with Jack Fanning)
In each round of an infinite horizon bargaining game, a proposer proposes a division of chips, until a responder accepts. The Coase conjecture
predicts that incomplete information about responders' preferences for fairness leads to almost immediate agreement on an equal payoff
split when discounting between rounds is small. We experimentally test this prediction when chips are equally valuable to both bargainers
and when they are worth three times as much to proposers, and compare outcomes to an ultimatum game. Behavior offers strong support for the
theory. In particular, when chips are more valuable to proposers, initial offers, initial minimum acceptable offers, and responder payoffs
are significantly higher in the infinite horizon game than in the ultimatum game, while proposer payoffs are significantly lower.
Ultimatum Game Bargaining in a Partially Directed Search Market
(joint with Stephen Paul)
We investigate a partially directed search market where buyers search for sellers and then final prices are determined by
ultimatum game bargaining. In the search stage of this game, sellers post intervals of possible surplus splits to attract
buyers and then buyers approach one seller from whom they attempt to purchase. Our main goal is to investigate the interaction
between bargaining and competition in the preliminary search stage. The main results confirm that behavior in the ultimatum game
is consistent with past findings (i.e., fairness matters), and the main effect on search is to drive up the posted lower
bounds for buyer surplus above the competitive equilibrium (towards more equal splits). Our main treatment variable is the number of
buyers in the market, and when the number of buyers is increased, lower bounds and ultimatum offers to buyers decrease. This is
consistent with fairness perceptions being influenced by competition.
Cooperation in Stochastic Games: A Prisoner's Dilemma Experiment
This experiment investigates cooperation in a stochastic version of the infinitely repeated prisoner's dilemma.
The stochastic element introduces the importance of beliefs about the future for supporting cooperation
as well as cooperation and defection on the equilibrium path. The results confirm that subjects cooperate
as predicted after they gain sufficient experience. There is some evidence in favor of alternating cooperation
and defection, but a maximum likelihood strategy estimation suggests that cooperation is conditioned mostly on
past actions. For example, the popular repeated game strategies Grim Trigger and Tit-for-Tat are still popular here,
although they are not equilibria in this environment.
An Experimental Study of Public Information in the Asymmetric Partnership Game
Markov games model a dynamic setting where there is uncertainty about the future. This paper analyzes
a laboratory experiment on the novel asymmetric partnership game in the environment of Kloosterman 2015
where public information about the uncertain future is available to the players. In this game, two players
jointly work on a project each period that only benefits one of them. Costly effort may be incentivized
through intertemporal incentives; effort which is non-benefical today induces effort from their partner in
future periods when it is beneficial. Behavior is shown to be best explained by an adaptation of the basin of
attraction (as introduced in Dal Bò and Frèchette 2011) to allow for state-dependent beliefs. The public signals
impact choices in the way that this theory predicts, and ultimately there is more effort when signals are more
informative. Finally, a new way to investigate strategies in these types of games is considered, and the results
show how the different states are used by subjects to employ partial effort strategies.
Essentially Stable Matchings
(joint with Peter Troyan and David Delacrétaz)
We propose a solution to the trade-off between Pareto efficiency and stability
in matching markets. We definne a matching to be essentially stable if any claim
initiates a chain of reassignments that ultimately results in the initial claimant
losing the object she claimed to a third agent. Our definition is not only
compatible with Pareto efficiency but also is practical, since explaining why
claims are not valid is straightforward. We study the essentially stable set
and show that it shares some, though not all, of the structure possessed by the
stable set. We classify popular Pareto efficient mechanisms using our definition:
those based on Shapley and Scarf's TTC mechanism are not essentially stable
while Kesten's EADA mechanism is. Our analysis points to a trade-off among
essential stability, Pareto efficiency, and strategyproofness: mechanisms exist
that satisfy any two of these properties but no mechanism achieves all three.
School Choice with Asymmetric Information: Priority Design and the Curse of Acceptance
(joint with Peter Troyan)
An implicit assumption in most of the matching literature is that all participants
know their preferences. If there is variance in the effort agents spend researching
options, some will know their preferences, while others may not. When this is true,
(ex-post) stable outcomes need not exist and informed agents gain at the expense of less
informed agents, outcomes we attribute to a curse of acceptance for the less informed
students. However, when all agents have a "secure school" we recover positive results:
equilibrium strategies are simple, the outcome is ex-post stable, and less informed
students are made better off. Our results have potential policy implications for the
current debate in school choice over how priority design affects outcomes.
Works in Progress
Imperfect Monitoring and Coordination Failure: Experimental Evidence
Optimal Information in a Principal Agent Problem