Andrew Kloosterman


Publications



Kloosterman, Andrew. An Experimental Study of Public Information in the Asymmetric Partnership Game Southern Economic Journal, 2019, 85(3), pp. 663-690.
Kloosterman, Andrew and Paul, Stephen. Ultimatum Game Bargaining in a Partially Directed Search Market Journal of Economic Behavior & Organization, 2018, 154, pp. 60-74.
Kloosterman, Andrew and Schotter, Andrew. Complementary Institutions and Economic Development: An Experimental Study Games and Economic Behavior, 2016, 99, pp. 186-205.
Kloosterman, Andrew. Directed Search with Heterogeneous Firms: An Experimental Study Experimental Economics, 2016, 19(1), pp. 51-66.
Kloosterman, Andrew. Public Information in Markov Games Journal of Economic Theory, 2015, 157, pp. 28-48.



Working Papers


Bargaining

A Simple Experimental Test of the Coase Conjecture: Fairness in Dynamic Bargaining (joint with Jack Fanning)
We conduct a novel experimental test of the Coase conjecture using subjects' private information about preferences for fairness. In an infinite horizon bargaining game, a proposer proposes a division of chips, until a responder accepts. Given private information about fairness preferences and patient players, the Coase conjecture predicts almost immediate agreement on equal payoffs. We test this for two different chip-to-money exchange rates, and compare outcomes to ultimatum games. Behavior closely matches theory. In particular, when chips are worth more to proposers than responders, initial offers, minimum acceptable offers, responder payoffs and efficiency are significantly larger in the infinite horizon.

Stochastic/Repeated Games

Cooperation to the Fullest Extent Possible? An Infinitely Repeated Games Experiment
Laboratory experiments on the infinitely repeated prisoner's dilemma, and other similar cooperation games, find little cooperation when the discount factor is near the theoretical cutoff discount factor for which cooperation is supported in equilibrium. The explanation is that the non-cooperative equilibrium is risk dominant; it is the best response to most beliefs about what the other player will choose. I study a new game where this property is reversed, the cooperative equilibrium is risk dominant at the cutoff, to understand whether cooperation can be empirically observed to the fullest extent that theory says is possible. The main finding is that there is still not pervasive cooperation, just 41% and 35% in period 0 of the game for the last 10 matches in two respective treatments. Cooperation is a best response to almost all beliefs in the latter treatment indicating that there is something else that inhibits cooperation.

Repeated Partnerships with Multiple Equilibria and Imperfect Monitoring: An Experimental Study
I investigate finitely repeated partnership games with imperfect monitoring where both mutual effort and mutual shirking are Nash equilibria of the stage game. The treatment variable is the number of repetitions. I find that period 1 effort rates are increasing in the number of repetitions, but subjects use trigger strategies that switch to permanent shirking after enough failed projects so effort rates decrease as the game progresses in all treatments. Additionally, the rate of decrease is less when there are more repetitions. These results are consistent with a theory of strategic uncertainty in which a subject best responds to their beliefs about whether their partner exerts effort or shirks. Finally, I show that total effort does not vary much as the number of repetitions is increased because the increased period 1 effort is mostly canceled out by the erosion of effort as the game progresses.

Cooperation in Stochastic Games: A Prisoner's Dilemma Experiment
This experiment investigates 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. There is more cooperation in treatments where beliefs predict cooperation after subjects gain sufficient experience. There is some evidence for cooperation and defection as predicted by equilibrium, but there is stronger evidence for behavior conditioning on past actions that is not consistent with equilibrium play. This latter finding is confirmed with a maximum likelihood strategy estimation where the repeated game strategies Grim Trigger and Tit-for-Tat are the most prevalent cooperative strategies, although they are not equilibria in this environment.

School Choice

Essentially Stable Matchings (joint with Peter Troyan and David Delacrétaz)
We propose a solution to the conflict between fairness and efficiency in matching markets. A matching is essentially stable if any priority-based claim initiates a chain of reassignments that results in the initial claimant losing the object. We show that an essentially stable and Pareto efficient matching always exists and investigate the properties of the set of essentially stable matchings. We then classify popular Pareto efficient mechanisms: those based on Shapley and Scarf's TTC mechanism are not essentially stable, while Kesten's EADA mechanism is. The simplicity of our concept makes it particularly well-suited for practical applications.

School Choice with Asymmetric Information: Priority Design and the Curse of Acceptance (joint with Peter Troyan)
We generalize standard school choice models by allowing for interdependent preferences and differentially-informed students. We show that in general, the commonly-used deferred acceptance mechanism is no longer strategy-proof, the outcome is not (ex-post) stable, and may make less informed students worse off. We attribute these results to a curse of acceptance. However, we also show that if priorities are designed appropriately, positive results are recovered: equilibrium strategies are simple, the outcome is ex-post stable, and less informed students are protected from the curse of acceptance. Our results have implications for the current debate over priority design in school choice.



Works in Progress


Signal Jamming and Collusion

An Experimental Study of Payment Scheme Sorting into Markets for Credence Goods (joint with Ellen Green)