Andrew Kloosterman


Publications


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)
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 and bargaining market with a laboratory experiment. First, sellers post intervals of possible surplus splits (i.e. the payoffs that would result from posting possible prices) that direct buyers to approach them. Second, after matching occurs, final surpluses are determined by ultimatum game bargaining. We investigate the interaction between bargaining and competition in the preliminary search stage, with a focus on how preferences for fair bargaining outcomes affect search. The main results confirm that behavior in the ultimatum game is consistent with preferences for fair outcomes, and the main effect on search is to drive up the posted buyer surplus lower bounds above the competitive equilibrium towards more equal surplus 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.

Stochastic/Repeated Games

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 co- operation as well as cooperation and defection on the equilibrium path. The results confirm that subjects cooperate as beliefs predict after they gain sufficient experience. There is some evidence in favor of alternating cooperation and defection, but conditioning on past outcomes is more prevalent. This is confirmed with a maximum likelihood strategy estimation where 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
This paper analyzes a laboratory experiment on the novel asymmetric partnership game with public information. In this game, two players jointly work on a project each period that only benefits one of them. The extent to which costly effort is incentivized through intertemporal incentives that punish shirking is the focus of the investigation. The public signals are about who is likely to benefit in the future, and the main treatment variable is the informativeness of these signals. 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.

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 (i.e., the claim is vacuous). We study the structure of the essentially stable set, and classify popular Pareto efficient mechanisms using our criterion: those based on Shapley and Scarf's TTC mechanism are not essentially stable, while Kesten's EADA mechanism is. Besides reconciling the conflict with efficiency, vacuous claims are simple and straightforward to explain, making essential stability 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


Imperfect Monitoring and Coordination Failure: Experimental Evidence

Optimal Information in a Principal Agent Problem