34504 - Topics in Microeconomics

Learning outcomes

At the end of the course the student will have acquired knowledge of specific advanced topics in microeconomics and the ability to develop critical and original views on the issues covered in the course.

Course contents

Course contents

Experimental Economics studies economic behavior in a controlled, laboratory or field environment. This course intends to teach the student how to design an experiment aimed at answering a self-developed research question. In addition, it gives an overview of recent trends in Experimental Economics. The course will focus around a set of recent experimental papers and on experimental designs developed by the students. Each student is expected to actively participate in classes by presenting and discussing papers selected by the instructor and to develop an experimental design of her/his own

Readings/Bibliography

Readings/Bibliography

You may be interested in the following (non mandatory) books:

• Markets, Games and Strategic Behavior; Recipes for Interactive Learning, by Charles Holt (Addison Wesley 2006); this is good to read about the basics of running experiments on different topics.
• Handbook of Experimental Economics by John Kagel and Al Roth (Princeton University Press, 1995). This will teach you more about the variety of experiments done. It is somewhat outdated, but no recent book is available at this point in time.
• The Handbook of Experimental Economics Results by Charles R. Plott and Vernon L. Smith (Elsevier 2008) is like an encyclopedia with short descriptions of experiments in a vast number of fields. This is a place to look up whether your own idea for an experiment has been done before.
• Experimental Economics by Nicholas Bardsley, Robin Cubitt, Graham Loomes, Peter Moffatt, Chris Starmer and Robert Sugden (Princeton University Press 2010) provides a nice overview of methodological discussions related to laboratory experiments.

Program:

There will be five meetings. In the first four, specific topics will be addressed. In the class, papers on the reading list will be discussed. It is the students' own responsibility to obtain these papers. For each paper one student will be pre-selected to present it in 25 minutes.

The following structure must be used in the presentation of a paper.

• Start with a 60 second “elevator pitch”. Here, you explain the paper’s research question, how they do it, and what they find. We will time this and stop you after 60 seconds. This is meant as a training in convincing people (usually big shots) in a minimum time span that they should be interested in your work.
• Present the paper in 20 minutes. This includes questions. Again, We will time you and cut you short after exactly 20 minutes. When preparing your presentation, you will need to reserve time for questions. During the presentation, you will need to efficiently deal with questions.
• If the paper presents an experiment (most do), the presentation must pay specific attention to the experimental design and its appropriateness for the problem at hand.
• 5 minutes for additional questions and answers (again timed).

What follows is a list of possible readings to choose from. You may, however, suggest an alternative paper on the topic for the session concerned. If the session is not yet fully booked, I will consider whether it is suitable. To be so, it must be published in a good journal and, obviously, be related to the topic of that session. Suggestions must reach me no later than May 3^rd, 1 pm.

Session 1 Introduction: methodology and data analysis

Bardsley, N. R. Cubitt, G. Loomes, P. Moffatt, Ch. Starmer and R. Sugden (2010): chapter 5 in Experimental Economics Princeton University Press 2010: 196-244. (I will have a copy made).

Binmore, K. and A. Shaked (2010): “Experimental economics: Where next?; Journal of Economic Behavior and Organization 73: 87-100. Include responses: 101-121.

Camerer, C. (2015): “The Promise and Success of Lab-Field Generalizibility in Experimental Economics: A Critical Reply to Levitt and List; Handbook of Experimental Economic Methodology by G.R. Fréchette and A. Schotter (eds), Oxford University Press (see: http://papers.ssrn.com/sol3/Papers.cfm?abstract_id=1977749).

Harrison, G., J. List, and Ch. Towe (2007): “Naturally Occurring Preferences and Exogenous Laboratory Experiments: A Case Study of Risk Aversion”; Econometrica 75:433-458

Hertwig, R. and A. Ortmann (2008): “Deception in Experiments: Revisiting The Arguments In Its Defense”; Ethics and Behavior, Vol. 18/1, 2008, pp. 59-82

Session 2 Voting

Battaglini, M., R. Morton and T.R. Palfrey (2010): “The Swing Voter’s Curse in the Laboratory”; Review of Economic Studies 77(1): 61-89.

Goeree, J.K., C.H. Holt (2005): “An explanation of anomalous behavior in models of political behaviour”; American Political Science Review 99: 201-213.

Grober, J. and A. Schram (2010): Public Opinion Polls, Voter Turnout and Welfare: An Experimental Study; the American Journal of Political Science 54, 2010; 700-717.

Levine, D.K. and T.R. Palfrey (2007): “The Paradox of Voter Participation? A Laboratory Study”, American Political Science Review 101: 143-158.

Grober, J., E. Reuben, and A. Tymula (2013): “Political Quid Pro Quo Agreements: An Experimental Study”; forthcoming in the American Journal of Political Science; http://www.ereuben.net/research/LobbyingAgreements.pdf

Session 3 Field Experiments

Bertrand, M. and S, Mullainathan (2004): “Are Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination”; The American Economic Review 94: 991-1013.

DellaVigna, S., J.A. List and U. Malmendier (2012): “Testing for Altruism and Social Pressure in Charitable Giving”; Quarterly Journal of Economics 127, 1-56.

Duflo, E., M. Kremer, and J. Robinson (2011): “Nudging Farmers to Use Fertilizer: Theory and Experimental Evidence from Kenya”, American Economic Review 101: 2350– 2390.

Hossain, T., & List, J. A. (2012): “The behavioralist visits the factory: Increasing productivity using simple framing manipulations”; Management Science 58: 2151–2167

Landry, C., A. Lange, J.A. List, M.K. Price and N.G. Rupp (2006): “Towards an Understanding of the Economics of Charity: Evidence from a Field Experiment.” Quarterly Journal of Economics 121: 747–782.

Soetevent, A.R. (2005): “Anonymity in Giving in a Natural Context, A Field Experiment in 30 Churches”; Journal of Public Economics 89, 2301–2323.

Session 4 Markets

Abbink, K. and J. Brandts (2008): “24. Pricing in Bertrand Competition with Increasing Marginal Costs”; Games and Economic Behavior, 63, 1-31.

Brunner, Ch., J.K. Goeree, Ch. A. Holt, and J. O. Ledyard (2010); “An Experimental Test of Flexible Combinatorial Spectrum Auction Formats”; American Economic Journal: Microeconomics 2, 39–57.

Henze, B., Noussair, C.N., & Willems, Bert (2012): “Regulation of Network Infrastructure Investments: An Experimental Evaluation”; Journal of Regulatory Economics 42(1), 1-38.

Session 5 Experimental proposals

Students must present their detailed experimental design in precisely 10 minutes each, once again starting with a one-minute elevator pitch. A five-minute discussion will follow the presentation.

Teaching methods

The following structure must be used in the presentation of a paper.

• Start with a 60 second “elevator pitch”. Here, you explain the paper’s research question, how they do it, and what they find. We will time this and stop you after 60 seconds. This is meant as a training in convincing people (usually big shots) in a minimum time span that they should be interested in your work.
• Present the paper in 20 minutes. This includes questions. Again, We will time you and cut you short after exactly 20 minutes. When preparing your presentation, you will need to reserve time for questions. During the presentation, you will need to efficiently deal with questions.

Assessment methods

Examination will be based on student presentations (40%) and on an experimental design to be developed and presented by the students (60%). The design may be joint work with another student. It must address a research question to be chosen by the student(s). More details about the requirements will be given in the course.

Office hours

See the website of Arthur Schram