Experiments on economic games

Abstract

Abstract This thesis comprises three experimental studies on social preferences. Two of them are analyzing the data gathered from laboratory and the last one is a field experiment. The first one called ¿Second-to-Fourth Digit Ratio Has a Non-Monotonic Impact on Altruism¿ studies the effect of prenatal exposure to testosterone on unconditional generosity. A widely acknowledged technique to observe the testosterone level that the baby is exposed during the gestation is the method called digit ratio. This ratio is calculated by dividing the length of index finger to the length of ring finger on the right hand especially. A smaller ratio indicates a higher level of testosterone exposure and vice-versa. The findings of the study suggest a non-monotonic relationship between unconditional generosity, where individuals with both very high and very low levels of testosterone exposure made less generous decisions comparing to the ones with medium levels. The second, so called ¿Heterogeneous Returns from Public Goods¿, investigates the impact of receiving unequal benefits in public good provision. In a voluntary contribution mechanism setting we formed diversely formed groups where players receive unequal benefits, so called marginal per capita return, from the public good. On the one hand we make comparisons between homogeneously formed groups, where each member of the group has the same marginal per capita return. On the other hand we compare the contributions of the players in heterogeneously formed groups, where the marginal per capita return of group members are not equal. Results show that the return levels are in strong positive correlation with the cooperation levels. This effect is even stronger in heterogeneously formed groups. The last study, ¿Heterogeneous Motives in Trust Game¿, analyzes the motivation behind the first player¿s decision in a binary Trust Game. The findings of the experiment point out a duality in the motivation as pro-social and opportunistic. Pro-social players, who choose to trust and also reciprocate, are found to be more generous and more able to shake hands than the ones who only send a positive amount as the first player but do not reciprocate.