The authors present an overview of the academic literature on charitable giving based on a literature review of more than 500 articles. They structure their review around the central question of why people donate money to charitable organizations. They identify eight mechanisms as the most important forces that drive charitable giving: (a) awareness of need; (b) solicitation; (c) costs and benefits; (d) altruism; (e) reputation; (f) psychological benefits; (g) values; (h) efficacy. These mechanisms can provide a basic theoretical framework for future research explaining charitable giving.

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A Literature Review of Empirical Studies of Philanthropy: Eight Mechanisms That Drive Charitable Giving

หนงสอ Behavioral Game Theory: Experiments in Strategic Interaction เขยนโดย Colin F. Camerer มวตถประสงคเพอนำเสนอหลกฐานเชงประจกษจากผลการวจยจำนวนมากมายทยนยนอทธพลของปจจยทางจตวทยาทมผลตอการตดสนใจตามทฤษฎเกม หนงสอ เลมนไดนำเสนอแนวคดทฤษฎทเพมความสามารถในการอธบายพฤตกรรมการตดสนใจตามทฤษฎเกม (Game theory) ซง von Neumann; & Morgenstern ไดเสนอไวในป ค.ศ. 1944 โดยชใหเหนวา ปจจยทางจตวทยามอทธพลทำใหการตดสนใจทเกดขนจรงคลาดเคลอนจากการคาดการณของทฤษฎเกม

Behavioral Game Theory: Experiments in Strategic Interaction

The purpose of this paper is to review theories and evidence regarding the effects of (performance-contingent) monetary incentives on individual effort and task performance. We provide a framework for understanding these effects in numerous contexts of interest to accounting researchers and focus particularly on how salient features of accounting settings may affect the incentives-effort and effort-performance relations. Our compilation and integration of theories and evidence across a wide variety of disciplines reveals significant implications for accounting research and practice. Based on the framework, theories, and prior evidence, we develop and discuss numerous directions for future research in accounting that could provide important insights into the efficacy of monetary reward systems.

The effects of monetary incentives on effort and task performance: theories, evidence, and a framework for research

This paper evaluates numerous positive and normative theories of justice in positive terms, i.e., in terms of how accurately they describe the impartial fairness preferences of real people. In addition, the paper proposes and defends an integrated justice theory based on preferences over four distinct and sometimes conflicting forces. These forces frame the analysis of the individual theories and inspire four corresponding theoretical classes: equality and need, utilitarianism and welfare economics, equity and desert, and context. This synthesis enables one to treat justice rigorously and to reconcile results that often appear contradictory or at odds with alternative theories.

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Which Is the Fairest One of All? A Positive Analysis of Justice Theories

We compare two devices previously found to increase contributions to public goods in laboratory experiments: communication, and punishment (allowing subjects to engage in costly reductions of one another's earnings after learning of their contribution decisions). We find that communication increases contributions more than punishment, and, taking into account the cost of punishment, only communication significantly increases subjects' earnings and thus efficiency. We study three forms of communication to understand what elements of communication are essential to this result: exchanges of nume rical messages, exchanges of verbal messages through a computer chat room, and face-to-face communication. Compared with a baseline of no communication and no punishment, we find that chat room communication increases cooperation and efficiency nearly as much as face-to-face communication, even though the chat room environment does not communicate cues of facial expression, tone of voice, and body language. Verbal communication is so effective that adding a punishment option to it does not significantly change the level of contributions or earnings. In contrast, communication limited to sending numerical messages has no net effect on contributions or efficiency.

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Communication and punishment in voluntary contribution experiments

Laboratory methods are used to evaluate the effects of institutional arrangements and rent-defending activity on rent-seeking auction outcomes. In part, Nash equilibrium predictions are a useful behavioral guide: As predicted, more rents are dissipated in perfectly-discriminating auctions, where the high-bidder wins, than in lotteries, where relative bids determine the chance of winning. Also as predicted, the introduction of a rent-defending buyer reduces social costs. Nevertheless, the social costs of rent-seeking consistently exceed predicted levels. Moreover, individual bidding, especially by buyers, deviates markedly from Nash predictions.

Do too many cooks always spoil the stew? An experimental analysis of rent-seeking and the role of a strategic buyer

This is the first comprehensive treatment of laboratory experiments designed to evaluate economic propositions under carefully controlled conditions. While it acknowledges that laboratory experiments are no panacea, it argues cogently for their effectiveness in selected situations. Covering methodological and procedural issues as well as theory, Experimental Economics is not only a textbook but also a useful introduction to laboratory methods for professional economists. The emphasis is on organizing and evaluating existing results. The book can be used as an anchoring device for a course at either the graduate or advanced undergraduate level. Applications include financial market experiments, oligopoly price competition, auctions, bargaining, provision of public goods, experimental games, and decision making under uncertainty. The book also contains instructions for a variety of laboratory experiments.

Introduction to Experimental Economics

The purpose of this paper is to discuss the grow­ ing importance of experimentation in economic analysis. We present a variety of economic is­ sues that have been explored with laboratory techniques. We also address some common ob­ jections to experimentati on, as well as some of the principal lessons that have been learned.

Experimental Economics: Methods, Problems, and Promise

In this article, we use laboratory methods to evaluate determinants of supracompetitive pricing. The experiment involves three treatments, each with the same market supply, demand, and competitive price. In the baseline treatment, capacity is divided among five sellers so that the competitive price is a Nash equilibrium. Market power is created in a second treatment by reallocating capacity among the sellers. This market power raises observed prices in all sessions. In a third treatment, the three smallest sellers are merged in a way that holds market power constant. The consolidation has little residual effect on prices.

Market Power and Mergers in Laboratory Markets with Posted Prices

THE HAYEK HYPOTHESIS IN EXPERIMENTAL AUCTIONS: INSTITUTIONAL EFFECTS AND MARKET POWER We report twelve market experiments utilizing a "seller market power" supply and demand structure where two of five sellers can unilaterally increase their profit by withholding supply. The data indicate that both the double auction and posted offer institutions result in traders extracting the bulk of the potential gains from exchange in the market; however, prices generally occur above the competitive equilibrium prediction. Market power in the form of strategic supply withholding does not appear to be responsible for the supra-competitive prices. I. INTRODUCTION One important result arising from experimental market research is that the information flows and contracting rules which define the institutional structure of a market can exert a pronounced influence on market performance. Such institutional features may be more important than some traditional structural characteristics in determining whether market outcomes will correspond to the predictions of the competitive model. In particular, a large and growing body of experimental data suggests that markets can generate efficient outcomes even when there are a relatively small number of buyers and sellers with incomplete information on the underlying structure of the market. Based on evidence from a wide variety of experimental double-auction markets, Vernon Smith [1982, 167] has expressed this more formally as the "Hayek Hypothesis": Markets economize on information in the sense that strict privacy together with the public messages of the market are sufficient to produce efficient CE (competitive equilibrium) outcomes. In this statement, however, the notion of an "efficient CE outcome" could be interpreted as (1) a simple efficiency claim that all exchange surplus will be extracted, or (2) a price claim that all exchange surplus will be extracted via trades at the competitive equilibrium price. A recent study by Holt, Langan and Villamil [1986] (hereafter "HLV") examines the validity of the Hayek Hypothesis using the double auction institution and a market structure designed to provide a rather difficult test for the competitive model. HLV's "market power" design provides a subset of sellers with an incentive to unilaterally generate a price increase via the strategic withholding of supply. The resulting price deviation from the competitive equilibrium is substantial but results in a relatively small loss of market efficiency. Thus, the "price interpretation" of the Hayek Hypothesis is violated in this design if holders of market power recognize their position and successfully affect prices to their advantage. The "efficiency interpretation," however, will still hold (approximately) even with the successful exercise of market power. In fact, the price interpretation of the Hayek Hypothesis tends to break down in HLV's markets, but the efficiency interpretation tends to hold. HLV report deviations from the competitive equilibrium price consistent with the exercise of market power in three of five seller market power experiments. They also conjecture that deviations from the competitive equilibrium may increase as participants become more experienced with the trading institution. This paper reports the results of twelve experiments that build on HLV's research. Our experiments compare market performance in HLV's seller market power (SMP) design using both the double auction and posted offer trading institutions. Our purpose in conducting these experiments is twofold. First, we are interested in examining the effects of changes in trading institutions on deviations from the competitive equilibrium price in the SMP design. Second, to the extent that competitive equilibrium price deviations are observed, we are interested in assessing whether the exercise of market power in the form of strategic withholding is the source of these deviations. …

Douglas D. Davis

Papers

Do too many cooks always spoil the stew? An experimental analysis of rent-seeking and the role of a strategic buyer

Introduction to Experimental Economics

Experimental Economics: Methods, Problems, and Promise

Market Power and Mergers in Laboratory Markets with Posted Prices

The hayek hypothesis in experimental auctions: institutional effects and market power