Institutional Heterogeneity in Social Dilemma Games: A Bayesian Examination

Klaus Moeltner, James Murphy, John Stranlund () and Maria Vélez

No 2012-04, Working Papers from University of Alaska Anchorage, Department of Economics

Abstract: A main research focus in many Social Dilemma Games is the suitability of external institutional treatments in inducing socially optimal outcomes. It is likely that participating subjects exhibit unobserved heterogeneity in their reaction to these treatments. This type of “institutional heterogeneity” has to date not found much attention in the experimental literature. We propose a Hierarchical Bayesian estimation framework to highlight these heterogeneity effects. We illustrate that models that ignore treatment-specific heterogeneity can severely under-estimate the variability in treatment-induced decisions amongst the subject population. The resulting misleading picture of comparative treatment effects can lead to sub-optimal institutional choices and related policy decisions.

Keywords: experimental economics; Social Dilemma Games; Hierarchical Modeling; Bayesian Simulation; Common Property Resource; environmental economics (search for similar items in EconPapers)
JEL-codes: C11 C24 C52 C72 C73 C93 Q28 Q56 (search for similar items in EconPapers)
Date: 2012-11
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Published in Handbook on Experimental Economics and the Environment. John A. List and Michael K. Price, editors. Northampton, MA: Edward Elgar.

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http://www.econpapers.uaa.alaska.edu/RePEC/ala/wpaper/ALA201204.pdf (application/pdf)

Related works:
Chapter: Institutional heterogeneity in social dilemma games: a Bayesian examination (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ala:wpaper:2012-04

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