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Saliency of outside options in the lost wallet game

Published online by Cambridge University Press:  14 March 2025

James C. Cox ,
Maroš Servátka  and
Radovan Vadovič
James C. Cox*
Affiliation:
Experimental Economics Center, Georgia State University, P.O. Box 3992, Atlanta, GA 30302-3992, USA
Maroš Servátka*
Affiliation:
Department of Economics and Finance, University of Canterbury, Private Bag 4800, Christchurch 8140, New Zealand
Radovan Vadovič*
Affiliation:
Center for Economic Research (CIE), Instituto Tecnológico Autónomo de México (ITAM), Av. Camino a Sta. Teresa 930, Col. Héroes de Padierna, Mexico City, D.F. 01000, Mexico
*
e-mail: [email protected]
e-mail: [email protected]
e-mail: [email protected]
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Abstract

This paper reports an experiment designed to shed light on an empirical puzzle observed by Dufwenberg and Gneezy (Games and Economic Behavior 30:163-182, 2000) that the size of the foregone outside option by the first mover does not affect the behavior of the second mover in a lost wallet game. Our conjecture was that the original protocol may not have made the size of the forgone outside option salient to second movers. Therefore, we change two features of the Dufwen- berg and Gneezy protocol: (i) instead of the strategy method we implement a direct response method (sequential play) for the decision of the second mover; and (ii) we use paper money certificates that are passed between the subjects rather than having subjects write down numbers representing their decisions. We observe that our procedure yields qualitatively the same result as the Dufwenberg and Gneezy experiment, i.e., the second movers do not respond to the change in the outside option of the first movers.

Keywords

SaliencyOutside optionsLost wallet game

JEL classification

C91: Laboratory, Individual Behavior C70: General
Type
Research Article
Information
Experimental Economics , Volume 13 , Issue 1 , March 2010 , pp. 66 - 74
Copyright
Copyright © Economic Science Association 2009

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Footnotes

Electronic supplementary material The online version of this article (http://dx.doi.org/10.1007/s10683-009-9229-5) contains supplementary material, which is available to authorized users.

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