The aim of this study is to evaluate the impact of information on levels of reasoning on individuals’ choices in p-beauty contest games. In the baseline design, subjects received information only on the average and target values from the previous period. In the alternative design, the winner(s) explained in a short message (30 words maximum) what reasoning he/she applied in selecting the target value and then stopped playing. The winner's message, the winning number, the target and average values were then displayed on all computer screens. The results show that non-winning players imitate the level of rationality of winners, and a significant proportion of the population adopt strategies which are best responses to other imitators’ behaviour rather than to the average level of rationality. Both the imitative strategies and the best responses to the imitative strategies stimulate a strong acceleration of the learning process.

Experimental dictator games have been used to explore unselfish behaviour. Evidence is presented here, however, that subjects’ generosity can be reversed by allowing them to take a partner's money. Dictator game giving therefore does not reveal concern for consequences to others existing independently of the environment, as posited in rational choice theory. It may instead be an artefact of experimentation. Alternatively, evaluations of options depend on the composition of the choice set. Implications of these possibilities are explored for experimental methodology and charitable donations respectively. The data favour the artefact interpretation, suggesting that demand characteristics of experimental protocols merit investigation, and that economic analysis should not exclude context-specific social norms.

This paper examines how selection affects trust and altruism in a Trust and Modified Dictator Game. Past Trust and Dictator game experiments not allowing partner selection show substantially more trust and altruism than equilibrium predicts. We predict partner selection will cause sorting in which behavior across partner types without selection will be positively correlated with partner choice. This selection pattern will cause trust and altruism to be higher with selection and the increase will be proportional to a maximum possible gain. We find selection has all these effects. We also find greater gains in the Trust than Modified Dictator game consistent with larger possible gains in the Trust game. The results imply that theories ignoring selection will underestimate trust and altruism in markets with selection.

In many market environments, for example in investment banking, salesforce management and others, workers and supervisors work closely as a team. Workers are paid a fixed salary and supervisors determine any raises, which are typically dependent on how well the organization does. In such scenarios, a supervisor who constantly offers suggestions can create a problem—typically a worker cannot ignore his supervisor's advice, yet if such advice is wrong and is followed, it will only decrease firm profits. We conduct a laboratory experiment to address a question critical for such settings—does the relationship between advisor and worker interfere with the learning abilities of the worker? The answer is a resounding no. In fact, subjects who have a supervisor advising them and whose advice is costly to ignore actually learn better than those with an advisor whose advice can be ignored. An even more striking result is that advisees as well as advisors in both these conditions learn better than subjects with no advisors. Our result can be attributed to the presence of advice and has direct relevance to learning in many environments.

Many prior studies have identified that subjects in experiments demonstrate preferences for fair allocations. We present an experimental study designed to test whether a similar concern for fairness manifests itself when the decision maker is choosing among differing probabilistic allocation mechanisms that will all generate an ex post unfair allocation by assigning an indivisible prize to one individual. This investigation is inspired by Karni and Safra (Econometrica, 70, 263-284, 2002) in which a structure for preferences for fairness in such an environment was developed. Here we use this model to design experiments that allow us to test for the presence of concern for fairness in individual choice behavior and examine some factors that may affect the intensity of the concern for fairness.

Experimental research on first price sealed bid auctions has usually involved repeated settings with information feedback on winning bids and payoffs after each auction round. Relative to the risk neutral Nash equilibrium, significantly higher bidding has been reported. The present paper reports the results of experimental first price auctions with n = 7 where feedback on payoffs and winning bids is withheld. Under these conditions, average bidding is below the risk neutral Nash equilibrium prediction but converges to it with repetition.