Bardsley, Nick and Rupert Sausgruber (forthcoming) Conformity and reprocity in public good provision. Journal of Economic Psychology

Bosman, Ronald, Matthias Sutter and Frans van Winden (forthcoming) The impact of real effort and emotions in the power-to-take game. Journal of Economic Psychology

Gächter, Simon and Arno Riedl (forthcoming) Moral Property Rights in Bargaining with Infeasible Claims Management Science PDF-file

Hommes, Cars, Joep Sonnemans, Jan Tuinstra and Henk van de Velden (forthcoming) A strategy experiment in dynamic asset pricing. Journal of Economic Dynamics and Control Link to article

This study presents a strategy experiment is asset pricing. In a simple dynamic asset pricing model the price in the present period is determined by the expectations of next period's price. After participating in an introductory laboratory experiment on expectation formation participants formulate a complete forecasting strategy. These strategies are programmed and markets are simulated. Participants receive feedback from the results of these simulations and can adapt their strategy. Four rounds are played. A final laboratory experiment compares predictions of participants with the predictions of the submitted strategy. We find that most of the participants submit complicated strategies and that strategies become more complicated over the rounds. Most markets converge to a steady state price only after many periods, if at all. The number of converging price sequences increases over the rounds. These results suggest in general slow convergence and learning of the subjects over the rounds. Even in a stationary environment it turns out to be difficult to learn the correct fundamental price level. An important part of the non-convergence seems to be caused not by individual strategies but by the interaction of several strategies together. From the final experiment we conclude that the strategies are a good representation of what participants do in a laboratory experiment.

Hommes, Cars, Joep Sonnemans, Jan Tuinstra and Henk van de Velden (forthcoming) Coordination of Expectations in Asset Pricing Experiments Review of Financial Studies Link to article Appendix

We investigate expectation formation in a controlled experimental environment. Subjects are asked to predict the price in a standard asset pricing model. They do not have knowledge of the underlying market equilibrium equations, but they know all past realized prices and their own predictions. Aggregate demand of the risky asset depends upon the forecasts of the participants. The realized price is then obtained from market equilibrium with feedback from individual expectations. Each market is populated by six subjects and a small fraction of fundamentalist traders. Realized prices differ significantly from fundamental values. In some groups the asset price converges slowly to the fundamental price, in other groups there are regular oscillations around the fundamental price. In all groups participants coordinate on a common prediction strategy. The individual prediction strategies can be estimated and correspond, for a large majority of participants, to simple linear autoregressive forecasting rules.

Okada, Akira and Arno Riedl (forthcoming) Inefficiency and Social Exclusion in a Coalition Formation Game: Experimental Evidence. Games and Economic Behavior Link to article

Riedl, Arno and Jean-Robert Tyran (forthcoming) Tax Liability Side Equivalence in Gift Exchange Labor Markets. Fortcoming Journal of Public Economics PDF-file

Tax Liability Side Equivalence (tax LSE) claims that the statutory incidence of a tax is irrelevant for its economic incidence. Tax LSE is predicted to hold in gift-exchange labor markets if workers’ effort choices exclusively depend on the net wage, but breaks down if they partially depend on the gross wage paid to workers. This is the case if the tax is perceived to be external to the gift-exchange relationship. We experimentally test tax LSE in a gift-exchange labor market and find that it holds very well.

Sadiraj, Vjollca, Jan Tuinstra and Frans van Winden (forthcoming) Interest Group Size Dynamics and Policymaking. Public Choice PDF-file

Schram, Arthur (forthcoming) A Dynamic Model of Voter Behavior and the Demand for Public Goods among Social Groups in Great Britain. Journal of Public Economics 41, 147-82

A dynamic model of voter behavior is discussed, explaining transitions in party choice by imputed party responsibilities with respect to public and private consumption possibilities. The model uses a group framework to explicitly describe voter interests. It allows for an estimation of the relative preference for public goods, as determined by the revealed preference mechanism of voting. The model is compared to popularity functions in their general form. An empirical application to Great Britain is presented. It appears that retired individuals have the highest relative preferences for public goods, followed by housewives/men, manual workers, self-employed, and nonmanual workers.

Schram, Arthur and Joep Sonnemans (forthcoming) Participation game experiments: Explaining voter turnoutMotivation in a Public Good Environment C.R. Plott and V.L. Smith (eds) The Handbook of Experimental Economics Results Elsevier, Amsterdam

Schram, Arthur, Theo Offerman and Joep Sonnemans (forthcoming) Explaining the comparative statistics in step-level public good games C.R. Plott and V.L. Smith (eds) The Handbook of Experimental Economics Results Elsevier, Amsterdam

Seinen, Ingrid and Arthur Schram (forthcoming) Social Status and Group Norms: Indirect Reciprocity in a Helping Experiment. European Economic Review PDF-file

Winden, Frans van (forthcoming) Social Science In The Making: An economistís view Paul A.M. van Lange (eds) Bridging Social Psychology: Benefits of Transdisciplinary Approaches Mahwah, NJ: Erlbaum

Recent developments in economics and psychology suggest that productivity in the social sciences will benefit from crossing existing academic barriers, and that such crossing is more and more likely. Social science is in the making, but its success seems particularly conditioned on the willingness to put experimentation and formalization on an equal footing. Economists will have to be satisfied with theoretical highways instead of malfunctioning superhighways, while social psychologists will have to adventure more fast-track formal theory building. Institutional changes would facilitate the integration.

Winden, Frans van, Frans van Dijk en Joep Sonnemans (forthcoming) Intrinsic Motivation in a Public Good EnvironmentMotivation in a Public Good Environment C.R. Plott and V.L. Smith (eds) The Handbook of Experimental Economics Results Elsevier, Amsterdam

Wit, Gerrit de and Frans van Winden (forthcoming) An Empirical Analysis of Self-Employment in the Netherlands. Economics Letters 32, 97-100

Using an endogenous switching model, applied to a unique data set, it is found that the choice between self-employment and paid-employment depends--among others--on the score of an IQ test applied at the age of 12, the employment status of the father, and the income differential.

Bornstein, Gary , Arthur Schram, and Joep Sonnemans (2004) Do Democracies breed Chickens? R. Suleiman, D. Budescu, I. Fischer and D. Messick (eds) Contemporary Psychological Research on Social Dilemmas Cambridge University Press

Our interest is in assessing the effect of different group decision-rules (or ‘regimes’) on conflict resolution. Toward this goal, we model intergroup conflict as a two-stage Chicken game between two groups (teams) of players and distinguish two decision-making procedures for determining a team's choice: democracy (majority rule) and dictatorship (one individual makes the team's decision). In an experiment with three individuals per team, we found that (i) decision-making procedures had no effect on choices at the team level; (ii) decision-making procedures did not affect first-stage choices by individuals; (iii) in the second stage, individuals in democracies were more likely to concede than dictators; (iv) dictators facing a democratic team were least likely to concede, whereas individuals in a democratic team facing a dictator were most likely to concede.

Brandts, Jordi, Tatsuyoshi Saijo and Arthur Schram (2004) How Universal is Behavior? A Four Country Comparison of Spite and Cooperation in Voluntary Contribution Mechanisms. Public Choice 119, 381-424 Link to article

This paper studies behavior in experiments with a linear voluntary contributions mechanism for public goods conducted in Japan, the Netherlands, Spain and the USA. The same experimental design was used in the four countries. Our 'contribution function' design allows us to obtain a view of subjects’ behavior from two complementary points of view. It yields information about situations where, in purely pecuniary terms, it is a dominant strategy to contribute all the endowment and about situations where it is a dominant strategy to contribute nothing. Our results show, first, that differences in behavior across countries are minor. We find that when people play “the same game” they behave similarly. Second, for all four countries our data are inconsistent with the explanation that subjects contribute only out of confusion. A common cooperative motivation is needed to explain the data.

Goeree, Jacob K. and Theo Offerman (2004) The Amsterdam Auction. Econometrica 72, 281-94

The Amsterdam auction has been used to sell real estate in the Dutch capital for centuries. By awarding a premium to the highest losing bidder, the Amsterdam auction favors weak bidders without having the implementation difficulties of Myerson s (1981) optimal auction. In a series of experiments, we compare the standard first-price and English auctions, the optimal auction, and two variants of the Amsterdam auction. With strongly asymmetric bidders, the second-price Amsterdam auction raises substantially more revenues than standard formats and only slightly less than the optimal auction.

Offerman, Theo and Joep Sonnemans (2004) What's Causing Overreaction? An Experimental Investigation of Recency and the Hot Hand Effect Scandinavian Journal of Economics 106, 533-553 Link to article

A substantial body of empirical literature provides evidence for overreaction in markets. Past losers outperform past winners in stock markets as well as in sports markets. Two hypotheses are consistent with this observation. The recency hypothesis states that traders overweight recent information. Thus, they are too optimistic about winners and too pessimistic about losers. According to the hot hand hypothesis, traders try to discover trends in the past record of a firm or a team, and thereby overestimate the autocorrelation in the series. An experimental design allows us to distinguish between these hypotheses. The evidence is consistent with the hot hand hypothesis. Experience slightly reduces the observed phenomenon of overreaction.

Oosterbeek, Hessel, Randolph Sloof and Gijs van de Kuilen (2004) Cultural differences in ultimatum game experiments: evidence from a meta-analysis. Experimental Economics 7, 171-188 Link to article

This paper reports the findings of a meta-analysis of 37 papers with 75 results from ultimatum game experiments. We find that on average the proposer offers 40% of the pie to the responder. This share is smaller for larger pie sizes and larger when a strategy method is used or when subjects are inexperienced. On average 16% of the offers is rejected. The rejection rate is lower for larger pie sizes and for larger shares offered. Responders are less willing to accept an offer when the strategy method is employed. As the results come from different countries, meta-analysis provides an alternative way to investigate whether bargaining behavior in ultimatum games differs across countries. We find differences in behavior of responders (and not of proposers) across geographical regions. With one exception, these differences cannot be attributed to various cultural traits on which for instance the cultural classifications of Hofstede (1991) and Inglehart (2000) are based.

Sloof, Randolph, Hessel Oosterbeek and Joep Sonnemans (2004) Specific investments, holdup, and the outside option principle. European Economic Review 48, 1399-1410 Link to article

According to the outside option principle the holdup problem can be solved when the non-investor has a binding outside option. The investor then becomes residual claimant, creating efficient investment incentives. This paper reports about an experiment designed to test this. We find that when the outside option is binding investment levels fall short of the efficient level, but holdup is less of a problem than predicted when the outside option is non-binding.

Sonnemans, Joep, Cars Hommes, Jan Tuinstra and Henk van de Velden (2004) The Instability of a Heterogeneous Cobweb Economy:a Strategy Experiment on Expectation Formation Jounal of Economic Behavior and Organization 54, 453-481 Link to article

Which strategies do agents use when forming expectations about future prices, and how often do combinations of these strategies lead to stable or unstable outcomes? To answer these questions we performed a four-round strategy experiment in a 20 period cobweb economy with expectations feedback. Subjects did not know the underlying market equilibrium equations, but only observed past prices. All strategies were programmed and after each round the subjects received feedback about the relative performance of their strategy, and were allowed to revise their strategy for the next round. Over the rounds quadratic forecasting errors decrease and realized market prices move to a neighborhood of the rational expectations (RE) steady state, but at the same time the complexity of the price fluctuations increases. Convergence to the unique RE steady state occurs in less than 10% of all cases. In the final round 60% of the price fluctuations appears to be chaotic. Strategy simulations with homogeneous agents typically show regular behavior, with prices converging to a steady state or to a 'far from the steady state' stable cycle. Heterogeneous interaction of simple prediction strategies thus seems to be the main source of the endogenous price fluctuations, frequently leading to a boundedly rational equilibrium of 'close to the steady state chaos'.

Bowles, Samuel, Jung-Kyoo Choi and Astrid Hopfensitz (2003) The co-evolution of individual behaviors and social institutions. Journal of Theoretical Biology 223, 135-147 Link to article

We present agent-based simulations of a model of a deme-structured population in which group differences in social institutions are culturally transmitted and individual behaviors are genetically transmitted. We use a standard extended tness accounting framework to identify the parameter space for which this co-evolutionary process generates high levels of group-beneficial behaviors. We show that intergroup conflicts may explain the evolutionary success of both:(a)altruistic forms of human sociality towards unrelated members of one's group; and (b) group-level institutional structures such as food sharing which have emerged and diffused repeatedly in a wide variety of ecologies during the course of human history. Group-beneficial behaviors may evolve if (a) they inflict sufficient fitness costs on outgroup individuals and (b) group-level institutions limit the individual fitness costs of these behaviors and thereby attenuate within-group selection against these behaviors. Thus, the evolutionary success of individually costly but group-beneficial behaviors in the relevant environments during the first 90,000 years of anatomically modern human existence may have been a consequence of distinctive human capacities in social institution building.

Goeree, Jabob K. (2003) Risk Averse Behavior in Generalized Matching Pennies Games Games and Economic Behavior 45, 97-113 Link to article

Goeree, Jacob K. (2003) Bidding for the Future: Signaling in Auctions with an Aftermarket Journal of Economic Theory 108, 345-364 Link to article

Goeree, Jacob K. (2003) A Model of Noisy Introspection Games and Economic Behavior 46, 365-382 Link to article

Goeree, Jacob K. and Theo Offerman (2003) Competitive Bidding in Auctions with Private and Common Values. Economic Journal 113, 598-613 Link to article

The objects for sale in most auctions possess both private and common value elements. This salient feature has not yet been incorporated into a strategic analysis of equilibrium bidding behaviour. This paper reports such an analysis for a stylised model in which bidders receive a private value signal and an independent common value signal. We show that more uncertainty about the common value has a negative effect on efficiency. Information provided by the seller decreases uncertainty, which raises efficiency and seller s revenues. Efficiency and revenues are also higher when more bidders enter the auction.

Goeree, Jacob K. and Theo Offerman (2003) Winner s Curse without Overbidding. European Economic Review 47, 625-44 Link to article

We report the results of a series of second-price auction experiments where each bidder s signal is given by a normally distributed value plus a normally distributed error. While bidders values differ in one treatment they are the same in another, which allows for a direct test of the winner s curse irrespective of confounding factors. Bidders may also fall prey to a news curse when they do not sufficiently take into account that signals and errors are correlated. We find that the effects of the winner s curse are mitigated by a news curse and loss or risk aversion.

Oosterbeek, Hessel, Joep Sonnemans and Susan van Velzen (2003) The Need for Marriage Contracts: An Experimental Study. Journal of Population Economics 16, 431-53 Link to article

A spouse who invests in relationship specific human capital enlarges the size of a couple s total surplus. Such investments typically also weaken the outside opportunities of the specializing spouse and thereby her bargaining position. Realizing this, underinvestment in relationship specific human capital may result. This reduces the couple s potential surplus. Private or public marriage contracts can stipulate conditions to solve this holdup underinvestment problem. This paper reports about an experiment that addresses the practical relevance of this problem. We find that although underinvestment in home production occurs, it is less frequent than game theory predicts. That is: players are prepared to specialize in home production when backwards induction predicts them not to do so. Furthermore, we find that the non-investing spouses are less opportunistic towards their partners when the large surplus has been created by the spouse than when the size of the surplus is determined exogenously.

Riedl, Arno (2003) Emotionen bestimmen wirtschaftliches Handeln: Experimentelle Befunde. R. Sturn, M. Held and G. Kubon-Gilke (eds) Experimentelle Wirtschaftsforschung Marburg/Lahn, Metropolis Verlag

Riedl, Arno and Frans van Winden (2003) Information and the Creation and Return of Social Capital: An Experimental Study. H. Flap and B. Volker (eds) Creation and Returns of Social Capital Routledge

Schram, Arthur (2003) Experimental Public Choice C. K. Rowley and F. Schneider (eds) Encyclopedia of Public Choice Boston:Kluwer Academic Publishers

Sloof, Randolph, Edwin Leuven, Hessel Oosterbeek and Joep Sonnemans (2003) An experimental comparison of reliance levels under alternative breach remedies. Rand Journal of Economics 34, 205-222

Breach remedies serve an important role in protecting relationship-specific investments. Theory predicts that some common remedies protect too well and induce overinvestment because of complete insurance against potential separation, and the possibility to prevent breach by increasing the damage payment due through the investment made. In this paper we report on an experiment designed to address whether these two motives show up in practice. In line with theoretical predictions we find that overinvestment does not occur under liquidated damages. In case of expectation damages the full insurance motive indeed appears to be operative. In case of reliance damages both motives are at work, as is predicted.

Ule, Aljaz and Richard J. Boucherie (2003) On the Distribution of Calls in a Wireless Network driven by Fluid Traffic. European Journal of Operational Research 147, 146-155 Link to article

Ule, Jernej, Kirk B. Jensen, Matteo Ruggiu, Aldo Mele, Aljaz Ule and Robert B. Darnell (2003) CLIP Indentifies Nova-Regulated RNA Networks in the Brain SCIENCE 302, 1212-1215

Wakker, Peter P. (2003) The Data of Levy and Levy Management Science 49, 979-981

Winden, Frans van (2003) Interest group behavior and influence C. K. Rowley and F. Schneider (eds) Encyclopedia of Public Choice Vol. I Boston: Kluwer Academic Publishers PDF-file


Bosman, Ronald and Frans van Winden (2002) Emotional Hazard in a Power-to-Take Experiment. Economic Journal 112, 147-69

In this experimental study of a two player power-to-take game, players earn an income in an individual effort task preceding the game. The game has two stages. First, one player can claim any part of the other s income take rate. Then, the latter player can respond by destroying own income. We focus on how emotions influence responses and show:1 a higher take rate increases (decreases) intensity of negative (positive) emotions;2 negative emotions drive destruction;3 at high emotional intensity, responders destroy everything;4 expectations affect the probability of punishment. Emotional hazard is identified as a new source of efficiency costs.

Cox, James C., Theo Offerman, Mark Olson and Arthur Schram (2002) Competition For vs On the Rails: A Laboratory Experiment International Economic Review 43, 709-736

Several European countries and Japan are in various stages of privatizing and/or introducing more competition in passenger rail service. This process has been furthered by a directive from the Commission of the European Communities (1991) requiring member states to separate operations from infrastructure on the books and give international groupings of trains access to their infrastructure. In the Netherlands, the Ministry of Transport, Public Works, and Water Management was assigned responsibility for making a recommendation to Parliament for choosing between competition for the rails and competition on the rails in increasing competition in the supply of passenger rail service. The Ministry commissioned the experiments reported here in order to acquire better understanding of the properties of the two alternative types of competition in the context of a simple stylized rail network. The experimental rail network includes station complementarity and time slot substitutability. It also includes tradeoffs between local and express trains. Competition on the rails involves allocation of rights to use station and time slot routes by price bids in a combinatorial auction. Competition for the rails involves allocation of rights to regional monopolies by fare-structure bids for supplying a pre-specified minimum transport schedule. The experiments include both allocation of rights and scheduling of trains on the network. The two forms of competition are evaluated with various criteria developed by the Ministry, including market prices and allocative efficiency.

Diecidue, Enrico and Peter P. Wakker (2002) Dutch Books: Avoiding Strategic and Dynamic Complications, and a Comonotonic Extension. Mathematical Social Sciences 43, 135-49 Link to article

This paper formalizes de Finetti s book-making principle as a static individual preference condition. It thus avoids the confounding strategic and dynamic effects of modern formulations that consider games with sequential moves between a bookmaker and a bettor. This paper next shows that the book-making principle, commonly used to justify additive subjective probabilities, can be modified to agree with nonadditive probabilities. The principle is simply restricted to comonotonic subsets which, as usual, leads to an axiomatization of rank-dependent utility theory. Typical features of rank-dependence such as hedging, ambiguity aversion, and pessimism and optimism can be accommodated. The model leads to suggestions for a simplified empirical measurement of nonadditive probabilities.

Dijk, Frans van, Joep Sonnemans and Frans van Winden (2002) Social Ties in a Public Good Experiment. Journal of Public Economics 85, 275-99 Link to article

The formation of social ties is examined in an experimental study of voluntary public good provision. The experiment consists of three parts. In the first part the value orientation (attitude to a generalized other) is measured. In the second part couples play 25 periods of a public good game. In the third part the attitudes of subjects to their partners in the public good game is measured. The concept of a social tie is operationalized as the difference between the measurements in the first and third parts. Evidence for the occurrence of social ties is found. These ties depend on the success of the interaction in the public good game.

Gilboa, Itzhak, David Schmeidler and Peter P. Wakker (2002) Utility in Case-Based Decision Theory. Journal of Economic Theory 105, 483-502 Link to article

Goeree, Jacob K. and Theo Offerman (2002) Efficiency in Auctions with Private and Common Values: An Experimental Study. American Economic Review 92, 625-43

Auctions are generally not efficient when the object s expected value depends on private and common value information. We report a series of first-price auction experiments to measure the degree of inefficiency that occurs with financially motivated bidders. While some subjects fall prey to the winner s curse, they weigh their private and common value information in roughly the same manner as rational bidders, with observed efficiencies close to predicted levels. Increased competition and reduced uncertainty about the common value positively affect revenues and efficiency. The public release of information about the common value also raises efficiency, although less than predicted.

Güth, Werner, Theo Offerman, Jan Potters, Martin Strobel and Harrie Verbon (2002) Are family transfers crowded out by public transfers? Scandinavian Journal of Economics 104, 587-604

Mazza, Isidoro and Frans van Winden (2002) Does Centralization Increase the Size of Government? The Effects of Separation of Powers and Lobbying. International Tax and Public Finance 9, 379-89 Link to article

Difficulties faced by the Economic and Monetary Union have strengthened the position of those who advocate a process of (further) political integration in the European Union (EU). A widespread fear is, though, that such a process would favor powerful interest groups able to lobby the EU policymakers. Persson and Tabellini (1994) argue that political centralization will increase the size of the government through lobbying because of free-riding incentives created by federally funded programs with localized benefits. We extend their analysis by presenting a model where the budgeting process is divided into two stages, instead of one, which better captures the EU institutional framework. A federal legislator (the Council) chooses the size of the budget at one stage, while a federal agency (the Commission) chooses the allocation of the budget at the next stage. We show that separation of powers in the budgeting process restricts free riding and, therefore, reduces the incentives to lobby. The result is an unchanged budget under centralization. Moreover, it is shown that if the lobbying activity is directed to both policymakers, competitive lobbying may actually reduce the size of the public sector under centralized policymaking

Offerman, Theo (2002) Hurting Hurts More Than Helping Helps. European Economic Review 46, 1423-37 Link to article

Previous experimental work suggests that both a dislike for an unequal division of payoffs and intentionality play a role to explain reciprocal behavior. This paper focuses on intentionality, and in particular on the question of whether negative intentionality matters more than positive intentionality. Experimental evidence obtained in the

Offerman, Theo, Jan Potters and Joep Sonnemans (2002) Imitation and Belief Learning in an Oligopoly Experiment. Review of Economic Studies 69, 973-97

We examine the force of three types of behavioural dynamics in quantity-setting triopoly experiments: (1) mimicking the successful firm, (2) rules based on following the exemplary firm, and (3) rules based on belief learning. Theoretically, these three types of rules lead to the competitive, the collusive, and the Cournot-Nash outcome, respectively. In the experiment we employ three information treatments, each of which is hypothesized to be conducive to the force of one of the three dynamic rules. To a large extent, the results are consistent with the hypothesized relationships between treatments, behavioural rules, and outcomes.

Sadiraj, Vjollca (2002) Essays on Political and Experimental Ecnonomics.

Wakker, Peter P. and Horst Zank (2002) A Simple Preference Foundation of Cumulative Prospect Theory with Power Utility. European Economic Review 46, 1253-71 Link to article

Most empirical studies of rank-dependent utility and cumulative prospect theory have assumed power utility functions, both for gains and for losses. As it turns out, a remarkably simple preference foundation is possible for such models: Tail independence (a weakening of comonotonic independence which underlies all rank-dependent models) together with constant proportional risk aversion suffice, in the presence of common assumptions(weak ordering, continuity, and first stochastic dominance), to imply these models. Thus, sign dependence, the different treatment of gains and losses, and the separation of decision weights and utility are obtained free of charge.

Winden, Frans van (2002) Experimental investigation of collective action S.L. Winer and H. Shibata (eds) Political Economy and Public Finance: The Role ofPolitical Economy in the Theory and Practice of Public Economics Edward Elgar,Cheltenham PDF-file


Bardsley, Nick (2001) Control Without Deception: Individual Behaviour in Free-Riding Experiments Revisited. Experimental Economics 3, 215-240 Link to article

Bosman, Ronald (2001) Emotions and Economic Behavior: An Experimental Investigation

Brandts, Jordi and Arthur Schram (2001) Cooperation and Noise in Public Goods Experiments: Applying the Contribution Function Approach. Journal of Public Economics 79, 399-427 Link to article

We introduce a new design for experiments with the voluntary contributions mechanism for public goods. Subjects report a complete contribution function in each period, i.e. a contribution level for various marginal rates of transformation between a public and a private good. The results show that subjects behavior cannot be explained exclusively as the result of errors. Individuals exhibit essentially one of two types of behavior. One group of subjects behaves in a way consistent with some kind of other-regarding motivation. Some features of the data indicate that these subjects behavior is interdependent. Another group of subjects behaves in accordance with a utility function that depends only on their own earnings. The interaction between these two groups may be important when explaining behavior over time.

Diecidue, Enrico and Peter P. Wakker (2001) On the Intuition of Rank-Dependent Utility. Journal of Risk and Uncertainty 23, 281-98 Link to article

Among the most popular models for decision under risk and uncertainty are the rank-dependent models, introduced by Quiggin and Schmeidler. Central concepts in these models are rank-dependence and comonotonicity. It has been suggested that these concepts are technical tools that have no intuitive or empirical content. This paper describes such contents. As a result, rank-dependence and comonotonicity become natural concepts upon which preference conditions, empirical tests, and improvements in utility measurement can be based. Further, a new derivation of the rank-dependent models is obtained. It is not based on observable preference axioms or on empirical data, but naturally follows from the intuitive perspective assumed. We think that the popularity of the rank-dependent theories is mainly due to the natural concepts used in these theories.

Dijk, Frans van, Joep Sonnemans and Frans van Winden (2001) Incentive Systems in a Real Effort Experiment. European Economic Review 45, 187-214 Link to article

In the reported experiment different payment schemes are examined on their incentive effects. Payments based on individual, team and relative performance are compared. Subjects conducted computerized tasks that required substantial effort. The results show that individual and team payment induced the same effort levels. In team production free-riding occurred, but it was compensated by many subjects providing more effort than in case of individual pay. Effort was higher, but more variable in tournaments, while in case of varying abilities workers with relatively low ability worked very hard and drove up effort of the others. Finally, attitudes towards work and other workers differed strongly between conditions.

Offerman, Theo, Jan Potters, et al. (2001) Cooperation in an Overlapping Generations Experiment. Games and Economic Behavior 36, 264-75 Link to article

Recent theoretical work shows that folk theorems can be developed for infinite overlapping generations games. Cooperation in such games can be sustained as a Nash equilibrium. But, of course, there are other equilibria. This paper investigates experimentally whether cooperation actually occurs in a simple overlapping generations game. Subjects both play the game and formulate strategies. Our main finding is that subjects fail to exploit the intertemporal structure of the game. Even when we provided subjects with a recommendation to play the grim trigger strategy, most of the subjects still employed safe history-independent strategies.

Offerman, Theo, Joep Sonnemans and Arthur Schram (2001) Expectation Formation in Step-Level Public Good Games. Economic Inquiry 39, 250-69 Link to article

This article focuses on the process of expectation formation. Specifically, the question is addressed whether individuals think strategically when they form beliefs about other players behavior. Most belief learning models assume that people abstract from strategic considerations. Using an incentive-compatible mechanism, experimental data are obtained on subjects expectations in a step-level public good game and in a game against nature. Beliefs in the interactive games develop in the same way as in the game against nature, providing evidence that strategic considerations do not play a role. The evidence is consistent with predictions derived from the naive Bayesian model.

Riedl, Arno, and Frans van Winden (2001) Does the Wage Tax System cause Budget Deficits? Public Choice 109, 371-394 Link to article

In this paper we investigate experimentally the economic functioning of a wage tax financed unemployment benefit system in an international economy, in particular in reaction to budget deficits and tax adjustment. Our results support the hypothesis that due to out-of-equilibrium price uncertainty producers are reluctant to employ inputs. We also observe a downward pressure on wages exacerbated by an over-supply of labor by consumers. These observations can explain the budget deficits found. Furthermore, we find that tax adjustments in order to facilitate a balancing of the budget has strong adverse effects on unemployment and real GDP.

Sonnemans, Joep, Hessel Oosterbeek and Randolph Sloof (2001) On the Relation between Asset Ownership and Specific Investments. Economic Journal 111, 791-820 Link to article

Experimental results are presented for a simplified version of Hart s(1995) theory of the firm. Theory predicts that investment levels remain constant when investors no-trade pay-offs increase, if these pay-offs are threat points. While they may decrease when no-trade pay-offs are outside options. Our results support these predictions in a relative sense. Average investment levels exceed the predicted level. Actual investment behaviour is consistent with the outcomes of the bargaining stage. The play of the game is supported by a reciprocity mechanism in which non-investors consider higher investment levels as fair behaviour which deserves a reward. Investors anticipate this.

Waegenaere, Anja de and Peter P. Wakker (2001) Nonmonotonic Choquet Integrals. Journal of Mathematical Economics 36, 45-60 Link to article

This paper shows how the signed Choquet integral, a generalization of the regular Choquet integral, can model violations of separability and monotonicity. Applications to intertemporal preference, asset pricing, and welfare evaluations are discussed.

Wakker, Peter P. (2001) Testing and Characterizing Properties of Nonadditive Measures through Violations of the Sure-Thing Principle. Econometrica 69, 1039-59

In expected utility theory, risk attitudes are modeled entirely in terms of utility. In the rank-dependent theories, a new dimension is added: chance attitude, modeled in terms of nonadditive measures or nonlinear probability transformations that are independent of utility. Most empirical studies of chance attitude assume probabilities given and adopt parametric fitting for estimating the probability transformation. Only a few qualitative conditions have been proposed or tested as yet, usually quasi-concavity or quasi-convexity in the case of given probabilities. This paper presents a general method of studying qualitative properties of chance attitude such as optimism, pessimism, and the inverse-S shape pattern, both for risk and for uncertainty. These qualitative properties can be characterized by permitting appropriate, relatively simple, violations of the sure-thing principle. In particular, this paper solves a hitherto open problem: the preference axiomatization of convex pessimistic or uncertainty averse nonadditive measures under uncertainty. The axioms of this paper preserve the central feature of rank-dependent theories, i.e. the separation of chance attitude and utility.

Winden, Frans van (2001) Emotional Hazard Exemplified by Taxation-Induced Anger. Kyklos 54, 491-506

Emotional hazard in case of taxation refers to the risk of an efficiency loss due to emotional responses. In this paper, first, emotional hazard is discussed and empirically illustrated using results from experimental studies concerning the power-to-take game. In this game, one player can claim any part of another player's endowment and, subsequently, the second player can respond by destroying any part of her endowment. Next, based on emotion theory, a tentative model is developed of the second player's behavior which integrates cognition and emotion. Finally, some implications for theory and policy are explored.

Bardsley, Nick (2000) Interpersonal interaction and economic theory: the case of public goods. Annals of Public and Cooperative Economics 71, 1-37

Gerxhani, Klarita and Arthur Schram (2000) Politics in Transition Economies: Consequences of a Clan Culture. Journal for Institutional Innovation, Development and Transition. 4, 5-14

We study the politico-economic interaction in a country in transition from a communist regime to a democratic, free market system, to wit, Albania. It is argued that the politico-economic system there is characterized by the existence of clans. Both the communists and the first democratically chosen government applied policies that favored specific clans. Moreover, a popularity function estimation shows that voters related to different clans react in a distinct way to party policies.

Jacobsen, Ben, Jan Potters, Arthur Schram, Frans van Winden and Jörgen Wit (2000) (In)accuracy of a European political stock market: The influence of common value structures European Economic Review 44, 205-230 Link to article

This paper presents the results of a political stock market in the Netherlands: PAM94. The exchange covered three consecutive elections, allowing trade on five different markets. The predictions at PAM94 appear to be less accurate than those of previous markets of comparable size. Of the possible explanations that we examine, one in particular survives closer scrutiny. It concerns a type of judgement failure related to the winner's curse in common value auctions. Theoretical as well as empirical support is offered. Apart from qualifying the attractiveness of such markets as an alternative for opinion polls, this explanation may also be relevant for the analysis of other asset markets. Moreover, this judgement failure may be more important for European political stock markets than for the U.S., because the structure of the common values (vote shares) at multiparty elections make them especially vulnerable to it.

Keser, Claudia and Frans van Winden (2000) Conditional Cooperation and Voluntary Contributions to Public Goods. Scandinavian Journal of Economics 102, 23-39

Potters, Jan and Frans van Winden (2000) Professionals and Students in a Lobbying Experiment: Professional Rules of Conduct and Subject Surrogacy. Journal of Economic Behavior and Organization 43, 499-522 Link to article

Lobbying is studied in a series of signaling game experiments. Students as well as professional lobbyists are used as subjects. In contrast with some earlier studies, comparing students and professionals, we find significant differences in the behavior of the two subject pools. Professional subjects appear to behave more in line with the game-theoretic predictions, display a higher degree of separation, and earn more money. We show that professional rules of conduct and professionalization can explain these differences. Although our results suggest that subject surrogacy is a relevant issue in this field of research, arguments are provided why experimentation with student subjects remains useful to study lobbying.

Schram, Arthur (2000) Sorting Out the Seeking: The Economics of Individual Motivations. Public Choice 103, 231-58 Link to article

Various models of individual motivations are confronted with evidence from different kinds of laboratory experiments. The motivations distinguished are categorized as selfish, other regarding, or cooperative. The experimental evidence shows that the traditional, selfish model is too limited, but that the alternative models that have been suggested each have shortcomings of their own.

Sloof, Randolph (2000) Interest group lobbying and the delegation of policy authority Economics and Politics 12, 247-274

In a signalling model of lobbying the politicians' decision whether to delegate policy authority and an interest group's choice between lobbying politicians or bureaucrats are investigated. Only bureaucrats are able to assess policy-relevant information coming from the interest group, but their interests may differ from those of politicians. In equilibrium politicians weigh the benefits of an informed policy decision against bureaucratic drift. We obtain that delegation occurs only when the bureaucracy is not too much biased and when the stakes of the interest group are not too high. Still, politicians sometimes prefer a biased bureaucracy and the interest group to have a larger stake. The model also predicts that interest groups typically lobby politicians to further delegation.

Sloof, Randolph and Frans van Winden (2000) Show Them Your Teeth First! A Game-Theoretic Analysis of Lobbying and Pressure. Public Choice 104, 81-120 Link to article

This paper investigates the choice of an interest group between lobbying words and pressure actions in order to influence a policymaker. Both lobbying and pressure are modeled as strategic means of transmitting information that is relevant to the policymaker. However, only pressure is directly costly to the policymaker. The interaction between the interest group and the policymaker is framed as a repeated signaling game. In equilibrium pressure--in contrast to lobbying--only occurs when the interest group s reputation is sufficiently low, and always improves its reputation. It is shown that repeated lobbying cannot completely substitute for pressure, and that the interest group may be forced to sustain its reputation through lobbying. We conclude that pressure is typically used to build up a reputation, lobbying to maintain a reputation.

Sonnemans, Joep (2000) Decisions and Strategies in a Sequential Search Experiment. Journal of Economic Psychology 21, 91-102 Link to article

The strategy method is becoming an important tool in experimental methodology. This study examines how well this method works in an individual decision experiment. Subjects are faced with a sequential search problem. After extensive practice in solving the problem and formulating strategies, they play 20 periods for money. In each period the subjects first make decisions by hand, after that their strategy operates on the same sequence of bids. In each period, only one of the results is paid out (randomly determined). After each period, subjects can change their strategy. This method makes a direct comparison between strategies and decisions possible.

Drissen, Eric (1999) Government decisions on income redistribution and public production.

Sloof, Randolph (1999) Campaign contributions and the desirability of full disclosure laws Economics and Politics 11, 83-107

In a signaling game model of costly political campaigning in which a candidate is dependent on a donor for campaign funds it is verified whether the electorate may benefit from campaign contributions directly observed. By purely focusing on the informational role of campaign contributions the model seems somewhat biased against the potential benefits of direct observation. Still, the conclusion can be drawn that directly observable contributions allow for more information being revealed in equilibrium. Using this result, from an informational perspective a case can be built for the desirability of full disclosure laws.

Sonnemans, Joep, Arthur Schram and Theo Offerman (1999) Strategic Behavior in Public Good Games: When Partners Drift Apart. Economics Letters 62, 35-41 Link to article Expanded working paper

(Abstract of the expanded Working Paper) We use a new design to (re)examine the occurrence of strategic behavior in voluntary contributions mechanism experiments. Subjects are in groups that remain constant for a number of periods before they change. The change is public knowledge and always consists of one member switching to another group. Moreover, everyone knows that this individual will not be grouped with any of the members again. In this sense 'partners' really become 'strangers'. We find considerable evidence of strategic behavior in these relatively simple games. Subjects who leave their group contribute less than in the previous period and less than in the next period in their new group. Contribution levels decline with the number of periods remaining for the group. The results can be explained by the occurrence of conditional cooperators, who are willing to contribute if and only if enough others do the same. The presence of these subjects elicits strategic (forward looking) behavior from others.

Winden, Frans van (1999) On the Economic Theory of Interest Groups: Towards a Group Frame of Reference in Political Economics. Public Choice 100, 1-29 Link to article

This paper evaluates the development of the economic theory of interest groups. Although there is important progress, many substantial lacunae in our knowledge exist. I argue that part of the problem is the way Public Choice theory developed. Methodological individualism has led to an overindividualized a-social view of human behavior. Furthermore, the importance of imperfect information has been underexposed. Acknowledging the essentially social character of human behavior and the lack of information leads to the conclusion that a more prominent place should be given to the role of social groups. A shift towards a group frame of reference is advocated.

Wit, Jorgen (1999) Social Learning in a Common Interest Voting Game. Games and Economic Behavior 26, 131-156 Link to article


Dijk, Frans van (1998) Private support and social security Journal of Population Economics 11, 345-371

The issue is adressed whether assistance to persons in need can be left to the ‘family’ and the ‘community’. In that case people depend on their social networks. The support a person receives through a given network of social ties is examined. However, ties are diverse and subject to change. By means of a model of the dynamics of social ties, the conditions for adequate private support are analyzed. The sustainability of private support over time is examined by incorporating the impact on social ties of lending and receiving support. It is shown that support is only an effective alternative in a limited number of situations.

Fehr, Ernst, Georg Kirchsteiger and Arno Riedl (1998) Gift Exchange and Reciprocity in Competitive Experimental Markets. European Economic Review 42, 1-34 Link to article

One of the outstanding results of three decades of laboratory market research is that under rather weak conditions prices and quantities in competitive experimental markets converge to the competitive equilibrium. Yet, the design of these experiments ruled out gift exchange or reciprocity motives, that is, subjects could not reciprocate for a gift. This paper reports the results of experiments which do not rule out reciprocal interactions between buyers and sellers. Sellers have the opportunity to choose quality levels which are above the levels enforceable by buyers. In principle they can, therefore, reward buyers who offer them high prices. Yet, such reciprocating behavior lowers sellers monetary payoff and is, hence, not subgame perfect. The data reveal that many sellers behave reciprocally. This generates a positive relation between prices and quality at the aggregate level which is anticipated by the buyers. As a result, buyers are willing to pay prices which are substantially above sellers reservation prices. These results indicate that reciprocity motives may indeed be capable of driving a competitive experimental market permanently away from the competitive outcome. The data, therefore, support the gift exchange approach to the explanation of involuntary unemployment.

Offerman, Theo and Joep Sonnemans (1998) Learning by Experience and Learning by Imitating Successful Others. Journal of Economic Behavior and Organization 34, 559-75 Link to article

It is examined whether individuals learn from experience and/or by imitation. Usually individual judgmental learning displays systematic biases against the ideal Bayesian model. Imitation of successful others may decrease such effects. In an experiment, subjects make investment decisions and report expectations. The profitability of an investment depends on the realization of a stationary distribution of states of the world. In the baseline, subjects do not receive information about others expectations; in the other conditions, subjects perceive the expectations of others who observed either exactly the same events or different events from the same distribution. The results indicate that people learn both from experience and by imitating successful others.

Offerman, Theo, Arthur Schram and Joep Sonnemans (1998) Quantal Response Models in Step-Level Public Good Games. European Journal of Political Economy 14, 89-100 Link to article

The effect of adding noise to both an equilibrium model and a naive Bayesian model of behavior in step-level public good games is studied. Quantal response equilibria are derived for these games and a naive Bayesian quantal response function is presented. The models are fit for experimental data from such a game and compared. The results seem more promising for the naive Bayesian model than for the equilibrium model.

Potters, Jan, Casper G. de Vries and Frans van Winden (1998) An ExperimentalReexamination of Rational Rent-seeking European Journal of PoliticalEconomy 14, 783-800

The theoretical literature exploring various ramifications and applications of Tullock's (1980) rent-seeking model is extensive and rapidly growing. In contrast, there exist as yet only a few experimental evaluations of this model, with ambiguous results. Moreover, these studies focus on one particular case (proportional probabilities) and use a problematic experimental design. With an appropriate design we investigate the extreme cases of proportional probabilities and perfect discrimination, which offer the starkest contrast in theoretical predictions. We find substantial evidence for the predictive power of the rent-seeking model, particularly if one allows for the fact that people sometimes make mistakes or are confused about what to do.

Sloof, Randolph (1998) Game-theorectic models of the political influence of interest groups. (eds) Kluwer, Boston

Sonnemans, Joep (1998) Strategies of Search. Journal of Economic Behavior and Organization 35, 309-32 Link to article

Two experiments are designed to examine the strategies people use in search behavior. In the first experiment, an electronic information board is used to register on which aspects of the situation subjects focus their attention and after that subjects also submit a formal strategy. Although efficiency is rather high, most subjects do not use the theoretical optimal strategy. Many subjects seem to focus on the total earnings instead of the marginal return of another draw. On an average, subjects stop searching too early. This cannot totally be explained by risk aversion. The second experiment shows that the tendency to search too little can be(partly) explained by learning processes.

Sonnemans, Joep, Arthur Schram and Theo Offerman (1998) Public Good Provision and Public Bad Prevention: The Effect of Framing. Journal of Economic Behavior and Organization 34, 143-61 Link to article

An experimental analysis of voluntary, binary contributions for step-level public goods/bads is presented. Alternatively, the situation is presented as the provision of a public good or the prevention of a public bad. From a strategic point of view, these presentations are equivalent. In early periods of the twenty round experiments, behavior is indeed observed to be similar in both cases but, after about five periods, differences start to occur that grow larger. A simple learning model is developed that replicates the patterns in the experiments. Extrapolation beyond twenty periods show that the pattern observed reflects an equilibrium selection.

Verstegen, Jos, Joep Sonnemans, Ruud Huirne, Aalt Dijkhuizen and James Cox (1998) Quantifying the effects of sow-herd management information systems on farmers' decision making using experimental economics American Journal of Agricultural Economy 80, 821-829 Link to article

A pilot experiment was conducted to yield insight into whether laboratory experiments can be used as an alternative to surveys for determining the profitability of management information systems (MIS) in sow farming. In total, eighty-six sow farmers, including fifty-one farmers from an earlier survey study, participated in an individual decision experiment, which was executed in a quasi-experimental, nonequivalent control, pretest/posttest design. In a MIS group, MIS estimates were derived by within-subjects comparisons of decision quality with and without MIS features. A baseline group was included to control for learning or exhaustion effects during an experimental session. Subjects receiving MIS features significantly improved their decision making whereas subjects without MIS features did not. Correlation between MIS estimates of the survey study and MIS estimates of the experiments was not significant.

Winden, Frans van (1998) Experimental Studies of Signaling Games L. Luini (eds) Uncertain Decisions, Bridging Theory and Experiments Kluwer, Boston

In this paper a survey and evaluation is presented of experiments dealing with signaling games.

Wit, Jorgen (1998) Rational choice and the Condorcet jury theorem. Games and Economic Behavior 22, 364-376 Link to article


Banks, Jeffrey, Mark Olson and David Porter (1997) An Experimental analysis of the bandit problem Economic Theory 10, 55-57

We investigate, in an experimental setting, the behavior of single decision makers who at discretetime intervals over an "infinite" horizon may choose one action from a set of possible actions where this set is constant in time, i.e. a bandit problem. Two bandit environments are examined, one in which the predicted behavior should always be myopic (the two-armed bandit) and the other in which the predicted behavior should never be myopic (the one-armed bandit). We also investigate the comparitive static predictions as the underlying parameters of the bandit environments are changed. The aggregate results show that the behavior in the two bandit environments are quantitatively different and in the direction of the theoretical predictions.

Dijk, Frans van and Frans van Winden (1997) Dynamics of social ties and local public good provision Journal of Public Economics 64, 323-341 Link to article

A model is presented in which social ties between individuals and private contributions to a local public good are interrelated. Ties are formalized by means of utility interdependence, and depend on the history of social interaction, in this case the joint provision of the public good. The resulting dynamic model generates equilibrium values of the intensity of ties and the private provision level. The impact of public provision on these variables is analyzed. Our results are very different from those obtained with the standard model, where individuals are only interested in the utility from own consumption.

Dijk, Frans van (1997) Is old-fashioned private assistance an alternative to modern social security? De Jong,P.R. and Marmor, T.R. (eds) Social policy and the labor market. International studies on social security Aldershot: Avebury Publishing Company

Offerman, Theo (1997) Beliefs and Decision Rules in Public Good Games (eds) Theory and Experiments Kluwer, Dordrecht/Boston/London

Ophem, Hans van and Arthur Schram (1997) Sequential and Multinomial Logit: A Nested Model. Empirical Economics 22, 131-52

A nested model is presented which has both the sequential and multinomial logit model as special cases. This model provides a simple test to investigate the validity of these specifications. Some theoretical properties of the model are discussed. During the analysis a distribution function is derived, which, to the best of our knowledge, has not been used before. This distribution is shown to be a generalization of the type I extreme-value distribution. Monte Carlo experiments and empirical applications of the model are presented.

Potters, Jan, Randolph Sloof and Frans van Winden (1997) Campaign Expenditures, contributions and direct endorsement: The strategic use of information and money to influence voter behavior European Journal of Political Economy 13, 1-31

A costly signaling model is presented in which we show how campaign expenditures can buy votes. The model shows that the amount of campaign expenditures may convey the electorate information about the candidate’s intended policy. When this model is extended to allow for a contributing interest group, it appears that for campaigning to be informative it is sometimes crucial that campaign funds are supplied by informed third parties. The extension also provides an explanation why interest groups contribute to the candidate’s campaign, rather than using direct endorsements; they may need the candidate as an intermediary to filter their opposing interests.

Riedl, Arno and Arthur Schram (1997) Weimar Woes and the Authoritarian Alternative: Politicoeconomic Developments in Interbellum Germany J. Komlos and S.Eddie (eds) Selected Cliometric Studies on German EconomicHistory Franz Steiner Verlag, Stuttgart

Schram, Arthur (1997) Do people care about Democracy? Public Choice 91, 49-51 Link to article

Sloof, Randolph (1997) Competitive lobbying for a legislator s vote :A comment Social Choice and Welfare 14, 449-464

This comment deals with some imperfections of the analysis presented by Austen-Smith and Wright [1]. It is argued that in [1] being informed is incorrectly identified with being informative, yielding an incomplete equilibrium analysis, and leading to bias in the kind of equilibrium behavior predicted. After correcting for this bias, the results obtained corroborate their main conclusion- legislators are often lobbied by just one of two competing groups, typically the a priori disadvantaged group. The comment also strenghtens their case for counteractive lobbying; the a priori favored group typically only lobbies to counteract the influence of an opposing group. Another conclusion, however, is qualified; an increase in the groups' stakes can make it less, rather than more, likely that the legislator makes the correct decision.

Sloof, Randolph (1997) Lobbying when the decisionmaker can acquire independent information: A comment Public Choice 91, 199-207 Link to article

In this comment it is argued that the game-theoretical analysis presented by Rasmusen (1993, PuCh, 77(4): 899-913) is incomplete. First, a short description of his model is given, then a proposition stating all equilibria of the model is presented. The proposition supplements the analysis of Rasmusen by showing that an, in our view plausible, equilibrium is ignored. Thereupon a comprehensive equilibrium analysis leads us to qualify his argument; lobbying does not always fully substitute for independent investigation, truthful lobbying is not necessarily successful, and a lobbyist having the 'right' information does not always gets his way.

Sloof, Randolph (1997) Game-theoretic Models of the Political influence of interest Groups.

Wit, Jorgen (1997) Dynamics and information.


Keser, Claudia (1996) Voluntary contributions to a public good when partial contribution is a dominant strategy Economic Letters 50, 359-366 Link to article

Mazza Isidoro and Frans van Winden (1996) A political economic analysis of labor migration and income redistribution Public Choice 89, 333-363

We present a two-country political economic model of income redistribution with internationally mobile labor. Migration can be exogenous and/or endogenous (i.e. determined by labor income differentials). Political influence is determined by the size and homogeneity of the groups, where the latter can be affected by immigration. We show that immigration can increase the transfers to, and the income of, the mobile group. We also investigate the possibility of migration regulation, tax-transfer policy competion and coordination and, finaaly, coordination of regulation policies. It is shown that the selection of any of those regimes will depend on the particular distribution of political influence among the relevant social groups in the two countries.

Offerman, Theo, Joep Sonnemans and Arthur Schram (1996) Value Orientations, Expectations and Voluntary Contributions in Public Goods. Economic Journal 106, 817-45 Link to article

An experimental analysis of voluntary, binary contributions for step-level public goods is presented. Independent information is obtained on individual value orientation and expectations about the behavior of other subjects using incentive compatible mechanisms. The effects of increasing payoffs for the public good and of decreasing groupsize are investigated. Attention is focused on the determination of expectations, the use of expectations when deciding on behavior, and differences in expectations and behavior between individuals with different value orientations.

Potters, Jan and Frans van Winden (1996) Comparative Statics of a Signaling Game: An Experimental Study. International Journal of Game Theory 25, 329-53

A basic signaling game is studied in an experimental environment. First, we want to check whether we can replicate some of the findings in the literature (concerning the use and impact of costly signals, and equilibrium selection). Second, and foremost, the comparative statics implications of the (hybrid) equilibrium of the game are studied. The experimental outcomes replicate the finding in the literature that costly messages are sent more frequently by 'higher' sender types (i.e., types whose information is such that persuasion is also profitable to the responder), and that such messages have an impact on the behavior of the responder. The discrepancies between predictions and observations are discussed and related to weak payoff incentives and gradual adjustment to regime switches.

Potters, Jan and Frans van Winden (1996) Models of Interest Groups Schofield, N., (eds) Collective Decision-Making, Social Choice andPolitical Economy Kluwer, Boston

Potters, Jan and Randolph Sloof (1996) Interest groups: A survey of empirical models that try to assess their influence European Journal of Political Economy 12, 403-442

Schram, Arthur and Joep Sonnemans (1996) Voter Turnout as a Participation Game: An Experimental Investigation. International Journal of Game Theory 25, 385-406

This paper reports the results of a series of experiments in which participation games are analyzed. Voter turnout is an example of an application of this game. Hypotheses derived from a game theoretic analysis are systematically elaborated, analyzed, and tested. The results are used to explore future paths of research. A distinction is made in two parameter configurations (representing winner-takes-all elections and elections with proportional representation).

Schram, Arthur and Joep Sonnemans (1996) Why People Vote: Experimental Evidence. Journal of Economic Psychology 17, 417-42 Link to article

This paper reports the results of a series of experiments in which the voter turnout decision was analyzed as a participation game. The experiments were inspired by the model of Schram and Van Winden(1991). In the model, individuals favoring the same policy or candidate are members of a common reference group, and the vote decision is determined by inter- and intragroup relations. Our experimental data supported three hypotheses derived from this model. First, participation increased with group identity. Second, communication enhanced participation. Finally, participation was strongly related to individual characteristics. A simple analysis of the way people learn from their experiences in previous periods is used to argue that any model of voter turnout should take account of myopic adaptive behavior and inertia.

Sonnemans, Joep and Nico Frijda (1995) The Determinants Of Subjective Emotional Intensity. Cognition Emotion 9, 483-506

Tested the hypothesis that emotional intensity is determined jointly by variables from the following 4 classes: concerns (strength and relevance), appraisal, regulation, and individual response propensities. For 6 wks, 37 college students reported an emotion every week and answered questions on a computer. All 4 classes were correlated with emotional intensity, and the concern variables showed the highest correlations. The importance of the determinants was not always the same. There were differences between the emotions and between the dimensions of emotional intensity. The relation between regulation and emotional intensity is a complex and reciprocal one. Emotional intensity presumably determines how much regulation is needed, but successful regulation will decrease that intensity.

Winden, Frans van (1995) On european economics Kyklos 48, 1995

In this paper the following issues are addressed: (1) Does the output of economists working in Europe have an own identity in terms of questions posed and analytical approach? (2) Is it desirable to create an incentive system as in the U.S., including a large competitive market?; What is to be expected? Specific attention is paid to the institutional environment of academic economists in Europe.

Winden, Frans van (1995) Government, Institutional Dynamics and Competitive A. Rugman et al. (eds) Beyond the Diamond JAI Press (Research in Global Strategic Management, vol. 5), Greenwich, 1995


Beus, Jos de (1994) On the Convergence of Formal Rules H.J. Wagener (eds) The Political Economy of Transformation Physica-Verlag,Berlin

Beus, Jos de (1994) European Constitutional Patriotism D. Miliband (eds) Reinventing the Left Polity Press, Cambridge

Beus, Jos de and Thomas Koeble (1994) Debating the quality of life Government and Opposition 29, 515-535

Dijk, Frans van (1994) Social Ties, Economic Performance and Public Intervention.

Olson Mark and David Porter (1994) An experimental examination into the design Economic Theory 4, 11-40

Schram, A., en Winden, F. van (1994) The Role of Inter-and Intragroup Interaction in the Voter Turnout Decision Brandstätter, H. & Güth, W. (eds) Essays on economic psychology Springer-Verlag, Berlin

Sonnemans, Joep and Nico Frijda (1994) The Structure Of Subjective Emotional Intensity. Cognition & Emotion 8, 329-350

Examined whether the subjective intensity of emotion is one dimensional, and, if not, what are its dimensions? 222 instances of emotions were studied and for each instance 37 Ss completed a questionnaire. Ss also drew a diagram of the course of their emotion over time. A factor analysis of the intensity questions and the diagram variables yielded 6 factors: (1) duration of the emotion and delay of its onset and peak; (2) perceived bodily changes and strength of felt passivity; (3) recollection and re-experience of the emotion; (4) strength and drasticness of action tendency, and drasticness of actual behavior; (5) belief changes and influence upon long-term behavior; and (6) overall felt intensity. Most specific dimensions correlated moderately with overall felt intensity.

Drissen, Eric and Frans van Winden (1993) A General Equilibrium Model with Endogenous Government Institutions Behavior. An Analytical Approach William Barnett, Melvin Hinich and Norman Schofield (eds) PoliticalEconomy; Institutions, Information and Competition Cambridge UniversityPress, Cambridge

A general equilibrium is constructed that (a) builds on a microeconomic foundation regarding the behavioral of consumers and producers (including their reactions to government policy changes), (b) is rooted in a positive political economic approach to government behavior that is not restricted to the political setting of a direct democracy, (c) allows for redistribution as well as the production and consumption of public goods, and (d) is nevertheless analytically solvable. The analysis focusses on the effects of endogenous government policies, comparative statics and tax reform.

Fehr, Ernst, Georg Kirchsteiger and Arno Riedl (1993) Does Fairness Prevent Market Clearing? An Experimental Investigation. Quarterly Journal of Economics 108, 437-59

This paper reports the results of an experiment that was designed to test the impact of fairness on market prices. Prices were determined in a one-sided oral auction, with buyers as pricemakers. Upon acceptance of an offer, sellers determined the quality of the good. Buyers offered prices that were substantially above the market-clearing level and expected sellers to respond with high quality levels. This expectation was, on average, confirmed by the behavior of sellers. These results provide, therefore, experimental support for the fair wage-effort theory of involuntary unemployment.

Keser, Claudia (1993) Some Results of Experimental Duoploy Markets with Demand Inertia The Journal of Industrial Economics 41, 133-152

Subjects played twice a multistage duopoly game with demand inertia. Their actual behavior is different from the unique subgame perfect equilibrium solution of the game. In the second plays of the game, subjects tend to behave more cooperatively than in the first plays: profits, prices and price stability are significantly higher. The individual markets in the second plays are classified into strongly cooperative, weakly cooperative and aggressive markets. Each market type shows a particular pattern of behavior. Average price and price instability of a market can be used as indicators for classification

van Riel, Arthur and Arthur Schram (1993) Weimar Economic Decline, Nazi Economic Recovery, and the Stabilization of Political Dictatorship. Journal of Economic History 53, 71-105

A politicoeconomic model of the relationship between economic and structural variables and government popularity is developed and applied to the Weimar Republic. The authors obtained d ata from decentralized election results in the 1924 to 1933 period using a weighted panel estimation method. Parameter estimates show a strong relationship between the development of economic variables and the decline in electoral support that confronted every government in thi s period. The authors link this finding to existing historiographic theories and extrapolate from it to estimate the effects of the economic recovery in the first years of the Nazi regime.

Velthoven, Ben van, Harrie Verbon and Frans van Winden (1993) The Political Economy of Government Debt: A Survey H. Verbon and Winden, F. van (eds) The Political Economy of Government Debt North-Holland, Amsterdam

Winden, Frans van (1993) Some Reflections on the Next 25 Years of Public Choice Public Choice 77, 213-223

Winden, Frans van and Gerrit de Wit (1993) Nomenklatura, state monopoly and private Public Choice 77, 573-594


Beus, Jos de (1992) Applying first world political economy to the second world s march into civil society Broeck, J. van den & Bulcke D. van (eds) Changing Economic Order. Wolters-Noordhoff, Groningen

Drissen, Eric and Frans van Winden (1992) Social security in a general equilibrium model with endogenous government behavior. D. Bos and S. Cnossen (eds) Fiscal Implications of an Aging Population Springer, Berlin

Frijda, Nico, Andrew Ortony, Joep Sonnemans and Gerald L. Clore (1992) The complexity of intensity. Issues concerning the structure of emotion intensity. Margaret S. Clark (eds) Emotion, Review of Personality and Social Psychology vol. 13. Newbury Park London New Delhi: SAGE Publications

Potters, Jan (1992) Fixed cost messages Economics Letters 38, 43-47 Link to article

Potters, Jan and Frans van Winden (1992) Lobbying and Asymmetric Information. Public Choice 74, 269-92

Schram, Arthur (1992) Testing Economic Theories of Voter Behaviour Using Micro-data. Applied Economics 24, 419-28

Three hypotheses often encountered in economic analyses of voter behavior are tested using an extensive data set derived from six consecutive national election studies in the Netherlands in the period 1971-1986. These hypotheses are: (i) the party choice and turnout decisions are taken sequentially and independently by voters; (ii) social groups play a central role in the decisionmaking processes in the political sphere; (iii) the effect of individual-level variables on party choice is stable over time. The results provide support for the first hypothesis and partial support for the second, where the specific categorization of individuals to be chosen is a matter that needs further investigation. The third hypothesis is rejected by the data: the relationship between the variables chosen and party choice proved to be unstable.

Schram, Arthur (1992) Rational choice models of individual political behavior in the Netherlands; European Journal of Political Research 21, 423-452

A review is given of Dutch papers in a subfield of rational choice theory: those applied to individual behavior in the political sphere. A number of fields of individual behavior are discussed. Most attention is paid to papers that appeared in the Dutch language.

Beus, Jos de (1991) Comments on The rise and decline of political economy by Bruce Yandle European Journal of Political Economy 6, 563-573

Beus, Jos de (1991) The ecological social contract Kraan, O.J.& Veld, R. in t (eds) Environmental Protection: Public or PrivateChoice Kluwer Academic Publishers, Dordrecht

Dijk, Frans van (1991) Decisionmaking about the environment: the role Kraan, O.J. & Veld, R. in t (eds) Environmental Protection: Public or Private Choice Kluwer Academic Publishers, Dordrecht

Drissen, Eric and Frans van Winden (1991) Social security in a general equilibrium Journal of Population Economics 4, 89-110

Potters, Jan, Frans van Winden and Michael Mitzkewitz (1991) Does concession always prevent pressure? Selten, R. (eds) Game Equilibrium IV, Social and political interaction Springer Verlag, Berlin

Renaud, Paul and Frans van Winden (1991) Behavior and budgetary atonomy European Journal of Political Economy 7, 547-577

Renaud, Paul and Frans van Winden (1991) A theoretical model of a multi-level Prud homme, R. (eds) Public Finance with Several Levels of Government Foundation Journal of Public Finance, The Hague

Schram, Arthur (1991) Voter behavior in economic perspectives (eds) Springer Verlag, Berlin-Heidelberg

Schram, Arthur and Frans van Winden (1991) Why people vote: free riding and the production and consumption of social pressure Journal of Economic Psychology 12, 575-620 Link to article

A model is presented which places the decision to vote or abstain in a rational choice framework. It is shown that casting a vote may well be a rational act, following from an individual cost-benefit analysis. It is argued that (reference-)group interests play an important role when an individual determines actions in the political sphere. Through its (relative) turnout, a group can affect future tax rates to which its members are liable, and an optimal turnout-level is derived for each group. Using this optimal level, within-group processes are analyzed, where certain group members ('producers of social pressure') try to convince others to go and vote. For these producers, voting is shown to be a rational act. Other members may give in to this pressure and be induced to cast a vote. These members may be thought to vote out of a sense of 'civic duty'. Equilibria for the model, characterized by positive turnout, are derived, an example is presented, and the results are discussed.

Sonnemans, Joep (1991) The Structure and Determinants of Emotional Intensity

Velthoven, Ben van and Frans van Winden (1991) A positive model of tax reform PublicChoice 72, 61-86

Wit, Gerrit de and Frans van Winden (1991) An m-sector N-group behavioral model of self-employment Small Business Economics 3, 49-66

A behavioral model is developed to determine the number of self-employed individuals in an economy characterized by different production sectors and social groups of which the individuals differ by their risk-aversion, their evaluation of job characteristics other than income, their expected managerial ability, the variance of their managerial ability and their productive performance as employee. The model leads to a linear complementarity problem that can be solves by the Lemke-algorithm. The 1-sector, n-group model and the m-sector, 2-group model are singled out for an extensive comparative static analysis.