Psychological game theory can provide rational-choice-based framing effects; frames influence beliefs, beliefs influence motivations. We explain this theoretically and explore empirical relevance ...experimentally. In a
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design of one-shot public good games we show that frames affect subjectʼs first- and second-order beliefs and contributions. From a psychological game-theoretic framework we derive two mutually compatible hypotheses about guilt aversion and reciprocity under which contributions are related to second- and first-order beliefs, respectively. Our results are consistent with either.
► Psychological game theory can explain framing effects in public goods experiments. ► We develop models of guilt aversion and reciprocity. ► Frames might influence beliefs, beliefs influence motivations and contributions. ► We ran one-shot public good experiments with four framing treatments. ► The results support the predictions.
Dishonest behavior significantly increases the cost of medical care provision. Upcoding of patients is a common form of fraud to attract higher reimbursements. Imposing audit mechanisms including ...fines to curtail upcoding is widely discussed among health care policy‐makers. How audits and fines affect individual health care providers' behavior is empirically not well understood. To provide new evidence on fraudulent behavior in health care, we analyze the effect of a random audit including fines on individuals' honesty by means of a novel controlled behavioral experiment framed in a neonatal care context. Prevalent dishonest behavior declines significantly when audits and fines are introduced. The effect is driven by a reduction in upcoding when being detectable. Yet upcoding increases when not being detectable as fraudulent. We find evidence that individual characteristics (gender, medical background, and integrity) are related to dishonest behavior. Policy implications are discussed.
We present a field experiment to assess the effect of own and peer wage variations on actual work effort of employees with hourly wages. Work effort neither reacts to an increase of the own wage, nor ...to a positive or negative peer comparison. This result seems at odds with numerous laboratory experiments that show a clear own wage sensitivity on effort. In an additional real-effort laboratory experiment we show that explicit cost and surplus information that enables an exact calculation of an employer's surplus from the work contract is a crucial prerequisite for a positive wage—effort relation. This demonstrates that an employee's reciprocity requires a clear assessment of the surplus at stake.
Other-regarding motivation is a fundamental determinant of public service provision. In health care, one example is physicians who act benevolently towards their patients when providing medical ...services. Such patient-regarding motivation seems closely associated with a personal sacrifice that health service providers are willing to make. Surprisingly, evidence on physicians' motivation is rare. This paper contributes to the literature by investigating prospective physicians', in particular, medical students', motivations and behavior. We measure the willingness to sacrifice own profit in order to increase the patients' health benefit. We conduct the same analysis for non-medical students. In a controlled incentivized laboratory experiment, participants decide, in the role of physicians, on the provision of medical services under fee-for-service or capitation schemes. Overall, 42 medical students and 44 non-medical students participated in five experimental sessions conducted between 2006 and 2008. We find substantial differences under both payment systems: compared to medical students, students of non-medical majors are less patient-regarding, less willing to sacrifice their own profit, and they state less motivation to improve patients' health. This results in significantly lower patient health benefits. Some implications for health care policies in light of physician shortage and for physician payment systems are discussed.
•Controlled economic experiments are employed in a medical decision-making context.•Medical students behave more patient-regarding than non-medical students.•Medical students are willing to sacrifice own profit to increase patients' health.•Stated motivations confirm behavioral differences.•Implications for health policy design in light of physician shortage are discussed.
The reconcilability of actions and beliefs in inter-country relationships, either in business or politics, is of vital importance as incorrect beliefs on foreigners' behavior can have serious ...implications. We study a typical inter-country interaction by means of a controlled laboratory investment game experiment in Germany, Israel and Palestine involving 400 student participants in total. An investor has to take a risky decision in a foreign country that involves transferring money to an investee/allocator. We found a notable constellation of calibrated and un-calibrated beliefs. Within each country, transfer standards exist, which investees correctly anticipate within their country. However, across countries these standards differ. By attributing the standard of their own environment to the other countries investees are remarkably bad in predicting foreign investors' behavior. The tendency to ignore this potential difference can be a source of misinterpreting motives in cross-country interaction. Foreigners might perceive behavior as unfavorable or favorable differentiation, even though-unknown to them-investors actually treat fellow-country people and foreigners alike.
We set up a laboratory experiment to investigate systematically how varying the magnitude of outside options—the payoffs that materialize in case of a bargaining breakdown—of proposers and responders ...influences players’ demands and game outcomes (rejection rates, payoffs, efficiency) in ultimatum bargaining. We find that proposers as well as responders gradually increase their demands when their respective outside option increases. Rejections become more likely when the asymmetry in the players’ outside options is large. Generally, the predominance of the equal split decreases with increasing outside options. From a theoretical benchmark perspective we find a low predictive power of equilibria based on self-regarding preferences or inequity aversion. However, proposers and responders seem to be guided by the equity principle (Selten, The equity principle in economic behavior. Decision Theory, Social Ethics, Issues in Social Choice. Gottinger, Hans-Werner and Leinfellner, Werner, pp 269–281,
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), while they apply equity rules inconsistently and self-servingly.
We quantify patient-regarding preferences by fitting a bounded rationality model to data from an incentivized laboratory experiment, where Chinese medical doctors, German medical students and Chinese ...medical students decide under different payment schemes. We find a remarkable stability in patient-regarding preferences when comparing subject pools and we cannot reject the hypothesis of equal patient-regarding preferences in the three groups. The results suggest that a health economic experiment can provide knowledge that reach beyond the student subject pool, and that the preferences of decision-makers in one cultural context can be of relevance in a very different cultural context.
Understanding how physicians respond to incentives from payment schemes is a central concern in health economics research. We introduce a controlled laboratory experiment to analyse the influence of ...incentives from fee-for-service and capitation payments on physicians’ supply of medical services. In our experiment, physicians choose quantities of medical services for patients with different states of health. We find that physicians provide significantly more services under fee-for-service than under capitation. Patients are overserved under fee-for-service and underserved under capitation. However, payment incentives are not the only motivation for physicians’ quantity choices, as patients’ health benefits are of considerable importance as well. We find that patients in need of a high (low) level of medical services receive larger health benefits under fee-for-service (capitation).
The psychological underpinnings of labor market discrimination were investigated by having participants from Israel, the West Bank and Germany (N = 205) act as employers in a stylized employment task ...in which they ranked, set wages, and imposed a minimum effort level on applicants. State self-esteem was measured before and after the employment task, in which applicant ethnicity and sex were salient. The applicants were real people and all behavior was monetarily incentivized. Supporting the full self-esteem hypothesis of the social identity approach, low self-esteem in women was associated with assigning higher wages to women than to men, and such behavior was related to the maintenance of self-esteem. The narrower hypothesis that successful intergroup discrimination serves to protect self-esteem received broader support. Across all participants, both ethnicity- and sex-based discrimination of out-groups were associated with the maintenance of self-esteem, with the former showing a stronger association than the latter.
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