2022 Fiscal Year Final Research Report
The experimental economics of decentralization
| Project/Area Number |
20K01553
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Multi-year Fund |
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| Section | 一般 |
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| Review Section |
Basic Section 07010:Economic theory-related
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| Research Institution | Waseda University |
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Principal Investigator |
Veszteg Robert 早稲田大学, 政治経済学術院, 教授 (30597753)
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| Project Period (FY) |
2020-04-01 – 2023-03-31
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| Keywords | unstructured bargaining / Nash bargaining solution / cooperative bargaining / experiments / axioms |
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| Outline of Final Research Achievements |
Although human decision-making seems to be unaltered by acute stress in the experimental laboratory (Veszteg et al., 2021), only a minority of participants (4-11%) behave fully rationally in a newly-designed unfamiliar environment (Guillen & Veszteg, 2020). Even cooperative models of free (unstructured) interaction struggle predicting behavior as many of the underlying theoretical assumptions have scarce empirical support (Navarro & Veszteg, 2020, 2023; Takeuchi et al., 2022).
In particular, bargaining outcomes might be affected by how the joint profits have been created. Together with the underlying preferences (social or not), bargaining outcomes are very much context dependent, as a relatively small change in the production process triggers notable changes in bargaining outcomes. Also, we find that classic theoretical bargaining solutions based on unobservables, like abstract utility units, have limited empirical relevance.
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| Free Research Field |
experimental economics
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| Academic Significance and Societal Importance of the Research Achievements |
Our research highlights the shortcomings of theoretical models written in terms of unobservable utility functions (a common technique in economics) and based on abstract rules. While accepting welfarism, we argue that different utility representations of a problem might lead to different outcomes.
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