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Institutional Heterogeneity in Social Dilemma Games: A Bayesian Examination

Author

Listed:
  • Klaus Moeltner

    (Department of Agricultural and Applied Economics, Virginia Tech)

  • James J. Murphy

    (Department of Economics, University of Alaska Anchorage)

  • John K. Stranlund

    (Department of Resource Economics, University of Massachusetts Amherst)

  • Maria Alejandra Velez

    (School of Management, Universidad de los Andes)

Abstract

A main research focus in many Social Dilemma Games is the suitability of external institutional treatments in inducing socially optimal outcomes. It is likely that participating subjects exhibit unobserved heterogeneity in their reaction to these treatments. This type of “institutional heterogeneity” has to date not found much attention in the experimental literature. We propose a Hierarchical Bayesian estimation framework to highlight these heterogeneity effects. We illustrate that models that ignore treatment-specific heterogeneity can severely under-estimate the variability in treatment-induced decisions amongst the subject population. The resulting misleading picture of comparative treatment effects can lead to sub-optimal institutional choices and related policy decisions.

Suggested Citation

  • Klaus Moeltner & James J. Murphy & John K. Stranlund & Maria Alejandra Velez, 2012. "Institutional Heterogeneity in Social Dilemma Games: A Bayesian Examination," Working Papers 2012-04, University of Alaska Anchorage, Department of Economics.
    • Handle: RePEc:ala:wpaper:2012-04
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    File URL: http://www.econpapers.uaa.alaska.edu/RePEC/ala/wpaper/ALA201204.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    experimental economics; Social Dilemma Games; Hierarchical Modeling; Bayesian Simulation; Common Property Resource; environmental economics;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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