Saliency of Outside Options in the Lost Wallet Game

James Cox, Maroš Servátka and Radovan Vadovic ()

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: This paper reports an experiment designed to shed light on an empirical puzzle observed by Dufwenberg and Gneezy (2000) that the size of the foregone outside option by the first mover does not affect the behavior of the second mover in a lost wallet game. Our conjecture was that the original protocol may not have made the size of the forgone outside option salient to second movers. Therefore, we change two features of the Dufwenberg and Gneezy protocol: (i) instead of the strategy method we implement a direct response method (sequential play) for the decision of the second mover; and (ii) we use paper money certificates that are passed between the subjects rather than having subjects write down numbers representing their decisions. We observe that our procedure yields qualitatively the same result as the Dufwenberg and Gneezy experiment, i.e., the second movers do not respond to the change in the outside option of the first movers.

Keywords: Experimental economics; Lost wallet game; Outside option (search for similar items in EconPapers)
JEL-codes: C70 C91 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2009-01-10
New Economics Papers: this item is included in nep-exp and nep-gth
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Citations: View citations in EconPapers (1)

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https://repec.canterbury.ac.nz/cbt/econwp/0903.pdf (application/pdf)

Related works:
Journal Article: Saliency of outside options in the lost wallet game (2010)
Working Paper: Saliency of Outside Options in the Lost Wallet Game (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:09/03

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