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Evidence of general economic principles of bargaining and trade from 2,000 classroom experiments

Nature Human Behaviour volume 4, pages 917–927 (2020)Cite this article

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Abstract

Standardized classroom experiments provide evidence about how well scientific results reproduce when nearly identical methods are used. We use a sample of around 20,000 observations to test reproducibility of behaviour in trading and ultimatum bargaining. Double-auction results are highly reproducible and are close to equilibrium predictions about prices and quantities from economic theory. Our sample also shows robust correlations between individual surplus and trading order, and autocorrelation of successive price changes, which test different theories of price dynamics. In ultimatum bargaining, the large dataset provides sufficient power to identify that equal-split offers are accepted more often and more quickly than slightly unequal offers. Our results imply a general consistency of results across a variety of different countries and cultures in two of the most commonly used designs in experimental economics.

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Fig. 1: Design and results of buyer–seller double auctions.
Fig. 2: Statistical analysis of trading dynamics.
Fig. 3: Offers, acceptance rates and reaction times in ultimatum game experiments.
Fig. 4: Cross-country heterogeneity (means and 95% CIs) in economic bargaining and market behaviour in ten regions.
Fig. 5: Experimental interface and the number of observations.

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Data availability

Double auction and ultimatum game data can be found on the Open Science Framework https://osf.io/9mfws/.

Code availability

Code for all analyses can be found on the Open Science Framework https://osf.io/9mfws/.

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Acknowledgements

T.I. was supported by Deutsche Forschungsgemeinschaft through CRC TRR 190. J.T.W. was supported by CRETA, National Taiwan University (NTU-107L900203 and MOST 107-3017-F-002-004) and the Ministry of Science and Technology of Taiwan (MOST 106-2628-H-002-001-MY4). C.F.C was supported by the Behavioral and Neuroeconomics Discovery Fund at Caltech (through the MacArthur Foundation Fellowship). The funders had no role in study design, data collection and analysis, decision to publish or preparation of the manuscript. We thank T. Cason, J. Duffy, D. Friedman, M. Hsu, M. O. Jackson, J. O. Ledyard, C. R. Plott and audiences at Bay Area Behavioral and Experimental Economics Workshop, the ESA North American Conference, Barcelona GSE Summer Forum (External Validity, Generalizability and Replicability of Economic Experiments), Chapman University and Caltech (Applied Microeconomics Lunch) for helpful feedback. We also thank the MobLab engineering team for technical assistance.

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Authors and Affiliations

  1. Division of the Humanities and Social Sciences, California Institute of Technology, Pasadena, CA, USA

    Po-Hsuan Lin & Colin F. Camerer

  2. MobLab, Pasadena, CA, USA

    Po-Hsuan Lin & Stephanie W. Wang

  3. Department of Economics, Texas A&M University, College Station, TX, USA

    Alexander L. Brown

  4. Department of Economics, LMU Munich, Munich, Germany

    Taisuke Imai

  5. Department of Economics, National Taiwan University, Taipei, Taiwan

    Joseph Tao-yi Wang

  6. Center for Research in Econometric Theory and Applications, Taipei, Taiwan

    Joseph Tao-yi Wang

  7. Department of Economics, University of Pittsburgh, Pittsburgh, PA, USA

    Stephanie W. Wang

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Contributions

T.I., S.W.W. and C.F.C designed the research. P.L., A.L.B., T.I., J.T.W. and S.W.W. analysed the data. P.L., A.L.B., T.I., J.T.W., S.W.W. and C.F.C wrote the paper. All authors discussed the results and implications and commented on the manuscript.

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Correspondence to Colin F. Camerer.

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Competing interests

The data used were shared from MobLab, a for-profit startup educational platform. The data availability is an in-kind contribution to all authors (although note that the data are available for purposes of analysis reproduction and extended analyses). P.L. was employed by MobLab from December 2017 to December 2018 and compensated more than US$10,000 during the last 3 years. A.L.B. was a visiting senior economist at MobLab from 22 January 2018 to 20 July 2018 and compensated more than US$10,000. T.I. has no competing interests. J.T.W. was a visiting senior economist at MobLab from 25 June 2018 to 7 September 2018 and is the John O. Ledyard Endowed Chair Professor of Experimental Economics at National Taiwan University, funded by contributions of more than US$10,000 to the university endowment fund from MobLab. S.W.W. holds an ownership stake in MobLab as a cofounder. She was compensated more than US$10,000 in 2018–2019. C.F.C. is a Scientific Advisor to MobLab, a position with no compensation but with a small ownership stake instead.

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Supplementary Tables 1–26, Supplementary Figs. 1–15, results, methods and references.

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Lin, PH., Brown, A.L., Imai, T. et al. Evidence of general economic principles of bargaining and trade from 2,000 classroom experiments. Nat Hum Behav 4, 917–927 (2020). https://doi.org/10.1038/s41562-020-0916-8

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