Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2013:6: Understanding the Nature of Cooperation Variability

Toke Fosgaard (), Lars Gårn Hansen () and Erik Wengström ()
Additional contact information
Toke Fosgaard: Department of Food and Resource Economics, University of Copenhagen
Lars Gårn Hansen: Department of Food and Resource Economics, University of Copenhagen
Erik Wengström: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: We investigate framing effects in a large-scale public good experiment. We measure indicators of explanations previously proposed in the literature, which when combined with the large sample, enable us to estimate a structural model of framing effects. The model captures potential causal effects and the behavioral heterogeneity of cooperation variability. We find that framing only has a small effect on the average level of cooperation but a substantial effect on behavioral heterogeneity and we show that this can be explained almost exclusively by a corresponding change in the heterogeneity of beliefs about other subjects’ behavior. Preferences are on the other hand stable between frames.

Keywords: Framing; Public Goods; Internet Experiment; Simulation

JEL-codes: C13; C71; C93; H41

56 pages, March 19, 2013

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