Prof. Dr. Michael Kurschilgen
Assistant Professor of Managerial Economics
TUM School of Management
Building 0505 · Room 2517
089-289-25394
[email protected]
Advanced Seminar in Managerial Economics: Strategic Interaction
SoSe 2016
Description. On markets, at the workplace, in the political arena, at university, in the subway, in
sports: the situations in which people interact strategically with one another are countless.
Whatever is best for me to do, often crucially depends on how you behave, and vice-versa. This
seminar introduces you to game theory and behavioral experiments as useful means for
enhancing our understanding of strategic interactions. Game theory provides a framework to
structure the overly complex reality and predict plausible outcomes. With the tools of
experimental economics, we can test those predictions and assess their behavioral validity, both
in the lab and in the field.
In this course, we will focus our attention on four distinct sets of questions:
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Trust and Reciprocity
Cooperation and Punishment
Coordination and Communication
Competition and Contest
The seminar consists of two phases. In the first phase, you will work in small groups on one of
these four topics. Within the group, you will read and discuss the relevant scientific literature with
the goal of presenting a cohesive overview of the topic to your classmates. In the second phase,
you will work individually on developing an own research idea related to one of the four topics
and applying the tools of game theory and experimental economics. You will present your
research proposal in class and ultimately submit it as a written seminar thesis.
Level. Master
Prerequisites. You should have some basic knowledge of microeconomics and statistics.
Previous knowledge of game theory and experimental methods will be helpful but not
indispensable.
Educational Method. Seminar
Language. English
Goal. Learn to identify and conceptualize different forms of strategic interaction and derive
plausible and testable behavioral predictions making use of game theory and economic
experiments. Enhance your presentation skills and your scientific writing skills.
Assessment. Your final grade will be based on:
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Group presentation of a research topic (bonus points)
Presentation of your seminar thesis (20%)
Written seminar thesis (80%)
Registration. Email to [email protected] (until April 1) attaching a current grade
transcript and a brief CV. Please state Application SI-Seminar as email subject.
Capacity. 20 participants
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Dates.
April 21
Kick-off meeting
10:00 – 14:00
Room 2403
May 6
Topic presentations 1:
10:00 – 19:00
Room 2403
10:00 – 19:00
Room 2403
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May 13
Trust and Reciprocity
Cooperation and Punishment
Topic presentations 2:
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Coordination and Communication
Competition and Contests
June 2
Work-in-progress discussion+feedback
10:00 – 19:00
Room 2403 (in subgroups)
June 16
Thesis presentation 1
10:00 – 19:00
Room 2403
June 17
Thesis presentation 2
10:00 – 19:00
Room 2403
July 26
Deadline. Submission of seminar thesis
23:59
Email PDF document to
[email protected]
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Literature
A. Background Readings
1. Osborne, M. J. (2004). An introduction to game theory. New York: Oxford University
Press.
2. Gibbons, R. (1992). A primer in game theory. New York: Harvester Wheatsheaf.
3. Camerer, C. (2003). Behavioral game theory: Experiments in strategic interaction. Princeton,
NJ: Princeton University Press.
4. Friedman, D., & Sunder, S. (1994). Experimental methods: A primer for economists.
Cambridge, UK: Cambridge University Press.
5. Kagel, J. H., Roth, A. E., & Hey, J. D. (1995). The handbook of experimental economics.
Princeton, NJ: Princeton University Press.
B. Trust and Reciprocity
6. Abeler, J., Altmann, S., Kube, S., & Wibral, M. (2010). Gift Exchange and Workers'
Fairness Concerns: When Equality is Unfair. Journal of the European Economic
Association, 8(6), 1299-1324.
7. Bellemare, C., & Shearer, B. (2009). Gift giving and worker productivity: Evidence
from a firm-level experiment. Games and Economic Behavior, 67(1), 233-244.
8. Bohnet, I., Greig, F., Hermann, B., & Zeckhauser, R. (2008). Betrayal Aversion:
Evidence from Brazil, China, Oman, Switzerland, Turkey, and the United States.
American Economic Review, 98, 294-301.
9. Charness, G., & Dufwenberg, M. (2006). Promises and partnership. Econometrica,
74(6), 1579-1601.
10. Charness, G., Cobo-Reyes, R., Jiménez, N., Lacomba, J. A., & Lagos, F. (2012). The
hidden advantage of delegation: Pareto improvements in a gift exchange game.
American Economic Review, 102(5), 2358-2379.
11. Cohn, A., Fehr, E., & Goette, L. (2015). Fair wages and effort provision: Combining
evidence from a choice experiment and a field experiment. Management Science, 61(8),
1777-1794.
12. Falk, A., & Kosfeld, M. (2006). The Hidden Costs of Control. American Economic
Review, 96, 1611-1630.
13. Falk, A., & Zehnder, C. (2013). A city-wide experiment on trust discrimination.
Journal of Public Economics, 100, 15-27.
14. Fehr, E., & Goette, L. (2007). Do Workers Work More if Wages Are High? Evidence
from a Randomized Field Experiment. American Economic Review, 97(1), 298-317.
15. Fehr, E., & List, J. A. (2004). The hidden costs and returns of incentives—trust and
trustworthiness among CEOs. Journal of the European Economic Association, 2(5), 743771.
16. Fehrler, S., & Kosfeld, M. (2013). Can you trust the good guys? Trust within and
between groups with different missions. Economics Letters, 121(3), 400-404.
17. Gneezy, U., & List, J. A. (2006). Putting behavioral economics to work: Testing for
gift exchange in labor markets using field experiments. Econometrica, 74(5), 1365-1384.
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18. Kube, S., Maréchal, M. A., & Puppe, C. (2012). The currency of reciprocity: Gift
exchange in the workplace. American Economic Review, 102(4), 1644-1662.
19. Kugler, T., Bornstein, G., Kocher, M., & Sutter, M. (2007). Trust between Individuals
and Groups. Groups are Less Trusting than Individuals but Just as Trustworthy.
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20. Maximiano, S., Sloof, R., & Sonnemans, J. (2007). Gift Exchange in a Multi-Worker
Firm. The Economic Journal, 117(522), 1025-1050.
21. Maximiano, S., Sloof, R., & Sonnemans, J. (2013). Gift exchange and the separation
of ownership and control. Games and Economic Behavior, 77(1), 41-60.
C. Cooperation and Punishment
22. Bornstein, G., Kugler, T., & Ziegelmeyer, A. (2004). Individual and Group Decisions
in the Centipede Game. Are Groups More "Rational" Players? Journal of Experimental
Social Psychology, 40, 599-605.
23. Charness, G., & Villeval, M.-C. (2009). Cooperation and Competition in
Intergenerational Experiments in the Field and the Laboratory. American Economic
Review, 99(3), 956-978.
24. Chen, Y., Harper, F. M., Konstan, J., & Xin Li, S. (2010). Social Comparisons and
Contributions to Online Communities. A Field Experiment on MovieLens. American
Economic Review, 100(4), 1358-1398.
25. Fehr, E., & Gächter, S. (2000). Cooperation and Punishment in Public Goods
Experiments. American Economic Review, 90(4), 980-994.
26. Fehr, E., & Rockenbach, B. (2003). Detrimental Effects of Sanctions on Human
Altruism. Nature, 422, 137-140.
27. Fischbacher, U., & Gächter, S. (2010). Social Preferences, Beliefs, and the Dynamics
of Free Riding in Public Good Experiments. American Economic Review, 100(1), 541556.
28. Frey, B. S., & Meier, S. (2004). Social comparisons and pro-social behavior: Testing"
conditional cooperation" in a field experiment. American Economic Review, 94(5), 17171722.
29. Gächter, S., & Thöni, C. (2005). Social learning and voluntary cooperation among
like-minded people. Journal of the European Economic Association, 3(2-3), 303-314.
30. Gürerk, Ö., Irlenbusch, B., & Rockenbach, B. (2006). The Competitive Advantage of
Sanctioning Institutions. Science, 312, 108-111.
31. Güth, W., Levati, V. M., Sutter, M., & van der Heijden, E. (2007). Leading by
Example With and Without Exclusion Power in Voluntary Contribution
Experiments. Journal of Public Economics, 91, 1023-1042.
32. Henrich, J., McElreath, R., Barr, A., Ensminger, J., Barrett, C., Bolyanatz, A., . . .
Ziker, J. (2006). Costly Punishment across Human Societies. Science, 312(5781), 17671770.
33. Herrmann, B., Thöni, C., & Gächter, S. (2008). Antisocial punishment across
societies. Science, 319, 1362-1367.
34. Messer, K. D., Zarghamee, H., Kaiser, H. M., & Schulze, W. D. (2007). New hope for
the voluntary contributions mechanism: The effects of context. Journal of Public
Economics, 91(9), 1783-1799.
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35. Nikiforakis, N. (2008). Punishment and Counter-Punishment in Public Good Games:
Can We Really Govern Ourselves? Journal of Public Economics, 92, 91-112.
36. Olken, B. A. (2010). Direct democracy and local public goods: Evidence from a field
experiment in Indonesia. American Political Science Review, 104(02), 243-267.
D. Coordination and Communication
37. Keser, C., Ehrhart, K.-M., & Berninghaus, S. K. (1998). Coordination and local
interaction: experimental evidence. Economics Letters, 58(3), 269-275.
38. Berninghaus, S. K., & Ehrhart, K.-M. (1998). Time horizon and equilibrium selection
in tacit coordination games: Experimental results. Journal of Economic Behavior &
Organization, 37(2), 231-248.
39. Blume, A., & Ortmann, A. (2007). The effects of costless pre-play communication:
Experimental evidence from games with Pareto-ranked equilibria. Journal of Economic
Theory, 132(1), 274-290.
40. Bornstein, G., Gneezy, U., & Nagel, R. (2002). The effect of intergroup competition
on group coordination: An experimental study. Games and Economic Behavior, 41(1), 125.
41. Cason, T. N., Sheremeta, R. M., & Zhang, J. (2012). Communication and efficiency in
competitive coordination games. Games and Economic Behavior, 76(1), 26-43.
42. Charness, G. (2000). Self-serving cheap talk: A test of Aumann's conjecture. Games
and Economic Behavior, 33(2), 177-194.
43. Charness, G., & Grosskopf, B. (2004). What makes cheap talk effective?
Experimental evidence. Economics Letters, 83(3), 383-389.
44. Cooper, R., DeJong, D. V., Forsythe, R., & Ross, T. W. (1992). Communication in
coordination games. The Quarterly Journal of Economics, 739-771.
45. Crawford, V. P., Gneezy, U., & Rottenstreich, Y. (2008). The power of focal points is
limited: Even minute payoff asymmetry may yield large coordination failures.
American Economic Review, 1443-1458.
46. Devetag, G. (2005). Precedent transfer in coordination games: An experiment.
Economics Letters, 89(2), 227-232.
47. Keser, C., Ehrhart, K.-M., & Berninghaus, S. K. (1998). Coordination and local
interaction: experimental evidence. Economics Letters, 58(3), 269-275.
48. Krupka, E. L., & Weber, R. A. (2013). Identifying Social Norms Using Coordination
Games: Why Does Dictator Game Sharing Vary? Journal of the European Economic
Association, 11(3), 495-524.
49. Manzini, P., Sadrieh, A., & Vriend, N. J. (2009). On Smiles, Winks and Handshakes as
Coordination Devices. The Economic Journal, 119(537), 826-854.
50. Riechmann, T., & Weimann, J. (2008). Competition as a coordination device:
Experimental evidence from a minimum effort coordination game. European Journal of
Political Economy, 24(2), 437-454.
51. Schotter, A., & Sopher, B. (2003). Social learning and coordination conventions in
intergenerational games: An experimental study. Journal of Political Economy, 111(3),
498-529.
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E. Competition and Contests
52. Abbink, K., Brandts, J., Herrmann, B., & Orzen, H. (2010). Intergroup conflict and
intra-group punishment in an experimental contest game. American Economic Review,
420-447.
53. Bosch-Domenech, A., Montalvo, J. G., Nagel, R., & Satorra, A. (2002). One,
two,(three), infinity,...: Newspaper and lab beauty-contest experiments. American
Economic Review, 92(5), 1687-1701.
54. Castillo, M., Petrie, R., Torero, M., & Vesterlund, L. (2013). Gender differences in
bargaining outcomes: A field experiment on discrimination. Journal of Public Economics,
99, 35-48.
55. Eisenkopf, G. (2014). The impact of management incentives in intergroup contests.
European Economic Review, 67, 42-61.
56. Fallucchi, F., Renner, E., & Sefton, M. (2013). Information feedback and contest
structure in rent-seeking games. European Economic Review, 64, 223-240.
57. Gneezy, U., & Rustichini, A. (2004). Gender and competition at a young age.
American Economic Review, 94(2), 377-381.
58. Gneezy, U., Leonard, K. L., & List, J. A. (2009). Gender differences in competition:
Evidence from a matrilineal and a patriarchal society. Econometrica, 77(5), 1637-1664.
59. Gneezy, U., Niederle, M., & Rustichini, A. (2003). Performance in Competitive
Environments: Gender Differences. The Quarterly Journal of Economics, 1049-1074.
60. Kocher, M. G., & Sutter, M. (2005). The Decision Maker Matters: Individual Versus
Group Behaviour in Experimental Beauty-Contest Games. The Economic Journal,
115(500), 200-223.
61. Kocher, M., Strauß, S., & Sutter, M. (2006). Individual or team decision-making—
causes and consequences of self-selection. Games and Economic Behavior, 56(2), 259-270.
62. Leibbrandt, A., & Sääksvuori, L. (2012). Communication in intergroup conflicts.
European Economic Review, 56(6), 1136-1147.
63. Potters, J., De Vries, C. G., & Van Winden, F. (1998). An experimental examination
of rational rent-seeking. European Journal of Political Economy, 14(4), 783-800.
64. Sheremeta, R. M. (2010). Experimental comparison of multi-stage and one-stage
contests. Games and Economic Behavior, 68(2), 731-747.
65. Sutter, M. (2005). Are four heads better than two? An experimental beauty-contest
game with teams of different size. Economics Letters, 88(1), 41-46.
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