Holger A. Rau


"Simultaneous and Sequential Contributions to Step-Level Public Goods: One vs. Two Provision Levels"
with Hans-Theo Normann Download

Forthcoming in Journal of Conflict Resolution.

In a step-level public-good experiment, we investigate how the order of moves (simultaneous vs. sequential) and the number
of step levels (one vs. two) affects public-good provision in a two-player game. We find that the sequential order of moves
significantly improves public-good provision and payoffs, even though second movers often punish first movers who give less
than half of the threshold contribution. The additional second step level---which is not feasible in standard Nash equilibrium --
leads to higher contributions but does not improve public-good provision and lowers payoffs. We calibrate the parameters of
Fehr and Schmidt's (1999) model of inequality aversion to make quantitative predictions. We find that actual behavior fits
remarkably well with several predictions in a quantitative sense.

"The Disposition Effect and Loss Aversion: Do Gender Differences Matter?" Download

in Economics Letters 123, 2014, 33-36.

This paper analyzes gender differences in the disposition effect in an experiment based on Weber and Camerer (1998).
The results emphasize that female investors realize less capital losses, have significantly higher disposition effects
and are more loss averse than men.

"Do Women Behave More Reciprocally Than Men? Gender Differences in Real Effort Dictator Games"
with Matthias Heinz and Steffen Juranek   Download

in Journal of Economic Behavior & Organization 83, 2012, 105-110.

We analyze dictator allocation decisions in an experiment where the recipients  have to earn the pot to be divided with
a real-effort task. As the recipients move before the dictators, their effort decisions resemble the rst move in a trust game.
Depending on the recipients' performance, the size of the pot is either high or low. We compare this real-effort treatment
to a baseline treatment where the pot is a windfall gain and where a lottery determines the pot size. In the baseline
treatment, reciprocity cannot play a role. We find that female dictators show reciprocity and decrease their taking-rates signicantly
in the real-effort treatment. This treatment effect is larger when female dictators make a decision on recipients who successfully
generated a large pot compared to the case where the recipients performed poorly. By contrast, there is no treatment effect with
male dictators, who generally exhibit more selfish behavior.

"Does Ambiguity Aversion Survive in Experimental Asset Markets?"
with Sascha Füllbrunn and Utz Weitzel     Download

Journal of Economic Behavior & Organization 107B, 810-826.

Although a number of theoretical studies explain empirical puzzles in finance with ambiguity aversion, it is not a given that individual
ambiguity attitudes survive in markets. In fact, despite ample evidence of ambiguity aversion in individual decision making, most
studies find no or only limited ambiguity aversion in experimental financial markets, even when they exclude arbitrage. We argue
that ambiguity effects in markets depend on market feedback and on a sufficiently strong bias toward ambiguity among the
participants. Accordingly, we find significant ambiguity effects in low-feedback call markets for assets that provoke high ambiguity
aversion, but no ambiguity effects in high-feedback double auctions.

"Trust and Trustworthiness : A Survey of Gender Differences"  Download 

in Psychology of Gender Differences, 2012,  Sarah McGeowen (ed.) Sarah McGeown, New York:
Nova Science Publishers.

This article reviews papers about gender differences in trust and reciprocity.
The literature about experimental trust games finds striking gender differences in participants' reciprocal behavior.
Most papers report that female first movers in trust games trust less than male ones. In trust games there is ample evidence
that female second movers are more trustworthy than male ones. Interestingly it can be found that reciprocal behavior of
female decision makers is stronger in the environment of a real-effort task. The results of gift-exchange gender studies document
that female workers' are discriminated in the laboratory and receive smaller wages than men in a double-auction market.
In general there is a tendency in trust games that men trust more than women and women are more trustworthy than men.
A real-effort task furthermore amplifies these results. In gift-exchange games it can be found that female principals show higher
levels of reciprocity and female workers receive lower wages in some setups

Working Papers                                                                                                                           

"Minimizing Learning Behavior in Experiments with Repeated Real-Effort Tasks"
with Volker Benndorf and Christian Sölch     Download

In this paper, we introduce a new real-effort task which mitigates learning behavior in repeated real-effort tasks.
In our task, participants need to encode three-letter words into numbers. The task is based on Erkral et al. (2011), however,
in our version a double-randomization mechanism is applied to minimize learning. Existing experiments using repeated
real-effort tasks report an increase of 15-30% in subjects' performance in the course of the experiment. By contrast, we find
that when comparing performance in the first period with the last period, our task mitigates learning behavior down to 8%.
The difference between the first and second half of the experiment is only about 3%.

"Do Leniency Policies Facilitate Collusion? Experimental Evidence"
with Georg Clemens     Download

This paper analyzes non-discriminatory and discriminatory leniency policies in a multi-stage cartel formation experiment where
multiple ringleaders may emerge. Ringleaders often take a leading role in the coordination and formation of a cartel. A leniency
policy which grants amnesty to all "whistleblowers'' except for ringleaders may reduce the incentive to become a ringleader and
thus disrupt cartel formation. Although theory predicts that cartels will always be reported, whistleblowing rarely occurs.
Paradoxically we find that the discriminatory leniency policy induces more firms to become ringleaders, which ultimately
facilitates coordination in the cartel.

"How Competitiveness May Cause a Gender Wage Gap:
Experimental Evidence" with Matthias Heinz and Hans-Theo Normann     Download

We show that choices in competitive behavior may entail a gender wage gap. In our experiments, employees first choose a remuneration scheme
(competitive tournament vs. piece rate) and then conduct a real-effort task. Employers know the pie size the employee has generated,
the remuneration scheme chosen, and the employee's gender. Employers then decide how the pie will be split, as in a dictator game.
Whereas employers do not discriminate by gender when tournaments are chosen, they take substantially and significantly more from female employees
who choose piece-rate remuneration. A discriminatory wage gap occurs which cannot be attributed to employees' performance.

"Cartel Coordination and the Role of Payoff Asymmetries: Experimental Evidence on Partial Cartels"
with Georg Clemens    Download

This paper provides evidence on the coordination to partial cartels in the presence of payoff asymmetries.
Firms face a coordination challenge when a partial cartel is to be formed as every firm is better off if it is not inside the cartel
but is a free-riding outsider. We introduce a two-stage mechanism with communication which facilitates the formation of a cartel
and respectively allows the formation of a partial cartel. Although theory predicts three-firm cartels to occur we hardly find firms
coordinating to these cartels when communication is possible. Instead, in the communication treatments firms coordinate to
all-inclusive cartels which are always formed. Our control treatments emphasize that coordination problems occur when chat is absent.
Strikingly, firms seem to care about payoff asymmetries, i.e., partial cartels are frequently rejected out-of-equilibrium if outside firms
profit excessively from the formation of the cartel.

"The Disposition Effect in Team Investment Decisions: An Experimental Analysis"    Download

This paper experimentally compares the disposition effects of team and single investors. The effect builds on prospect theory
(Kahneman and Tversky, 1979) describing a phenomenon where investors predominantly sell stocks whose price is above the purchase price.
At the same time, capital losses are hardly sold. Weber and Camerer (1998) demonstrate in a controlled experiment with six stocks and
predetermined prices that individuals exhibit disposition effects in the laboratory. This paper extends this framework to a setup where two
investors can discuss their common trading actions without decision rule. The data shows that teams suffer psychological side effects for what
reason they exhibit stronger disposition effects and realize more capital gains and less capital losses than individuals. Teams' reluctance to sell
losses is caused by their perceived regret after stock-price decreases.

"Fariness and Learning in Multi-Employee Gift-Exchange Games: An Experimental Analysis"
with Volker Benndorf    Download

We compare Abeler et al.'s (2010) multi-employee gift-exchange game to a single-employee environment and find a twofold effect.
Under flexible wages, workers learn that higher effort pays off and exert more effort than in the single worker case.
Without wage discrimination, effort is crowded-out: it is substantially smaller than in the single-employee treatment.

Work in Progress                                                                                                                       

"Gender Differences in the Crowd-Out of Work Performance"
with Volker Benndorf and Christian Sölch

"On the Impact of Quotas and Decision Rules in Collective Bargaining"
with Robert Feicht, Veronika Grimm and Gesine Stephan

"The Impacts of Minimum Wages and Labor Unions on Work Performance"
with Katrin Köhler and Beatrice Pagel

"Self Reports in Multi-Employee Workplaces: Experimental Evidence"
with Veronika Grimm


Dr. Holger A. Rau

Assistant Professor of
Experimental Economics
E-Mail: holger.rau@uni-goettingen.de
web: http://www.uni-goettingen.de/rau

University of Göttingen
Platz der Göttinger Sieben 3
Room: 2.244 (Oeconomicum)
37073 Göttingen (Germany)
Fon: +49 (0)551 / 39-22281