Experimental Economics

There have recently been novel applications of medical systematic review guidelines to economic policy interventions which contain controversial methodological assumptions that require further scrutiny. A landmark 2017 Cochrane review of unconditional cash transfer (UCT) studies, based on the Grading of Recommendations Assessment, Development and Evaluation (GRADE), exemplifies both the possibilities and limitations of applying medical systematic review guidelines to UCT and universal basic income (UBI) studies. Recognizing the need to upgrade GRADE to incorporate the differences between medical and policy interventions, (...) the GRADE Public Health Project Group (PHPG) was convened to enumerate and address these methodological challenges. However, in light of our analysis of additional methodological challenges that arise for UCT and UBI studies, we argue that the adaptation of medical systematic review guidelines to economic methodology is far from straightforward and is in fact more challenging than claimed by the PHPG. (shrink)

The article focuses on the study of specific characteristics of seaports development under conditions of digitalization. The article aims to study features of the development of the international seaport under digitalization to implement the best achievements in Ukraine. The main research method was a systemic-structural approach used to examine seaport digitalization as a part of a logistics chain, including horizontal and vertical links between its elements. To achieve an effective digital transformation, we also used the above method. It helped to (...) study how the factors determined during the study of international practices and possible innovations influence the object under study. The practices, which are of interest for Ukraine and other developing countries, were identified based on the international experience in seaports development under digitalization. The main strategic directions for the digital transformations of the above infrastructural objects were suggested. They involve increasing seaport competitiveness and their effectiveness in the framework of the international transport system. The directions are of interest for public authorities of the governmental and regional levels (while establishing the digitalization policy in the area of sea transport) and the port administrations (while making justified strategic decisions for their development). (shrink)

Discussions of the non-identity problem presuppose a widely shared intuition that actions or policies that change who comes into existence don't, thereby, become morally unproblematic. We hypothesize that this intuition isn’t generally shared by the public, which could have widespread implications concerning how to generate support for large-scale, identity-affecting policies relating to matters like climate change. To test this, we ran a version of the well-known dictator game designed to mimic the public's behavior over identity-affecting choices. We found the public (...) does seem to behave more selfishly when making identity-affecting choices, which should be concerning. We further hypothesized that one possible mechanism is the notion of harm the public uses in their decision-making and find that substantial portions of the population seem to each employ distinct notions of harm in their normative thinking. These findings raise puzzling features about the public’s normative thinking that call out for further empirical examination. (shrink)

The European Union (EU) has been experiencing an unprecedented energy crisis for the last 50 years, with severe economic, social and political consequences. Rising energy demand, extreme weather events (unprecedented heat and long winters), disruptions in supply chain and poor regional and global reserves have all contributed to the current energy crisis in the EU. Prices on natural gas in the EU are rising as demand around the world increases. Prices on the gas rose by more than 800 percent year-on-year (...) and prices on the electricity by about 500 percent. Rising prices on gas are due to low stocks in European storage facilities and pressure from Russia, which is trying to speed up the launch of the Nord Stream-2 pipeline. Also in the EU, there is reduction the production of coal and natural gas, reducing the capacity of wind farms. As natural gas plays a significant role in shaping the prices on electricity, electricity has also risen in price. As prices on gas is rose, prices on oil and coal is rose significantly. Demand for energy consumption has also increased due to weather conditions – cold winters and periods of abnormal heat in summer. The largest consumers of gas and electricity in the EU are suffering heavy losses due to rising prices on energy. Industrial giants have begun to cut production, threatening economic recovery. The world economy is recovering from the crisis caused by the coronavirus pandemic, and the EU countries are increasingly in need of energy for industry and the population. An unbalanced transition to renewable energy has become a particular problem for the EU. Calmer weather this year has led to lower energy production using wind turbines. And old European nuclear power plants are gradually being decommissioned. Green energy is not able to cover all needs, so the continent has risen sharply demand on gas. All the above-mentioned problems have certainly affected the further ensure energy security of the EU and require the developing of appropriate mechanisms to overcoming current challenges. (shrink)

The problem of corruption in Ukraine has been examined, as well as Blockchain technology application feasibility in combating the phenomenon has been analyzed in the article. Blockchain instrumental features and properties, making the technology unique and determining its potential applications in many sectors of the economy, have been covered with much attention. The authors have analyzed both advantages and obstacles for a distributed data registry implementation. Analysis of benchmarks and application of the best practices of Blockchain technology in the public (...) sector, including the fiscal process, have been presented in the study. Profound interest in exploring the technology feasibility has been emphasized on the part of the world's leading governments. Information on pilot Blockchain projects in the public sector of Ukraine has been presented. The article focuses on the fact that alongside with the technology area and ways of scaling its application, a new era of digital society development is emerging. (shrink)

Game theorists tend to model climate negotiations as a so-called ‘tragedy of the commons’. This is rather worrisome, since the conditions under which such commons problems have historically been solved are almost entirely absent in the case of international greenhouse gas emissions. In this paper, I will argue that the predictive accuracy of the tragedy model might not stem from the model’s inherent match with reality but rather from the model’s ability to make self-fulfilling predictions. I then sketch some possible (...) ways to dispel the tragedy, including (1) recognizing some ways the assumptions of the model fail, (2) taking seriously recent work suggesting that increasing greenhouse gas emissions is not in most nations’ own self-interest, and (3) preferring alternative models like collective risk dilemmas, bargaining games, or cooperative models. (shrink)

According to what I call the ‘argument from public bads’, if a researcher deceived subjects in the past, there is a chance that subjects will discount the information that a subsequent researcher provides, thus compromising the validity of the subsequent researcher’s experiment. While this argument is taken to justify an existing informal ban on explicit deception in experimental economics, it can also apply to implicit deception, yet implicit deception is not banned and is sometimes used in experimental economics. Thus, experimental (...) economists are being inconsistent when they appeal to the argument from public bads to justify banning explicit deception but not implicit deception. (shrink)

Neuroeconomics is a research programme founded on the thesis that cognitive and neurobiological data constitute evidence for answering economic questions. I employ confirmation theory in order to reject arguments both for and against neuroeconomics. I also emphasize that some arguments for neuroeconomics will not convince the skeptics because these arguments make a contentious assumption: economics aims for predictions and deep explanations of choices in general. I then argue for neuroeconomics by appealing to a much more restrictive (and thereby skeptic-friendly) characterization (...) of the aims of economics. (shrink)

There is a long-standing debate in philosophy about whether it is morally permissible to harm one person in order to prevent a greater harm to others and, if not, what is the moral principle underlying the prohibition. Hypothetical moral dilemmas are used in order to probe moral intuitions. Philosophers use them to achieve a reflective equilibrium between intuitions and principles, psychologists to investigate moral decision-making processes. In the dilemmas, the harms that are traded off are almost always deaths. However, the (...) moral principles and psychological processes are supposed to be broader than this, encompassing harms other than death. Further, if the standard pattern of intuitions is preserved in the domain of economic harm, then that would open up the possibility of studying behavior in trolley problems using the tools of experimental economics. We report the results of two studies designed to test whether the standard patterns of intuitions are preserved when the domain and severity of harm are varied. Our findings show that the difference in moral intuitions between bystander and footbridge scenarios is replicated across different domains and levels of physical and non-physical harm, including economic harms. (shrink)

Focusing on the work of Friedrich von Hayek and Vernon Smith, we discuss some conceptual links between Austrian economics and recent work in behavioral game theory and experimental economics. After a brief survey of the main methodological aspects of Austrian and experimental economics, we suggest that common views on subjectivism, individualism, and the role of qualitative explanations and predictions in social science may favour a fruitful interaction between these two research programs.

A framing effect occurs when an agent's choices are not invariant under changes in the way a decision problem is presented, e.g. changes in the way options are described (violation of description invariance) or preferences are elicited (violation of procedure invariance). Here we identify those rationality violations that underlie framing effects. We attribute to the agent a sequential decision process in which a “target” proposition and several “background” propositions are considered. We suggest that the agent exhibits a framing effect if (...) and only if two conditions are met. First, different presentations of the decision problem lead the agent to consider the propositions in a different order (the empirical condition). Second, different such “decision paths” lead to different decisions on the target proposition (the logical condition). The second condition holds when the agent's initial dispositions on the propositions are “implicitly inconsistent,” which may be caused by violations of “deductive closure.” Our account is consistent with some observations made by psychologists and provides a unified framework for explaining violations of description and procedure invariance. (shrink)

The usage of Randomised Evaluations(REs) in social inquiry has been recent and responses to them have been wide ranging.RE seek to make predictions on the impact of an intervention, when it is attempted in a new situation. REs work by first determining the impact of the intervention. Subsequently, for the new situation it is expected that the impact would be similar. -/- The problem of induction poses one of the most serious challenges to the epistemological status of RE claims as (...) the value of REs themselve stem from their predictive validity. If the problem of induction is not solved or evaded then belief in projections based on REs is undermined. -/- In this paper, I argue that the unique methodology of REs used in Social Sciences allows itself to evade the problem the successfully, warranting belief that future interventions would have similar impact. (shrink)