Date of Award

Spring 5-15-2010

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Dr. James C. Cox - Committee Chair - jccox@gsu.edu

Second Advisor

Dr. Vjollca Sadiraj - Committee Member - vsadiraj@gsu.edu

Third Advisor

Dr. Ragan A. Petrie - Committee Member - rpetrie1@gmu.edu

Fourth Advisor

Dr. Lucy F. Ackert - Committee Member - lackert@kennesaw.edu

Abstract

This dissertation comprises three essays. The unifying theme is experiments used as the empirical methodology. Each essay is an independent study, but aspects of behavior related to cooperation, trust, and entitlement are present in each essay. The first essay looks at the efficiency-equality tradeoff of increasing redistribution in a small group setting. Subjects generate a stronger sense of entitlement to their labor earnings by performing a real effort task. Subjects must trust other members of their group to work in order to keep labor a profitable activity under higher levels of redistribution. We find a significant efficiency-equality tradeoff explained by lowered work incentives. Labor supply decisions also show strategic and cooperative behavior similar to behavior found in public goods experiments. The efficiency-equality tradeoff calls for a reconsideration of increasing dependence on the public sector for charity provision. The second essay investigates how the application of a role-reversal protocol affects behavior in cooperative games. Subjects play all possible player roles in the game under a role-reversal protocol. We test if behavior results from a two-role trust game are robust to applying a role-reversal protocol. We find that paying subjects for one role leads to no significant role-reversal effect whereas previous studies paying for both roles find reductions in generosity in both roles. The third essay is co-authored with Dr. James C. Cox. We test for differences in trust-related behavior under private and common property environments. Subjects participate in payoff equivalent 2-person Private Property Trust Game or Common Property Trust Game. We strengthen property right entitlements by asking subjects perform a real effort task to earn their private or common property endowments. Strengthening entitlements leads to behavioral differences in the two trust games not previously found. We find second mover generosity in response to first mover decisions is lower in the Common Property Trust Game. Second movers are relatively less generous because first movers overturn the status quo opportunity set which is most generous and signals “full trust.” Many first movers anticipate this and respond optimally by choosing extremes which signal “full trust” or “no trust” in the game.

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