Andreas Ortmann

• Professor at UNSW Sydney

Luckman et al. (2018) experimentally tested the conjecture that a single model of risky intertemporal choice can account for both risky and intertemporal choices, and under the conditions of their experiment, found evidence supporting it. Given the existing literature, that is a remarkable result which warrants (conceptual) replication. Luckman et...

Objectives To systematically review studies eliciting monetary value of a statistical life (VSL) estimates within, and across, different sectors and other contexts; compare the reported estimates; and critically review the elicitation methods used. Methods In June 2019, we searched the following databases to identify methodological and empirical s...

We consider a two-layered review system of environmental regulation where a polluting firm periodically self-reports its emissions to a regulatory authority. The system typically requires a third party to verify the firm’s report and, in addition, an official of the regulatory authority to spot-check. If there are potential gains from corruption, b...

We review Transportation Demand Management strategies through the conceptual lens of Behavioural Economics, focussing on non-pricing (behavioural) interventions often known as nudges. We identify promising precedents, evaluate their impact and stability, and nominate strategies that might be applicable in the Melbourne context.

This paper reviews the preconditions for successful applications of Experimental Economics methods to research on transportation problems, as new transportation and research technologies emerge. We argue that the application of properly designed incentives, the hallmark of Experimental Economics, provides a high degree of experimental control, lead...

Policymakers worldwide have proposed a new contract - the 'social impact bond' (SIB) - which they claim can allay the underperformance afflicting not-for-profits, by tying the private returns of (social) investors to the success of social programs. We investigate experimentally how SIBs perform in a first-best world, where investors are rational an...

Self-regulatory organizations (SROs) can be found in education, healthcare, and other not-for-profit sectors as well as in the accounting, financial, and legal professions. DeMarzo et al. (2005) show theoretically that SROs can create monopoly market power for their affiliated agents, but that governmental oversight, even if less efficient than ove...

The present article builds on a background paper that was commissioned for a “witness seminar” in 2010 that had a dozen prominent experimental economists—witnesses, indeed—discuss the origin and evolution of experimental economics. Rather than providing a history of the experimental method in the behavioral science (with particular emphasis on thos...

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The Allais Paradox, or Common Consequence Effect to be precise, is one of the most wellknown behavioral regularities in individual decision making under risk. A common perception in the literature, which motivated the development of numerous generalized non‐expected utility theories, is that the Allais Paradox is a robust empirical finding. We argu...

Analyzing the rhetorical structure of The Wealth of Nations (Smith WN) and its context, we make the case for the central importance of its Book V, "Of the Revenue of the Sovereign or Commonwealth”, which tends to be neglected in most accounts of Smith’s oeuvre (even, most recently, Phillipson 2010; see Ortmann & Walraevens 2014) but which in our re...

The present article builds on a background paper that was commissioned for a “Witness Seminar” in 2010 that had a dozen prominent experimental economists -- witnesses, indeed -- discuss the origin and evolution of experimental economics. Rather than providing a history of the experimental method in the behavioral science (with particular emphasis o...

Null Hypothesis Significance Testing has been widely used in the experimental economics literature. Typically, attention is restricted to type-I-errors. We demonstrate that not taking type-II errors into account is problematic. We also provide evidence, for one prominent area in experimental economics (dictator game experiments), that most studies...

Plott, Wit & Yang (2003) conduct a betting market experiment and find: First, information was aggregated. This suggests that traders updated their private information based on observed market odds. Second, a model based only on the use of private information seems to fit their data best. The authors call this paradoxical. Because the original data...

The effect of past experiences and actions in shaping current perceptions, emotions, decisions and goals is widely recognized in the psychological literature. When it comes to economic decisions, however, these influences are sometimes seen as impediments to rational decision-making. In an attempt to explore the enduring consequences of the past, w...

To discuss experimental results without discussing how they came about makes sense when the results are robust to the way experiments are conducted. Experimental results, however, are – arguably more often than not – sensitive to numerous design and implementation characteristics such as the use of financial incentives, deception, and the way infor...

The following is a set of reading notes on, and questions for, the Neuroeconomics enterprise. My reading of neuroscience evidence seems to be at odds with basic conceptions routinely assumed in the Neuroeconomics literature. I also summarize methodological concerns regarding design, implementation, and statistical evaluation of Neuroeconomics exper...

We study the effects of loaded instructions in a bribery experiment. We find a strong gender effect: men and women react differently to real-world framing. The treatment effect becomes significant once we allow for genderspecific coefficients. Our paper contributes to the (small) literature on experimental tests of (anti-)corruption measures and ad...

The prisoner's dilemma (PD) is played by two players in each of two groups. The two groups compete for an external prize whose allocation is determined by the degree of within-group coordination. The experimental evidence supports the predictions of multilevel game theory well.

Cheap talk is shown to facilitate coordination on the unique efficient equilibrium in experimental order-statistic games. This result is roughly consistent with theoretical predictions according to which cheap talk promotes efficient Nash play. The evidence concerning the mechanisms that theory appeals to is mixed: Frequent agreement of messages an...

Traditionally, enforcement of consumer protection laws meant to provide quality assurance of goods and services was considered a responsibility of the state in its various guises. Unfortunately, enforcement is an expensive, and hence particularly problematic proposition in transition economies that have many competing demands on their very scarce r...

In this paper we address an asymmetric information problem in the fundraising industry, the fundraising problem. The problem arises from donors’ lack of information about the quality of charities that solicit donations. We focus on one particular solution of this problem, certification, where an independent agency provides a costly signal, a certif...

We study the conditions under which it is rational for a representative entrepreneur to start a nonprofit firm. Taking as point of departure a model of entrepreneurial choice proposed by Glaeser and Shleifer (2001), we analyze consequences of weak enforcement of the non-distribution constraint on entrepreneurial choice and price and quality of the...

Corruption and corruptibility - due to their illegal and therefore secretive nature - are difficult to be assessed either with traditional tools, such as hard data on criminal convictions or soft data elicited through opinion polls, questionnaires, or case studies. While there seems to be agreement nowadays that corruption does have a negative impa...

The author presents a brief classroom demonstration illustrating Bertrand price undercutting. The demonstration is appropriate for micro principles and intermediate- and upper-level undergraduate classes, as well as graduate classes in micro, industrial organization, and game theory.

The results of standard lab experiments have long been questioned because of the convenience samples of subjects they typically employ and the abstract nature of the lab settings. These two characteristics of experimental economics, it is argued, are the key factors that endanger the external validity of experiments. Researchers have tried to addre...

A collection of carefully selected contributions to behavioral economics from some of the leading international scholars in the field. Designed to fully complement Volume One, topics covered include preferences, behavioral game theory, motivated mental states and emotions and decision making.

The author presents a brief classroom demonstration illustrating Bertrand price undercutting. The demonstration is appropriate for micro principles and intermediate- and upper-level undergraduate classes, as well as graduate classes in micro, industrial organization, and game theory.

Murray Rothbard's posthumous Economic Thought Before Adam Smith is notable for its vilification of 'the quiet Scottish professor.' While there is little disagreement that Smith was, at best, an ambivalent champion of free markets, Rothbard's indictment of him as a proto-Marxist is less than persuasive. We argue that Rothbard's book suffers from log...

The author presents a brief classroom demonstration illustrating Bertrand price undercutting. The demonstration is appropriate for micro principles and intermediate- and upper-level undergraduate classes, as well as graduate classes in micro, industrial organization, and game theory.

With about two initial public offerings per year, the number of publicly traded degree-granting providers of post-secondary education in the United States has grown steadily ever since the Apollo Group (University of Phoenix, College of Financial Planning, etc.) went public in December 1994. To sell to investors ownership in companies that compete...

We provide a game-theoretic model of academic organizations, focusing on the strategic interaction of prototypical overseers, administrators, and professors. By identifying key principal-agent games routinely played in colleges and universities, we begin to unpack the black box typically used to conceptualize these institutions. Our approach sugges...

Berg et al. (Games and Economic Behavior, 10, pp. 122–142, 1995) study trust and reciprocity in an investment setting. They find significant amounts of trust and reciprocity and conclude that trust is a guiding behavioral instinct (a “primitive†in their terminology). We modify the way information is presented to participants and, through a qu...

In modern New Institutional Theory of Economics the concept of the “homo oeconomicus” is recognized as bounded rational and opportunistic. Bounded rationality leads to high costs for individuals who try to be completely informed. In particular, informational asymmetries in transaction processes and the resulting possibilities for opportunistic beha...

We implement a prisoner’s dilemma-type game in the laboratory to study whether men and women have different cooperation rates, and whether they respond differently to experiences in previous rounds. We find that women cooperate significantly more than men in the first round; this difference disappears by the last round. We attribute the latter resu...

Adam Smith's discussion of the payment modes of teachers and their consequences for the quality of teaching and the process of curricular innovation are reviewed through the conceptual lenses of modern agency theory. Smith's analysis of higher education in his day sheds light on incentive problems that currently afflict higher education and provide...

This article examines the trust hypothesis: the claim that asymmetric information can explain the existence of non-profit enterprise in certain markets. We argue that this hypothesis, in order to be viable, has to meet three challenges: ‘reputational ubiquity’, ‘incentive compatibility’ and ‘adulteration’. Drawing on modern agency theory, we conclu...

In this note we describe a simple, flexible and instructive moral hazard experiment. It can be used in a variety of classes, including principles classes, to illustrate the basic incentive conflicts in principal-agent interactions, the importance of information, and the power of reputational enforcement. (JEL A2, C7)

In this note, the authors describe a simple, flexible, and instructive moral hazard experiment. It can be used in a variety of classes, including principles classes, to illustrate the basic incentive conflicts in principal-agent interactions, the importance of information, and the power of reputational enforcement. Copyright 1997 by Oxford Universi...

Established economic theories of nonprofit organizations are incomplete. They tend to treat nonprofits as a black box; in other words, they do not address the severe incentive problems that can and do arise within nonprofit organizations and that undermine the main building block of traditional theories of nonprofits-the nondistribution constraint....

Building on an analysis of Adam Smith's enumeration of five classes of passions, we show that self-command in his Theory of Moral Sentiments (TMS) can be modeled as a game whose structure is identical to endogenous quality or reputation models. While acknowledging Smith's views on the evolutive nature of the general rules of morality (as well as th...

We use a dynamical systems approach to model the origin of bargaining conventions and report the results of a symmetric bargaining game experiment. Our experiment also provides evidence on the psychological salience of symmetry and efficiency. The observed behavior in the experiment was systematic, replicable, and roughly consistent with the dynami...

I present a brief classroom demonstration of the difference between Dutch and English auctions. The classroom demonstration is appropriate for micro principles as well as intermediate and upper classes in micro, Industrial Organization, and Game Theory.

We propose a general equilibrium model of endogenous growth in which human capital investment is the engine of growth. Within that model we analyze the potential role of e-learning in the elimination of the human capital bootstrapping problem so typical for transition economies. We Þnd that e-learning can indeed speed up convergence to the frontier...

In this chapter we examine the trust hypothesis: the proposition that information asymmetries between providers and consumers of services can explain the existence of nonprofit enterprise in certain markets. We argue that this hypothesis, in order to be viable, has to meet three challenges: (1) the de jure inability of nonprofits to distribute prof...

Abstract Corruption has been identified as a major impediment to growth, either directly through welfare-reducingrent-seeking and/or the taxation-like nature of bribes or indirectly through the lack of trust that it engenders in producers, consumers, citizens, tourists, and foreign investors (e.g., Zak & Knack 2001). By all accounts corruption (e.g...

Typescript (photocopy). Thesis (Ph. D.)--Texas A & M University, 1991. Vita. Includes bibliographical references. "Major subject: Economics."

Thesis (M.A.)--University of Georgia, 1987. Directed by Donald Keenan. Includes bibliographical references (leaves 74-80).

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This paper examines the social effects of fair trade transactions emerging from policies to expand the market around the globe. Focusing on the case of coffee farmers in Guatemala, it examines tensions that are created in local organisational networks linked to production, processing and certification of fair trade organic coffee and how these tens...