Error-Prone Inference from Response Time: The Case of Intuitive Generosity in Public-Good Games

37 Pages Posted: 12 Mar 2018  

Maria P. Recalde

The University of Melbourne

Arno Riedl

Maastricht University; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Lise Vesterlund

University of Pittsburgh - Department of Economics

Date Written: February 28, 2018

Abstract

Previous research on public-good games revealed greater contributions by fast decision-makers than by slow decision-makers. Interpreting greater contributions as generosity, this has been seen as evidence of generosity being intuitive. We caution that fast decisions are more prone to error, and that mistakes, rather than preferences, may drive the observed comparative static. Varying the location of the equilibrium in public-good games with a unique dominant strategy, we show that the location of the equilibrium determines whether contributions are larger for fast decision-makers than for slow decision-makers. Replicating previous results, we find that fast decision-makers give more than slow decision-makers when the equilibrium is below the mid-point of the strategy set, but that this result is reversed when the equilibrium is above the mid-point. Consistent with fast decisions being more prone to error, we find that individuals who make (or have to make) fast decisions are insensitive to incentives, more often make mistakes, and are less likely to make equilibrium contributions. These findings make clear that we must control for the rate of errors if we are to draw inference on preferences from response time.

Keywords: Response time, preference inference, error, generosity, public good game

JEL Classification: C91, C92, D01, D03, H41

Suggested Citation

Recalde, Maria P. and Riedl, Arno and Vesterlund, Lise, Error-Prone Inference from Response Time: The Case of Intuitive Generosity in Public-Good Games (February 28, 2018). Journal of Public Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3136472

Maria P. Recalde

The University of Melbourne ( email )

185 Pelham Street, Carlton, Victoria 3053
Melbourne, Victoria 3010
Australia

Arno M. Riedl (Contact Author)

Maastricht University ( email )

Department of Economics (AE1)
P.O. Box 616
Maastricht, 6200 MD
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Lise Vesterlund

University of Pittsburgh - Department of Economics ( email )

4T18 WW Posvar. Hall
Pittsburgh, PA 15260
United States

HOME PAGE: http://www.econ.iastate.edu/faculty/vesterlund/

Register to save articles to
your library

Register

Paper statistics

Downloads
21
Abstract Views
64
PlumX