Transcript An experimental analysis of the Tiebout’s model in a

Alessandro Innocenti
University of Siena
in collaboration with
Patrizia Lattarulo (IRPET) and Maria Grazia Pazienza (University of Firenze)
VII LABSI WORKSHOP ON BEHAVIORAL AND EXPERIMENTAL ECONOMICS,
SIENA 13-14 APRIL 2010
Many experimental economists seem to view their
enterprise as akin to silicon chip production.
Subjects are removed from all familiar contextual
cues. Like the characters 'thing one' and 'thing two'
in Dr. Suess' Cat in the Hat, buyers and sellers
become 'persons A and B', and all other
information that might make the situation familiar
and provide a clue about how to behave is
removed.
George Loewenstein (1999)
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The context-free experiment is an elusive goal and
not necessarily a good thing
Games in the laboratory are usually played without
labels but subjects inevitably apply their own labels
A major discovery of cognitive psychology is how
all forms of thinking and problem solving are
context-dependent (language comprehension)
The laboratory is not a socially neutral context, but
is itself an institution with its own formal or
informal, explicit or tacit, rules
Jones-Sudgen (2001)
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Wason’s selection task to test positive bias
confirmation: tendency, when testing an existing
belief, to search for evidence which could confirm
that belief, rather than for evidence which could
disconfirm it
Correct response is facilitated by adding thematic
content to the task, i.e. by providing a cover story
which accounts for the statement and gives some
point to the selection task
Aim: to extend previous experimental evidence on
travel mode choice by providing subject not only
with information acquired through personal
experience, but also with actual travel times of the
alternative non chosen travel modes
Key Findings:
 subjects show a marked preference for cars
 are inclined to confirm their first choices
 exhibit a low propensity to change travel mode
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Experimental literature on travel mode choice relies
widely on studies on route choice
Common object: coordination games, i.e. the
payoff each traveler can achieve is conditional on
her/his ability to diverge from or to converge with
other travelers’ choices
Selten et al. (2007), Ziegelmeyer et al. (2008),
Razzolini-Dutta (2009) provide laboratory
evidence that choices between route A and route B
generate Nash equilibria
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Evidence from the field shows that these learning
processes are affected by cognitive biases (Kareev et
al. 1997, Verplanken–Aarts 1999)
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To provide travelers with more accurate
information on actual travel times does not
necessarily increase their propensity to minimize
travel costs (Avineri-Prashker 2006)
Information is better processed when travelers lack
long-term experience on travel time distribution
(Ben Elia–Erev-Shiftan 2008)
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Cars are generally perceived as travel means giving
people the sensation of freedom and independence
The costs associated to car use are undervalued
because they not paid contextually with car use
Pollution or social costs due to car accidents are often
neglected and not easily computable
These factors explain the presence of a general
propensity to use private cars and of a psychological
resistance to reduce it
Van Vugt et al. 1995, Tertoolen et al. 1998, Bamberg et al. 2003
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62 undergraduate students (31 women and 31
men) from the University of Firenze
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Computerized experiment
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Between subject
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Each session lasted approximately an hour
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Average earnings 18.4 euro
1) Choice between car or metro
Metro travel costs are fixed, while car costs are
uncertain and determined by the joint effect of
casual events and traffic congestion
2) Choice between car or bus
Car and bus are both uncertain and determined by
the combination of casual events and traffic
congestion.
Travelers’ utility only depends on travel times,
which are converted in monetary costs. After each
choice, subjects are informed of actual times of
both available modes, but not of the probability
distributions determining casual events
Table 2 Experimental parameters made known to subjects
Treatment
Car Expected
Time Travel
(in minutes)
Car Fixed
Cost
Metro / Bus
Expected Time
Travel
Metro / Bus
Fixed Cost
Metro vs. Car
25
1.5
30
1.0
Bus 1.0 vs. Car
27
1.5
32
1.0
Bus 0.8 vs. Car
27
1.5
32
0.8
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Metro Car treatment- the expected total costs of
car and metro were equivalent if the share of car
users was not greater than 55%;
Bus 1.0 Car treatment - the expected total costs of
car and bus were equivalent if the share of car
users was not greater than 55%;
Bus 0.8 Car treatment- the expected total cost of
the bus was 20% lower than car expected total
costs if the share of car users was not greater than
55%.
Table 8 Proportion of car choices by treatment (each five periods)
Period
1
5
10
15
20
25
30
35
40
45
50
Total
Metro
0.70
0.67
0.60
0.57
0.57
0.77
0.67
0.70
0.60
0.67
0.73
0.68
Bus 1.0
0.60
0.67
0.47
0.67
0.53
0.53
0.73
0.60
0.53
0.60
0.53
0.58
Bus 0.8
0.59
0.35
0.35
0.47
0.53
0.41
0.71
0.71
0.53
0.53
0.53
0.50
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The first choice effect decreases the propensity to
change travel mode
Only 28.6% of the subjects in the metro treatment
and 39% of the subjects in the bus treatments
change more than 20 times over 50 periods.
On average, subjects change mode 17.7 times in
the metro treatment and 18.0 times in the bus
treatments
Travel mode choice is significantly affected by
heuristics and biases that lead to robust deviations
from rational behaviour
Travelers choose modes using behavioural rules that
do not necessarily involve the minimization of total
travel costs.
Subjects show a marked preference for cars, are
inclined to confirm their first choice and exhibit a low
propensity to change travel mode.
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In repeated travel mode choice, available information
is not properly processed, cognitive efforts are
generally low and rational calculation play a limited
role
The habit of using cars should be assumed to be
relatively resistant, to the effect of economic
incentives
Little progress can be expected by asking travelers to
voluntarily reduce the use of a car or even by
subsidizing public transport costs
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One of the basic tenets of laboratory methodology
is that the use of non-professional subjects and
monetary incentives allows making subjects’ innate
characteristics largely irrelevant
In our experiment, it is as if subjects take into the
lab the preferences applied to real choices and
stick to them with high probability
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This inclination to prefer cars tends to override the
incentives effect
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Labels give subjects clues to become less and not
more rational
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Internal validity - ability to draw confident causal
conclusions from one's research
External validity - ability to generalise from the
research context to the settings that the research is
intended to approximate
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Experiments have the reputation of being high in
internal validity but low in external validity
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Field studies of being low in internal validity but
high in external validity
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In our experiment, subjects’ behavior depends
more on prior learning outside the laboratory than
on expected gains in the laboratory
Labels have the power to increase external validity
with a minimal sacrifice of the internal validity
To test learning and cognitive models, it is
necessary to remind and to evoke contexts which
may activate emotions, association, similarities in
the laboratory