Abstract
Considering the expanding usage of experiments in Economics, the present article chooses one published paper in the area, dealing with the house money effect, and analyzes it in a didactic way as concepts relating to the experimental design of lab experiments are evoked and discussed. In order to do so, three sections are outlined. First of all, the house money effect is explained and the article under scrutiny is placed in the context of what had already been done before; secondly, some of the experimental design concepts are summarised and then applied to soundly describe the experimental design of their experiment. Finally, after briefly presenting their results, there is an analytical overview of what has been done after their work and a personal take on possible lines for further research.
Keywords
- Experimental Economics Search this journal for Experimental Economics (opens in a new tab)
- Experimental Design Search this journal for Experimental Design (opens in a new tab)
- Methodology Search this journal for Methodology (opens in a new tab)
- House Money Effect Search this journal for House Money Effect (opens in a new tab)
References
- Binswanger, H. P. (1980). Attitudes toward risk: Experimental measurement in Rural India. American Journal of Agricultural Economics, 62, 395-407. DOI: https://doi.org/10.2307/1240194
- Brandts, J. & Charness, G. (2000). Hot vs. cold: Sequential responses and preference stability in experimental games. Experimental Economics, 2, 227-238. DOI: https://doi.org/10.1023/A:1009962612354
- Brandts, J. & Charness, G. (2011). The strategy versus the direct-response method: a first survey of experimental comparisons. Experimental Economics, 14, 375-398. DOI: https://doi.org/10.1007/s10683-011-9272-x
- Camerer, C. & Mobbs, D. (2017). Differences in behavior and brain activity during hypothetically and real choices. Trends in Cognitive Sciences, 21, 46-56. DOI: https://doi.org/10.1016/j.tics.2016.11.001
- Cárdenas, J. C., Roux, N. D., Jaramillo, C. R. & Martinez, L. R. (2014). Is it my money or not? An experiment on risk aversion and the house-money effect. Experimental Economics, 17, 47-60. DOI: https://doi.org/10.1007/s10683-013-9356-x
- Carlsson, F., He, H. & Martinsson, P. (2013). Easy come easy go: The role of windfall money in lab and field experiments. Experimental Economics, 16, 190-207. DOI: https://doi.org/10.1007/s10683-012-9326-8
- Charness, G., Gneezy, U. & Halladay, B. (2016). Experimental methods: Pay one or pay all. Journal of Economic Behavior & Organization, 131, 141-150. DOI: https://doi.org/10.1016/j.jebo.2016.08.010
- Clark, J. (2002). House money effects in public good experiments. Experimental Economics, 5, 223-231. DOI: https://doi.org/10.1023/A:1020832203804
- Clot, S., Grolleau, G. & Ibanez, L. (2018). Shall we pay all? An experimental test of random incentivized systems. Journal of Behavioral and Experimental Economics, 73, 93-98. DOI: https://doi.org/10.1016/j.socec.2018.01.004
- Crosetto, P. & Filippin, A. (2013). The “bomb” risk elicitation task. Journal of Risk and Uncertainty, 47, 31-65. DOI: https://doi.org/10.1007/s11166-013-9170-z
- Dankováa, K. & Servátka, M. (2015). The house money effect and negative reciprocity. Journal of Economic Psychology, 48, 60-71. DOI: https://doi.org/10.1016/j.joep.2015.02.007
- Davis, L. R., Joyce, B. P. & Roelofs, M. R. (2010). My money or yours: house money payments effects. Experimental Economics, 13, 189-205. DOI: https://doi.org/10.1007/s10683-010-9235-7
- Eber, N. & Willinger, M. (2012). L'économie expérimentale. La Découverte. DOI: https://doi.org/10.3917/dec.eber.2012.01
- Frino, A., Grant, J. & Johnstone, D. (2008). The house money effect and local traders on the Sydney Futures Exchange. Pacific-Basin Finance Journal, 16, 8-25. DOI: https://doi.org/10.1016/j.pacfin.2007.04.002
- Gneezy, U. & Potters, J. (1997). An experiment on risk-taking and evaluation periods. Quarterly Journal of Economics, 112, 631-645. DOI: https://doi.org/10.1162/003355397555217
- Hackinger, J. (2016). Not all income is the same to everyone: Cognitive ability and the house money effect in public goods games. SSRN. DOI: https://doi.org/10.2139/ssrn.2786603
- Holt, C. A. & Laury, S. K. (2002). Risk aversion and incentive effects. American Economic Review, 92, 1644-1655. DOI: https://doi.org/10.1257/000282802762024700
- Hvidey, H. K., Leez, J. H. & Odeanx, T. (2019). Easy money, cheap talk, or spuds: Inducing risk aversion in economics experiments. SSRN. DOI: https://doi.org/10.2139/ssrn.3433380
- Jacquemet, N. & L'Haridon, O. (2018). Experimental Economics: Method and Applications. Cambridge University Press. DOI: https://doi.org/10.1017/9781107446786
- Rosenboim, M. & Shavit, T. (2012). Whose money is it anyway? Using prepaid incentives in experimental economics to create a natural environment. Experimental Economics, 15, 145-157. DOI: https://doi.org/10.1007/s10683-011-9294-4
- Scrogin, D. (2017). Effects of payment timing and prior outcomes on the composition of choices over public lotteries. Theoretical Economics Letters, 7, 747-756. DOI: https://doi.org/10.4236/tel.2017.74054
- Thaler, R. H. & Johnson, E. J. (1990). Gambling with the house money and trying to break even: The effects of prior outcomes on risky choice. Management Science, 36, 643-660. DOI: https://doi.org/10.1287/mnsc.36.6.643
- Xu, S., Pan, Y., Qu, Z., Fang, Z., Yang, Z., Yang, F., Wang, F. & Rao, H. (2018). Differential effects of real versus hypothetical monetary reward magnitude on risk-taking behavior and brain activity. Scientific Reports, 8. DOI: https://doi.org/10.1038/s41598-018-21820-0
Downloads
Full-text downloads recorded for this article, by month.
No downloads have been recorded for this article yet. Figures appear here once readers begin downloading the full text.
How to Cite
Share this article
License
Copyright (c) 2022 Abilio Henrique Berticelli De Freitas (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.
Author (s) should affirm that the material has not been published previously. It has not been submitted and it is not under consideration by any other journal. At the same time author (s) need to execute a publication permission agreement to assume the responsibility of the submitted content and any omissions and errors therein. After submission of revised paper in the light of suggestions of the reviewers, the editorial team edits and formats manuscripts to bring uniformity and standardization in published material.
This work will be licensed under Creative Commons Attribution 4.0 International (CC BY 4.0) and under condition of the license, users are free to read, copy, remix, transform, redistribute, download, print, search or link to the full texts of articles and even build upon their work as long as they credit the author for the original work. Moreover, as per journal policy author (s) hold and retain copyrights without any restrictions.
Keywords
- Experimental Economics Search this journal for Experimental Economics (opens in a new tab)
- Experimental Design Search this journal for Experimental Design (opens in a new tab)
- Methodology Search this journal for Methodology (opens in a new tab)
- House Money Effect Search this journal for House Money Effect (opens in a new tab)
Section
Published
Submissions
Have research to publish? Journal of Economics and Behavioral Studies welcomes submissions.
Make a Submission