Project: "Asset Markets with OLG - An Experimental Approach"

Role LEE: Project principal researcher is Miroslav Zajíček.

Abstract of the project: Part of the project financing was providen by the Internal Grant System of the University of Economics in Prague (IGS UEP).

Abstract of the project: For more than two decades the dominant line of thinking (and experimental research) about pricing in asset markets has been based on the seminal paper by Smith, Williams and Suchanek (1988) showing that asset markets are prone to generate bubbles even if there is no uncertainty about the fundamental value of traded assets.  The experimental setting of this paper has ever since been challenged, however, after two decades of testing the original hypothesis remains robust and unchanged. The feature that has not been explored is the fact, that at the end of each experiment subjects trading assets face highly unusual situation: "the end of the world" (EoW). It is the situation that everyone knows that there is no activity after that particular moment and at the same times she/he knows that others know etc. ad infinitum. Moreover, everyone knows that "the end of the world" happens at one predefined and known moment. In real world, people know that there is no end in trading, regardless of the fact that they may know the approximate end of their trading activities. To explore this, we build an experimental environment based on the overlapping generation mechanism with determined life time of the generation New traders enter cash and asset positions of those who “die”, so, no cash new fresh cash enters the market (as opposed to in Deck, Porter and Smith, 2011). We employ the constant fundamental value model. Data collection has not been finished so far, but initial findings are so far very interesting: there seems to be a long lasting and sustained bubble for major part of trading; there is no particular price change when generations overlap (if anything prices go down, which is in clear contradiction to Deck, Porter and Smith (2011)) and the new generations mostly takes as “given” the price that it inherits from the previous one.

Project: "Reaction Times and Prepulse Inhibition of Startle Reaction"

Role LEE: Running of series of experiments for the project. (Project principal investigator is the Toxoteam from the Faculty of Science of the Charles University). Person responsible for conducting the experiments at the LEE: Petr Houdek.

Abstract of the project: As it arises from many studies the negative effects of Toxoplasma gondii are less innocent than it was believed not so long ago. Among the most important manifestations there are elongation prolongation of reaction times and weakening of startle reactions in otherwise healthy people. This information has been gained mainly from psychological questionnaires and simple tests of reaction times. This project aims to prove the results of studies based on questionnaires by experiments, to reveal the particular effects caused by Toxoplasma gondii and possibly to help in understanding the mechanisms accountable for the observed effects. To achieve this we want to employ a batch of tests focused on studying startle reactions, reaction times, physiological reactions in stress situations (dermal resistance, blood pressure, heartbeat, steroid hormones levels) and psychological factors gained from questionnaires filled in by our experimentees the subjects of our experiments?. The project starts by blood samples off-take. Chosen experimentees in latent phase of toxoplasmosis undergo first a batch of psychological questionnaires together with an adequate number of controls, then experimental sessions consisting mainly of computer tests of reaction times on multiple types of stimuli; finally, the startle reactions and prepulse inhibition of these reactions are measured.

Project: "Self Regulating Organizations: An Experimental Investigation"

Role of the LEE: Running of pilot experiments for the project and research experiments later on. (Project principal researcher are Silvester van KotenAndreas Ortmann). Person responsible for conducting the experiments at the LEE: Silvester van Koten.

Abstract of the project: Self-regulation is a feature of a number of professions. We experimentally test models to asses the efficiency (or lack thereof) of self-regulation. We especially focus on the interplay between agents and clients. Theory predicts that self-regulation may give the agents regulated by the self-regulating organization considerable market power. We test the extend that the theoretical predictions can be replicated in a lab.

Project: "On Small and Large Tax Rates"

Role of the LEE: Project principal researcher is Peter Katuščák. Persons responsible for conducting the experiments at the LEE: Lasha Lanchava, Peter Katuščák, Martin Rusnák, Miroslav Zajíček; 3 experiments were conducted at the LEE on December 29 and 30, 2010.

Abstract of the project: Will be available soon. Be patient with us.

Project: "Behavioral Market Design" as a part of the GDN 11th Annual Regional Research Competition

Role of the LEE: Project principal researchers are Fabio Michelucci (CERGE-EI and LEE) and Miroslav Zajíček (NF VŠE, IES FSV and LEE), GDN web-page can be found here.

Abstract of the project: Auction theory is often used to analyze important issues in market design. Most of the existing theoretical and experimental work on auctions is based on the concept of Bayesian Nash equilibrium. Such approach ignores, however, many behavioral biases that have recently been documented in the literature. Although there is an emerging work that attempts to use some of these biases to explain observed deviations from equilibrium bidding predictions, it does not address the question of how to design auctions that take these biases into account. We will conduct several experiments on market design motivated by some of these biases, such as the endowment effect, reference-dependent preferences or anticipated regret. In particular, we will investigate how to design auctions that achieve higher revenue or efficiency by exploiting such behavioral regularities.

Project: "Social Inequalities and the Market Risks Following from Housing Consumption. The Real and Desirable Response of State Fiscal and Monetary Policies" (Czech: "Sociální nerovnosti a tržní rizika vyplývající ze spotřeby bydlení. Aktuální a žádoucí reakce fiskální a monetární politiky státu") 

Principal researcher: Institute of sociology of the Czech Academy of Science, project web-page can be found here.

Role of the LEE: Running of 5 experiments for the project, persons responsible for conducting the experiments at the LEE: Vojtěch Bartoš, Martina Mikezsová, Ján Palguta, Miroslav Zajíček, dates when experiments were conducted: October 26 and 27, 2010, November 1, 4 and 5, 2010.

Project: "Consumer Decision-Making in Retail Investment Services: A Behavioural Economics Perspective" (Czech: "Rozhodování spotřebitele na trhu retailových investičních služeb: pohled behaviorální ekonomie") 

Principal researcher: Decision Technology Ltd.

Role of the LEE: Running of 8 experiments for the project, persons responsible for conducting the experiments at the LEE: Peter Katuščák, Fabio Miccelucci, Miroslav Zajíček, dates when experiments were conducted: October 7, 8 and 9, 2010.

Project homepage can be found here. Final report of the project can be found here. Description of conducted experiments and analysis of their results begin on page 345.