We study four strategically equivalent variants of the trust game where, in two of them, agents make a promise regarding the outcome. In one variant, called the partitioned trust game with promise, the promise is made to be carried out only in a specific contingency, where the trustworthiness of the agent is only observed in that contingency. We find that partitioning the promise in that way increases trust by nearly 17% when compared to the overall levels of trust in the base trust game with promise, where the trustworthiness of an agent is fully observed. On the other hand, however, we find that trustworthiness conditional on promise remains statistically unchanged across the two variants of the trust game with promise. When we compare the base trust and partitioned trust without promise, the results reverse. That reversal suggests that principals behave in accordance with an aversion to being deceived. 

Citation: Han, J.J., Lubart, A. & Haruvy, E. (Under Review). Partitioned Promises in a Trust Game, Economics Letters.

[SSRN][Data]

We study two variants of an allocation problem where two parties lay proportional claims to an asset, and an arbiter has a final say on allocation. The two variants we study vary by the incentives to the arbiter. In one variant, the arbiter is incentivized proportional to the payoff to the lowest paid claimant and in the other, the arbiter is incentivized proportional to the payoff to the highest paid claimant. While neither incentive scheme changes the set of equilibria, they alter expected payoff in off-equilibrium outcomes, with implications for equilibrium selection. Accordingly, the first variant leads to egalitarian claims whereas the second leads to claims of the entire pot, and subsequently to high incidence of impasse. A level-k model of bounded rationality fits the observed outcomes. Thus, in bargaining with multiple equilibria, the level-k model is useful in designing arbiter incentives to maximize efficiency.

Citation: Han, J.J. & Haruvy, E. (Under Review). Efficiency and off-equilibrium considerations in an allocation problem, Journal of Economic Behavior and Organization.

[ResearchSquare][Data]

In B2B markets, both buyers and sellers have a say in pricing and such price determining mechanism has long been the norm in the form of auctions and bargaining. These market designs have certainly enjoyed advances in technology for they have become more structured and capable of capturing more areas under the demand curve. Specifically, B2B auctions can now incorporate and automate a sophisticated scoring system which evaluates numerous dimensions, and B2B bargaining can now be automated to deal individually with each of tens of thousands of consumers. In this chapter, we present recent findings on the automated processes for both auctions and bargaining on a mass scale.

Citation: Han, J.J. & Haruvy, E. (2021). Participative pricing in B2B markets. In L. Dube, M. Cohen, N. Yang, & B. Monla(Eds.), Precision Retailing, University of Toronto Press.

[Book][Chapter 15]

Five experiments are reported to compare models of attitude formation about hot-button policy issues like climate change. In broad strokes, the deficit model states that incorrect opinions are a result of a lack of information, while the cultural cognition model states that opinions are formed to maximize congruence with the group that one affiliates with. The community of knowledge hypothesis takes an integrative position. It states that opinions are based on perceived knowledge, but that perceptions are partly determined by the knowledge that sits in the heads of others in the community. We use the fact that people's sense of understanding is affected by knowledge of others’ understanding to arbitrate among these views in the domain of public policy. In all experiments (N = 1767), we find that the contagious sense of understanding is nonpartisan and robust to experimental manipulations intended to eliminate it. While ideology clearly affects people's attitudes, sense of understanding does as well, but level of actual knowledge does not. And the extent to which people overestimate their own knowledge partly determines the extremity of their position. The pattern of results is most consistent with the community of knowledge hypothesis. Implications for climate policy are considered. 

Citation: Rabb, N., Han, J. J., & Sloman, S. (2020). How others drive our sense of understanding of policies. Behavioural Public Policy, 5(4), 454-479, doi:10.1017/bpp.2020.40

[Paper][Supplementary materials]

Counterfactual conditionals concern relations in other possible worlds. Most of these possible worlds refer to how a situation would have unfolded forward from a counterfactual assumption. In some cases, however, reasoning goes backward from the assumption, a phenomenon that is called backtracking. In the current study, we propose that people backtrack if and only if doing so will make a counterfactual claim true in the alternative world. We present evidence to support the proposal.

Citation: Han, J.J., Jimenez-Leal, W. & Sloman, S. (2014). Conditions for backtracking with counterfactual conditionals. Proceedings of the 36th Annual Conference of the Cognitive Science Society (pp. 2429-2434).

[Paper]

Git is a version control tool that is versatile like a Swiss army knife. It offers a range of functionalities that may be challenging to learn but gradually become clear with practice and a good primer (like this one) that will get you up to speed.

[Primer (Korean)][Primer (English)]