Single-dose testosterone administration increases men's preference for status goods.

In modern human cultures where social hierarchies are ubiquitous, people typically signal their hierarchical position through consumption of positional goods-goods that convey one's social position, such as luxury products. Building on animal research and early correlational human studies linking the sex steroid hormone testosterone with hierarchical social interactions, we investigate the influence of testosterone on men's preferences for positional goods. Using a placebo-controlled experiment (N = 243) to measure individuals' desire for status brands and products, we find that administering testosterone increases men's preference for status brands, compared to brands of similar perceived quality but lower perceived status. Furthermore, testosterone increases positive attitudes toward positional goods when they are described as status-enhancing, but not when they are described as power-enhancing or high in quality. Our results provide novel causal evidence for the biological roots of men's preferences for status, bridging decades of animal behavioral studies with contemporary consumer research.

Increasing Cooperation in Prisoner's Dilemmas by Establishing a Precedent of Efficiency in Coordination Games.

Coordination games have multiple Nash equilibria (i.e., sets of strategies which are best responses to one another). In weak-link coordination games players choose a number 1-7. Their payoff is increasing in the minimum number (or weakest link) and decreasing in the difference between their number and the minimum. Choosing 7 is an efficient equilibrium because it gives everybody a higher payoff than any other coordinated choice. Higher-payoff equilibria are riskier, however, so the game expresses the tradeoff between group efficiency and personal risk present in many social and organizational settings. We tested whether choosing efficiently in a weak-link game increases cooperative play in a subsequent prisoner's dilemma (PD) game. This cross-game transfer resembles the transfer of cooperative norms in small firms (which are more like coordination games than PDs) as firms grow larger and become like PDs. In two experiments, if a group of players share a history of playing the weak-link game efficiently, that efficiency precedent can transfer to a subsequent PD game, improving the level of cooperativeness. The effect of transfer is much larger in magnitude (increasing cooperation from 15-30% to 71%) than the effects of most variables in previous PD studies. However, the transfer effect depends on descriptive similarity of strategies in the two games, since it largely disappears when the strategies are numbered differently in the weak-link game and the PD. Copyright 2000 Academic Press.

Behavioral economics: reunifying psychology and economics.

"Behavioral economics" improves the realism of the psychological assumptions underlying economic theory, promising to reunify psychology and economics in the process. Reunification should lead to better predictions about economic behavior and better policy prescriptions.

Experience-Weighted Attraction Learning in Coordination Games: Probability Rules, Heterogeneity, and Time-Variation.

In earlier research we proposed an "experience-weighted attraction (EWA) learning" model for predicting dynamic behavior in economic experiments on multiperson noncooperative normal-form games. We showed that EWA learning model fits significantly better than existing learning models (choice reinforcement and belief-based models) in several different classes of games. The econometric estimation in that research adopted a representative agent approach and assumed that learning parameters are stationary across periods of an experiment. In addition, we used the logit (exponential) probability response function to transform attraction of strategies into choice probability. This paper allows for nonstationary learning parameters, permits two "segments" of players with different parameter values in order to allow for some heterogeneity, and compares the power and logit probability response functions. These specifications are estimated using experimental data from weak-link and median-action coordination games. Results show that players are heterogeneous and that they adjust their learning parameters over time very slightly. Logit probability response functions never fit worse than power functions, and generally fit better. Copyright 1998 Academic Press.