Knut-Eric Neset Joslin
Adjunct Associate Professor - Department of Economics
Heggedal, Tom-Reiel; Helland, Leif & Joslin, Knut-Eric Neset (2018)
Should I stay or should I go? Bandwagons in the lab
Journal of Economic Behavior and Organization, 150(June), s. 86- 97. Doi: 10.1016/j.jebo.2018.03.019
We experimentally investigate the impact of strategic uncertainty and complementarity on leader and follower behavior using the model of Farrell and Saloner (1985). At the core of the model are endogenous timing, irreversible actions and private valuations. We find that strategic complementarity strongly determines follower behavior. Once a subject decides to abandon the status quo the probability that other players jump on the bandwagon increases sharply. However, there is a reluctance to lead when leading is a conditional best response. We explain this deviation from the neo-classical equilibrium by injecting some noise in the equilibrium concept. We also find that cheap talk improves efficiency.
|2011||BI Norwegian Business School||Master of Science|
|2012 - Present||BI Norwegian Business School||PhD Candidate|