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Strategic default with social interactions: A laboratory experiment

Jean Paul Rabanal

Research in Experimental Economics2014https://doi.org/10.1108/s0193-2306(2013)0000016003?utm_campaign=repec&wt.mc_id=repecarticle
ABDC B
Weight
0.26

What the paper says

Abstract Purpose The chapter studies strategic default using an experimental approach. Design/methodology/approach The experiment considers a stochastic asset process and a loan with no down-payment. The treatments are two asset volatilities (high and low) and the absence and presence of social interactions via a direct effect on the subject's payoff. Findings I demonstrate that (i) people appear to follow the prediction of the strategic default model quite closely in the high asset volatility treatment, and that (ii) incorporating social interactions delays the strategic default beyond what is considered optimal. Originality/value The study tests adequately the strategic default using a novel experimental design and analyzes the neighbor's effect on that decision.

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https://doi.org/https://doi.org/10.1108/s0193-2306(2013)0000016003?utm_campaign=repec&wt.mc_id=repec

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@article{jean2014,
  title        = {{Strategic default with social interactions: A laboratory experiment}},
  author       = {Jean Paul Rabanal},
  journal      = {Research in Experimental Economics},
  year         = {2014},
  doi          = {https://doi.org/https://doi.org/10.1108/s0193-2306(2013)0000016003?utm_campaign=repec&wt.mc_id=repec},
}

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Strategic default with social interactions: A laboratory experiment

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Evidence weight

0.26

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.00 × 0.4 = 0.00
M · momentum0.20 × 0.15 = 0.03
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.