Affiliation:
1. Fukuoka Daigaku Fukuoka University Fukuoka Japan
2. College of Comprehensive Psychology Ritsumeikan University Osaka Japan
Abstract
AbstractThe ratchet effect is an economic phenomenon where agents strategically restrict their efforts to conceal information on their characteristics under the dynamic setting. This study experimentally examines the effect of the probability of proceeding to the next stage on ratcheting behavior. We find evidence that if the probability is smaller than 1, the ratchet effect is mitigated.
Funder
Japan Society for the Promotion of Science
Central Research Institute, Fukuoka University