Round effects in economic experiments - A novel probabilistic programming approach to timevariant response behaviour

Round effects can arise in any kind of economic experiment, where participants have to make decisions over a course of various rounds. They are associated with changes of preferences and patterns of response variance, they may counteract or distort experimental treatment effects and ultimately result in the biased estimation of the “true” underlying preferences. To investigate how exactly round effects occur and can be captured statistically, we have designed and conducted a multi-round study with German agricultural students. We develop a novel Bayesian Probabilistic Programming approach to assess to which extent preference learning, institutional learning and fatigue effects influence the response behaviour of survey participants. We find strong evidence for fatigue effects, since the response behaviour of our participants became increasingly variant over the course of the experiment. We could also falsify the assumptions of institutional and preference learning for our participant group. Our results emphasize the importance of modelling round effects in economic experiments. The results and the developed modelling framework will be of interest to both, experimental agricultural economists and policy developers, who interpret and apply findings from business simulation games and similar multi-period experimental studies.