We conduct a laboratory experiment to study how, after a history of decay, cooperation in a repeated voluntary contribution game can be revived in an enduring way. Simply starting the repeated game over—a simple fresh start—leads to an initial increase of cooperation, but to a subsequent new decay. Motivated by cooperation decay in organizations we study the potential of three interventions of triggering higher and sustained cooperation, which take place at the same time as a restart. Surprisingly, we find that the detailed explanation of the causes of the decay in cooperation of Fischbacher and Gächter (Am Econ Rev 100:541–556, 2010) combined with an advice on how to prevent decay do not have an effect beyond that of just starting over. In contrast, a one-way free form communication message sent by the leader to the followers strongly revives cooperation. We find evidence that repeated free form communication by the leader further strengthens the reviving effect on cooperation. Combining the two previous interventions does not outperform the pure effect of communication. Our content analysis reveals that leader communication is more people oriented than the expert advice.

We investigate the relative merits of the Boston and Serial Dictatorship mechanisms when the timing of students’ preference submission over schools varies within the structure of the mechanism. Despite the well-documented disadvantages of the Boston mechanism Abdulkadiroglu and Sonmez (American Economic Review 93:729–747 2003), we hypothesize that a Boston mechanism where students are required to submit their preferences before the realization of their exam scores, can in fact have fairness and efficiency advantages compared to the often favored Serial Dictatorship mechanism. We test these hypotheses in a series of laboratory experiments which vary by the class of mechanism implemented, and the preference submission timing by students, reflective of actual policy changes which have occurred in China. Our experimental findings confirm the efficiency hypothesis straightforwardly, and lend support to the fairness hypothesis when subjects have the chance to learn with experience. The results have important policy implications for school choice mechanism design when students’ relative rankings by schools are initially uncertain.

The paper performs an in-depth comparison of four incentivised risk elicitation tasks. We show by means of a simulation exercise that part of the often observed heterogeneity of estimates across tasks is due to task-specific measurement error induced by the mere mechanics of the tasks. We run a replication experiment in a homogeneous subject pool using a between subjects one-shot design. Results shows that the task estimates vary over and above what can be explained by the simulations. We investigate the possibility the tasks elicit different types of preferences, rather than simply provide a different measure of the same preferences. In particular, the availability of a riskless alternative plays a prominent role helping to explain part of the differences in the estimated preferences.

We theoretically and experimentally study voter behavior in a setting characterized by plurality rule and mandatory voting. Voters choose from three options. We are interested in the occurrence of strategic voting in an environment where Condorcet cycles may occur and focus on how information about the preference distribution affects strategic behavior. We also vary the relative importance of the second preferred option. Quantal response equilibrium analysis is used to analyze the game and derive predictions. Our results indeed show that strategic voting arises. Its extent depends on (i) information availability; (ii) the relative importance of the intermediate candidate; (iii) the electorate’s relative support for one’s preferred candidate; (iv) the relative position of the plurality-supported candidate in one’s preference ordering. Our results show that information serves as a coordination device where strategic voting does not harm the plurality-preferred candidate’s chances of winning.

Experiments have demonstrated that men are more willing to compete than women. We develop a new instrument to “price” willingness to compete. We find that men value a $2.00 winner-take-all payment significantly more (about $0.28 more) than women; and that women require a premium (about 40 %) to compete. Our new instrument is more sensitive than the traditional binary-choice instrument, and thus, enables us to identify relationships that are not identifiable using the traditional binary-choice instrument. We find that subjects who are the most willing to compete have high ability, higher GPA’s (men), and take more STEM courses (women).

We extend the study of procedural fairness in three new directions. Firstly, we focus on lotteries determining the initial roles in a two-person game. One of the roles carries a potential advantage over the other. All the experimental literature has thus far focused on lotteries determining the final payoffs of a game. Secondly, we modify procedural fairness in a dynamic—i.e. over several repetitions of a game—as well as in a static—i.e. within a single game-sense. Thirdly, we analyse whether assigning individuals a minimal chance of achieving an advantaged position is enough to make them willing to accept substantially more inequality. We find that procedural fairness matters under all of these accounts. Individuals clearly respond to the degree of fairness in assigning initial roles, appraise contexts that are dynamically fair more positively than contexts that are not, and are generally more willing to accept unequal outcomes when they are granted a minimal opportunity to acquire the advantaged position. Unexpectedly, granting full equality of opportunity does not lead to the highest efficiency.

In an experiment with more than 500 participants we study how past experience of uncertainty (imperfect knowledge of the state space) affects risk preferences. Participants in our experiment choose between a sure outcome and a lottery in 32 periods. All treatments are exactly identical in periods 17–32 but differ in periods 1–16. In the early periods of the risk treatment there is perfect information about the lottery; in the ambiguity Treatment participants perfectly know the outcome space but not the associated probabilities; in the unawareness treatment participants have imperfect knowledge about both outcomes and probabilities. We observe strong treatment effects on behavior in periods 17–32. In particular, participants who have been exposed to an environment with very imperfect knowledge of the state space subsequently choose lotteries with high (low) variance less (more) often compared to other participants. Estimating individual risk attitudes from choices in periods 17–32 we find that the distribution of risk attitude parameters across our treatments can be ranked in terms of first order stochastic dominance. Our results show how exposure to environments with different degrees of uncertainty can affect individuals’ subsequent risk-taking behavior.

We set out to test whether the effect of promises on trustworthiness derives from the fact that they are made (internal consistency) or that they are received (social obligation). The results of an experimental trust game appeared at first to support the former mechanism. Even when trustee messages are not delivered to trustors, trustees who make a promise are more likely to act trustworthy than those who do not make a promise. However, we subsequently ran a control treatment with restricted (non-promise) communication to examine whether the correlation between promises and trustworthiness is causal. The results show that the absence of promises does not decrease average cooperation rates. This indicates that promises do not induce trustworthiness, they are just more likely to be sent by cooperators than by non-cooperators.

While previous research has shown that social preferences develop in childhood, we study whether this development is accompanied by reduced use of deception when lies would harm others, and increased use of deception to benefit others. In a sample of children aged between 7 and 14, we find strong aversion to lying at all ages. Lying is driven mainly by selfish motives and envy. Children with stronger social preferences are less prone to deception, even when lying would benefit others at no monetary cost. Older children lie less than younger children and use self-justification to lie.

Leadership mechanisms provide a potential means to mitigate social dilemmas, but empirical evidence on the success of such mechanisms is mixed. In this paper, we explore the institutional frame as a relevant factor for the effectiveness of leadership. We compare subjects’ behavior in public-goods experiments that are either framed positively (give-some game) or negatively (take-some game). We observe that leader and follower decisions are sensitive to the institutional frame. Leaders contribute less in the take-some game, and the correlation between leaders’ and followers’ contribution is weaker in the take-some game. Additionally, using a strategy method to elicit followers’ reactions at the individual level, we find evidence for the malleability of followers’ revealed cooperation types. Taken together, the leadership institution is found to be less efficient in the take- than in the give-frame, both in games that are played only once and repeatedly.

We run laboratory experiments to analyze the impact of prior investment experience on price efficiency in asset markets. Before subjects enter the asset market they gain either no, positive, or negative investment experience in an investment game. To get a comprehensive picture about the role of experience we implement two asset market designs. One is prone to inefficient pricing, exhibiting bubble and crash patterns, while the other exhibits efficient pricing. We find that (i) both, positive and negative, experience gained in the investment game lead to efficient pricing in both market settings. Further, we show that (ii) the experience effect dominates potential effects triggered by positive and negative sentiment generated by the investment game. We conjecture that experiencing changing price paths in the investment game can create a higher sensibility on changing fundamentals (through higher salience) among subjects in the subsequently run asset market.

Previous experimental research suggests that individuals apply rules of thumb to a simplified mental model of the “real” decision problem. We claim that this simplification is obtained either by neglecting the other players’ incentives and beliefs or by taking them into consideration only for a subset of game outcomes. We analyze subjects’ eye movements while playing a series of two-person, 3 × 3 one-shot games in normal form. Games within each class differ by a set of descriptive features (i.e., features that can be changed without altering the game equilibrium properties). Data show that subjects on average perform partial or non-strategic analysis of the payoff matrix, often ignoring the opponent´s payoffs and rarely performing the necessary steps to detect dominance. Our analysis of eye-movements supports the hypothesis that subjects use simple decision rules such as “choose the strategy with the highest average payoff” or “choose the strategy leading to an attractive and symmetric outcome” without (optimally) incorporating knowledge on the opponent’s behavior. Lookup patterns resulted being feature and game invariant, heterogeneous across subjects, but stable within subjects. Using a cluster analysis, we find correlations between eye-movements and choices; however, applying the Cognitive Hierarchy model to our data, we show that only some of the subjects present both information search patterns and choices compatible with a specific cognitive level. We also find a series of correlations between strategic behavior and individual characteristics like risk attitude, short-term memory capacity, and mathematical and logical abilities.

We study the willingness to compete of 588 children and teenagers aged ten to seventeen. We replicate the gender difference in tournament entry choices usually found in the literature for adults. We then show that policy interventions like quotas and preferential treatment help to close down the gender gap without leading to losses in efficiency, during or after a tournament. Given that differences in competitive behavior are prevalent from an early age, the application of interventions to promote females in competitions may be desirable already at early ages to promote equal chances for women on labor markets later on.

We examine three tools that can enhance coordination success in a repeated multiple-choice coordination game. Gradualism means that the game starts as an easy coordination problem and moves gradually to a more difficult one. The Endogenous Ascending mechanism implies that a gradual increase in the upper bound of coordination occurs only if coordination with the Pareto superior equilibrium in a stage game is attained. The Endogenous Descending mechanism requires that when the game’s participants fail to coordinate, the level of the next coordination game be adjusted such that the game becomes simpler. We show that gradualism may not always work, but in such instances, its effect can be reinforced by endogeneity. Our laboratory experiment provides evidence that a mechanism that combines three tools, herein termed the “Gradualism with Endogenous Ascending and Descending (GEAD)” mechanism, works well. We discuss how the GEAD mechanism can be applied to real-life situations that suffer from coordination failure.

We introduce, test, and compare two auction-based methods for eliciting discount rates. In these “patience auctions”, participants bid the smallest future sum they would prefer -or- the longest time they would wait for a reward, rather than receive a smaller, immediate payoff. The most patient bidder receives the delayed reward; all others receive the immediate payoff. These auctions allow us to compare discounting when participants’ attention is focused on the temporal versus monetary dimension of delayed rewards. We find that the estimated parameters in the three most commonly used discount functions (exponential, hyperbolic, and quasi-hyperbolic) differ across these two bidding methods (time-bids vs. money-bids). Specifically, our participants tend to show more impatience under time-bids. Furthermore, we find that people are more likely to exhibit exponential (as opposed to hyperbolic) discounting and exhibit less present bias under time-bids, compared to money-bids. To our knowledge, this paper is the first to directly compare time versus money preference elicitations, within the same subjects, using an incentive-compatible mechanism.

This paper reports findings of a laboratory experiment, which explores how reported self-assessment regarding the own relative performance is perceived by others. In particular, I investigate whether overconfident or underconfident subjects are considered as more likeable, and who of the two is expected to win in a tournament, thereby controlling for performance. Underconfidence beats overconfidence in both respects. Underconfident subjects are rewarded significantly more often than overconfident subjects, and are significantly more often expected to win. Subjects being less convinced of their performance are taken as more congenial and are expected to be more ambitious to improve, whereas overconfident subjects are rather expected to rest on their high beliefs. While subjects do not anticipate the stronger performance signal of underconfidence, they anticipate its higher sympathy value. The comparison to a non-strategic setting shows that men strategically deflate their self-assessment to be rewarded by others. Women, in contrast, either do not deflate their self-assessment or do so even in non-strategic situations, a behavior that might be driven by non-monetary image concerns of women.

We make two main contributions in this article. We examine whether social comparisons affects workers’ performance when a firm can choose workers’ wages or let them choose their own. Firms can delegate the wage decision to neither, one or both workers in the firm. We vary the information workers receive, finding that social comparisons concerning both wages and decision rights affect workers’ performance. Our second contribution is methodological. We find that our treatment effects are present with both stated effort and a real-effort task, which suggests that both approaches may yield similar results in labor experiments.

Many democratic decision making institutions involve quorum rules. Such rules are commonly motivated by concerns about the “legitimacy” or “representativeness” of decisions reached when only a subset of eligible voters participates. A prominent example of this can be found in the context of direct democracy mechanisms, such as referenda and initiatives. We conduct a laboratory experiment to investigate the consequences of the two most common types of quorum rules: a participation quorum and an approval quorum. We find that both types of quora lead to lower participation rates, dramatically increasing the likelihood of full-fledged electoral boycotts on the part of those who endorse the Status Quo. This discouraging effect is significantly larger under a participation quorum than under an approval quorum.

Past studies on laboratory corruption games have not been able to find consistent evidence that subjects make “immoral” decisions. A possible reason, and also a critique of laboratory corruption games, is that the experiment may fail to trigger the intended immorality frame in the minds of the participants, leading many to question the very raison d’être of laboratory corruption games. To test this idea, we compare behavior in a harassment bribery game with a strategically identical but neutrally framed ultimatum game. The results show that fewer people, both as briber and bribee, engage in corruption in the bribery frame than in the alternative and the average bribe amount is lesser in the former than in the latter. These suggest that moral costs are indeed at work. A third treatment, which relabels the bribery game in neutral language, indicates that the observed treatment effect arises not from the neutral language of the ultimatum game but from a change in the sense of entitlement between the bribery and ultimatum game frames. To provide further support that the bribery game does measure moral costs, we elicit the shared perceptions of appropriateness of the actions or social norm, under the two frames. We show that the social norm governing the bribery game frame and ultimatum game frame are indeed different and that the perceived sense of social appropriateness plays a crucial role in determining the actual behavior in the two frames. Furthermore, merely relabelling the bribery game in neutral language makes no difference to the social appropriateness norm governing it. This indicates that, just as in the case of actual behavior, the observed difference in social appropriateness norm between bribery game and ultimatum game comes from the difference in entitlement too. Finally, we comment on the external validity of behavior in lab corruption games.

We report evidence from an experiment where an employer selects one of two workers to perform a task for a fixed compensation. Workers differ in their ability. The employer’s payoff depends on the worker’s ability and on a non-contractible effort that the worker exerts once employed. We find that selected workers exert an effort higher than the minimum enforceable one. When the employers can send a free-text form message to the selected worker, workers with low ability exert significantly higher effort than the workers with high ability. The difference in effort overcompensates the difference in ability.