Economics has not widely investigated the role of group identity in defining social norms. The present experiment considers the interplay between choices having social dimension and a notion of group affiliation based on shared intrinsic characteristics. More specifically, a triadic game setting...

A freeze-out bond exchange offer can occur when a firm wants to replace an exist- ing bond, issued with a covenant, with a new bond that does not have this type of restriction. If the bondholders are not fully coordinated, the shareholders can make the exchange offer unfair to capture wealth...

When contracts are not enforceable, or property rights are not clearly defined, individuals might lack an incentive to carry out costly investments even when they are socially efficient. Some recent contributions such as Ellingsen and Robles (2002) prove that this problem might be less dramatic...

This paper addresses the emergence of cooperation in asymmetric pris- oners' dilemmas in which one player chooses after having observed the other player's choice (Trust Game). We use the finite automata approach with complexity costs to study the equilibria of the repeated version of this game....

A single, long-run policeman faces a large population of myopic would- be criminals. This paper shows that this interaction has counterintuitive comparative static properties. A forward-looking inspector might tolerate more law violations than a short-sighted one.

The bias generated by the subjective perception of scarcity on the consumer's choice is discussed from a theoretical perspective. The core idea here discussed is that scarcity is an Lancasterian attribute of the goods which is not endogenously built in the goods, like many physical attributes,...

In a modified dictator game experiment, we study how distributional justice, measured by the proportionality between effort exerted and rewards obtained, and guilt feelings triggered by others’ expectations affect dictator’s choices. We consider these two sources of behavior in isolation and...

This paper experimentally investigates a well-known anomaly in portfolio management, i.e. the fact that paper losses are realized less than paper gains (disposition effect). The existence of the disposition effect is documented in a simple risk task which demonstrates that the anomaly is most...

We experimentally investigate social effects in a principal-agent setting with incomplete contracts. The strategic interaction scheme is based on the well-known Investment Game (Berg et al., 1995). In our setting four agents (i.e., trustees) and one principal (i.e., trustor) are interacting and...