Evaluations of new infrastructure in developing countries typically focus on direct effects, such as the impact of an electrifification program on household energy use. But if new infrastructure induces people to move into an area, other local publicly provided goods may become congested,...

Drought is Africa’s primary natural disaster and a pervasive source of income risk for poor households. This paper documents the long-run health effects of early life exposure to drought and investigates an important source of heterogeneity in these effects. Combining birth cohort variation in...

This paper investigates physiological responses to perceptions of unfair pay. In a simple principal agent experiment agents produce revenue by working on a tedious task. Principals decide how this revenue is allocated between themselves and their agents. In this environment unfairness can arise...

A bargaining solution balances fairness and efficiency if each player's payoff lies between the minimum and maximum of the payoffs assigned to him by the egalitarian and utilitarian solutions. In the 2-person bargaining problem, the Nash solution is the unique scale-invariant solution satisfying...

A bargaining solution guarantees minimal equity if each player's payoff is at least as large as the minimum of the payoffs assigned to him by the equal-gain (i.e., egalitarian) and equal-loss solutions. The Kalai-Smorodinsky solution is the unique scale-invariant 2-person solution with this...

This paper develops a simple theoretical model that can be implemented to estimate the willingness to pay for distributive justice. We derive a formula that allows one to recover the willingness to pay for distributive justice from the estimated coefficients of a probit regression and fiscal...

We present an economic experiment on network formation, in which subjects can decide to form links to one another. Direct links are costly but being connected is valuable. The game-theoretic basis for our experiment is the model of Bala and Goyal (2000). They distinguish between two scenarios...

In this Paper we show that a simple model of fairness preferences explains major experimental regularities of common pool resource (CPR) experiments. The evidence indicates that in standard CPR games without communication and without sanctioning possibilities inefficient excess appropriation is...

The prevailing labour market models assume that minimum wages do not affect the labour supply schedule. We challenge this view in this paper by showing experimentally that minimum wages have significant and lasting effects on subjects’ reservation wages. The temporary introduction of a minimum...

This Paper shows that identical offers in an ultimatum game generate systematically different rejection rates depending on the other offers that are available to the proposer. This result casts doubt on the consequentialist practice in economics of defining the utility of an action solely in...