We study optimal contracts in a simple model where employees are averse to inequity as modelled by Fehr and Schmidt (1999). A "selfish" employer can profitably exploit such preferences among its employees by offering contracts which create inequity off-equilibrium and thus, they would leave...

It is common to find in experimental data persistent oscillations in the aggregate outcomes and high levels of heterogeneity in individual behavior. Furthermore, it is not unusual to find significant deviations from aggregate Nash equilibrium predictions. In this paper, we employ an evolutionary...

Pérez-Castrillo and Wettstein (2002) and Veszteg (2004) propose the use of a multibidding mechanism for situations where agents have to choose a common project. Examples are decisions involving public goods (or public "bads"). We report experimental results to test the practical tractability...

We investigate experimentally whether preferences over an outcome depend on what other possible outcomes of the situation under consideration are, i.e. whether choices are "menu dependent". In simple sequential games we analyze whether reactions to a certain benchmark oucome are influenced by...

We report experimental results on one-shot two person 3x3 constant sum games played by non-economists without previous experience in the laboratory. Although strategically our games are very similar to previous experiments in which game theory predictions fail dramatically, 80% of actions taken...

This paper reconsiders the evidence on lying or deception presented in Gneezy (2005,American Economic Review). We argue that Gneezy?s data cannot reject the hip?esis that people are one of two kinds: either a person will never lie, or a person will lie whenever she prefers the outcome obtained...

We study how personal relations affect performance in organizations. In the experimental game we use a manager has to assign different degrees of decision power to two employees. These two employees then have to make distributive decisions which affect themselves and the manager. Our focus is on...

In this paper we compare two broad categories of organizing a cooperative R&D project between rival firms : An Research Joint Venture (RJV) and a Cross Licensing Agreement (CLA).

Many organizations suffer poor performance because individuals within the organization fail to coordinate on efficient patterns of behavior. Using controlled laboratory experiments, we study how financial incentives can be used to find a way out of such performance traps. Our experiments are set...

We study manager-employee interactions in experiments set in a corporate environment where payoffs depend on employees coordinating at high effort levels; the underlying game being played repeatedly by employees is a weak-link game. In the absence of managerial intervention subjects invariably...