The paper explores the consequences that relying on different behavioral assumptions in training managers may have on their future performance. We argue that training with an emphasis on the standard assumptions used in economics (rationality and self-interest) is good for technical posts but...

We report results from a randomized policy experiment designed to test whether increased audit risk deters rent extraction in local public procurement and service delivery in Brazil. Our estimates suggest that temporarily increasing annual audit risk by about 20 percentage points reduced the...

We study the dynamics of corruption relying on two fundamental observations: (a) Given agents detected as corrupt are typically fired and replaced, the historical levels of corruption have an impact on current corruption through the distribution of corruption costs of old agents; (b)...

We study bureaucratic corruption in a model in which a constituency sets required levels for a given set of activities. Each activity is carried out by an external provider, and its realization is supervised by a bureaucrat. While bureaucrats are supposed to act on behalf of the constituency,...

Manipulation of government finances for the benefit of narrowly defined groups is usually thought to be limited to the part of the budget over which politicians exercise discretion in the short run, such as earmarks. Analyzing a revenue-sharing program between the central and local governments...

We consider a procurement problem in which the procurement agent is supposed to allocate the realization of a project according to a competitive mechanism that values bids in terms of the proposed price and quality. Potential bidders have private information about their production costs. Since...

We introduce a model of strategic thinking in games of initial response. Unlike standard models of strategic thinking, in this framework the player's "depth of reasoning" is endogenously determined, and it can be disentangled from his beliefs over his opponent's cognitive bound. In our approach,...

We present a lab-field experiment designed to assess systematically the external validity of social preferences elicited in a variety of experimental games. We do this by comparing behavior in the different games with a number of behaviors elicited in the field and with self-reported behaviors...

Through an experiment, we investigate how the level of rationality relates to concerns for equality and efficiency. Subjects perform dictator games and a guessing game. More rational subjects are not more frequently of the selfregarding type. When performing a comparison within the same degree...

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been...