In this paper we show that a simple model of reciprocal 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...

We study finitely repeated 2 / 2 normal form games, where players have incomplete information about their opponents’ payoffs. In a laboratory experiment we investigate whether players (a) learn the game they are playing, (b) learn to predict the behavior of their opponent, and (c) learn to...

This paper shows that reciprocity has powerful implications for many economic domains. It is an important determinant in the enforcement of contracts and social norms and enhances the possibilities of collective action greatly. Reciprocity may render the provision of explicit incentive...

This paper reports results from social learning experiments where subjects choose between two options and each subject has a small chance of being perfectly informed about which option is correct. In treatment "sequence", subjects observe the entire sequence of predecessors' choices while in...

We experimentally study auctions versus grandfathering in the initial assignment of pollution permits that can be traded in a secondary spot market. Low and high emitters compete for permits in the auction, while permits are assigned for free under grandfathering. In theory, trading in the spot...

We study the effects of deliberation on collective decisions. In a series of experiments, we vary groups' preference distributions (between common and conflicting interests) and the institutions by which decisions are reached (simple majority, two-thirds majority, and unanimity). When...

Based on an experimental analysis of a simple monetary economy we argue that a monetary system is more stable than one would expect from individual rationality. We show that positive reciprocity stabilizes the monetary system, provided every participant considers the feedbacks of his choice to...

We suggest a new micro-foundation of money in which markets are well-organized but consumers' preferences are stochastic. In this model, we solve for stationary equilibria and show that there is an optimum quantity of money. The rational solution of our model is compared with actual behavior in...

This manual explains the use of z-Tree, the "Zurich Toolbox for Readymade Economic Experiments". No programming knowledge is necessary to use z-Tree. This software allows to program and to conduct a wide range of experiments. This includes simultaneous and sequential games as well as market...

We study indirect reciprocity and strategic reputation building in an experimental helping game. At any time only half of the subjects can build a reputation. This allows us to study both pure indirect reciprocity that is not contaminated by strategic reputation building and the impact of...