This paper investigates in a principal-agent environment whether and how group membership influences the effectiveness of incentives and when incentives can have “hidden costs”, i.e., a detrimental effect. We show experimentally that in all interactions control mechanisms can have hidden...

We conduct an experimental study to investigate the causal impact of social identity on individuals' response to economic incentives. We focus on China's household registration (hukou) system which favors urban residents and discriminates against rural residents in resource allocation. Our...

The paper empirically expounds the richness of the identity approach to labor market behavior by allowing individuals to experience identity conflict. Specifically, it investigates the relationship between the importance individuals attach to labor-market activities – which is influenced by...

According to social-psychological research, feelings of uncertainty in decision-making evoke two opposite responses: (i) reduction of uncertainty by information search, leading to less stereotyping of people, and hence less discrimination; (ii) social identification with an ingroup, inducing...

This paper examines whether the chances of job placements improve if unemployed persons are counselled by caseworkers who belong to the same social group, defined by gender, age, education, and nationality. Based on an unusually informative dataset, which links Swiss unemployed to their...

This paper reviews the problems and potential benefits of integrating personality psychology into economics. Economists have much to learn from and contribute to personality psychology.

We compare inequality aversion in individuals and teams by means of both within- and between-subject experimental designs, and we investigate how teams aggregate individual preferences. We find that team decisions reveal less inequality aversion than individual initial proposals in team...