In this paper we use an experiment to compare a theory of risk aversion and a theory of spite as an explanation for overbidding in auctions. As a workhorse we use the second-price all-pay and the first-price winner-pay auction. Both risk and spite can be used to rationalize deviations from risk...

We study how punishment influences conditional cooperation. We ask two questions: 1) how does conditional cooperation change if a subject can be punished and 2) how does conditional cooperation change if a subject has the power to punish others. In particular, we disentangle the decision to be a...

Credence goods markets – like for health care or repair services – with their informational asymmetries between sellers and customers are prone to fraudulent behavior of sellers and resulting market inefficiencies. We present the first model that considers both diagnostic uncertainty of...

The completeness axiom of choice has been questioned for long, and in response, theoretical models of decision making allowing for incomplete preferences have been developed. So far the theoretical accomplishments have however not been paired with empirical evidence on the actual existence of...

An important element for the public support of policies is their perceived justice. At the same time most policy choices have uncertain outcomes. We report the results of a first experiment investigating just allocations of resources when some recipients are exposed to uncertainty. Although,...

We study experimentally the protection of property in five widely distinct countries- Austria, Mexico, Mongolia, South Korea and the United States. Our main results are that the security of property varies with experimental institutions, and that our subject pools exhibit significantly different...