This paper analyzes a dynamic relational contract for employees with reciprocal preferences. I develop a tractable model to investigate how “direct” performance-pay (promising a bonus in exchange for effort) and generous upfront wages (which activate the norm of reciprocity) interact over...

We use the trust and the dictator games to explore the effects of religious identity on trust, trustworthiness, prosociality, and conditional reciprocity within a beliefs-based model. We provide a novel and rigorous theoretical model to derive the relevant predictions, which are then tested in...

This paper examines the reflexive interplay between individual decisions and social forces to analyze the evolution of cooperation in the presence of "multi-directedness," whereby people's preferences depend on their psychological motives. People have access to multiple, discrete motives....

The mathematical framework of psychological game theory is useful for describing many forms of motivation where preferences depend directly on own or others’ beliefs. It allows for incorporating, e.g., emotions, reciprocity, image concerns, and self-esteem in economic analysis. We explain how...

This paper derives and justifies a procedurally fair bidding mechanism and reviews experiments that apply the mechanism to public projects provision. In the experiments, not all parties benefit from provision, and the projects ́costs can be negative. The experimental results indicate that the...

Although reciprocity is a key concept in the social sciences, it is still unclear why people engage in costly reciprocation. In this study, physiological and self-report measures were employed to investigate the role of emotions, using the Power-to-Take Game. In this 2-person game, player 1 can...

We study the pattern of correlations across a large number of behavioral regularities, with the goal of creating an empirical basis for more comprehensive theories of decision-making. We elicit 21 behaviors using an incentivized survey on a representative sample (n = 1;000) of the U.S....

While trust and trustworthiness provide a fundamental foundation for human relationships, little is known about how trusting and trustworthy behavior in social dilemmas is related to age and aging. A few papers use data from surveys such as the World Values Survey to address a potential...

We investigate whether there is a link between conditional cooperation and betrayal aversion. We use a public goods game to classify subjects by type of contribution preference and by belief about the contributions of others; and we measure betrayal aversion for different categories of subject....