In business and politics, gifts are often aimed at influencing the recipient at the expense of third parties. In an experimental study, which removes informational and incentive confounds, subjects strongly respond to small gifts even though they understand the gift giver's intention. Our...

Using a new experimental design, we compare how subjects form beliefs in an investor-client setup under varying degrees of liability. Our results reflect the importance of social preferences when making investment decisions for others. We show that when investors have no liability, those with...

Social interactions predominantly take place under the shadow of the future. Previous literature explains cooperation in indefinitely repeated prisoner's dilemma as predominantly driven by self-interested strategic considerations. This paper provides a causal test of the importance of social...

Why do people give when asked, but prefer not to be asked, and even take when possible? We show that standard behavioral axioms including separability, narrow bracketing, and scaling invariance predict these seemingly inconsistent observations. Specifically, these axioms imply that...

This paper shows that the public provision of private goods may be justified on pure efficiency grounds in an environment where individuals have relative consumption concerns. By providing private goods, governments directly intervene in the consumption structure, and thereby have an instrument...

A series of experiments compares bargaining behavior under three different settings: no arbitration, conventional and final offer arbitration. Under no arbitration disputes with zero payoffs were around 10%, while the pie was equally split in less than half of the cases. Under conventional...

Value Surveys may reveal well-behaved societies by the statistical treatment of the agents` declarations of compliance with social values. Similarly, the results of experiments conducted on games with conflict of interest trace back to two important primitives of social capital trust and...

A main goal of affirmative action (AA) policies is to enable disadvantaged groups to compete with their privileged counterparts. Existing theoretical and empirical research documents that incorporating AA can result in both more egalitarian outcomes and higher exerted efforts. However, the...

People with higher-incomes tend to support less redistribution than lower-income people. This has been attributed not only to self-interest, but also to psychological mechanisms including differing beliefs about the hard work or luck underlying inequality, differing fairness views, and differing...

Supporters of left-wing parties typically place more emphasis on redistributive policies than right-wing voters. I investigate whether this difference in tolerating inequality is amplified by suspicious success - achievements that may arise from cheating. Using a laboratory experiment, I...