When an employee in a gift exchange game earns significantly less than the employer, the source of employer income does not affect effort choices. However, to induce one unit of effort, the employer has to pay higher wages than in a game without payoff inequality.

We perform a within-subject analysis of pro-social behavior in the public-good and gift-exchange game. We find that participants classified as cooperators in the public-good game tend to reciprocate higher wages in the gift-exchange game with higher levels of effort. Non-cooperators do not...

How do people react to a mix of good deeds to a third party and bad deeds against them? A modified ultimatum game shows that previous good deeds make responders substantially more tolerant to unfair proposals.

This note presents results from modified dictator games in which the payoff-relevant game is either chosen randomly or by the recipients. We do not observe reciprocal behavior when recipients choose the game: Dictators do not condition their donations on the game chosen by recipients.

We revisit job design with sequential tasks and outcome externalities from a different perspective, extending Schmitz (2013a). When two sequential tasks need to be performed by wealth-constrained agents, the principal can hire only one agent or two different agents. When there exists an outcome...

We investigate the relationship between tournament prices and effort choices in the presence of favoritism. High tournament prizes can decrease agents’ effort supply when the choice of the winner is not perfectly objective but affected to some extent by personal preferences of an evaluator.

We apply the die rolling experiment of Fischbacher and Föllmi-Heusi (2013) to a two-player tournament incentive scheme. Our treatments vary the prize spread. The data highlights that honesty is more pronounced when the prize spread is small.

This paper examines how a religious festival (Ramadan) and the degree of religiosity affect cooperation and costly punishment in a public goods experiment. We find significantly higher cooperation levels outside the festival among less religious people. This behavior is consistent with a...

Entry decisions in market entry games usually depend on the belief about how many others are entering the market, the belief about the own rank in a real effort task, and subjects’ risk preferences. In this paper I am able to replicate these basic results and examine two further dimensions:...

Arad and Rubinstein (2012a) have designed a novel game to study level-k reasoning experimentally. Just like them, we find that the depth of reasoning is very limited and clearly different from that in equilibrium play. We show that such behavior is even robust to repetitions; hence there is, at...