The presence of background risk increases self-protection effort or caution as long as an agent is prudent. In addition, the result extends to monetary self-protection investment if wealth and consumption are complements.

We re-examine the link between absolute prudence and self-protection activities. We show that the level of effort chosen by an agent with decreasing absolute prudence is larger than the optimal effort chosen by a risk-neutral agent if the degree of absolute prudence is less than a threshold that...

We show that there is a class of risk lovers who optimally choose a positive level of self-protection investment. In most cases, a risk lover increases his self-protection investment as he becomes less downside risk averse.

Do corrupt people self select themselves in professions where the scope of corruption is high? We conduct a corruption experiment with private sector job aspirants and aspirants of Indian bureaucracy. The game models embezzlement of resources in which “supervisors” evaluate the performance...

We test in a laboratory experiment the theoretical prediction that risk attitudes have a surprisingly small role in distorting reports from true belief distributions. We find evidence consistent with theory in our experiment.

I examine two dimensions of framing in public goods games: Contributing vs. Taking and Gains vs. Losses. I find decreased cooperation under the Taking frame, but not under the Loss frame. This framing effect is stronger for men than women.

We investigate parochial altruism, the combination of in-group altruism and out-group hostility, in an experimental conflict game preceded by a prisoner’s dilemma. Our data are consistent with parochial altruism, but cannot be explained by in-group pro-sociality or out-group hostility alone.

Shotgun clauses are commonly included in the business agreements of partnerships and limited liability companies (LLCs), but the role of offeror typically remains unassigned. In a common-value, one-sided asymmetric information setting, unequal and inefficient outcomes occur with an unassigned...