Bilateral joint ventures, such as marriage, are economically inspired by their prospects of labor division and specialization. However, specialization makes the partnerwho investsmore in relation-specificqualificationsmore exploitable (holdup problem). In a two-person experiment we study...

We present an overlapping-generations model with two interacting teams, where young team members earn an income, whereas old team members depend on either intrateam transfers from young members (voluntary solidarity) or tax-financed transfers (compulsory solidarity). We derive the individually...

How do we make sense of the cross-country heterogeneity in value judgments emerging from international surveys? Our study suggests that the answer needs to go beyond the adaptation of values to existing institutions and should tap into deeper beliefs. In our case, Finnish respondents do support...

Although one may hope to achieve equality of stated profits without enforcing it, one may not trust in such voluntary equality seeking and rather try to impose rules (of bidding) guaranteeing it. Our axiomatic approach is based on envy-free net trades according to bids, which, together with the...