Tax authorities utilize the audit process, imposing penalties on tax evaders, as their primary means of enforcement. In recent years, a “service” paradigm, whereby tax authorities provide information about correct tax reporting to taxpayers, has shown the potential to further “encourage”...

The public finance literature demonstrates the equivalence between consumption and labor income (wage) taxes. We construct an environment in which individuals make real labor-leisure choices and spend their earned income on real goods. We use this experimental framework to test whether a labor...

Substantial evidence has been accumulated in recent empirical works on the limited ability of the Nash equilibrium to rationalize observed behavior in many classes of games played by experimental subjects. This realization has led to several attempts aimed at finding tractable equilibrium...

We compare the strategy and direct-response methods in a one-shot trust game with hidden action. In our experiment, the decision elicitation method affects neither participants' behavior nor their beliefs about this behavior. We conclude that the direct-response method does not, by itself,...

We show and explain how generosity beyond that explainable by social preferences can manifest in bargaining. We analyze an ultimata game with two parties vying to coalesce with a randomly chosen proposer. They simultaneously demand shares of the surplus. The proposer must then make an offer that...

I ran an experiment in order to evaluate the relationship, if any, between power, or the search for power, and the degree of altruism. In particular I experimentally tested whether an organization structured in a strictly hierarchical way was able to reduce the degree of altruism of a group of...

This paper highlights a new social motivation, the indirect reciprocity, through a three-player dictator-ultimatum game. Player 2 has the opportunity to reward or punish indirectly the player 1 by inciting – with her offer - player 3 to accept or to reject the division. We implement three...

Principal-agent models in which the agent has access to private information before a contract is signed are a cornerstone of contract theory. We have conducted an experiment with 720 participants to explore whether the theoretical insights are reflected by the behavior of subjects in the...

Recent experimental research has shown that when rating systems are available, buyers are more generous in accepting unfair offers made by sellers. It has also shown that sellers make fairer decisions when they are rated, while some studies show that they are little affected by the rating...

Psychological states side by side with the bounded rational expectations among social agents contributes to the pattern of consumptions in economic system. One of the psychological states are the envy – a tendency to emulate any gaps with other agents’ properties. The evolutionary game...