This paper reports laboratory experiments comparing arbitration behavior between and across two countries with extensive trade relations, the United States and Japan. Besides comparing disputes in both locations, we evaluate disputes between them. While we find nominal differences between the...

This article reports results from controlled laboratory experiments designed to study secondmoment (that is, risk-based) statistical discrimination in a labor market setting. Since decision makers may not view risk in the same way as economists or statisticians (that is, risk 5 variance of...

This article presents a classroom game in which students choose whether or not to comply with pollution regulations. By varying the level of monitoring and fines for noncompliance, the game shows students how the probability and severity of enforcement affects incentives for compliance. The game...

The effect of inequality on economic growth and efficiency is often debated. Our study investigates a behavioral phenomenon through which inequality might have adverse effects on economic growth. In particular we investigate whether or not individuals exhibit a discouragement effect in the face...

Familiar inefficiencies arise with competing interests over private goods in Stackelberg and investment games. Private good experiments reveal whether reciprocity enhances cooperative outcomes. Familiar social dilemmas arise with voluntary provision of public goods and voluntary appropriation...

Recent articles hypothesize that an asymmetry in regret motivates aggressive bidding in laboratory first-price auctions. Subjects emphasize potential earnings foregone from being outbid. Proposed motivators of this asymmetry include the one-to-one relationship in the auction between winning and...

In this article, we adopt a variant of the trust game by Berg, Dickhaut, and McCabe (1995) and the dictator game by Cox (2004) to determine if income inequality can activate in-group favoritism and, if so, whether such a bias is strong enough to survive the removal of income inequality. We find...

The concept of comparative advantage is a fundamental tool in economics. Yet, it is a concept that new students of economics frequently find challenging to grasp. In this interactive classroom game, I highlight the three essential lessons of comparative advantage: (i) individuals can have a...

This paper explores several determinants of tipping behavior. First, I consider two social norms explanations—reciprocity and letdown (guilt) aversion—of why consumers tip in restaurants. Second, I examine three aspects of the tipping situation that influence how much consumers tip in...

This article presents a classroom game that allows students to directly experience the welfare improvements that can result from price discrimination. The demonstration uses a very familiar decision-making scenario, campus parking, to introduce the concept of price discrimination as well as...