We develop, and experimentally test, a behavioral model of deal- making which includes binding contracts and informal agreements as distinct but related special cases. The key assumptions: people are mostly honest; they suffer costs of overcoming temptation to renege; and they tend to split gains...

Reciprocity can be a powerful motivation for human behaviour. Scholars argue that it is relevant in the context of private provision of public goods. We examine whether reciprocity can resolve the associated coordination problem. The interaction of reciprocity with cost-sharing is critical....

We develop, and experimentally test, models of informal agreements. Agents are assumed to be honest but suffer costs of overcoming temptations. We extend two classical bargaining solutions -- split-the-difference and deal-me-out -- to this informal agreement setting. For each solution there are...

Understanding the motivations behind people’s voluntary contributions to public goods is crucial for the broader issues of economic and social development. By using the experimental design of Fischbacher et al. (2001), we investigate the distribution of contribution types in two developing...

We develop a model that relates self-control and conflict identification to cooperation patterns in social dilemmas. As predicted, we find in a laboratory public goods experiment a robust association between stronger self-control and higher levels of cooperation. This means that there is...

In an experiment, we study risk-taking of cohabitating student couples, finding that couples’ decisions are closer to risk-neutrality than single partners’ decisions. This finding is similar to earlier experiments with randomly assigned groups, corroborating external validity of earlier results.

Earlier research has shown that using a default option has a decisive effect on individuals’ choices. In many cases, however, the low proportion of subjects who switch from the pre-set default option might partly explained by inexperience with the goods or services offered, and high...

We test the proposition that individuals may experience a self-control conflict between short-term temptation to be selfish and better judgment to act pro-socially. Using a dictator game and a public goods game, we manipulated the likelihood that individuals identified self-control conflict, and...

We study household decision making in a high-stakes experiment with a random sample of households in rural China. Spouses have to choose between risky lotteries, first separately and then jointly. We find that spouses’ individual risk preferences are more similar the richer the household and...

Studies have shown that there are differences in cooperative behavior across countries. Furthermore, differences in the use and the reaction on the introduction of a norm enforcement mechansism have been documented in cross-cultural studies, recently. We present data which prove that stark...