We examine an incentive scheme for a group of agents, where all agents are rewarded ifthe group meets its target. If the group does not meet its target, only the agents that meettheir individual target are rewarded. In environmental policy, the EU burden sharingagreement and the UK Climate...

Norms play an important role in establishing social order. Thecurrent literature focuses on the emergence, maintenance and impactof norms with regard to coordination and cooperation. However, theissue of norm-related conict deserves more attention. We develop ageneral theory of \normative...

We study ultimatum and dictator experiments where the first moverchooses the amount of money to be distributed between the playerswithin a given interval, knowing that her own share is fixed. Thus, thefirst mover is faced with scarcity, but not with the typical trade-off betweenher own and the...

Recent research has cast some doubt on the general validity of outcome-basedmodels of social preferences. We develop a model based on cognitive dissonance thatfocuses on the importance of self-image. An experiment (a dictator game variant)tests the model.First, we nd that subjects whose choices...

We exploit a controlled frameless laboratory experiment to study settlement negoti-ations and the plainti¤’s decision to raise a lawsuit in case of an impasse. We …nd thatgreater variance in court outcomes increases the litigation rate and lowers the settlementrate. This latter …nding goes...