Will generous return policies in auctions benefit bidders? We investigate this issue using second-price common-value auctions. Theoretically, we find that the bidding equilibrium is unique unless returns are free, in which case there exist multiple equilibria with different implications for...

We develop and test experimentally the argument that gender/family and/or professional identities, activated through psychological priming, may influence preference for competition. We focus on female professionals for whom these identities may conflict and male professionals for whom they may...

Tournaments are widely used to assign bonuses and determine promotions. Tournament-based compensation is motivating because of the link between relative performance and financial rewards. However, performing relatively well (poorly) may also yield psychological benefits (pain). This may also...

We examine the influence of social distance on levels of trust and reciprocity in China. Social distance, reflected in the indigenous concept of guanxi, is of central importance to Chinese culture. In Study 1, some participants participated in two financially salient trust games to measure...

We experimentally investigate a new variant of the trust/investment game that captures some key features of internet peer-to-peer (P2P) lending: the borrower specifies the amount of money required and makes a contingent promise about the value of the generally higher repayment prior to the...

We investigate the effects of social distance on both actual trusting and reciprocity behavior and beliefs about such behavior. Some participants participated in two financially salient trust games to measure behavior, one with a classmate and the other with a student who was a stranger, while...

Employing a two-by-two factorial design that manipulates whether dictator groups are single or mixed-sex and whether procedures are single or double-blind, we examine gender effects in a standard dictator game. No gender effects were found in any of the experimental treatments. Moreover, neither...

We demonstrate that effectiveness of performance-contingent incentives is inversely related to individual risk-aversion levels through two mechanisms: 1) rational optimizing decisions about the amount of effort to supply when effort is positively correlated with risk exposure and 2) the possibly...

Employing a two-by-two factorial design that manipulates whether dictator groups are single or mixed-sex and whether procedures are single or double-blind, we examine gender effect in a standard dictator game. No gender effect was found in any of the experimental treatments. Moreover, neither...

We examine equilibrium selection in a two-stage sequential elimination contest in which contestants compete for a single prize. This game has a continuum of equilibria, only one of which satisfies the Coalition-Proof Nash Equilibrium (CPNE) refinement. That equilibrium involves “burning out”...