From the perspective of competitors, competition may be modeled as a prisoner's dilemma. Setting the monopoly price is cooperation, undercutting is defection. Jointly, competitors are better off if both are faithful to a cartel. Individually, profit is highest if only the competitor(s) is (are)...

Both in the field and in the lab, participants frequently cooperate, despite the fact that the situation can be modelled as a simultaneous, symmetric prisoner’s dilemma. This experiment manipulates the payoff in case both players defect, and explains the degree of cooperation by a combination...

If two players of a simultaneous symmetric one-shot prisoner's dilemma hold standard prefer-ences, the fact that choosing the cooperative move imposes harm on a passive outsider is imma-terial. Yet if participants hold social preferences, one might think that they are reticent to impose harm on...

Cooperation problems are at the heart of many everyday situations. In this paper, we propose a very simple and light-handed mechanism to sustain cooperation and test its performance in a rich laboratory environment. The mechanism moderates cooperation by controlling experiences, more...

For a rational choice theorist, the absence of crime is more difficult to explain than its presence. Arguably, the expected value of criminal sanctions, i.e. the product of severity times certainty, is often below the expected benefit. We rely on a standard theory from behavioral economics,...

How do actual prisoners solve their proverbial dilemma? In a lab experiment, conducted in a German prison for male juvenile offenders, we find that prisoners are no less cooperative than students in a symmetric two-person prisoner's dilemma. Using data from post-experimental tests, we explain...

Both in the field and in the lab, participants frequently cooperate, despite the fact that the situation can be modelled as a simultaneous, symmetric prisoner’s dilemma. This experiment manipulates the payoff in case both players defect, and explains the degree of cooperation by a combination...

For a rational choice theorist, the absence of crime is more difficult to explain than its presence. Arguably, the expected value of criminal sanctions, i.e. the product of severity times certainty, is often below the expected benefit. We rely on a standard theory from behavioral economics,...

Intelligence and personality significantly affect social outcomes of individuals. We study how and why these traits affect the outcome of groups, looking specifically at how these characteristics operate in repeated interactions providing opportunity for profitable cooperation. Our experimental...

A large literature in behavioral economics has emphasized in the last decades the role of individual differences in social preferences (such as trust and altruism) and in influencing behavior in strategic environments. Here we emphasize the role of attention and working memory, and show that...