In an experimental 2x2 coordination game with two strict equilibria we observe that, in contrast to equilibrium selection theory (Harsanyi and Selten 1988), only half of the subjects choose the strategy that relates to the payoff- and risk-dominant equilibrium. We propose modified risk dominance...

Belief elicitation in economics experiments usually relies on paying subjects according to the accuracy of stated beliefs in addition to payments for other decisions. Such incentives, however, allow risk-averse subjects to hedge with their stated beliefs against adverse outcomes of other...

Facing a stochastic market wage, which is independent of their own hiring policy, employersoffer contracts specifying fixed wage, revenue share and employment duration.In ongoing employment relations it depends on the treatment whether fixed wages canbe only increased or also decreased. Will the...

Two firms compete on a sales market as well as in hiring labor. The duopolists'sales levels depend on their workforce. There are two each of two typesof workers, mobile and immobile, with differing effort costs. An immobileworker's eort costs are lower when he is employed by the local firm,...

Standard economic explanations of good conduct in trade rely almostexclusively on future-directed extrinsic motivations induced by materialincentives. But intrinsic motives to behave trustworthy and to punishuntrustworthiness do support trade. In our model, intrinsically motivatedplayers are...

This paper outlines why program evaluation should follow well-respected scientific standards and why it should be performed by independent researchers.

(...) We provide support for the disposition effect. Participants who experience a gain sell their assets more rapidly than participants who experience a loss, and positively framed subjects generally sell their assets later than negatively framed subjects.

This paper investigates the robustness of hindsight bias in experimental asset markets, the time invariance of the different experimental risk elicitation methods of certainty equivalents and binary lottery choices, and their correspondence.

In this paper the performance of locally risk-minimizing hedge strategies for European options in stochastic volatility models is studied from an experimental as well as from an empirical perspective. These hedge strategies are derived for a large class of diffusion-type stochastic volatility...

There is abundant evidence that many individuals violate the rationality assumptions routinely made in economics. However, powerful evidence also indicates that violations of individual rationality do not necessarily refute the aggregate predictions of standard economic models that assume full...