We use a novel experimental design to identify the subjects' strategies in an infinitely repeated prisoners' dilemma experiment. We ask subjects to design strategies that will play in their place. We find that eliciting strategies has negligible effects on their behavior, supporting the validity...

A usual criticism of the theory of infinitely repeated games is that it does not provide sharp predictions since there may be a multiplicity of equilibria. To address this issue we present experimental evidence on the evolution of cooperation in infinitely repeated prisoners’ dilemma games as...

This paper uses a laboratory experiment to study beliefs and their relationship to action and strategy choices in finitely and indefinitely repeated prisoners' dilemma games. We find subjects' beliefs about the other player's action are accurate despite some systematic deviations corresponding...

Economists typically predict that people are inherently selfish; however, experimental evidence suggests that this is often not the case. In particular, delegating a choice (such as a wage) to the performing party may imbue this party with a sense of responsibility, leading to improved outcomes...

We study worker and firm behavior in an environment where worker effort could depend on co-workers? wages. Theoretically, we show that an increase in workers? ?concerns? with coworkers? wages should lead profit-maximizing firms to compress wages under quite general conditions. However, firms...

The population of most developed societies is 'graying'. As life expectancy increases and the large baby-boom generation approaches retirement age, this has critical consequences for maintaining a high standard of living and the sustainability of pension systems. In the light of these...

We devise an experiment to explore the effect of different degrees of competition on optimal contracts in a hidden-information context. In our benchmark case, each principal is matched with one agent of unknown type. In our second treatment, a principal can select one of three agents, while in a...

This paper surveys the contributions of laboratory experiments to labor economics. We begin with a discussion of methodological issues: why (and when) is a lab experiment the best approach; how do laboratory experiments compare to field experiments; and what are the main design issues? We then...

We examine factors that may contribute to 'overconfidence' in relative ability on an intelligence test. We test experimentally for evidence of self-esteem concerns and instrumental strategic concerns. Errors in Bayesian updating are rare when the information does not involve own relative...

We test experimentally an explanation of over and under confidence as motivated by (perhaps unconscious) strategic concerns, and find compelling evidence supporting this hypothesis in the behavior of participants who send and respond to others' statements of confidence about how well they have...