We develop an axiomatic foundation for the classical problem of paying workers in settings where their actions are not observed by the employer. The latter only observes the distribution of ability and demands fairness. First, we uniquely characterize workers’ expected pay thanks to a set of...

People's fairness preferences are an important constraint for what constitutes an acceptable economic transaction, yet little is known about how these preferences are formed. In this paper, we provide clean evidence that contrast effects arising from previous transactions play an important role...

We examine self-referential games in which there is a chance of understanding an opponent's intentions. Our main focus is on the interaction of two sources of information about opponents' play: direct observation of the opponent's code-of-conduct, and indirect observation of the opponent's play...

People's fairness preferences are an important constraint for what constitutes an acceptable economic transaction, yet little is known about how these preferences are formed. In this paper, we provide clean evidence that previous transactions play an important role in shaping perceptions of...

This paper reports the results of a laboratory experiment on network formation among heterogeneous agents. The experimental design extends the basic Bala-Goyal (2000) model of network formation with decay and two-way flow of benefits by allowing for agents with lower linking costs or higher...

We analyze the effects of asymmetric information concerning the size of a pie on proposer behavior in three different bargaining situations: the ultimatum game, the Yes-No-game and the dictator game. Our data show that (a) irrespective of the information condition, proposer generosity increases...

We introduce intention-based social preferences into a mechanism design framework with independent private values and quasilinear payoffs. For the case where the designer has no information about the intensity of social preferences, we provide conditions under which mechanisms which have been...

We study equilibrium reporting behavior in Fischbacher and Föllmi-Heusi (2013)-type cheating games when agents have a fixed cost of lying and image concerns not to be perceived as a liar. We show that equilibria naturally arise in which agents with low costs of lying randomize among a set of...