Despite recent advances in reputation technologies, it is not clear how reputation systems can affect human cooperation in social networks. Although it is known that two of the major mechanisms in the evolution of cooperation are spatial selection and reputation-based reciprocity, theoretical...

This paper offers a new theory of discrimination in the workplace. We consider a manager who has to assign two tasks to two employees. The manager has superior information about the employees' abilities. We show that besides an equilibrium where the manager does not discriminate, equilibria...

Does a ban on grade inflation bring about better information transmission? This paper studies grade inflation in a framework in which a sender (the professor) sends a signal (GPA's) about the students' knowledge to receivers (employers in the job market). If students' ability increases annually,...

We investigate the influence of self and social image concerns as potential sources of lying costs. In a standard die-rolling experiment, we exogenously manipulate self-awareness and observability, which mediate the focus of a person on their private and public selves, respectively. First, we...

One of the main arguments people use for cheating is that others also do it. Cheating becomes a tool for establishing fairness when others cheat. Using different payoff schemes, we experimentally investigate whether varying who can lie matters for one’s lying. In a real effort task that...

We analyze the effects of introducing asymmetric information in an investment game (Berg et al., 1995), in which the division of an economic surplus between a trustor and a trustee is not contractible. Backward induction suggests that rational self-interested players would not voluntarily engage...

This paper examines the occurrence and fragility of information cascades in laboratory experiments.One group of low informed subjects make predictions in sequence. In a matchedpairs design, another set of high informed subjects observe the decisions of the first group andmake predictions....