An experiment is designed to provide a snapshot of the strategies used by players in a repeated price competition game with a random continuation rule. One hundred pairs of subjects played the game over the Internet, with subjects having a few days to make their decisions in each round....

We experimentally investigate the effect of population viscosity (an increased probability to interact with others of one's type or group) on cooperation in a standard prisoner's dilemma environment. Subjects can repeatedly choose between two groups that differ in the defector gain in the...

How can we maximize the common good? This is a central organizing question of public policy design, across political parties and ideologies. The answer typically involves the provisioning of public goods such as fresh air, national defense, and knowledge. Public goods are costly to produce but...

Earlier studies have found that a substantial part of the contributions in public good games can be explained by subjects misperceiving the game's incentives. Using a large-scale public good experiment, we show that subtle changes in how the game is framed substantially affect such...

This paper examines a voluntarily provided common-property resource (CPR) in settings that vary the rules used for allocating the resource to providers. Three allocation mechanisms are investigated: “allocator,” “tremble,” and “egalitarian.” The allocator mechanism, based on...

Impersonal exchange is the hallmark of an advanced society. One key institution for impersonal exchange is money, which economic theory considers just a primitive arrangement for monitoring past conduct in society. If so, then a public record of past actions—or memory—supersedes the function...

The notion of face-to-face contacts has recently become very popular in regional economics and in economic geography. This is the most obvious way to explain why firms still locate in proximity to others after the death of distance, i.e., the shrinking costs for transportation, especially...

In this paper, we analyze the nature of cooperation in different corruption regimes. In a laboratory experiment with university students in Mexico, individuals play first a corruption game and then a public goods game. The corruption game is divided into three groups: high- and low-monitoring...

Earlier studies have found that a substantial part of the contributions in public good games can be explained by subjects misperceiving the game's incentives. Using a large-scale public good experiment, we show that subtle changes in how the game is framed substantially affect such...

In this paper we test the effect of non-binding defaults on the level of contribution to a public good. We manipulate the default numbers appearing on the decision screen to nudge subjects toward a free-rider strategy or a perfect conditional cooperator strategy. Our results show that the vast...