The most important financial source for behavioral economics is the Russell Sage Foundation (RSF). The most prominent behavioral economists among the RSF’s twenty-six member Behavioral Economics Roundtable (BER) are Kahneman, Tversky, Thaler, Camerer, Loewenstein, Rabin, and Laibson. The...

The question of whether lawyers and managers behave selfishly or fairly has inspired discussion for a long time. Empirical evidence, however, is sparse. Using data from an experiment with 359 law and business administration students, we investigate this question empirically and provide first...

The power to take game is a simple two player game where players arerandomly divided into pairs consisting of a take authority and responder.Both players in each pair have earned an own income in an individual realeffort decision-making experiment preceding the take game. The gameconsists of two...

We investigate experimentally whether emotions affect bidding behavior in a firstprice auction. To induce emotions, we confront subjects after a first auction series with apositive or negative random economic shock. We then explore the relation between emotions andbidding behavior in a second...

In many business transactions, in labor-management relations, in internationalconflicts, and welfare state reforms bargainers hold strong entitlements that are oftengenerated by claims that are not feasible any more. These entitlements seem to considerablyshape negotiation behavior. By using the...

Although reciprocity is a key concept in the social sciences, it is still unclear why people engage in costly reciprocation. In this study, physiological and self-report measures were employed to investigate the role of emotions, using the Power-to-Take Game. In this 2-person game, player 1 can...

From the viewpoint of the independence axiom of expected utility theory, an interesting empirical dynamic choice problem involves the presence of a “global risk,” that is, a chance of losing everything whichever safe or risky option is chosen. In this experimental study, participants have to...

Trust beliefs are heterogeneous across individuals and, at the same time, persistent across generations. We investigate one mechanism yielding these dual patterns: false consensus. In the context of a trust game experiment, we show that individuals extrapolate from their own type when forming...

For a rational choice theorist, the absence of crime is more difficult to explain than its presence. Arguably, the expected value of criminal sanctions, i.e. the product of severity times certainty, is often below the expected benefit. We rely on a standard theory from behavioral economics,...

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...