We consider the case of an upstream seller who works to improve an asset that has been specialized to a downstream buyer's needs. The buyer then makes a take it or leave it offer to the seller about how the future surplus should be split. We assume that the seller from the outset has private...

This experimental study asks whether generosity decreases emotional distance, a question pertinent to human service quality. Highly vulnerable service recipients may not enforce quality standards. Quality can then be viewed as an act of generosity, a gift from the provider to the recipient. For...

This paper develops a theory of the allocation of authority between two parties that produce impure public goods. We show that the optimal allocation depends on technological factors, the parties' valuations of the goods produced, and the degree of impurity of these goods. When the degree of...

This paper examines the effectiveness of cheap talk when the receiver is imperfectly informed. We show that the receiver’s prior knowledge becomes an impediment to efficient communication in a model with the discrete state space: in general, the more the receiver is informed, the less...

We consider a firm A initially owning a software platform (e.g. operating system) and an application for this platform. The specific knowledge of another firm B is needed to make the platform successful by creating a further application. When B’s application is completed, A has incentives to...

We use a power-to-resist game to find out the effects of individuals' judgments about a proposer's selection procedure on the willingness to offer resistance against proposed outcomes. In the experiment, one individual is selected on the grounds of a particular procedure. This individual is...

This paper presents the results of a field study at a large financial services firm that combines multiple methods, including two economic experiments, to measure ethical norms and their behavioral correlates. Standard survey questions eliciting ethical evaluations of actions in on-the-job...

This paper studies the role of autonomy and reciprocity in explaining control averse responses in principal-agents interactions. While most of the social psychology literature emphasizes the role of autonomy, recent economic research has provided an alternative explanation based on reciprocity....

This paper analyzes delegation and joint decision making in an environment with private information and partially aligned preferences. We compare the benefits of these two decision making procedures as well as the interaction between them. We give a condition under which delegation is preferred...

We conduct an artefactual field experiment to compare the individual preferences and propensity to cooperate of three pools of subjects: Undergraduate students, temporary workers and permanent workers. We find that students are more selfish and contribute less than workers. Temporary and...