This paper theoretically and experimentally explores a fixed price mechanism inwhich, if aggregate demand exceeds supply, bidders are proportionally rationed. Ifdemand is uncertain, in equilibrium bidders overstate their true demand in order toalleviate the effects of being rationed. This effect...

This paper proposes a geometric delineation of distributional preference types and a non-parametric approach for their identification in a two-person context. It starts with a small set of assumptions on preferences and shows that this set (i) naturally results in a taxonomy of distributional...

We present a model where each of two players chooses between remuneration based on either private or team effort. Although at least one of the players has the equilibrium strategy to choose private remuneration, we frequently observe both players to choose team remuneration in a series of...

This paper tests social identity theory with respect to individuals' self-identification behavior. We report results from a laboratory experiment in which subjects choose their group membership, which is interpreted as decision to identify with the respective group. Inducing a trade-off between...

We propose and experimentally test a mechanism for a class of principal-agent problems in which agents can observe each others' efforts. In this mechanism each player costlessly assigns a share of the pie to each of the other players, after observing their contributions, and the final...

This paper studies behavior in experiments with a linear voluntary contributions mechanism for public goods conducted in Japan, the Netherlands, Spain and the USA. The same experimental design was used in the four countries. Our 'contribution function' design allows us to obtain a view of...

To study coordination in complex social systems such as financial markets, the authors introduce a new prediction market set -up that accounts for fundamental uncertainty. Nonetheless, the market is designed so that its total value is known, and thus its rationality can be evaluated. In two...

The effect of objective feedback on performance is often studied, while subjective feedback is largely neglected in the economics literature. We estimate the impact of positive subjective feedback - encouragement and praise - on effort and performance, and compare the effect by gender. We use a...

Thanks to the recent studies of the history and philosophy of experimental economics, it is well known that around the early 1980s, experimental economists made a case for the legitimacy of their laboratory work by emphasizing that it was a nice and indispensable complement to mechanism design...

In this paper, we examine labor market favoritism in a unique laboratory experiment design that can shed light on both the private benefits and spillover costs of employer favoritism (or discrimination). Group identity is induced on subjects such that each laboratory "society"consists of eight...