We test whether the binary lottery procedure makes subjects behave as if they are risk neutral in the Holt-Laury and Eckel-Grossman tasks. Depending on the task we find that at most a third of subjects behave as if risk neutral. In fact, when we compare the distribution of choices we find no...

We provide an experimental analysis of competitive insurance markets with adverse selection. Our parameterized version of the lemons' model (Akerlof 1970) in the insurance context predicts total crowding out of low-risks when insurers offer a single full insurance contract. The therapy proposed...

Ambiguity aversion has shown to be economically relevant and has been proposed as an explanation for many phenomena in economics and finance. While the literature has suggested a large variety of elicitation methods to measure ambiguity preferences, their consistency and reliability it is rarely...

We theoretically show that agents with loss-averse preferences facing a decision to receive a bad financial payoff if they report honestly or to receive a better financial payoff if they report dishonestly are more likely to lie to avoid receiving the low payoff the lower the ex-ante probability...

Studying the likelihood that individuals cheat requires a valid statistical measure of dishonesty. We develop an easy empirical method to measure and compare lying behavior within and across studies to correct for sampling errors. This method estimates the full distribution of lying when agents...

We theoretically show that agents with loss-averse preferences facing a decision to receive a bad financial payoff if they report honestly or to receive a better financial payoff if they report dishonestly are more likely to lie to avoid receiving the low payoff the lower the ex-ante probability...

Studying the likelihood that individuals cheat requires a valid statistical measure of dishonesty. We develop an easy empirical method to measure and compare lying behavior within and across studies to correct for sampling errors. This method estimates the full distribution of lying when agents...

We report three repetitions of Falk and Kosfeld's (2006) C5 and C10 treatments whose results largely conflict with those of the original study. We mainly observe hidden costs of control of low magnitude which lead to low-trust principal-agent relationships. We also report an extension where...

I examine how financial incentives interact with intrinsic motivation and especially cognitive abilities in explaining heterogeneity in performance. Using a forecasting task with varying cognitive load, I show that the effectiveness of high-powered financial incentives as a stimulator of...

This paper extends existing evidence on the interaction between financial incentives and cognitive capital. I focus on the impact of task-specific cognitive capital, the role of which is central to the capital-labor-production framework of Camerer and Hogarth (1999) and has long been studied in...