We study the interplay of inequality and trust in a dynamic game, in which trust increases efficiency and thus allows higher growth of the experimental economy in the future. We find that trust is initially high in a treatment starting with equal endowments, but decreases over time. In a...

Current social utility models posit fairness as a motive for certain types of strategic behavior. The models differ, however, with respect to how fairness is measured. Distribution models measure fairness in terms of relative payoff comparisons. Reciprocal-kindness models measure fairness in...

Experimental sealed bid first price auctions with private values in which feedback on the losing bids is provided yield lower revenues than auctions where this feedback is not given. Furthermore, bids tend to be above the equilibrium predictions for risk neutral bidders. While the latter...

Retributive responses do play a role in human behavior. Whether they are primarily triggered by supposed intentions or by observed consequences of actions is an important question. It can be addressed by experimental studies of retributive responses in situations in which the individual actor...

Applying an evolutionary framework, we investigate how a reputation mechanism and a buyer insurance (as used on Internet market platforms such as eBay) interact to promote trustworthiness and trust. Our analysis suggests that the costs involved in giving reliable feedback determine the gains...

We study an ultimatum experiment in which the responder does not know the offer when accepting or rejecting. Unconditional veto power leads to acceptances, although proposers are significantly greedier than in standard ultimatum games, and this is anticipated by responders.

We let subjects estimate behavior and expectations of others before they play dictator games, and only vary the quantitative scales for their estimates. Our data show that this manipulation may significantly affect economic decisions: dictators who are presented a scale with a higher midpoint...

Laboratory market experiments observe a sharp dichotomy between (selfish) competitive behavior and fair-minded social behavior depending on competitive conditions. While the dichotomy is consistent with social preference theory, the often advanced hypothesis that social behavior is an artifact...