We present a simple mechanism that can be implemented in a simple experiment. In a modified trust game, the allocator can offer to pay the investor to cooperate. The mechanism is successful at implementing efficient outcomes: participants manage to achieve an efficient outcome, when this is...

This paper reports on experiments designed to compare the performance of two incentive mechanisms in public goods problems. One mechanism rewards and penalizes deviations from the average contribution of the other agents to the public good (tax-subsidy mechanism). Another mechanism allows agents...

This paper examines the occurrence and fragility of information cascades in laboratory experiments. One group of low informed subjects make predictions in sequence. In a matched pairs design, another set of high informed subjects observe the decisions of the first group and make predictions....

We compare the performance of two incentive mechanisms in public goods experiments. One mechanism, the Falkinger mechanism, rewards and penalizes agents for deviations from the average contributions to the public good (Falkinger mechanism). The other, the compensation mecha- nism, allows agents...

We compare the performance of two incentive mechanisms in public goods experiments. One mechanism, the Falkinger mechanism, rewards and penalizes agents for deviations from the average contributions to the public good (Falkinger mechanism). The other, the compensation mechanism, allows agents to...

We compare the performance of two incentive mechanisms in public goods experiments. One mechanism, the Falkinger mechanism, rewards and penalizes agents for deviations from the average contributions to the public good (Falkinger mechanism). The other, the compensation mechanism, allows agents to...

The paper reports on experiments designed to compare the performance of two incentive mechanisms in public goods problems. One mechanism rewards and penalizes deviations from the average contribution of the other agents to the public good (tax-subsidy mechanism). Another mechanism allows agents...