An often-replicated result in the experimental literature on social dilemmas is that a large share of subjects reveal conditionally cooperative preferences. Cooperation generated by this type of preferences is notoriously unstable, as individuals reduce their contributions to the public good in...

Previous work has shown that unobservable random shocks on output have a detrimental effect on effort provision in short-term ('static') employment relationships. Given the prevalence of long-term ('dynamic') relationships in firms, we investigate whether the impact of shocks is similarly...

Empirical work on Akerlof's theory of gift exchange in labor markets has concentrated on the fair wage-effort hypothesis. In fact, however, the theory also contains a social component that stipulates that homogenous agents that are employed for the same wage level will exert more effort,...

Psychological game theory can help provide a rational choice explanation of framing effects; frames influence beliefs, beliefs influence motivations. We explain this theoretically, and explore the empirical relevance experimentally. In a 2×2 design of one-shot public good games we show that...

Psychological game theory can provide rational-choice-based framing effects; frames influence beliefs, beliefs influence motivations. We explain this theoretically and explore empirical relevance experimentally. In a 2×2 design of one-shot public good games we show that frames affect subject's...

An often-replicated result in the experimental literature on social dilemmas is that a large share of subjects reveal conditionally cooperative preferences. Cooperation generated by this type of preferences is notoriously unstable, as individuals reduce their contributions to the public good in...

Psychological game theory can provide rational-choice-based framing effects; frames influence beliefs, beliefs influence motivations. We explain this theoretically and explore empirical relevance experimentally. In a 2x2 design of one-shot public good games we show that frames affect subject’s...

We consider three-person envy games with a proposer, a responder, and a dummy player. In this class of games, the proposer, rather than allocating a constant pie, chooses the pie size which the responder can then accept or reject while the dummy player can only refuse his own share. While the...

Industrial organization is mainly concerned with the behavior of large firms. Experimental industrial organization therefore faces a problem: How can firms be brought into the laboratory? The main approach relies on framing: Call individuals firms! This experimental approach is not in line with...

We experimentally study behavior in a simple voting game where players have private information about their preferences. With random matching, subjects overwhelmingly follow the dominant strategy to exaggerate their preferences, which leads to inefficiency. We analyze an exogenous linking...