We present a field experiment to assess the effect of own and peer wage variations onactual work effort of employees with hourly wages. Work effort neither reacts to anincrease of the own wage, nor to a positive or negative peer comparison. This resultseems at odds with numerous laboratory...

In an experimental study we examine a variant of the ‘minimum effort game’, acoordination game with Pareto ranked equilibria, and risk considerations pointing to theleast efficient equilibrium. We focus on the question whether simple cues such as smiles,winks and handshakes could be...

Trust games are employed to investigate the effect of heterogeneity in income and5 race on cooperation in South Africa. The amount of socio-economic informationavailable to the subjects about their counterparts is varied. No significantbehavioural differences are observed when no such...

We study the effect of fair institutions on growth. In our model, individuals are endowed with unequal entitlements to theeconomy’s output. They can free-ride or cooperate. Cooperation is individually costly, but increases aggregate output and growth.Experimentally, we observe significantly...