This paper reports an experiment evaluating the effect of gift giving on building trust in a relationship. We have nested our explorations in the standard version of the investment game. Our gift treatment includes a dictator stage in which the trustee decides whether to give a gift to the...

Both the law and culture make a central distinction between acts of commission that overturn the status quo and acts of omission that uphold it. In everyday life acts of commission often elicit stronger reciprocal responses than do acts of omission. In this paper we compare reciprocal responses...

What is the motivational effect of imposing a minimum effort requirement? Agents may no longer exert voluntary effort but merely meet the requirement. Here, we examine how such hidden costs of control change when control is considered legitimate. We study a principal-agent model where control...

We conduct an experimental test of the long-standing conjecture that autonomy increases motivation and task performance. Subjects face a menu consisting of two projects: risky and safe. The probability that the risky project succeeds depends on the subject's effort. In one treatment, subjects...

When groups face difficult problems, the voice of experts may be lost in the noise of others' contributions. We present results from a 'naturally noisy' setting, a large first-year undergraduate class, in which the 'expert's voice is lost' to such a degree that it is in fact optimal for all...

We develop, and experimentally test, models of informal agreements. Agents are assumed to be honest but suffer costs of overcoming temptations. We extend two classical bargaining solutions -- split-the-difference and deal-me-out -- to this informal agreement setting. For each solution there are...

In Internet auctions bidders frequently bid in one of three ways: either only early, or late, or they revise their early bids. This paper rationalizes all three bidding patterns within a single equilibrium. We consider a model of a dynamic auction in which bidders can search for outside prices...

We examine equilibration in a market where Marshallian path adjustment can be enforced, or not, as a treatment: a posted offer market either with buyer queueing via value order, or random order, respectively. We derive equilibrium predictions, and run experiments crossing queueing rules with...

Lab evidence on trust games involves more cooperation than conventional economic theory predicts. We explore whether this pattern extends to a field setting where (much like in a lab) we are able to control for (lack of) repeat-play and reputation: cab drivers in Mexico City. We find a...