When exogenously imposed, rank-order tournaments have incentive properties but their overall efficiency is reduced by a high variance in performance (Bull, Schotter, and Weigelt 1987). However, since the efficiency of performance-related pay is attributable both to its incentive effect and to...

This paper extends existing evidence on the interaction and relative productivity of cognitive effort and cognitive capital in an experimental environment. I focus on the impact of task-specific cognitive capital, which is central to the capital-labor argument of Camerer and Hogarth (1999) as...

Gneezy, List and Wu [Q. J. Econ. 121 (2006) 1283-1309] document that lotteries are often valued less than the lotteries’ worst outcomes. We show how to undo this result.

After the introduction in Section 2, we very briefly sketch out current theoretical and empirical developments in the social sciences. In our view, they all point in the same direction: toward the acute and increasing need for multidisciplinary longitudinal data covering a wide range of living...

In experiments with two-person sequential games we analyze whether responses to favorable and unfavorable actions depend on the elicitation procedure. In our “hot” treatment the second player responds to the first player’s observed action while in our “cold” treatment we follow the...

In the context of eliciting preferences for decision making under risk, we ask the question: “which might be the ‘best’ method for eliciting such preferences?”. It is well known that different methods differ in terms of the bias in the elicitation; it is rather less well-known that...

Measuring risk aversion is sensitive to assumptions about the wealth in subjects’ utility functions. Data from the same subjects in low- and high-stake lottery decisions allow estimating the wealth in a pre-specified one-parameter utility function simultaneously with risk aversion. This...

This paper deals with estimating data from experiments determining lottery certainty equivalents. The paper presents the parametric and nonparametric results of the least squares (mean), quantile (including median) and mode estimations. The examined data are found to be positively skewed for low...

In many economic contexts, an elusive variable of interest is the agent's expectation about relevant events, e.g. about other agents' behavior. Recent experimental studies as well as surveys have asked participants to state their beliefs explicitly, but little is known about the causal relation...

We critically review the methodological practices of two research programs which are jointly called 'neuroeconomics'. We defend the first of these, termed 'neurocellular economics' (NE) by Ross (2008), from an attack on its relevance by Gul and Pesendorfer (2008) (GP). This attack arbitrarily...