Tax Liability Side Equivalence (tax LSE) claims that the statutory incidence of a tax is irrelevant for its economic incidence. In gift-exchange labor markets, firms provide a gift to workers by paying high wages, and workers reciprocate by providing high efforts. Tax LSE is theoretically...

We study the effects of competition in a context in which people's actions can not be contractually fixed. We find that in such an environment the very presence of competition does neither increase efficiency nor does it yield any payoff gains for the short side of the market. We also find that...

Theoretical research on claims problems has concentrated on normative properties and axiomatizations of solution concepts. We complement these analyses by empirical evidence on the predictability of three classical solution concepts in a bankruptcy problem. We examine both people's impartial...

Explaining the evolution and maintenance of cooperation among unrelated individuals is one of the fundamental problems in biology and the social sciences. Recent experimental evidence suggests that altruistic punishment is an important mechanism to maintain cooperation among humans. In this...

We investigate experimentally whether emotions affect bidding behavior in a first price auction. To induce emotions, we confront subjects after a first auction series with a positive or negative random economic shock. We then explore the relation between emotions and bidding behavior in a second...

In this paper we discuss experimental evidence for two different institutional approaches to a possible resolution of the fundamental conflict between social welfare maximization and individual utility maximization. The basic workhorse for modelling this conflict is the voluntary contribution of...

In this paper we investigate experimentally the functioning of a wage tax financed unemployment benefit system on the development of the budget deficit, unemployment, and some other indicators of economic performance in an international economy. We find support for the hypothesis that...

This paper reports the results of experiments involving a 3-person coalition formation game with an ultimatum bargaining character. The grand coalition was always the efficient coalition, whereas the values of the 2-person coalitions are varied such that they lead to an efficiency loss in the...

A recently much debated issue is why observed investment and growth rates in poor countries are lower than traditional theory predicts. Empirical evidence suggests that social and political instability is a major reason for the divergence between poor and rich countries. However, there is still...

In many business transactions, in labor-management relations, in international conflicts, and welfare state reforms bargainers hold strong entitlements that are often generated by claims that are not feasible any more. These entitlements seem to considerably shape negotiation behavior. By using...