The financial industry has been struggling with widespread misconduct and public mistrust. Here we argue that the lack of trust into the financial industry may stem from the selection of subjects with little, if any, trustworthiness into the financial industry. We identify the social preferences...

The paper provides theoretical foundations for models of strategic interdependence under uncertainty that have a continuum of agents and a decomposition of uncertainty into an macro component and an agent-speci c micro component, with a law of large numbers for the latter. The decomposition of...

Frequently in experiments there is not only variance in the reaction of participants to treatment. The heterogeneity is patterned: discernible types of participants react differently. In principle, a finite mixture model is well suited to simultaneously estimate the probability that a given...

Arguably, for many citizens the perceived expected disutility from sanctions is smaller than the monetary gain from tax evasion. Nevertheless most people pay their taxes most of the time. In a lab experiment, we show that the willingness to pay taxes even absent enforcement is indeed pronounced....

Credence goods markets are characterized by pronounced informational asymmetries between consumers and expert sellers. As a consequence, consumers are often exploited and market efficiency is threatened. However, in the digital age, it has become easy and cheap for consumers to self-diagnose...

Personal information is shared extensively every day, partly in exchange for benefits or as a reaction to other people's information sharing. In this paper, we experimentally investigate these two factors by analyzing the interaction of peer comparison and incentives to disclose potentially...

Die deutsche Diskussion über die Europäische Währungsunion steckt in einer Empörungsfalle. Rechtsnormen und Zahlen werden ungenau und missverständlich wiedergegeben, Kausalzusammenhänge werden nicht belegt. Der Begriff des "Target-Kredits" vermengt volkswirtschaftliche und...

We study how the powerful perceive power abuse, and how negative experience related to it influences the appropriateness judgments of the powerless. We create an environment conducive to unfair exploitation in a repeated Public Goods game where one player (punisher) is given a further ability to...