Decision makers often take risky decisions on the behalf of others rather than for themselves. Competing theoretical models predict both, higher as well as lower levels of risk aversion when taking risk for others, and the experimental evidence is mixed. In our within-subject design, money...

We design an experiment to investigate the influence of announced future variations in interest rates and prices on consumption decisions. In an experimental implementation of the discounted utility model, the subjects learn the entire paths of inflation and interest rates prior to deciding on a...

Fairness considerations are important determinants of behavior in unstructured bargaining situations with equal bargaining power. If the surplus over which the bargaining takes place was created by separate, individual efforts, several entitlementrelated fairness ideals might be relevant. In our...

We develop a simple experimental setting to evaluate the role of the Taylor principle, which holds that the nominal interest rate has to respond more than one-for-one to fluctuations in the inflation rate. In our setting, the average infl ation rate fluctuates around the inflation target if the...

Previous experimental investigations have shown that expectations are not perfectly rational due to bias. Traditional adaptive models, however, in many cases do not perfectly describe the formation of expectations either. This paper makes two contributions to the experimental literature on the...

In this paper we report the results of a laboratory experiment, in which we observed the behavior of agents in a simple macroeconomic setting. The structure of the economy was only partially known to the players which is a realistic feature of our experiment. We investigate whether subjects...