Economic interactions often take place in open communities, where agents are free to leave in order to join a more preferred community. Tiebout (1956) conjectured that “voting with feet” might generate considerable efficiency gains, since individuals with different preferences sort...

According to the Greek philosopher Plato “[…] if anyone at all is to have the privilege of lying the rulers of the State […] may be allowed to lie for the public good” (The Royal Lie). To investigate whether The Royal Lie may foster cooperation in public goods provision we experimentally...

We present a field experiment to assess the effect of own and peer wage variations on actual work effort of employees with hourly wages. Work effort neither reacts to an increase of the own wage, nor to a positive or negative peer comparison. This result seems at odds with numerous laboratory...

The impossibility of speculative trade result (Milgrom and Stokey, 1982) provokes the questions why traders care about their private information, if they cannot profit from it and how the aggregate information can then be reflected in REE prices. This paper answers these questions by analyzing a...

Team leaders often provide incentives for cooperation. A challenging question is how different incentive schemes and their actual choice by the leader shape the team's culture and contribute to the team's success. To shed light on this issue we investigate how a leader chooses between rewards or...