The prevailing labour market models assume that minimum wages do not affect the labour supply schedule. We challenge this view in this paper by showing experimentally that minimum wages have significant and lasting effects on subjects’ reservation wages. The temporary introduction of a minimum...

Social preference research has fundamentally changed the way economists think about many important economic and social phenomena. However, the empirical foundation of social preferences is largely based on laboratory experiments with self-selected students as participants. This is potentially...

This paper reports evidence from a city-wide field experiment on trust. About 1000 inhabitants of Zurich take part in a trust experiment, in which first movers can condition their investments on the residential districts of second movers. First movers differentiate their investments...

Recent field evidence suggests a positive link between overconfidence and innovative activities. In this paper we argue that the connection between overconfidence and innovation is more complex than the previous literature suggests. In particular, we show theoretically and experimentally that...

The notion of contracts as reference points provides the basis for a deeper understanding of important phenomena such as the employment contract, vertical integration, firm scope, authority, and delegation. Previous experiments lend support to this notion but they ignore realistic aspects of...

Researchers have demonstrated that the presence of people with social preferences has important economic implications. However, the empirical basis of this research relies to a large extent on experiments that do not provide anonymity between experimenter and subject. It has been argued that...