This paper presents rigorous and direct tests of two assumptions relating to limited commitment and asymmetric information that underpin current models of risk pooling. A specially designed economic experiment involving 678 subjects across 23 Zimbabwean villages is used to solve the problems of...

Are individuals expected utility maximizers? This question represents much more than academic curiosity. In a normative sense, at stake are the fundamental underpinnings of the bulk of the last half-century’s models of choice under uncertainty. From a positive perspective, the ubiquitous...

Male and female choices differ in many economic situations, e.g., on the labor market. This paper considers whether such differences are driven by different attitudes towards competition. In our experiment subjects choose between a tournament and a piece-rate pay scheme before performing a real...

The labor economics literature has shown that the “efficient bargaining” model, in which wage and employment are negotiated simultaneously, is less frequently used on unionized markets than the less efficient “right-to-manage” model, in which wage is determined via bargaining and...