We apply the die rolling experiment of Fischbacher and Föllmi-Heusi (2013) to a two-player tournament incentive scheme. Our treatments vary the prize spread. The data highlights that honesty is more pronounced when the prize spread is small.

When employers can incur losses from the labor relationship in a gift exchange game, they offer lower wages on average than in a no-loss relationship. Taking employers’ risk of losing money into account, employees exert more effort per wage unit.

We introduce the joy-of-destruction game. Two players each receive an endowment and simultaneously decide on how much of the other player's endowment to destroy. In a treatment without fear of retaliation, money is destroyed in almost 40% of all decisions.