The effect of inequality on economic growth and efficiency is often debated. Our study investigates a behavioral phenomenon through which inequality might have adverse effects on economic growth. In particular we investigate whether or not individuals exhibit a discouragement effect in the face...

Tournament compensation of asset traders has been shown to promote deconvergence from intrinsic value pricing in an experimental asset market where all traders are so compensated (James and Isaac 2000). This paper explores the extent of this effect as experimental design parameters—proportion...