The effects of public subsidies in supporting innovative activity is subject to long-standing debates. Since empirical findings remain largely inconclusive, this study adds to this debate with counterfactual evidence from a laboratory experiment. In a creative real effort task simulating the...

Markets for credence goods are classified by experts alone being able to identify consumers' problems and determine appropriate services for solution. Examining a market where experts have to invest in costly diagnosis to correctly identify problems and consumers being able to visit multiple...

Economic research on innovation has long discussed which policy instruments best foster innovativeness in individuals and organizations. One of the instruments easily accessible to policy-makers is innovation contests; however, there is ambiguous empirical evidence concerning how such contests...

Markets for expert services are characterized by information asymmetries between experts and consumers. We analyze the effects of consumer information, where consumers suffer from either a minor or serious problem and only experts can infer the appropriate treatment. Consumer information is a...

Moral hazard in expert diagnoses is more complicated in credence goods markets because ex-post verification of service optimality is usually not possible. We provide an experimental framework to investigate expert and consumer behavior as well as market efficiency in a setting in which experts...

In this paper we contribute to the discussion on whether intellectual property rights foster or hinder innovation by means of a laboratory experiment. We introduce a novel Scrabble-like creativity task that captures most essentialities of a sequential innovation process. We use this task to...

In an experiment on moral cleansing with an endogenously manipulated moral self-image, we examine the relevance of the addressee of an immoral action. The treatments differ such that cheating on a die roll reduces either the experimenter´s or another subject´s payoff. We find that cheating is...

Economic small group research points to groups as more rational decision-makers in numerous economic situations. However, no attempts have been made to investigate whether groups are affected similarly by behavioral biases that are pervasive for individuals. If groups were also able to more...

Reputational herding has been considered as a driving force behind economic and financial forecasts clustered around consensus values. Strategic coordination can consequently explain poor performances of prediction markets as resulting from the distinct incentives that forecasters face. While...