We report an experiment designed to evaluate the impact of loss aversion on rent-seeking contests. We find, as theoretically predicted, a negative relationship between rent-seeking expenditures and loss aversion. However, for any degree of loss aversion, levels of rent-seeking expenditure are...

We report an experiment designed to evaluate the impact of loss aversion on rent-seeking contests. We find, as theoretically predicted, a negative relationship between rent-seeking expenditures and loss aversion. However, for any degree of loss aversion, levels of rent-seeking expenditure are...

This paper reports an experiment designed to test whether prior consultation within a group affects subsequent individual decision making in tasks where demonstrability of correct solutions is low. In our experiment subjects considered two paintings created by two different artists and were...

We analyze and evaluate the different decision rules describing the Council of Ministers of the EU starting from 1958 up to date. All the existing studies use the Banzhaf index (for binary voting) or the Shapley-Shubik index (for distributive politics). We argue that the nucleolus can be...

The game-theoretic assumption of ‘common knowledge of rationality’ leads to paradoxes when rationality is represented in a Bayesian framework as cautious expected utility maximisation with independent beliefs (ICEU). We diagnose and resolve these paradoxes by presenting a new class of formal...

We use an experimental lottery choice task and public goods game to examine if responsibility for the financial welfare of others affects decisionmaking behaviour in two different types of decision environments. We find no evidence that responsibility affects individual risk preferences....

It is well known that proposers have an advantage in the canonical model of bargaining in legislatures: proposers are sure of being part of the coalition that forms, and, conditional on being in a coalition, a player receives more as a proposer than as a coalition partner. In this paper I show...

Loss aversion can occur in riskless and risky choices. Yet, there is no evidence whether people who are loss averse in riskless choices are also loss averse in risky choices. We measure individual-level loss aversion in riskless choices in an endowment effect experiment by eliciting both WTA and...

We compare social preference and social norm based explanations for peer effects in a threeperson gift-exchange game experiment. In the experiment a principal pays a wage to each of two agents, who then make effort choices sequentially. We find that both agents supply more effort in response to...

We examine the effectiveness of bonuses and fines in an ‘inspection game’ where an employer can learn the effort of a worker through costly inspection. Standard game theoretic analysis predicts that fines discourage shirking, whereas bonuses encourage shirking. In contrast, ownpayoff effects...