We examine the effects of strategic delegation in a simple ultimatum game experiment. Specifically, we show that when the proposer uses a delegate, his share increases. Since in such a case the proposer does not use the delegate as a commitment device, this effect identifies an additional...

We study the following basic intuition: when faced with a decision how to split their investment between a risky lottery and an asset with a fixed return, people increase the proportion invested in the risky option the more they like the lottery. We find counter-examples to this, and in fact we...

In contrast to the simplifying assumption of selfishness, social incentives have been shown to play a role in economic interactions. Before incorporating social incentives into models and policies, however, one needs to know their efficiency relative to standard pay-for-performance incentives....

We report evidence from a large field experiment that compares the effectiveness of contingent and noncontingent incentives in eliciting costly effort for a large range of payment levels. The company with which we worked sent 7,250 letters asking customers to complete a survey. Some letters...

First we discuss how extrinsic incentives may come into conflict with other motivations. For example, monetary incentives from principals may change how tasks are perceived by agents, with negative effects on behavior. In other cases, incentives might have the desired effects in the short term,...

We report experimental results on a series of ten one-shot two-person 3x3 normal form games with unique equilibrium in pure strategies played by non-economists. In contrast to previous experiments in which game theory predictions fail dramatically, a majority of actions taken coincided with the...

We compare behavior in modified dictator games with and without role uncertainty. Subjects choose between a selfish action, a costly surplus creating action (altruistic behavior) and a costly surplus destroying action (spiteful behavior). While costly surplus creating actions are most frequent...

We study optimal contracts in a simple model where employees are averse to inequity as modelled by Fehr and Schmidt (1999). A selfish employer can profitably exploit envy or guilt by offering contracts which create inequity off-equilibrium, i.e., when employees do not meet his demands. Such...

This paper uses subjects’ diverse self-reported justifications to explain discrepancies between observed heterogeneous behavior and the unique equilibrium prediction in a one-shot traveler's dilemma experiment. Principal components analysis suggests that iterative reasoning, aspiration levels,...