The sanctioning of norm-violating behavior by an effective formal authority is an efficient solution for social dilemmas. It is in the self-interest of voters and is often favorably contrasted with letting citizens take punishment into their own hands. Allowing informal sanctions, by contrast,...

Using a laboratory experiment, we examine whether informal monetary sanctions can lead to better coordination in a repeated minimum effort coordination game. While most groups first experience inefficient coordination, the efficiency increases substantially after introducing an ex post...

In today’s business environment, team work is omnipresent. But might teams be more prone toward non-compliance with laws and regulations than single individuals despite imminent neg-ative consequences of uncovering misconduct? The recent prevalence of corporate delinquencies gives rise to this...

This paper examines the effect of peers on individual risk taking. In the absence of informational motives, we investigate why social utility concerns may drive peer effects. We test for two main channels: utility from payoff differences and from conforming to the peer. We show experimentally...

A particular problem of traditional Rational Choice Theory is that it cannot explain equilibrium selection in simple coordination games. In this paper we analyze and discuss the solution concept for common coordination problems as incorporated in the theory of Team Reasoning (TR). Special...

Based on a Salop model with regulated prices, we investigate quality provision behavior of competing hospitals before and after a merger. For this, we use a controlled laboratory experiment where subjects decide on the level of treatment quality as head of a hospital. We find that the...

This study investigates a potential mechanism to promote coordination. With theoretical guidance using a belief-based learning model, we conduct a multi-period, binary-choice, and weakest-link laboratory coordination experiment to study the effect of gradualism – increasing the required...

When multiple charities, social programs and community projects simultaneously vie for funding, donors risk miscoordinating their contributions leading to an inefficient distribution of funding across projects. Community chests and other intermediary organizations facilitate coordination among...

When multiple charities, social programs and community projects simultaneously vie for funding, donors risk miscoordinating their contributions leading to an inefficient distribution of funding across projects. Community chests and other intermediary organizations facilitate coordination among...

The unravelling prediction of disclosure theory relies on the idea that strategic forces lead firms (information senders) to voluntarily disclose information about the quality of their products provided the information disclosed is verifiable and the costs of disclosure are negligible. This...