We test a mechanism whereby groups are formed endogenously, through the use of voting. Once formed, groups play a public-goods game, where there are economies of scale: in two treatments the social value of an incremental contribution to the group account increases with the size of the group,...

In this paper, we propose a new channel of contract design to boost efficiency. If deviating from one's own words induces a self-imposed moral burden, the optimal contracting procedure with regard to cheap talk shall assign the responsibility for installing the nonbinding promise in the contract...

We test a mechanism whereby groups are formed voluntarily, through the use of voting. These groups play a public-goods game, where efficiency increases with group size (up to a limit, in one treatment). It is feasible to exclude group members, to exit one's group, or to form larger groups...

Recently, there has been a Renaissance for multi-level selection models to explain the persistence of unselfish behavior in social dilemmas, in which assortative/correlated matching plays an important role. In the current study of a multi-round prisoners’ dilemma experiment, we introduce...

We study the two-color problem by Ellsberg (1961) with the modification that the decision maker draws twice with replacement and a different color wins in each draw. The 50-50 risky urn turns out to have the highest risk conceivable among all prospects including the ambiguous one, while all...