In this article, we show experimentally that individuals can adapt their decision making to social environments, like markets, and respond strategically to biases, such as regret aversion. We find they can employ herding as a behaviorally rational strategy to improve their expected outcomes and...

Trading is more than a personal valuation of own property. Traders try to anticipate the WTP potential buyers have for the good they want to sell. They do not focus on the value the entitlement has for them, their personal valuation is only a reservation price. The law analyzes the Endowment...

The realization of market transactions often depends on decisions in groups in which members are anonymous and cannot communicate, but have interrelated outcomes. In a comprehensive study, we investigated the interaction of group effects, strategic effects and endowment effects in different...

Anticommons are a special kind of mixed-motive dilemma in which negative effects for society are caused by the excessive use of exclusion rights. In two fully incentivized experiments on trading goods with risky prospects, we disentangle three psychological sources that have been suggested to...

Recent research in experimental law and economics shows that the imposition of a fine, intended to deter some harmful behavior, may crowd out moral motivation: the behavior occurs more frequently even though a payment is charged to discourage it. In A Fine is a Price, Gneezy and Rustichini...

Promising serves as an important commitment mechanism by operating on a potential cheater’s internal value system. We present experimental evidence on what motivates people to keep their promises. First, they feel that they are duty-bound to keep their promises regardless of whether promisees...