The Axiom of Monotonicity (AM) is a necessary condition for a number of expected utility representations, including those obtained by de Finetti (1930), von Neumann and Morgenstern (1944), Savage (1954), and Anscombe and Auman (1963). The paper reports on experiments that directly test AM by...

We conduct a laboratory experiment to study the impact of affirmative action on the choice to compete in a multistage elimination contest. In particular, we assess whether gender quotas imposed in the final stage increase the share of female entrants and winners already in the first round of the...

Costly competitions between economic agents are modeled as contests. Researchers use laboratory experiments to study contests and test comparative static predictions of contest theory. Commonly, researchers find that participants' efforts are significantly higher than predicted by the standard...

We study the interaction between competition and social proximity on altruism, trust, and reciprocity. We decompose the behavioral channels by utilizing variants of both the Trust Game and the Dictator Game in a design that systematically controls the transmission of relevant information. Our...

Communication has been shown to play a positive role in promoting trust, yet there is no evidence on how sensitive this result is to the size of the gains from cooperation. To investigate this issue, we adopt an experimental design in which a trustee can send a free form message to a trustor,...

This paper provides a simple model of repeated extortion. In particular, we ask whether corrupt government officials' ex post opportunism to demand more once entrepreneurs have made sunk investments entails further distortion in resource allocations. We show that the inability of government...

The housing rental market offers a unique laboratory for studying price stickiness. This paper is motivated by two facts: 1. Tenants' rents are remarkably sticky even though regular and expected recontracting would, by itself, suggest substantial rent flexibility. 2. Rent stickiness varies...

Local interactions refer to social and economic phenomena where individuals' choices are influenced by the choices of others who are close to them socially or geographically. This represents a fairly accurate picture of human experience. Furthermore, since local interactions imply particular...

I develop a game theoretic model where players use two different reasoning processes in strategic situations: cooperative and competitive. Players always consider cooperating at first: if they believe others will cooperate with enough probability, they will do so; otherwise they behave...