In this paper we present an experiment on the false consensus effect. Unlike previous experiments, we provide monetary incentives for revealing the actual estimation of others' behavior. In each session and round sixteen subjects make a choice between two options simultaneously. Then they...

We experimentally study behavior in a simple voting game where players have private information about their preferences. With random matching, subjects overwhelmingly follow the dominant strategy to exaggerate their preferences, which leads to inefficiency. Applying a linking mechanism suggested...

Belief elicitation in economics experiments usually relies on paying subjects according to the accuracy of stated beliefs in addition to payments for other decisions. Such incentives, however, allow risk-averse subjects to hedge with their stated beliefs against adverse outcomes of other...

Standard models of moral hazard predict a negative relationship between risk and incentives, but the empirical work has not confirmed this prediction. In this paper, we propose a model with adverse selection followed by moral hazard, where effort and the degree of risk aversion are private...

Standard models of moral hazard predict a negative relationship between risk and incentives, but the empirical work has not confirmed this prediction. In this paper, we propose a model with adverse selection followed by moral hazard, where effort and the degree of risk aversion are private...

This paper examines the impact of vouchers in general, and voucher design in particular, on public school performance. It argues that all voucher programs are not created equal. There are often fundamental differences in voucher designs that affect public school incentives differently and induce...

In principal-agent settings with moral hazard, the fact that agents are altruistic vis-a-vis third parties (e.g. their family) modifies incentive costs. We derive sufficient conditions for the principal to benefit from altruism. They bear on how altruism affects the agent's marginal rate of...