We consider guilt averse agents and principals and study the effects of guilt on optimal behavior of the principal and the agent in a moral hazard model. The principal’s contract proposal contains a target effort in addition to the monetary incentive scheme. By accepting the agreement,...

We explore experimentally how power asymmetries between partners affect relationship-specific investments. We find that on average players’ investments are larger than equilibrium investments. In contrast to social dilemma experiments, in our experiment preferences for social welfare and...

We study ultimatum and dictator experiments where the first mover chooses the amount of money to be distributed between the players within a given interval, knowing that her own share is fixed. Thus, the first mover is faced with scarcity, but not with the typical trade-off between her own and...

Envy is often the cause of mutually harmful outcomes. We experimentally study the impact of envy in a bargaining setting in which there is no conflict in material interests: a proposer, holding the role of residual claimant, chooses the size of the pie to be shared with a responder, whose share...

Extensive research on human cooperation in social dilemmas has shown that individuals condition their behaviour upon the behaviour of others. However, few attempts have been made to disentangle the motivations backing conditional cooperation. We try to assess the relative importance of three...

We report the results of a combination of a dictator experiment with either a "social planner" or a "veil of ignorance" experiment. The experimental design and the analysis of the data are based on the theoretical framework proposed in the companion paper by Becker, Häger, and Heufer (BHH,...