In a laboratory experiment we study how costly punishment behavior of second and third parties in a social dilemma situation is affected by monitoring costs. Subjects have to pay a fee over and above punishment costs if they wish to condition punishments on previous play, which is equivalent to...

Is feedback on trustworthiness necessary for the functioning of economic relationships? In many real-world economic environments, such feedback can at best be acquired through costly monitoring, raising questions of how trust and efficiency can be maintained. In the lab, we conduct a modified...

In a laboratory experiment, using a game in which a “decider” determines her own payoff and the payoff of a “stakeholder” by choosing between two payoff allocations, we analyze the effect of time pressure on self-serving behavior under two transparency conditions. Under “transparent...