The social preference of corrective taxation to corrective subsidy or to a policy of no action at all is examined within the context of a simple general general equilibrium framework in which an external production diseconomy exists. Equilibrium positions are obtained for a number of different...

An investment game is used to generate indices of trust and reciprocity from 182 young adults. The raw data indicate that men are more trusting than women and responders return a larger share of their resources to more trusting senders than to less trusting senders. Sex differences do not...

The objective of this paper is to use the ultimatum game setting in a controlled laboratory environment to provide additional empirical evidence on the puzzling phenomenon of why some economic agents may reject non-trivial offers for distributing the surplus of an economic transaction, while...

In this paper, we adapt the standard political economy models of mixed financing of private goods to allow for an exit option in which individuals can choose to neither consume nor finance the publicly provided private good. Using a controlled laboratory experiment, we empirically investigate...

In a laboratory-controlled environment we provide experimental evidence on the effects of transparency (complete over incomplete information) and empowerment on trust and trustworthiness. We implement a simple version of the standard two-person investment game in a repeated game context with...

Using data from a laboratory-controlled environment we analyze the decisions of principals to veto the allocations of grossed-up investments proposed by their agents in a modified trust game. We also analyze the changes in the surplus associated with the introduction of empowerment and the...

Schott et al. (2007) have shown that the “tragedy of the commons” can be overcome when individuals share their output equally in groups of optimal size and there is no communication. The assignment of individuals to groups as either strangers or partners does not significantly affect this...