The widespread use of markets leads to unprecedented material well-being in many societies. We study whether market interaction, as a side effect, erodes moral values. In an influential paper, Falk and Szech (2013) provide experimental data that seem to suggest that "market interaction erodes...

This paper analyzes responsibility attributions for outcomes of collective decision making processes. In particular, we ask if decision makers are blamed for being pivotal if they implement an unpopular outcome in a sequential voting process. We conduct an experimental voting game in which...

Behavioral robustness is essential in mechanism design. Existing papers focus on robustness as captured by dominant strategies. This paper studies the novel concept of externality-robustness, which addresses players' motives to affect other players' monetary payoffs. One example is externalities...

This paper studies socially responsible behavior in markets. We develop a laboratory product market in which low-cost production creates a negative externality for third parties, but where alternative production with higher costs mitigates the externality. Our first study, conducted in...

Are competitive mechanisms perceived as just sources of economic inequality? Perceptions of fairness violations can have severe economic consequences, as they may cause counterproductive behavior such as rule book slowdowns or quality shading. To analyze fairness perceptions associated with...

How does an ex ante contract affect behavior in an ex post renegotiation game? We address this question in a canonical buyer-seller relationship with renegotiation. Our paper provides causal experimental evidence that an initial contract has a highly significant and economically important impact...

This paper analyzes the impact of wage comparisons among inequity averse agents on optimal incentive intensities in a linear-exponential-normal moral hazard model with multi-tasking. We consider individual and team production tasks that differ in that only individual production causes wage...

We study how the scope of negative externalities from market activity affects the willingness of market actors to exhibit social responsibility. Using the laboratory experimental paradigm introduced by Bartling, Weber & Yao (2015), we compare the voluntary internalization of negative social...

The widespread use of markets leads to unprecedented material well-being in many societies. We study whether market interaction, as a side effect, erodes moral values. An encompassing understanding of the virtues and vices of markets, including their possible impact on moral values, is necessary...