Whether incentive contracts perform better than trust in terms of productiveefficiency is usually explored by principal-agent experiments (mostinvolving only one agent). We investigate this issue in the context of athree-person ultimatum experiment, which is simpler and more neutrallyframed than...

We construct a simple three person trust game with one trustor and two trustees. The trustorhas the possibility to either trust both trustees or none, while the trustees make their decisionseither sequentially or simultaneously, depending on the treatment. When trustees play...

The existing literature acknowledges that a mismatch between the experimenter'sand the subjects' models of an experimental task can adversely aect the interpretation ofdata from laboratory experiments. We discuss why the two common experimental designs(between-subjects and within-subjects) used...

Previous research indicates that risky and uncertain marginal returnsfrom the public good significantly lower contributions. This paper presentsexperimental results illustrating that the effects of risk and uncertainty dependon the employed parameterization. Specifically, if the value of the...

We replicate three pricing tasks of Gneezy, List and Wu (2006) for which they document the so called uncertainty effect, namely that people value a binary lottery over non-monetary outcomes less than other people value the lottery’s worse outcome. Unlike the authors who implement a verbal...

As firms implement tournament bonus reward schemes, mainly the idea is to introduce competition amongst their agents in the order to promote their performance.Tournaments in which agents compete for a bonus by investing effort, are frequentlyapplied, e.g., in development races, political...

In this paper, we experimentally test the Modigliani-Miller theorem. Applying ageneral equilibrium approach and not allowing for arbitrage among ¯rms with differ-ent capital structure, we are able to address a question fundamental to the valuationof firms: does capital structure affect the...

Similar to welfare economics where with(out) interpersonal comparisonsone defines unique (set-valued) welfare (Pareto) optima, we present a frameworkfor one-person decision making where with(out) a prior probability distributionindividual optimality prescribes usually a unique (set of)...