Male and female choices differ in many economic situations, e.g., on the labor market. This paper considers whether such differences are driven by different attitudes towards competition. In our experiment subjects choose between a tournament and a piecerate pay scheme before performing a real task. Men choose the tournament significantly more often than women. Women are mainly influenced by th...

We present an experimental study on the wasted resources associated with tax evasion. This waste arises from taxpayers and tax authorities, investing costly effort in concealment, respectively detection, of tax evasion. We show that (socially inefficient) efforts depend positively on the prevailing tax rate, but not on the fine which is imposed in case of detected tax evasion. The frequency of ...

This experiment investigates contests between groups. Each group has one strong player, with a higher valuation for the prize, and two weak players, with lower valuations. In contests where individual efforts are perfect substitutes, all players expend significantly higher efforts than predicted by theory. In best-shot contests, where group performance depends on the best performer, most of the...

Anecdotal and indirect empirical evidence suggest that excitement and market bubbles are intertwined, such that excitement not only arises during bubbles but may also help fuel them. We directly test the impact of excitement on bubbles in a bubbleprone experimental asset-pricing market (Capinalp, Porter, and Smith, 2001). Prior to trading, participants are assigned to emotion inductions through...

In many economic interactions, for instance in firms, the standard approximation of strict selfinterest is inadequate to modeling human behavior. A scientific theory of preferences, grounded in evolutionary psychological and biological theory, can avoid resort to ad hoc assumptions. Evolutionary theory is supported by a growing body of data including new results in experimental economics. It ho...

Most studies on the effect of incentives on risk attitude use within-subject designs. This may however raise an issue of sequentiality of effects as later choices may be influenced by earlier ones. This paper reports between-subject results on the effect of monetary stakes on risk attitudes for small probability prospects. Under low stakes, we find the typical risk seeking for small probabiliti...

We examine the degree of trust and trustworthiness in an experimental trust game with 662 participants from six different age groups, ranging from 8-year-olds to retired persons. Although both trust and trustworthiness have been identified as fundamental pillars for efficient economic interactions, economic research has devoted little attention to measuring their strength in different age group...

This paper investigates whether information about generosity or fairness can be useful in reducing dispute costs and enhancing bargaining efficiency. Subjects were first screened using a dictator game, with the allocations chosen used to separate participants into two types. Mutually anonymous pairs of subjects then bargained, with a dispute cost structure imposed. Sorting with identification r...

In the nineteenseventies, James Tobin suggested the introduction of a transaction tax on the currency market to cope with exchange rate volatility. We investigate the consequences of the introduction of such a tax on an asset market model from a game-theoretic and an experimental point of view. Our main results include in respect to our model that contrary to the situation in game-theoretic equ...

In this paper we provide experimental evidence indicating that incentive contracts may cause a strong crowding out of reciprocity-driven voluntary cooperation. This crowding out effect constitutes costs of incentive provision that have been largely neglected by economists. In our experiments the crowding out effect is so strong that the incentive contracts are less efficient than contracts with...