We report evidence from public goods experiments with and without punishment which we conducted in Russia with 566 urban and rural participants of young and mature age cohorts. Russia is interesting for studying voluntary cooperation because of its long history of collectivism, and a huge urban-rural gap. In contrast to previous experiments we find no cooperation-enhancing effect of punishment....

Corporate scandals, reflected in excessive management compensation and fraudulent accounts, cause considerable damage. Agency theory’s insistence on linking the compensation of managers and directors as closely as possible to firm performance is a major reason for these scandals. They cannot be overcome by improving variable pay for performance, as selfish extrinsic motivation is reinforced. Ba...

How should an organization’s center allocate resources units under its control which are better informed? Even with conscientious productivity reviews, important information will remain asymmetrically held. If units value their own expenditures more than those of their peers, they will seek excess budgets and expenditures. Fortunately, budget authorities can infer productivities from units’ exp...

Conventional wisdom suggests that an increase in monetary incentives should induce agents to exert higher effort. In this paper, however, we demonstrate that this may not hold in team settings. In the context of sequential team production with positive externalities between agents, incentive reversal might occur: an increase in monetary incentives (either because rewards increase or effort cost...

The architecture and the computational kernels of SIMBEX, an Internet portal managing the simulation of elementary bimolecular processes as those occurring in crossed beam apparatuses, is discussed. The construction of this portal is our contribution to project 003/001 of the COST in Chemistry action D23 (Metachem: Metalaboratories for complex computational applications in chemistry). The porta...

If people are free to contract, will outcomes be efficient? We study the question through the lens of a non-cooperative model of contract negotiations, considering both compulsory and voluntary participation in negotiations. In either case, we find that all consistent equilibria of the contracting game are efficient in the case of two players. With mandatory participation, efficiency is attaina...

We examine the phenomenon of escalation from an economist's perspective, emphasizing explanations which do not rule out rational behavior on the part of rms or agents. We argue that escalation cannot be established as a separate phenomenon unless these possible alternative explanations are properly accounted for. We present Staw and Hoang's (1995) study of NBA data as an instance of where evide...

This paper studies the effect of litigation as a way to enforce patents when firms hold private information. Patent protection granted by courts affect the entry, settlement and litigation decisions of future innovations. The model is broadly consistent with recent empirical evidence. We show that higher protection might be detrimental to the patentholder since it reduces entry of infringers th...

Should the buyer of a customized good use competitive bidding or negotiation to select a contractor? To shed light on this question, we consider several possible determinants that may influence the choice of auctions versus negotiations. We then examine a comprehensive data set of private sector building contracts awarded in Northern California during the years 1995–2000. The analysis suggestsa...

In a public goods experiment with the opportunity to vote to expel members of a group, we found that contributions rose to nearly 100% of endowments with significantly higher efficiency compared with a noexpulsion baseline. Expulsions were strictly of the lowest contributors, and there was an exceptionally strong fall-off in contributions in the last period, when the expulsion threat was unavai...