An Experimental Bribery Game

Essential characteristics of corruption are (1) reciprocityrelationships between bribers and public officials, (2) negativewelfare effects, and (3) high penalties when discovered. Weseparate the influences of these factors in an experiment. Ina two-player game, reciprocation is economically inefficientthrough negative externalities. A control treatment withoutexternalities is also conducted. In a third, so-called suddendeath treatment, corrupt pairs face a low probability of exclusionfrom the experiment without payment. The results show that reciprocitycan establish bribery relationships, where negative externalitieshave no apparent effect. The penalty threat significantly reducescorruption, although discovery probabilities are typically underestimated.     

Identifying personality traits to enhance trust between organisations: an experimental approach

We investigate an experimental representatives' trust game which resembles trust relationships between representatives of organisations. Personality traits of subjects are elicited by a personality questionnaire (Cattell's 16 PF‐R) which is well established in personnel psychology. For the first time, personality traits are linked to actually observed behaviour in a trust game. Detailed personality profiles are derived and it is shown that they differ significantly between behavioural types. Individuals with low scores in anxiety turn out to be particularly qualified for enhancing trust between organisations. Copyright © 2008 John Wiley & Sons, Ltd.     

Career concerns in a simple experimental labour market

We experimentally investigate a simple version of Holmström's career concerns model in which firms compete for agents in two consecutive periods. Profits of firms are determined by agents’ unknown ability and the effort they choose. Before making second-period wage offers firms are informed about first-period profits. In a different treatment firms additionally learn the abilities of agents. Theory suggests high first-period equilibrium effort in the hidden ability treatment but no effort elsewhere. However, we find that effort tends to be higher in the revealed ability treatment and therefore conclude that transparency does not weaken, but strengthen career concerns incentives.     

Are non‐binding contracts really not worth the paper?

We experimentally investigate behavior in sequential one‐shot transactions which are governed by non‐binding contracts. In a second, incomplete information treatment, contracts are binding for some players. While according to traditional game‐theoretical analysis no trade is expected in the first treatment, full trade should result in the latter. However, we find that trade is even higher in the non‐binding contract treatment. On the one hand, non‐binding contracts—although they are cheap talk—do guide behavior, especially at the beginning of a business relationship, while reciprocal reactions prevail later on. On the other hand, in the treatment with binding contracts cooperative behavior appears to be crowded out. Copyright © 2005 John Wiley & Sons, Ltd.     

Who follows the crowd—Groups or individuals?

In games of social learning individuals tend to give too much weight to their own private information relative to the information that is conveyed by the choices of others (Weizsäcker, 2010). In this paper we investigate differences between individuals and small groups as decision makers in information cascade situations. In line with results from social psychology as well as results on Bayesian decision making (Charness et al., 2006) we find that groups behave more rationally than individuals. Groups, in particular, are able to abandon their own private signals more often than individuals when it is rational to do so. Our results indicate that the intellective part of the decision task contributes slightly more to the superior performance of groups than the judgmental part. Our findings have potential implications for the design of decision making processes in organisations, finance and other economic settings.     

Relative rewards within team-based compensation

How to design compensation schemes to motivate team members appears to be one of the most challenging problems in the economic analysis of labour provision. We shed light on this issue by experimentally investigating team-based compensations with and without bonuses awarded to the highest contributors in teams.A purely team-based compensation scheme induces agents to voluntarily cooperate while introducing an additional relative reward increases effort and efficiency only when the bonus is substantial. In this case, however, the data suggests that tournament competition crowds out voluntary cooperation within a team.     

Do two bribe less than one? – An experimental study on the four-eyes-principle

We incorporate a four-eyes-mechanism on the briber’s side into a bribery game. Our results are mixed. We find no effect of the mechanism in a one-shot setting, but a reduction of bribes when the setting is repeated.     

How to hire helpers? Evidence from a field experiment

How to hire voluntary helpers? We shed new light on this question by reporting a field experiment in which we invited 2859 students to help at the ‘ESA Europe 2012’ conference. Invitation emails varied non-monetary and monetary incentives to convince subjects to offer help. Students could apply to help at the conference and, if so, also specify the working time they wanted to provide. Just asking subjects to volunteer or offering them a certificate turned out to be significantly more motivating than mentioning that the regular conference fee would be waived for helpers. By means of an online-survey experiment, we find that intrinsic motivation to help is likely to have been crowded out by mentioning the waived fee. Increasing monetary incentives by varying hourly wages of 1, 5, and 10 Euros shows positive effects on the number of applications and on the working time offered. However, when comparing these results with treatments without any monetary compensation, the number of applications could not be increased by offering money and may even be reduced.     

Honesty in tournaments

We apply the die rolling experiment of Fischbacher and Föllmi-Heusi (2013) to a two-player tournament incentive scheme. Our treatments vary the prize spread. The data highlights that honesty is more pronounced when the prize spread is small.