Participation costs for responders can reduce rejection rates in ultimatum bargaining

This paper reports data from an ultimatum mini-game in which responders first had to choose whether or not to participate. Participation was costly, but the participation cost was smaller than the minimum payoff that a responder could guarantee himself in the ultimatum game. Compared to a standard treatment, we find that the rejection rate of unfavorable offers is significantly reduced when participation is costly. A possible explanation based on cognitive dissonance is offered

How burning money requires a lot of rationality to be effective

This paper proposes an extension of the valuation equilibrium concept (Jehiel and Samet, 2007), which partly endogenises the underlying grouping of actions. The effect on equilibrium predictions is illustrated in a burning money game. </p

Providing Public Goods in the Absence of Strong Institutions

This paper proposes a simple two-stage mechanism to establishnpositive contributions to public goods in the absence of powerful institutions tonprovide the public good and to sanction free-riders. In this mechanism players commit to the public good by paying a deposit prior to the contribution stage.nIf there is universal commitment, deposits are immediately refunded whenever anplayer contributes her speci¯ed share to the public good. If there is no universalncommitment, all deposits are refunded and the standard game is played. For suitable deposits, prior commitment and full ex post contributions are supported as a strict subgame perfect Nash equilibrium for the resulting game. As the mechanism obviates the need for any ex post prosecution of free-riders, it is particularlynsuited for situations where players do not submit to a common authority as in the case of international agreements