Are you a Good Employee or Simply a Good Guy? Infl?uence Costs and Contract Design.

We develop a principal-agent model with a moral hazard problem in which the principal has access to a hard signal (the level of output) and a soft signal (the supervision signal) about the agent?s level of effort. We show that the agent?'s ability to manipulate the soft signal increases the cost of implementing the effcient equilibrium, leading to wage compression when the infl?uence cost is privately incurred by the agent. When manipulation activities negatively affect the agent?s productivity through the level of output, the design of infl?uence-free contracts that deter manipulation may lead to high-powered incentives. This result implies that high-productivity workers face incentive schemes that are more sensitive to hard evidence than those faced by their low-productivity counterparts. In that context, the principal will tolerate infl?uence for low-productivity workers but not for high-productivity workers. We also fi?nd that in the case of productivity-based costs, it may be optimal for the principal not to supervise the agent, even if supervision is costless.principal-agent model with supervision, contract design, in?uence activities, manipulation, productivity-based influence costs, power of incentives

No evidence of inequality aversion in the investment game

We report experimental evidence on second-movers’ behavior in the investment game (also known as the trust game) when there exists endowment heterogeneity. Using a within-subject analysis, we investigate whether or not second-movers exhibit some taste for inequality aversion by returning a larger (smaller) share of the available funds to first-movers who are initially endowed with a lesser (larger) endowment, respectively. Our data suggest that second-movers do not take into consideration the level of endowments when making their decisions as their behavior is consistent across distribution of endowments; i.e., they return the same proportion of the available funds regardless of the endowments. We indeed find that some second-movers have a tendency to return what they have received from firstmovers. In our data, there is also a substantial proportion of second-movers who are selfish and return nothing

Personal Lies

Using the mind game, we provide experimental evidence that people are more likely to lie when they disclose non-personal information (e.g., reporting a number they thought of) compared with personal information (e.g., reporting the last digit of their birth year). Our findings suggest that the type of information is an important factor for lying behavior

An Experiment on the Neolithic Agricultural Revolution. Causes and Impact on Inequality

Testing causal relationships expressed by mathematical models on facts about human behaviour across history is challenging. A prominent example is the Neolithic agricultural revolution [1]. Many theoretical models of the adoption of agriculture has been put forward [2] but none has been tested. The only exception is [3], that uses a computational approach with agent-based simulations of evolutionary games. Here, we propose two games that resemble the conditions of human societies before and after the agricultural revolution. The agricultural revolution is modelled as an exogenous shock in the lab (n=180, 60 independent groups), and the transition from foraging to farming results from an equilibrium selection process decided by experimental subjects. The experimental data replicate the known facts that foragers organized themselves around division of labour [4] and were more egalitarian than farmers [5]. There is also evidence of bi-modal distribution along the foraging-farming axis with many in-between groups [6, 7, 8]. These results provide direct evidence that the modes of production determine the system of values of societies (inequality) and lend support for the idea that human moved in a widespread manner from foraging to farming societies. We also find that cultural and institutional preconditions were crucial for farming [9], as more egalitarian foraging groups adopted earlier agricultural techniques, but inequality raises in farming societies as agriculture settles [10], with the long run success of agriculture being determined by the land-owner’s legitimacy. These results enrich our understanding of the Neolithic agricultural revolution and highlight the relevance of experimental methodology to generate a rich dataset that complements the fragmented evidence from archaeological sites

Equity and bargaining power in ultimatum games

This paper studies the extent to which offers and demands in ultimatum games are consistent with equity theory when there is a joint endowment to be distributed. Using a within-subject design, we also investigate the importance of the bargaining power by comparing the subjects’ behavior in the ultimatum and the no-veto-cost game, which differ in the possible cost of responders rejecting the proposers’ offer. Our findings suggest that proposers are willing to reward responders for their contribution to the joint endowment in any of the two games. As for responders, their behavior is consistent with equity theory only in the no-veto-cost game (in which a rejection is costless for them) when the game is first played. When the no-veto-cost game is played after the ultimatum game, we observe that the responders’ demands usually exceed their contribution to the endowment. Finally, this paper reports evidence that the ultimatum and the no-veto-cost game differ in terms of efficiency and rejection rates

Equal distribution or equal payoffs? Reciprocity and inequality aversion in the investment game

We report experimental evidence on second-movers' behavior in the investment game (also known as the trust game) when there exists endowment heterogeneity. Using a within-subject analysis, we investigate whether second-movers have a tendency to be reciprocal (i.e., they return to first movers at least what they have received from them), or exhibit some taste for inequality aversion (i.e., they return a larger (smaller) share of the available funds to first-movers who are initially endowed with a lesser (larger) endowment, respectively). Our results suggest that second-movers' behavior is consistent across distribution of endowments, what indicates that second-movers (on average) do not take into consideration the level of endowments when making their decisions. This finding, in turn, implies that subjects behave according to our definition of reciprocity and that inequality-aversion receives little support from our data

Equal distribution or equal payoffs? Reciprocity and inequality aversion in the investment game

We report experimental evidence on second-movers' behavior in the investment game (also known as the trust game) when there exists endowment heterogeneity. Using a within-subject analysis, we investigate whether second-movers have a tendency to be reciprocal (i.e., they return to first movers at least what they have received from them), or exhibit some taste for inequality aversion (i.e., they return a larger (smaller) share of the available funds to first-movers who are initially endowed with a lesser (larger) endowment, respectively). Our results suggest that second-movers' behavior is consistent across distribution of endowments, what indicates that second-movers (on average) do not take into consideration the level of endowments when making their decisions. This finding, in turn, implies that subjects behave according to our definition of reciprocity and that inequality-aversion receives little support from our data

Standard vs random dictator games: On the effects of role uncertainty and framing on generosity

This project was conducted while Ernesto Mesa-Vázquez was visiting Universidad Loyola Andalucia. He wants to particularly thank Pablo Brañas-Garza and Diego Jorrat for continued guidance and assessment with the experimental design. Álvaro Núñez-Bermúdez and the faculty members of the Economics and Business Sciences department at the University of Seville were very helpful in providing assistance for running the experiment. The paper has benefited from comments and suggestions provided by Maria Paz Espinosa, Giuseppe Attanassi, José Enrique Vila, Iván Arribas, Marco Faillo, Cristina Borra and participants at the Loyola Behavioral Lab and the Early Career Researchers in Experimental Economics Workshop (ECREEW) organized by the Red Española de Economía Experimental y del Comportamiento. Members of the ESA community were very helpful pointing out to relevant papers to our research. Special thanks to Daniel Müller, Michael Kurschilgen, Sabine Erika Kröger, Daniel Zizzo, Praveen Kujal, Paul J. Halevy, Michal Krawczyk and Matthias Greiff for their references and stimulating discussion. Finally, we acknowledge financial support from the Spanish Ministry of Economics and Competition under the project ECO2016- 75575-R (A. Urbano) and the Spanish Ministry of Science, Innovation and Universities under projects PID2019-110790RB-I00 (A. Urbano) and PGC2018-097875-A-I00 (Ismael Rodriguez-Lara); and the Generalitat Valenciana, Spain under the Excellence Program Prometeo 2019/095 (A. Urbano). Funding for open access charge: Universidad de Granada/CBUA. The usual disclaimers apply.We show that generosity is affected when we vary the level of role uncertainty, i.e., the probability that the dictator’s decision will be implemented. We also show that framing matters for generosity in that subjects are less generous when they are told that their choices will be implemented with a certain probability, compared with a setting in which they are told that their choices will not be implemented with certain probabilitySpanish Government ECO2016-75575-RSpanish Ministry of Economics and Competition PID2019-110790RB-I00 PGC2018-097875-A-I00Spanish Ministry of Science, Innovation and UniversitiesGeneralitat Valenciana 2019/095Universidad de Granada/CBU

Humans expect generosity

Mechanisms supporting human ultra-cooperativeness are very much subject to debate. One psychological feature likely to be relevant is the formation of expectations, particularly about receiving cooperative or generous behavior from others. Without such expectations, social life will be seriously impeded and, in turn, expectations leading to satisfactory interactions can become norms and institutionalize cooperation. In this paper, we assess people's expectations of generosity in a series of controlled experiments using the dictator game. Despite differences in respective roles, involvement in the game, degree of social distance or variation of stakes, the results are conclusive: subjects seldom predict that dictators will behave selfishly (by choosing the Nash equilibrium action, namely giving nothing). The majority of subjects expect that dictators will choose the equal split. This implies that generous behavior is not only observed in the lab, but also expected by subjects. In addition, expectations are accurate, matching closely the donations observed and showing that as a society we have a good grasp of how we interact. Finally, correlation between expectations and actual behavior suggests that expectations can be an important ingredient of generous or cooperative behavior.This project has been circulating over the last years under different titles. We greatly appreciate the comments and suggestions of James Andreoni, Jeffrey Butler, Antonio Cabrales, Valerio Capraro, Gary Charness, Maripaz Espinosa, John List, Luis Miller, Ignacio Palacios-Huerta, David Rand, Jean-Robert Tyran, as well as insights from participants at the French Economic Association Meeting (Lyon), SIG Max Planck Institute (Jena), the SEET Meeting, and Alhambra Meets Colosseo Meeting (Rome). We are also thankful to attendees of seminars in Bar-Ilan University, fae2-Bilbao, Middlesex University London and University of Exeter. Luis Lopez-Lemus provided excellent assistance during the experimental sessions run in Mexico, and Mark Houssart was very useful in proofreading the manuscript. This work was partially supported by the EU through FET-Proactive Project DOLFINS (contract no. 640772, A.S.) and FET-Open Project IBSEN (contract no. 662725, A.S.), grant ECO2013-44879-R from the Ministerio de Economia y Competitividad (Spain), grant FIS2015-64349-P (MINECO/FEDER, UE) and grant P12.SEJ.01436 from Junta de Andalucía (Spain)