This paper focuses on the relationship between individual self-control and peer pressure. To this end, we performed a laboratory experiment that proceeded in two parts. The first part involved an individual real-effort task in which subjects could commit themselves to a particular level of performance while being tempted by an alternative recreational activity. The second part consisted of bargaining in a power-to-take game in which previously earned revenues were at stake. The experimental treatments involved variations in the available information provided to peers about previous individual behavior. The results show that many subjects make a serious commitment. Further, the subsequent revelation of commitment level induces subjects to increase the credible components of their commitment decisions. Past individual behaviors also play a role in bargaining because (i) partners who have committed themselves benefit from lower rates of both take and destruction and (ii) partners who have succumbed to temptation suffer from higher rates of both take and destruction.

This paper proposes a methodology to implement probabilistic belief elicitation in continuous-choice games. Representing subjective probabilistic beliefs about a continuous variable as a continuous subjective probability distribution, the methodology involves eliciting partial information about the subjective distribution and fitting a parametric distribution on the elicited data. As an illustration, the methodology is applied to a double auction experiment, where traders’ beliefs about the bidding choices of other market participants are elicited. Elicited subjective beliefs are found to differ from proxies such as Bayesian Nash equilibrium beliefs and empirical beliefs, both in terms of the forecasts of other traders’ bidding choices and in terms of the best-response bidding choices prescribed by beliefs. Elicited subjective beliefs help explain observed bidding choices better than BNE beliefs and empirical beliefs. By extending probabilistic belief elicitation beyond discrete-choice games to continuous-choice games, the proposed methodology enables to investigate the role of beliefs in a wider range of applications.

Many economic, political and social environments can be described as contests in which agents exert costly effort while competing over the distribution of a scarce resource. These environments have been studied using Tullock contests, all-pay auctions and rank-order tournaments. This survey provides a comprehensive review of experimental research on these three canonical contests. First, we review studies investigating the basic structure of contests, including the number of players and prizes, spillovers and externalities, heterogeneity, risk and incomplete information. Second, we discuss dynamic contests and multi-battle contests. Then we review studies examining sabotage, feedback, bias, collusion, alliances, group contests and gender, as well as field experiments. Finally, we discuss applications of contests and suggest directions for future research.

How should countries in a fixed exchange rate system balance their current account? This question was at the center of the historical debate between Keynes and White in 1944 and is being debated increasingly these days for the Eurozone. Should consolidation by deficit countries be complemented by higher spending in surplus countries in order to avoid a downward bias in the level of consumption? We investigate the associated disequilibrium behavior experimentally, letting our experimental subjects act as heads of state who repeatedly seek to coordinate their policies. If only deficits are punished, as proposed by White, we observe that consumption is persistently reduced and adjustment is slower than in a treatment in which a surplus is also punished, as suggested by Keynes. We find support for the fact that underconsumption occurs for behavioral but not for rational reasons.

Parliamentary democracies use the vote of confidence procedure, which links the survival of a government with that of a bill, in order to discipline members of the majority. In this paper I investigate the role that the vote of confidence procedure has on public good provision and show that it has unintended negative consequences: even when efficient, public goods may be turned down in favor of earmarked projects. I use a laboratory experiment to test my model and show that the increase in voting cohesion comes at the cost of a 23 % reduction in public good provision and more unequal earmarking.

We use a simple laboratory experiment to measure the effect on altruism of (i) whether the participants’ choices are presented verbally or non-verbally, and (ii) whether the participants have a large amount of loose change. We find strong evidence for the first effect and weaker evidence for the second. These effects may explain some of the variation in the average level of generosity found in different Dictator Game results.

A growing number of papers theoretically study the effects of introducing a preference signaling mechanism. However, the empirical literature has had difficulty proving a basic tenet, namely that an agent has more success when the agent uses a signal. This paper provides evidence based on a field experiment in an online dating market. Participants are randomly endowed with two or eight “virtual roses” that a participant can use for free to signal special interest when asking for a date. Our results show that, by sending a rose, a person can substantially increase the chance of the offer being accepted, and this positive effect is neither because the rose attracts attention from recipients nor because the rose is associated with unobserved quality. Furthermore, we find evidence that roses increase the total number of dates, instead of crowding out offers without roses attached. Despite the positive effect of sending roses, a substantial fraction of participants do not fully utilize their endowment of roses and even those who exhaust their endowment on average do not properly use their roses to maximize their dating success.