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Microfinance programs provide poor people with small loans given to jointly liable self-selected groups. Follow-up loans provide incentives to repay. We experimentally investigate the influence of those features on strategic default. Each group member invests in an individual risky project, whose outcome is known only to the individual investor. Subjects decide whether to contribute to group repayment or not. Only those with successful projects can contribute. The experiment ends if too few repay. We investigate group size and social ties effects and observe robust high repayment rates. Group lending outperforms individual lending. Self-selected groups show high but less stable contributions. (JEL C90, H41, I38, O16, Z13), I. INTRODUCTION In recent years microfinance institutions (MFIs) have become one of the most important instruments in development policy. The idea of microfinance arose in the mid-1970s when Mohammad Yunus [...]

We study the relation between the number of firms and price-cost margins under price competition with uncertainty about competitors' costs. We report an experiment in which two, three, and four identical firms repeatedly interact in this environment. In line with the theoretical prediction, market prices decrease with the number of firms, but on average stay above marginal costs. Pricing is more aggressive than in equilibrium. Absolute and relative surplus increases with the number of firms. Total surplus is close to the equilibrium level, because enhanced consumer surplus through lower prices is counteracted by occasional displacements of the most cost-efficient firm. (JEL C90, C72, D43, D83, L13), I. INTRODUCTION In markets with posted price competition sellers independently choose prices, which are publicly communicated to buyers on a take-it-or-leave-it basis. Such posted pricing is common in retail markets [...]

We introduce two variants of the one-shot joy-of-destruction minigame (mini-JOD). Two players are endowed with the same amount of money. They simultaneously decide whether or not to reduce the other player's payoff at an own cost. In one treatment there was a probability that nature would destroy the opponent's money anyway. We test whether this feature reduces the moral costs of nastiness, and find that destruction rates rise significantly, despite the absence of strategic reasons. (JEL C72, C91, D03), Antisocial behavior is ubiquitous in the real world. People suffer violence from perfect strangers or have their cars scratched and tires punctured. Computer viruses are circulated solely to do harm. [...]