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Bribery, a grand global challenge, often occurs across national jurisdictions. Behavioral research studying bribery to inform anticorruption interventions, however, has merely examined bribery within single nations. Here, we report online experiments and provide insights into crossnational bribery. We ran a pilot study (across three nations) and a large, incentivized experiment using a bribery game played across 18 nations ( N = 5,582, total number of incentivized decisions = 346,084). The results show that people offer disproportionally more bribes to interaction partners from nations with a high (vs. low) reputation for foreign bribery, measured by macrolevel indicators of corruption perceptions. People widely share nation-specific expectations about a nation’s bribery acceptance levels. However, these nation-specific expectations negatively correlate with actual bribe acceptance levels, suggesting shared yet inaccurate stereotypes about bribery tendencies. Moreover, the interaction partner’s national background (more than one’s own national background) drives people’s decision to offer or accept a bribe—a finding we label conditional bribery.

We contribute to the pressing question of how organizational design influences corporate wrongdoing by studying different decision structures — simultaneous vs. sequential — in experimental coordination games. Participants can report private information honestly, or lie to increase their own, as well as the group’s, payoff. In simultaneous decision structures, all group members report at the same time, without information about the reports of others, whereas in sequential decision structures there is a first mover who decides first. We find that the presence of a first mover decreases dishonesty levels in repeated interactions (but not in one-shot settings). We argue that this effect is primarily driven by image concerns of decision leaders.

Curbing bribery presents a global grand challenge. Increasingly bribery occurs across national jurisdictions. While behavioral approaches to study bribery have gained popularity to help design better anti-corruption policies, research has merely examined bribery within single nations. Here we provide first behavioral insights on cross-national bribery. We ran a pilot study (across three nations) and a large incentivized online experiment using a bribery game played across 18 nations (total N = 6,472). Results uncover that people offer bribes to interaction partners from nations with a reputation for being corrupt. People widely agree on expectations about a nation's bribery acceptance levels, but these expectations negatively correlate with reality, indicating incorrect shared expectations about bribery. The national background of one’s interaction partner matters more than one’s own national background for the emergence of cross-national bribery. The findings advance behavioral science of ethical behavior that has focused individual behavior by revealing a strong social influence from the respective interaction partners. Our behavioral insights also inform evidence-based anti-bribery policies and question previous cultural-deterministic views on bribery.

We study how help can be fostered by means of a team bonus in the presence of rank-order tournaments. In a simple model we combine elements of relative rewards and a team bonus and study their effect on effort, help and sabotage. Quite intuitively the theoretical analysis suggests that team members help less as relative rewards increase. This problem is mitigated by a team bonus that is proportional to the output of the whole team. We compare different parameter constellations of the theoretical benchmark with behavior observed in a one-shot experiment.

A recent debate raises questions on what shapes socially responsible behavior. In an experiment, we disentangle major determinants, social information, buyer/seller framing and diffusion of responsibility, and provide evidence on how they influence decisions when decision-makers can gain money by harming uninvolved parties. Our results show that buyer/seller framing tends to encourage subjects to make purely self-interested decisions. In contrast, social information about others who behaved socially responsible increases social responsibility. When comparing individual decisions with joint decisions, we observe no effect of diffusion of responsibility on socially responsible behavior.

In a novel real-effort setting, we experimentally study the effects of different communication media on creative performance in a collaborative task that is highly visual. While group communicating via chat seem to perform less well, groups that communicate via video conferences do not perform less well as compared to those that communicate face-to-face. Thus, we provide evidence that barriers to creativity in virtual teams can be mitigated by real-time video conference communication – at least when tasks are visual.

We analyze the effects of limited feedback on beliefs and contributions in a repeated public goods game setting. In a first experiment, we test whether exogenously determined feedback about a good example (i.e., the maximum contribution in a period) in contrast to a bad example (i.e., the minimum contribution in a period) induces higher contributions. We find that when the type of feedback is not transparent to the group members, good examples boost cooperation while bad examples hamper it. There is no difference when the type of feedback is transparent. In a second experiment, feedback is endogenously chosen by a group leader. The results show that a large majority of the group leaders count on the positive effect of providing a good example. This is true regardless whether they choose the feedback type to be transparent or non-transparent. Half of the group leaders make the type of feedback transparent. With endogenously chosen feedback about good examples no difference in contributions can be observed among transparent and non-transparent feedback selection. In both experiments feedback shapes subjects’ beliefs. With exogenously chosen feedback, transparent feedback tends to reduce beliefs when good examples are provided as feedback and tends to increase beliefs in when bad examples are provided as feedback compared to the respective non-transparent cases. Our results shed new light on the design of feedback provision in public goods settings.

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 se...

We set up a laboratory experiment to investigate systematically how varying the magnitude of outside options—the payoffs that materialize in case of a bargaining breakdown—of proposers and responders influences players’ demands and game outcomes (rejection rates, payoffs, efficiency) in ultimatum bargaining. We find that proposers as well as responders gradually increase their demands when their respective outside option increases. Rejections become more likely when the asymmetry in the players’ outside options is large. Generally, the predominance of the equal split decreases with increasing outside options. From a theoretical benchmark perspective we find a low predictive power of equilibria based on self-regarding preferences or inequity aversion. However, proposers and responders seem to be guided by the equity principle (Selten, The equity principle in economic behavior. Decision Theory, Social Ethics, Issues in Social Choice. Gottinger, Hans-Werner and Leinfellner, Werner, pp 269–281, 1978), while they apply equity rules inconsistently and self-servingly.

International audience; This review surveys recent research developed in behavioral economics on the determinants of unethical behavior. Most recent progress has been made in three directions: the understanding of the importance of moral norms in individual decision-making, the conflicting role of opportunities provided by asymmetries of information and social preferences, and the crucial effect of rules, occupational norms and incentive schemes in the diffusion of dishonesty. The connection between economics and psychology is the most vivid on the first dimension.

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.

Does probation pay a double dividend? Society saves the cost of incarceration, and convicts preserve their liberty. But does probation also reduce the risk of recidivism? In a meta-study we show that the field evidence is inconclusive. Moreover, it struggles with an identification problem: those put on probation are less likely to recidivate in the first place. We therefore complement the existing field evidence with a novel lab experiment that isolates the definitional feature of probation: the first sanction is conditional on being sanctioned again during the probation period. We find that probationers are more likely to recidivate (i.e., to reduce their contributions to a joint project), that punishment cost is higher, efficiency lower, and inequity higher. While experimental subjects are on probation, they increase their contributions to a joint project. However, once the probation period expires, they reduce their contributions. While in the aggregate these two effects almost cancel out, critically, those not punished themselves trust the institution less if punishment does not become immediately effective.

We experimentally investigate how different information about others’ individual contributions affects conditional cooperators’ willingness to cooperate in a one-shot linear public goods game. We find that when information about individual contributions is provided, contributions are generally higher than when only average information is available. This effect is particularly strong when others’ individual contributions are relatively homogeneous. When both types of information are provided, this effect is moderated. In the case of individual feedback we find the willingness to contribute to be higher the lower the variation in others' contributions, but with pronounced heterogeneity in individuals’ reactions. While the majority of conditional cooperators’ are mainly guided by others’ average contributions, more people follow the bad example of a low contributor than the good example of a high contributor. Overall, we provide evidence that information (and lack thereof) about others’ individual contributions affects conditional cooperators’ willingness to cooperate in systematic ways.

Economic interactions often take place in open communities, where agents are free to leave in order to join a more preferred community. Tiebout (1956) conjectured that “voting with feet” might generate considerable efficiency gains, since individuals with different preferences sort themselves into those communities that suit them most. We provide new empirical insights into Tiebout's intuition by showing that self-selection in open heterogeneous communities can significantly foster communities' success. Voting with feet improves cooperation by facilitating the right initial match between individuals and institutions and by establishing a cooperative environment that is attractive for others to join.

In three studies (S1–S3; N = 256) we investigated whether moral hypocrisy (MH) is motivated by conscious impression management concerns or whether it is self-deceptive. In a dictator game, MH occurred both within participants (saying one thing, doing another; S1) and between participants (doing one thing when it is inconsequential, doing another thing when it affects payoffs; S2). People were willing to let an ostensibly fair coin determine payoffs only if they could fudge the results of the coin flip, suggesting that hypocrites do not deceive themselves (S3). Also supporting this view, MH was associated with adherence to Conformity values (S1–S2), indicative of a desire to appear moral in the eyes of others but not indicative of self-deception. Universalism values were predictive of moral integrity (S1, S3).

We study gender diversity and performance in endogenously formed teams in a repeated work setting. Participants can choose whether to perform a cooperation task only with members of the own gender or in a mixed-gender team. We find that independent of the team choice, in the initial periods, men contribute significantly more to the team projects than women. This induces men to prefer the successful men-only teams in the subsequent periods, resulting in significantly higher profits for men compared to women. Only over time, this endogenously emerged “gender profit gap” closes.

We apply the die rolling experiment of Fischbacher and Follmi-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.

We studied gender diversity and performance in endogenously formed teams in a repeated teamwork setting. In our experiment, the participants (N = 168, 84 women and 84 men) chose whether to perform a cooperative task only with members of the own gender or in a mixed-gender team. We found that independent of the choice of team, in the initial period, men contributed significantly more to the team projects than women. Men preferred the successful men-only teams in the subsequent periods, resulting in significantly higher profits for men compared to women. This endogenously emerging “gender pay gap„ only closed over time.

We demonstrate that receiver credulity can be understood through a false consensus effect: the likelihood with which individuals believe messages about the behavior of others can be explained by their own behavioral tendencies in a comparable situation. In a laboratory experiment, subjects play a public good game with punishment in which feedback on actual contributions is obscured. Instead, subjects communicate what they have contributed through a post hoc announcement mechanism. Using subjects’ social value orientation as a proxy for their contribution tendency, we show that those high on the measure have inflated beliefs about the contribution of others. This, in turn, impacts their contribution and punishment decisions.

In his classic article “An Essay on Bargaining” Schelling (1956) argues that ignorance might actually be strength rather than weakness. We test and confirm Schelling's conjecture in a simple take-it-or-leave-it bargaining experiment where the proposer can choose between two possible offers. Option A always gives the proposer a higher payoff than option B . The payoff of the responder depends on the (randomly determined) state of nature. In one state payoffs of the two players are aligned whereas they are not aligned in the other state. The responder is always informed about the actual state. The proposer knows the actual state in our first treatment but not in the second. We find that proposers indeed benefit from ignorance because the responders accept almost all offers (even the unfavorable ones) if the payoffs are not transparent for the proposer. In additional treatments we investigate bargaining situations where the proposer can deliberately remain ignorant.

We investigate the influence of two popular compensation schemes on subjects’ inclination to lie by adapting an experimental setup of Fischbacher and Heusi (2008) . Lying turns out to be more pronounced under team incentives than under individual piece-rates, which highlights a fairly neglected feature of compensation schemes. Moreover, when disentangling different motives of the more pronounced unethical conduct under team incentives, we find that subjects tend to lie more under team incentives because they can diffuse their responsibility, i.e., their deceptive acts cannot unambiguously be attributed to them individually. Our findings are robust even when controlling for individual difference variables. In both compensation schemes subjects who are younger, male, high on Extraversion, and high on Neuroticism tend to lie more.

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 ( Weizsacker, 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.

Although relative performance schemes are pervasive in organizations, reliable empirical data on induced sabotage behavior are almost nonexistent. We study sabotage in repeated tournaments in a controlled laboratory experiment and observe that effort and sabotage are higher for higher wage spreads. Additionally, we find that also in the presence of tournament incentives, agents react reciprocally to higher wages by exerting higher effort. Destructive activities are reduced by explicitly calling them by their name “sabotage.” Communication among principal and agents can curb sabotage when they agree on flat prize structures and increased output. If sabotage is not possible, the principals choose tournament incentives more often. This paper was accepted by Peter Wakker, decision analysis.

I. INTRODUCTION Suppose several academics are working together on a research project: providing input to the joint project usually much resembles contributing to a public good, and therefore reciprocity and conditional cooperation may affect the team members. But now assume that, for a certain team member, working on the project pays privately. For example, this researcher might have to accomplish a task required for the project (e.g., gathering data or acquiring knowledge about a new research method) for some closely related and profitable consultancy work anyway. How will the collaborators on the project respond to the work input of this team member? Will they regard it as an example to follow or rather neglect any reciprocity motive because of the private profitability of the work? We analyze this situation by introducing a public-goods experiment where one privileged player (1) has a higher marginal per capita rate of return (MPCR) from the public good than have the other players. In our baseline treatment, the privileged player has an MPCR larger than one, that is, he/she has a net benefit from contributing to the public good. (2) In the other treatment, the privileged player has a high per capita rate, but the rate is smaller than one, such that contributions are relatively cheap for this player but still constitute a sacrifice. Our data show that the presence of a privileged player with an MPCR smaller than one has a positive impact on the contributions of the other players. However, if the privileged player has an MPCR larger than one, the other group members contribute less than they do in the first treatment. This is striking as the privileged players with an MPCR larger than one contribute almost their entire endowments. The results contribute to the literature on conditional cooperation, reciprocity, and leadership. There is substantial evidence that subjects are conditional cooperators, that is, they cooperate only if other players of the group do the same (Fischbacher, Gachter, and Fehr 2001). This robust finding has initiated public-goods experiments in which group members choose sequentially. Some player becomes the first mover--either voluntarily or exogenously imposed--who can give a positive example to the other group members (Clark and Sefton 2001; Gachter and Renner 2003; Guth et al. 2007; Levati, Sutter, and van der Heijden 2007; Potters, Sefton, and Vesterlund 2005, 2007). These studies find that participants indeed reciprocate to first movers who provide an example. A recent study compares cooperation in normal and privileged groups in simultaneous-move public-good games with and without punishment (Reuben and Riedl 2009). Consistent with our findings, the increased contributions of players with an MPCR larger than one are not necessarily reciprocated by other players. This can be due to the fact that other players take into account intentions and that the high contributions of the privileged player with an MPCR larger than one are interpreted as a merely selfish act. In line with this interpretation, leadership research suggests that self-sacrifice might be a crucial mediating factor to generate increased cooperation and reciprocity. In hypothetical public-good scenarios, it has been shown that leaders' nonmonetary sacrifices increase cooperation (De Cremer and van Knippenberg 2002; see also Choi and Mai-Dalton 1998) and, particularly, if distributive justice is low (De Cremer, van Dijke, and Bos 2004). Elaborating on these findings, we are the first to show that, in a public-good situation with different MPCRs, a privileged player's sacrifice considerably supports the emergence of reciprocating behavior in other players. II. THE EXPERIMENT A. Experimental Design In our experiment, subjects participate in two x ten periods of a typical linear public-goods game in constant groups of four players with a surprise restart (3) after Period 10. …

Every organization rests on some form of hierarchical structure. We experimentally study how different organizational reporting hierarchies influence dishonesty of group members. Group members repo...

Team leaders often provide incentives for cooperation. A challenging question is how different incentive schemes and their actual choice by the leader shape the team’s culture and contribute to the team’s success. To shed light on this issue we investigate how a leader chooses between rewards or punishment in an experimental team setting and how teammates’ contributions are influenced by this choice. Leaders show a clear initial preference for rewards, which diminishes over time in some teams. Leaders who observe more free-riders in their teams tend to switch to punishment incentives. A change from rewards to negative incentives results in an immediate and enduring increase in contributions. On the other hand, contributions show a decreasing trend in teams with a leader who sticks to rewards.

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.

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.

From an employer's perspective, a tournament should induce agents to exert productive activities but refrain from destructive ones. We experimentally test the predictive power of a tournament model which suggests that (within a reasonable framework) productive and destructive activities are influenced neither by the number of agents taking part in the tournament nor by the fraction of the winner prizes. Our results clearly confirm that sabotage in tournaments indeed occurs. While tournament size has virtually no effect on behavior, a balanced fraction of winner and loser prizes appears to enhance productive activities.

In corporate contests, employees compete for a prize. Ideally, contests induce employees to exert productive effort which increases their probability of winning. In many environments, however, employees can also improve their own ranking position by harming their colleagues. Such negative incentive effects of corporate contests are largely unexplored, which can partly be attributed to the fact that sabotaging behavior is almost unobservable in the field. In this study we analyze behavior in experimental contests with heterogeneous players who are able to mutually sabotage each other. We find that sabotaging behavior systematically varies with the composition of different types of contestants. Moreover, if the saboteur’s identity is revealed sabotage decreases while retaliation motives prevail. Our results promise to be valuable when designing corporate contests.

A recent debate raises the question whether market interaction erodes social responsibility. In an experiment, we disentangle three major characteristics of market interaction, diffusion of responsibility, social information, and market framing, and provide evidence for how these characteristics influence behavior when trade harms uninvolved parties. We model the negative externalities from trade by reducing donations to a charity that provides meals to needy children. Our results show that diffusion of responsibility tends to encourage subjects to make purely self-interested decisions. This holds to a much larger extent if the economic transaction is framed as a market. In contrast, social information increases social responsibility in our setting. Observing the behavior of others seems to convince a substantial fraction of people to behave steadfastly, i.e., they avoid trading a good that comes with negative externalities, even if gains from trade are high.

We experimentally study a frequently observed public good setting where accurate contribution feedback is not available and group members can send non-verifiable cheap talk messages about their contributions. As feedback, subjects receive only announced contributions or the announced or actual contribution with 50% probability. In this setting, we explore both information transmission and reception as well as the effectiveness of costly peer punishment. Overall, we find that cooperation breaks down in all announcement treatments except when actual contribution feedback is provided some of the time and punishment is available. We identify various constraints to full cooperation relative to the standard public good game. First, subjects make errors in adjusting their beliefs for the announcements of others and, on average, adjust their beliefs downward for a given announcement. Second, we find that significantly more punishment is assigned to high contributors compared to the standard public good game. Furthermore, punishment for low contributors appears to have a smaller disciplining effect. When actual contribution information is provided some of the time we find that these constraints are less severe compared to the setting where only announcements are available.

Does probation pay a double dividend? Society saves the cost of incarceration, and convicts preserve their liberty. But does probation also reduce the risk of recidivism? In a meta-study we show that the field evidence is inconclusive. Moreover it struggles with an identification problem: those put on probation are less likely to recidivate in the first place. We therefore complement the field evidence by a lab experiment that isolates the definitional feature of probation: the first sanction is conditional on being sanctioned again during the probation period. We find that probationers contribute less to a joint project; punishment cost is higher; efficiency is lower; inequity is higher. While experimental subjects are on probation, they increase their contributions to a joint project. However, once the probation period expires, they reduce their contributions. While in the aggregate these two effects almost cancel out, critically those not punished themselves do trust the institution less if punishment does not become effective immediately.

Microfinance institutions (MFIs) serve more than 5 million households in developing countries. A crucial variable for MFI schemes is the interest rate to be charged from borrowers. This paper studies the behavioural impacts of the repayment burden on repayment performance. In a laboratory experiment, we vary the amount a borrower group has to repay and study how this affects free-riding behaviour. We can identify two counteracting effects: a higher repayment burden intensifies the incentives to free-ride as shirking saves more money. On the other hand, high-interest loans are less tolerant towards defaulters, which exerts a disciplining effect.

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.

We experimentally investigate a simple version of Holmstrom'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.

We investigate a simple buyer/seller transaction, which is governed by a non-binding contract. In a first treatment none of the two players has to adhere to the contract but in a second, incomplete information treatment the contract may be binding for the buyer. According to normative game theory no trade is expected in the first treatment, but full trade should be observed in the latter. Contrary, we find that efficiency of trade is quite similar in both settings. Our results strongly recommend to look out for a behaviorally founded contract theory.

If organizations implement incentive systems in which rewards depend on relative rather than on absolute performance, activities are induced from at least two dimensions: (i) productive activities increase the own output of an agent whereas (ii) destructive ones (called sabotage) reduce the output of the competitors. Unfortunately, the sabotage dimension is quite hard to be investigated in real organizations because in general this activity is undesired and therefore strictly forbidden. The present paper aims to fill this gap by an experimental approach which provides clear evidence of the influence of the fraction of winner prizes and the size of the prize difference on both activity dimensions. Contrary to the game-theoretic prediction the productive activity is highest for non-experienced participants in tournaments with a balanced fraction of winner and loser prizes. Moreover, the amount of destructive effort exerted is inefficiently high in relation to the productive effort. This sabotage problem is exacerbated by an increase in the prize difference.

We introduce and experiment the Fisherman’s Game in which the application of economic theory leads to four different benchmarks. Non-cooperative sequential rationality predicts one extreme outcome while the core (which coincides with the competitive market equilibrium) predicts the other extreme. Intermediate, disjoint outcomes are predicted by fairness utility models and the Shapley value. None of the four benchmarks fully explains the observed behavior. However, since elements of both cooperative and non-cooperative game theory are crucial for organizing our data, we conclude that effort towards bridging the gap between the various concepts is a promising approach for future economic research.

Since recently, rank order tournaments have become quite popular for providing incentives in employment relationships. However, the consequences of different tournament designs are widely unexplored. This paper experimentally investigates different tournament design alternatives along two dimensions: tournament size and prize structure. We find that average effort tends to increase with a higher proportion of winner prizes. Additionally, variability of effort is lower if the number of winner prizes is high. Especially two-person tournaments are prone to collusion. Furthermore, we observe a restart effect.