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We conduct a field and an online classroom experiment to study gender differences in self-set performance goals and their effects on performance in a real-effort task. We distinguish between public and private goals, performance being public and identifiable in both cases. Participants set significantly more ambitious goals when these are public. Women choose lower goals than men in both treatments. Men perform better than women under private and public goals as well as in the absence of goal setting, consistent with the identifiability of performance causing gender differences, as found in other studies. Compared to private goal setting, public goal setting does not affect men's performance at all but it leads to women's performance being significantly lower. Comparing self-set goals with actual performance we find that under private goal setting women's performance is on average 67% of goals, whereas for men it is 57%. Under public goal setting the corresponding percentages are 43% and 39%, respectively., Brandts thanks the Spanish Ministerio de Ciencia e Innovación (Grant number PID2020-114251GB-I00), the Spanish Agencia Estatal de Investigación (AEI), through the Severo Ochoa Programme for Centres of Excellence in R&D (Barcelona School of Economics CEX2019-000915-S) and the Generalitat de Catalunya (Grant: 2017 SGR 1136) for financial support.

We study the performance effects of two profit sharing schemes in a simplified representation of an organization with high task interdependence. The production process involves three stages such that output of earlier stages is the necessary input for subsequent stages. Work at earlier stages is easier than at later stages and the product is only final if it goes successfully through the highest stage. We compare the effects on the performance of the organization of a payment scheme in which profits are equally shared by all those involved in the production process with one where the participation in profits is strongly increasing in the production stage. The comparison is made for two ways of assigning individuals to the production stage: randomly or by merit. We also study the distinction between sharing schemes that are exogenously imposed and those that are chosen by the person at the top of the hierarchy. We find that overall the type of payment scheme has no effect on profits. We also find that profits increase over time and more so with the equal than with the unequal sharing scheme. The high interdependence in production that we study makes steep incentives ineffective and even counter-productive. These changes in profits over time can be explained by changes in production performance over time. We also find that merit-based assignment to positions in the hierarchy leads to significantly higher profits than random assignment., The authors gratefully acknowledge financial support from the Spanish Ministry of Economics and Competitiveness through Grant: ECO2017-88130 and through the Severo Ochoa Program for Centers of Excellence in R&D (CEX2019-000915-S), the Generalitat de Catalunya (Grant: 2017 SGR 1136) and the Antoni Serra Ramoneda (UAB – Catalunya Caixa) Research Chair.

Advice processes are omnipresent in our professional and private lives. We use a laboratory experiment to study how gender and gender matching affect advice giving and how gender matching affects advice following about entry into a real-effort tournament. For advice giving we find that women are less likely than men to recommend tournament entry to advisees than are intermediate performers. Furthermore, women maximize less often the expected earnings of advisees than intermediate performers. For advice following we find that men enter the tournament significantly more often than women in the intermediate-performance group do. Gender matching does not seem to affect advice giving or following. Overall, when it is less clear what the better advice or decision is, gender differences emerge. These results are consistent with findings in other areas that document that gender differences emerge in situations that are more ambiguous., The authors gratefully acknowledge financial support from the Spanish Ministry of Economy and Competitiveness (Grant: ECO2017-88130), the Severo Ochoa Program for Centers of Excellence in R&D (SEV2015-0563) the Generalitat de Catalunya (Grant: 2017 SGR 1136) and the Antoni Serra Ramoneda (UAB – Catalunya Caixa) Research Chair.

We conduct a field and an online classroom experiment to study gender differences in self-set performance goals and their effects on performance in a real-effort task. We distinguish between public and private goals, performance being public and identifiable in both cases. Participants set significantly more ambitious goals when these are public. Women choose lower goals than men in both treatments. Men perform better than women under private and public goals as well as in the absence of goal setting, consistent with the identifiability of performance causing gender differences, as found in other studies. Compared to private goal setting, public goal setting does not affect men's performance at all but it leads to women's performance being significantly lower. Comparing self-set goals with actual performance we find that under private goal setting women's performance is on average 67% of goals, whereas for men it is 57%. Under public goal setting the corresponding percentages are 43% and 39%, respectively.

Some popular views about the workings of the economy are completely at odds with solid empirical evidence and congruent theoretical explanations and therefore can be qualified as misconceptions. Such beliefs lead to support for harmful policies. Cognitive biases may contribute to explaining why misconceptions persist even when scientific information is provided to people. We conduct two experimental studies to investigate, for the first time in economics, whether presenting information in a refutational way affects people’s beliefs about an important socio-economic issue on which expert consensus is very strong: the harmful effects of rent controls. In the laboratory (Study 1) both our refutational and non-refutational messages induce a belief change in the direction of expert knowledge. The refutational message, however, does not improve significantly on the non-refutational one. In the field (Study 2), where participants are college students receiving economic training, the refutational text improves, subject to some caveats, on standard instruction but not on the non-refutational message. The main overall implications of our results are that providing information moderately reduces the misconception, but does not eliminate it, and that the refutational approach does not work better than providing the same information in a non-refutational manner., The authors acknowledge financial support from the Spanish Ministerio de Ciencia e Innovación and FEDER, through grants PID2020-114251GB-I00 (Brandts), ECO2017-82882-R (Lopez-Mayan), PGC2018-094364-B-I00 (Panadés); RTI2018-095799-B-I00 (Busom). Authors also acknowledge financial support from Generalitat de Catalunya 2017SGR 1136 (Brandts), 2017SGR 207 (Busom) and 2017SGR 1765 (Lopez-Mayan and Panadés) and the Spanish Agencia Estatal de Investigación (AEI), through the Severo Ochoa Programme for Centres of Excellence in R&D (Barcelona School of Economics CEX2019-000915-S) (Brandts). This work complies with the ethical requirements of Universitat Autonoma de Barcelona and Universitat de Valencia.

A common rationale for the use of salary contracts is that they can produce substantial incentive effects when coupled with firing threats. However, enforcing firing threats may require close supervision of employees, thus possibly offsetting the very reasons salaries are commonly used, such as lowering monitoring costs and granting autonomy to employees. We design a series of experiments to study the effectiveness of firing threats when only limited information is available to supervisors. We show that light and unobtrusive supervision can produce large incentive effects. Compared to salary contracts, firing threats based on observing organizational performance alone increase employees’ output by 70% whereas only observing how long an employee works doubles output. These findings show that salaries can produce large incentive effects even in the absence of intensive supervision. Finally, we show that salary contracts with firing threats perform at least as well as other popular incentive schemes, such as bonuses, individual and team incentives, that rely on a similar amount of information about employees., The authors gratefully acknowledge financial support from the Spanish Ministry of Economics and Competitiveness through Grant: ECO2017–88130 and through the Severo Ochoa Program for Centers of Excellence in R&D (CEX2019–000915-S), the Generalitat de Catalunya (Grant: 2017 SGR 1136).

Competition involves two dimensions, rivalry for resources and social-status ranking. In our experiment we exclude the first dimension and investigate gender differences in the preference for status ranking. Participants perform a task under non-rivalry incentives. Before doing so, individuals indicate whether they prefer to do the task in an environment with social-status ranking or one without, knowing whether or not the choice will be imposed upon the whole group (as opposed to being personal) and whether the ranking will be observed by a man or a woman. We find no gender difference in mean status-ranking aversion when the ranking is personal. When the ranking is imposed, there are still no gender differences in the preferences for social ranking when the rank observer is a woman, and women are not affected by the rank observer's gender. With a male rank observer, however, men have a much stronger desire to be ranked than with a female rank observer., We thank the EUI (Grant IP53), the Spanish Ministry of Economics and Competitiveness through (Grant: ECO2017-88130) and through the Severo Ochoa Program for Centers of Excellence in R&D (SEV2015-0563) and the Generalitat de Catalunya (Grant: 2017 SGR 1136) for financial support.

Trabajo presentado en los KTI International seminar series organizados por el Centre for Economic and Regional Studies de la Hungarian Academy of Sciences, durante el 15 de junio de 2017, We experimentally study the effects of different types of market experience on the efficiency levels attained in a subsequent social dilemma. Our motivation stems from the existence of contrasting views on the potential spillover effects of participation in markets on non-market activities requiring cooperation. In our set-up, market interaction takes place in a continuous double auction involving a short and a long side of the market. This feature represents the very unequal opportunities that exist in some markets. Our focus is on the comparison of the efficiency levels attained in a subsequent social dilemma by pairs of individuals who were on the short side of the market, market-winners, with that of individuals who were on the long side, market-losers. We study both the cases where interaction in the social dilemma is with others from the same market, Market-Partners, and where it is with others from another market, Market-Strangers. We compare the efficiency of cooperation with and without market experience controlling for earnings, allowing us to identify the causal effects of market interaction. The results show that the experience of market interaction has a negative effect on cooperation efficiency in Market-Partners. This holds for both market-losers and market-winners pairs. By contrast, for Market-Strangers we find the positive effect that market-winner pairs tend to achieve higher cooperation efficiency than in the absence of previous market interaction., The authors thank the Spanish Ministerio de Economia y Competitividad (Grant: ECO2014-59302-P), the Generalitat de Catalunya (Grant: 2014 SGR 510), the Antoni Serra Ramoneda Research Chair (UAB-Catalunya Caixa) for financial support.

Democracies go to war with each other less frequently than dictatorships do with each other. This is an established empirical regularity. However, it is not clear whether there is a causal link between democracy and peace. We use laboratory experiments to study whether there is a causal impact. We study the bellicosity of democracies compared with two types of dictatorships, inclusive and exclusive, where each society is composed of three members. We also analyze how bellicosity depends on the presence of the possibility of deliberation among the members of a society. Neither the ‘voting’ nor ‘inclusion’ aspect of democracy nor ‘deliberation’ in isolation has a positive causal impact on peace. However, when all three are combined, there is evidence that their combination produces less bellicosity than some kinds of dictatorship. It is the availability of deliberation that makes the crucial distinguishing difference for democracy in our experiment. We observe democratic peace only in the presence of deliberation.

Resumen del trabajo presentado en el Second Reading Experimental and Behavioral Economics Workshop (REBEW), celebrado en Reading, Berkshire (Gran Bretaña), el 16 de mayo de 2019, False beliefs about natural, health and socio-economic issues are pervasive in society. Many persist even when contradicted by scientific evidence. Research in cognitive psychology shows that this behaviour relates to several cognitive biases. Consequently, dispelling misconceptions may be hard, even after exposure to sound information. We conduct a field and a lab experiment to investigate the effect of a particular communication strategy, the refutation text, previously used in the natural sciences and psychology, on a widespread economic misconception: the belief that rent controls make housing available to more people. Our interest is in successfully communicating social science results to the general public and in effectively teaching economics. We find that in the field a refutation text induces a significant belief change in the direction of expert reasoning and of evidence.

Corrigendum Text: The sentence in the abstract: “Furthermore, women maximize less often the expected earnings of advisees than intermediate performers” is incorrect. The correct sentence is: “Furthermore, women maximize less often the expected earnings of advisees that are intermediate performers.” The authors apologize for this error.

Competition involves two dimensions, rivalry for resources and social-status ranking. In our experiment we exclude the first dimension and investigate gender differences in the preference for status ranking. Participants perform a task under non-rivalry incentives. Before doing so, individuals indicate whether they prefer to do the task in an environment with social-status ranking or one without, knowing whether or not the choice will be imposed upon the whole group (as opposed to being personal) and whether the ranking will be done by a man or a woman. We find no gender difference in mean status-ranking aversion when the ranking is personal. When the ranking is imposed, there are still no gender differences in the preferences for social ranking when the ranker is a women, and women are not affected by the ranker’s gender. With a male ranker, however, men have a much stronger desire to be ranked than with a female ranker.

We present results from three-player experiments aimed at studying distributional concerns in how owner-managers compensate themselves and workers of different productivities and effort costs, as well as their relations to various equity principles. We are also interested in how owner-managers decisions’ are affected by pay secrecy. We use a game in which workers first exert effort and owner-managers then decide on bonuses for themselves and workers. Our design includes four treatments: (1) different productivities of workers with complete information; (2) different productivities of workers with pay secrecy among workers; (3) different effort cost of workers with complete information; and (4) different effort cost of workers with pay secrecy among workers. The equity principles we focus on are ‘production-equity’, higher production leads to higher wage, and ‘effort-cost equity’, higher effort-cost leads to higher wage. Across all treatments about 50% of all manager choices are compatible both with ‘production equity’ and with ‘effort- cost equity’, about 20% only with production equity and about 15% only with effort-cost equity. Overall, the effect of effort-cost equity is significantly stronger than that of production-equity. Pay secrecy does not significantly affect compensation differences among workers., The authors gratefully acknowledge financial support from the Spanish Ministry of Economy and Competitiveness (Grant: ECO2017-88130), the Severo Ochoa Program for Centers of Excellence in R&D (SEV2015-0563) the Generalitat de Catalunya (Grant: 2017 SGR 1136).and the Antoni Serra Ramoneda (UAB – Catalunya Caixa) Research Chair

Competition involves two main dimensions, a rivalry for resources and the ranking of relative performance. If socially recognized, the latter yields a ranking in terms of social status. The rivalry for resources resulting from competitive incentives has been found to negatively affect women’s performance relative to that of men. However, little is known about gender differences in the performance consequences of social-status ranking. In our experiments we introduce a novel design that allows us to isolate the effects of status ranking from those caused by a rivalry for resources. Subjects do a time-limited task where they need to search for numbers and add them up. Performance is straightforwardly measured by the number of correct summations. When there is no status ranking we find no gender differences in the number of attempted summations or in performance. By contrast, when there is status ranking men significantly increase the number of attempted summations as well as the number of correct summations. Remarkably, when women are subjected to status ranking, they significantly decrease the number of attempted summations. The net result is striking. With status ranking men attempt more summations and correctly solve many more than women. These differences are markedly large and statistically highly significant. Our results suggest that increased participation in competitive environments could harm women’s labor market success along a hidden channel., We also thank the Research Priority Area Behavioral Economics of the University of Amsterdam, the Spanish Ministry of Economics and Competitiveness through Grant: ECO2014-59302-P and through the Severo Ochoa Program for Centers of Excellence in R&D (SEV2015-0563) and the Generalitat de Catalunya (Grant: 2014 SGR 510) for financial support, Veronica Benet-Martinez for providing us access to the laboratory of the Universitat Pompeu Fabra in Barcelona, and Pablo Lopez-Aguilar, Eva Maciocco, Elia Soler Pastor, Silvia Soriano and Imma Triano for help in organizing the experiments.

We study experimentally how the ability to communicate affects the frequency andeffectiveness of flexible and inflexible contracts in a bilateral trade context where sellers canadjust trade quality after observing a post-contractual cost shock and a discretionary buyertransfer. In the absence of communication, we find that rigid contracts are more frequent andlead to higher earnings for both buyer and seller. By contrast, in the presence of communication,flexible contracts are much more frequent and considerably more productive, both for buyers andsellers. Also, both buyer and seller earn considerably more from flexible with communicationthan rigid without communication. Our results show quite strongly that communication, a normalfeature in contracting, can remove the potential cost of flexibility (disagreements caused byconflicting perceptions). We offer an explanation based on social norms.

JEL Classification Codes : C92, D43, L11, L94.-- Trabajo presentado al "Murat Sertel Center for Advanced Economic Studies Inaugural Workshop" celebrado en Turquía en 2010., In the process of regulatory reform in the electric power industry, the mitigation of market power is one of the basic problems regulators have to deal with. We use experimental data to study the sources of market power with supply function competition, akin to the competition in wholesale electricity markets. An acute form of market power may arise if a supplier is pivotal; that is, if the supplier’s capacity is required in order to meet demand. To be able to isolate the impact of demand and capacity conditions on market power, our treatments vary the distribution of demand levels as well as the amount and symmetry of the allocation of production capacity between different suppliers. We relate our results to a descriptive power index and to the predictions of two alternative models: a supply function equilibrium (SFE) model and a multi-unit auction (MUA) model. We find that pivotal suppliers do indeed exercise their market power in the experiments. We also find that observed behavior is consistent with the range of equilibria of the unrestricted SFE model and inconsistent with the unique equilibria of two refinements of the SFE model and of the MUA model., Financial support by the Spanish Ministerio de Ciencia e Innovación, the Barcelona GSE Research Support Program and Consolider-Ingenio is gratefully acknowledged.

We use a game-theoretical model and results from laboratory experiments to study the process by which subordinated regions of a country can obtain a more favorable political status. In our theoretical model a dominant and a dominated region first interact through a political process. This process involves two referenda, one at the level of the country as a whole and one at the level of the subordinated region. If the political process succeeds, then the new autonomy level is implemented. If this process fails, then both regions engage in a costly political conflict in which both sides can spend resources to win the upper hand. We show that in the subgame-perfect equilibrium of our game the voting process leads to an intermediate arrangement acceptable for both parts so that the costly political struggle never occurs. In contrast, in our experiments we observe frequent fighting involving high material losses., The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The authors thank the Spanish Ministerio de Economı´a y Competitividad (Grant: ECO2011-29847-C02-01), the Generalitat de Catalunya (Grant: 2009 SGR 820), the Antoni Serra Ramoneda Research Chair (UAB-Catalunya Caixa), Consolider-Ingenio 2010 (CSD2006-00016) and the British Academy and the University of Nottingham for their financial support.

In the context of supply function competition with private information, we test in the laboratory whether—as predicted in Bayesian equilibrium—costs that are positively correlated lead to steeper supply functions and less competitive outcomes than do uncorrelated costs. We find that the majority of subjects bid in accordance with the equilibrium prediction when the environment is simple (uncorrelated costs treatment) but fail to do so in a more complex environment (positively correlated costs treatment). Although we find no statistically significant differences between treatments in average behaviour and outcomes, there are significant differences in the distribution of supply functions. Our results are consistent with the presence of sophisticated agents that on average best respond to a large proportion of subjects who ignore the correlation among costs. Experimental welfare losses in both treatments are higher than the equilibrium prediction owing to a substantial degree of productive inefficiency., Anna Bayona acknowledges the financial support from Banc de Sabadell. Jordi Brandts acknowledges financial support from the Spanish Ministry of Economics and Competitiveness (Grant ECO2014-59302-P) and the Generalitat de Catalunya (AGAUR Grant 2014 SGR 510). Xavier Vives acknowledges financial support of the Spanish Ministry of Economics and Competitiveness (Grant ECO2015- 63711-P) and the Generalitat de Catalunya (AGAUR Grant 2014 SGR 1496).

We report on the results of an experiment with a statistical choice task involving the toss of a fair coin. In our experiment, participants had to decide whether they were willing to pay a price to switch from betting on the future performance of one player to betting on that of another player. The switch was from a player who had been previously less successful in betting on five coin flips to another one who had been more successful in the same task. We conducted a treatment with the Becker–DeGroot–Marschak mechanism and one in which participants were faced with a fixed price. In both cases, participants exhibit a strong bias towards placing their bets on players with a good guessing history in the coin toss task. Participants’ behaviour is compatible with prescriptive luck beliefs, that is, the idea that luck is a somehow deterministic and personal attribute., The authors gratefully acknowledge the financial support from the Antoni Serra Ramoneda (UAB–Catalunya Caixa) Research Chair, the Spanish Ministry of Economics and Competitiveness (Grant: ECO2014-59302-P), the Generalitat de Catalunya (Grant: 2014 SGR 510), and the Barcelona GSE.

We investigate parochial altruism, the combination of in-group altruism and out-group hostility, in an experimental conflict game preceded by a prisoner's dilemma. Our data are consistent with parochial altruism, but cannot be explained by in-group pro-sociality or out-group hostility alone. © 2012 Elsevier B.V., The authors thank the Spanish Ministerio de Economía y Competitividad (Grant: ECO2011-29847-C02-01) and the Generalitat de Catalunya (Grant: 2009 SGR 820) for their financial support

We conduct an experiment to investigate how the gender composition of an audience interacts with the gender of a player thereby shaping her/his degree of responsibility in decision-making. Together with the measures of accountability based on decision theory, we employ two physiological measures, blood pressure and heart rate variability, which allow us to disentangle the separate effects of stress and accountability. Our results show that men are more sensitive to changes in the gender composition of the audience; specifically, men lower their accountability when paired with a female audience. By contrast, women display a level of accountability that does not change with gender pairing. Finally, we find that the variation in blood pressure has a significant but small effect only on men's behavior. © 2011 Elsevier B.V., We thank the Antoni Serra Ramoneda, UAB – Caixa Catalunya Research Chair for providing financial support.

[EN]: We present a brief overview of the experimental economics literature on social preferences. In numerous experiments, economically incentivized subjects are willing to sacrifice part of their material earnings to compensate the kind behavior of others, or will be willing to reciprocate at a non-negligible cost, or even pay a positive price for punishing the behavior of selfish individuals. All these actions are labeled as social in economics because there is no apparent way to reconcile them with any reasonable form of pure self-interest. We focus on social dilemma games and want to communicate two main messages. First, research in experimental economics has produced abundant evidence that illustrates the social components of people's preferences. Second, social sanctions of different types play an important role in facilitating cooperative behavior., [ES]: Presentamos un breve panorama de la literatura en economía experimental sobre preferencias sociales. En numerosos experimentos, participantes con incentivos económicos están dispuestos a sacrificar parte de sus ingresos materiales para compensar el comportamiento amable de otros o a pagar un precio positivo para castigar el comportamiento de individuos egoístas. En economía todas estas acciones reciben el calificativo de sociales, porque no hay una manera clara de reconciliarlas con alguna forma razonable de egoísmo puro. Nos centramos en juegos de dilemas sociales y queremos transmitir dos mensajes. Primero, la investigación en economía experimental ha producido abundante evidencia que ilustra los componentes sociales de las preferencias de las personas. Segundo, sanciones sociales de diferentes tipos desempeñan un papel importante a la hora de facilitar el comportamiento cooperativo.

We study how conflict in a contest game is influenced by rival parties being groups and by group members being able to punish each other. Our main motivation stems from the analysis of socio-political conflict. The relevant theoretical prediction in our setting is that conflict expenditures are independent of group size and independent of whether punishment is available or not. We find, first, that our results contradict the independence of groupsize prediction: conflict expenditures of groups are substantially larger than those of individuals, and both are substantially above equilibrium. Towards the end of the experiment material losses in groups are 257% of the predicted level. There is, however, substantial heterogeneity in the investment behaviour of individual group members. Second, allowing group members to punish each other after individual contributions to the contest effort are revealed leads to even larger conflict expenditures. Now material losses are 869% of the equilibrium level and there is much less heterogeneity in individual group members’ investments. These results contrast strongly with those from public goods experiments where punishment enhances efficiency and leads to higher material payoffs.

24 páginas, 6 figuras, 6 tablas.-- El pdf del artículo es el documento de trabajo., This paper studies experimentally how firms choose between using a centralized market and bilateral negotiations to recruit new personnel. In the market firms interact with several workers but do not have information about workers' behavior in the past. In the bilateral negotiations firms negotiate bilaterally with prospective workers and learn about workers' performance in previous jobs. We show that the interaction between social preferences, the incompleteness of contracts and the existence of information about a worker's past performance provides an explanation for firms forgoing market opportunities and bilaterally negotiating with a worker. We observe that approximately 30% of all job contracts were bilaterally negotiated when these contracts are incomplete as opposed to only 10% when contracts were complete. The surplus from trade is higher when incomplete contracts can be bilaterally negotiated, which can be attributed to the presence of information., Financial support by Netherlands Organization for Scientific Research (VENIGrant451-04-106), the Spanish Ministerio de Ciencia e Innovación, the Barcelona GSE Recognition of Research Program and Consolider Ingenio 2010 (CSD2006-00016) is gratefully acknowledged.

10 páginas, 3 figuras, 4 tablas.-- El pdf del artículo es la versión pre-print., This paper experimentally studies the effects of competitive rivalry in a social dilemma where people's actions cannot be contractually fixed. We find that, in comparison with no rivalry, the presence of rivalry does neither increase efficiency nor does it yield any gains in earnings for the short side of the exchange relation. Moreover, rivalry has a clearly negative impact on the disposition towards others and on the experienced well-being of those on the long side. Since subjective well-being improves only for those on the short side rivalry contributes to larger inequalities in experienced well-being. All in all rivalry does not show up as a positive force in our environment., Financial support by the European Union through the TMR research network ENDEAR (FMRX-CT98-0238) and ENABLE (MRTM-CT2003-505223) is gratefully acknowledged.

We study how communication affects cooperation in an experimental public goods environment with punishment and counter-punishment opportunities. Participants interacted over 30 rounds in fixed groups with fixed identifiers that allowed them to trace other group members' behavior over time. The two dimensions of communication we study are asking for a specific contribution level and having to express oneself when choosing to counter-punish. We conduct four experimental treatments, all involving a contribution stage, a punishment stage, and a counter-punishment stage in each round. In the first treatment communication is not possible at any of the stages. The second treatment allows participants to ask for a contribution level at the punishment stage and in the third treatment participants are required to send a message if they decide to counter-punish. The fourth combines the two communication channels of the second and third treatments. We find that the three treatments involving communication at any of the two relevant stages lead to significantly higher contributions than the baseline treatment. We find no difference between the three treatments with communication. We also relate our results to previous results from treatments without counter-punishment opportunities and do not find that the presence of counter-punishment leads to lower cooperation level. The overall pattern of results shows that given fixed identifiers the key factor is the presence of communication. Whenever communication is possible contributions and earnings are higher than when it is not, regardless of counter-punishment opportunities., The work presented in this paper has been performed in the frame of the MacNorms project (Intramurales de frontera CSIC – PIF08-007), MILESS project (Ministerio de economía y competitividad - TIN2013-45039-P - financed by FEDER) and of the GLODERS project (Seventh Framework EU Programme FP7/2007-2013 Grant: 315874).

Organizations are crucial entities from an economic perspective. Multiple transactions take place in markets but many others occur inside organizations of all sorts or between organizations, where individuals may behave differently to how they would if interacting in markets. There is an extensive list of topics used to describe in detail organizational behavior: such as, the creation of organizations, organizational learning, innovation, organizational culture, communication and others (see for instance, Robbins, 2010). For this reason we will focus on two types of problems that organizations need to solve which have a fundamentally economic basis. These are problems of providing appropriate incentives to agents interested in the organization and problems of coordinating their actions. We will present, as much as possible, work relating to these matters along with other fundamental aspects of organizations. Taken together, these problems have the same objective: favoring the creation of value in the organization.

In many organizations the measurement of job performance cannot rely on easily quantifiable information. In such cases, supervising managers often use subjective performance evaluations. We use laboratory experiments to study whether the way employees are assigned to a manager affects managers' and co-employees' subjective evaluations of employees. Employees can either be hired by the manager, explicitly not hired by him and nevertheless assigned to him or exogenously assigned to him. We present data from three different treatments. For all three treatments we find escalation bias by managers. Managers exhibit a positive bias towards those employees they have hired or a negative one towards those they have explicitly not hired. For three treatments we find that managers' and employees' biases are connected. Exogenously assigned employees are biased in favor of employees hired by the manager and against those explicitly not hired., The authors gratefully acknowledge financial support from the Antoni Serra Ramoneda (UAB – Catalunya Caixa) Research Chair, the Spanish Ministry of Economics and Competitiveness (Grant: ECO2014-59302-P) and the Generalitat de Catalunya (Grant: 2014 SGR 510)

We study manager-employee interactions in experiments set in a corporate environment where payoffs depend on employees coordinating at high effort levels; the underlying game being played repeatedly by employees is a weak-link game. In the absence of managerial intervention subjects invariably slip into coordination failure. To overcome a history of coordination failure, managers have two instruments at their disposal, increasing employees' financial incentives to coordinate and communication with employees. We find that communication is a more effective tool than incentive changes for leading organizations out of performance traps. Examining the content of managers' communication, the most effective messages specifically request a high effort, point out the mutual benefits of high effort, and imply that employees are being paid well.

We present results from 50-round market experiments in which firms decide repeatedly both on price and quantity of a completely perishable good. Each firm has capacity to serve the whole market. The stage game does not have an equilibrium in pure strategies. We run experiments for markets with two and three identical firms. Firms tend to cooperate to avoid fights, but when they fight bankruptcies are rather frequent. On average, pricing behavior is closer to that for pure quantity than for pure price competition and price and efficiency levels are higher for two than for three firms. Consumer surplus increases with the number of firms, but unsold production leads to higher efficiency losses with more firms. Over time prices tend to the highest possible one for markets both with two and three firms.

© 2014, The Author(s). We present a comprehensive experimental design that makes it possible to characterize other-regarding preferences and their relationship to the decision maker’s relative position. Participants are faced with a large number of decisions involving variations in the trade-offs between own and other’s payoffs, as well as in other potentially important factors like the decision maker’s relative position. We find that: (1) choices are responsive to the cost of helping and hurting others; (2) The weight a decision maker places on others’ monetary payoffs depends on whether the decision maker is in an advantageous or disadvantageous relative position; and (3) We find no evidence of reciprocity of the type linked to menu-dependence. The results of a mixture-model estimation show considerable heterogeneity in subjects’ motivations and confirm the absence of reciprocal motives. Pure selfish behavior is the most frequently observed behavior. Among the subjects exhibiting social preferences, social-welfare maximization is the most frequent, followed by inequality-aversion and by competitiveness., Financial support by the Spanish Ministry of Economics and Competitiveness (Grant: ECO2011-29847-C02-01), the Generalitat de Catalunya (Grant: 2009 SGR 820), the Barcelona GSE Research Network, and CONSOLIDER-INGENIO 2010 (CSD2006-00016) is gratefully acknowledged

In many areas of social life, individuals receive information about a particular issue of interest from multiple sources. When these sources are connected through a network, then proper aggregation of this information by an individual involves taking into account the structure of this network. The inability to aggregate properly may lead to various types of distortions. In our experiment, four agents all want to find out the value of a particular parameter unknown to all. Agents receive private signals about the parameter and can communicate their estimates of the parameter repeatedly through a network, the structure of which is known by all players. We present results from experiments with three different networks. We find that the information of agents who have more outgoing links in a network gets more weight in the information aggregation of the other agents than under optimal updating. Our results are consistent with the model of >persuasion bias> of DeMarzo et al. (2013. Q. J. Econ., 909) and at odds with an alternative heuristic according to which the most influential agents are those with more incoming links., Financial support by the Spanish Ministerio de Ciencia e Innovación (Grant: ECO2014-59302-P), the Generalitat de Catalunya (Grant: 2014 SGR 510), the Barcelona GSE Research Support Program and Consolider-Ingenio is gratefully acknowledged

Many organizations suffer poor performance because individuals within the organization fail to coordinate on efficient patterns of behavior. Using controlled laboratory experiments, we study how financial incentives can be used to find a way out of such performance traps. Our experiments are set in a corporate environment where subjects' payoffs depend on coordinating at high effort levels; the underlying game being played repeatedly by employees is a weak-link game. In an initial phase, the benefits of coordination are low relative to the cost of increased effort. Play in this initial phase typically converges to an inefficient outcome with employees failing to coordinate at high effort levels. The experimental design then explores the effects of varying the financial incentives to coordinate at a higher effort level. We find that an increase in the benefits of coordination leads to improved coordination, but, surprisingly, large increases have no more impact than small increases. Once subjects have coordinated on a higher effort level, reductions in the financial incentives to coordinate have little effect on behavior. Hence, a "shock therapy" of temporary increases in incentives to coordinate can lead to permanent improvements in an organization's performance.