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This paper examines the usefulness of Kalai (2020)'s measure of the viability of Nash equilibrium. We experimentally study a class of participation games, which differ in the number of players, the success threshold, and the payoff to not participating. We find that Kalai's measure captures well how the viability of the everyone-participates (eP) equilibrium depends on the success threshold; the measure does not capture other elements of the game which affect the likelihood that the eP equilibrium is played.

Does being lucky (or unlucky) affect honest decision-making? We examine (1) whether luck-based income strengthens or erodes the moral value of honesty; (2) whether the perceived level of agency over an uncertain event affects the relationship between luck and honesty; and (3) whether accumulated luck affects honesty. To this end, we conducted a lab experiment where participants self-report a dice roll outcome, which is associated with effort-based income, after having received luck-based income. We manipulated the participants' perceptions regarding their influence on luck-based income. In the exogenous luck treatment, computerized coin tosses determines the luck-based income, whereas in the endogenous luck treatment, the participants choose the coin's winning side before the computerized coin toss. Our results are as follows: (1) lying behaviour increases when contemporaneous luck-based income is high, (2) lying is not affected by the perceived level of agency, and (3) lying is not affected by the previous outcomes of the luck-based income. Our observations challenge the relative importance of context that may render moral justification. Therefore, our findings indicate that differences in dishonest behavior may be largely due to individual-specific heterogeneity.

This study investigates the influence of gender composition on allocation decisions involving a rank–inequality tradeoff. In a laboratory experiment, participants chose to either alleviate inequality by relinquishing their current relative rank or exacerbate inequality by maintaining their current rank. Two essential features of the experiment are: 1) participants' relative rank is the outcome of their real-effort performance and luck; 2) participants' genders are naturally revealed by gender-specific nicknames. We found that female participants are more reluctant to relinquish their current relative rank when the persons ranked below and above them are of the opposite gender. This tendency was less pronounced in the male participants.

We consider infinite-horizon bargaining in which an uninformed seller sequentially makes a price offer to a privately informed buyer who decides whether to accept or reject it in every bargaining round. Existing theories suggest that the presence (absence) of an arbitrarily small outside option available to the buyer in this dynamic screening problem leads the seller (buyer) to enjoy a substantial surplus, and we examine the validity of the differences in the share of the surplus theoretically and experimentally. We first show that the theoretical differences collapse if an arbitrarily small fraction of optimistic buyers would believe that the sellers sometimes ask for a lower price in the subsequent rounds. We then present experimental evidence that the earnings of both the buyers and the sellers when the buyer has an outside option are not significantly different from those without the outside option. We find supporting evidence that some buyers reject the current-round offers, optimistically believing that the next offer would be more favorable to them.

Session-specific features of a laboratory experiment, if those exist, do not disappear by clustering standard errors at the session level. Randomly ordering sessions, which is crucial to deal with sampling issues, cannot justify clustering the standard errors at the session level. The experimental design should primarily determine the clustering level. In a typical controlled laboratory experiment where subjects make choices in the same environment repeatedly, clustering at a participant level is inherited from the experimental design, and standard errors could be larger (that is, statistical inference can be more conservative) when clustered at the individual or decision-group level than the session level. It implies that clustering standard errors at the session level can lead to false-positive treatment effects if it is mistakenly chosen. A rule of thumb using standard deviations is introduced.

Many-player divide-the-dollar games have been a workhorse in the theoretical and experimental analysis of multilateral bargaining. If we are dealing with a loss, that is, if we consider many-player "divide-the-penalty" games for, e.g., the location choice of obnoxious facilities, the allocation of burdensome chores, or the reduction of carbon dioxide emissions at a climate change summit, the theoretical predictions do not merely flip the sign of those in the divide-the-dollar games. We show that the stationary subgame perfect equilibrium (SSPE) is no longer unique in payoffs. The most "egalitarian" equilibrium among the stationary equilibria is a mirror image of the essentially unique SSPE in the Baron-Ferejohn model. That equilibrium is fragile in the sense that allocations are sensitive when responding to changes in parameters, while the most "unequal" equilibrium is not affected by changes in parameters. Experimental evidence clearly supports the most unequal equilibrium: Most of the approved proposals under a majority rule involve an extreme allocation of the loss to a few members. Other observations such as no delay, proposer advantage, and the acceptance rate are also consistent with the predictions based on the most unequal equilibrium.

Winner‐take‐all competitions can lead to the person in the second‐tier (middle‐tier) environment having the worst expected payoff when players exclusively choose their environment and exert effort before their random, heterogeneous environmental supports are realized. The tiers are defined by the ranks in pairwise competitions. The second‐tier trap (STT) is a situation in which a player from the second‐tier environment has the worst expected payoff even though his expected environmental support is strictly greater than that of the third‐tier player. A sufficient condition for the STT is that the ex‐ante advantages, the winning probabilities when all the players exert the same amount of effort regardless of their environment, are the same for those two environments. I claim that this sufficient condition for the STT is so weak that players can easily be tempted to choose the second‐tier environment, which is the wrong decision. Lab experiments strongly support this claim.