Projects

Shocks and Relationships (MS)

The positive correlation between wage and effort in static conditions has been demonstrated in many experimental studies and has been one of the prominent explanations for the existence of wage rigidity. We subject this finding to further tests in a non-stationary environment that better corresponds to outside-the-lab market conditions. We claim that the environment with negative exogenous shocks is more appropriate and provides a better test for the existence of wage-rigidity because it brings stronger incentives to decrease the wage than a setting when the market conditions are relatively stable or improving. We do not find support for downward wage rigidity in our data. Once the shocks occur, firms lower the wages and relationships often break down. The workers who accept a lower wage respond with exerting a lower effort.

Imperfect Monitoring and Small Prizes in Team Production (MS)

We study why there are positive contributions to public projects. Based on observation of knowledge sharing networks and opinion portals, such as Sharenet or Ciao, we form a hypothesis that the contributions could be driven by small awards and prizes for the high contributors. We model the situation as a public good game with a tournament and test it experimentally in the laboratory.

Handshakes (MS, RV)

We explore the effects of cheap talk communication and informal agreements in a game with moral hazard.

Legitimacy of Control (RV)

Falk & Kosfeld (2006) have experimentally shown that controlling an agent may have a detrimental effect on the agent's performance in favor of the principal. The question which remains unanswered is when does the principal benefit from controlling his employees and when is he better off simply trusting them. We argue that in practice controls are often applied precisely in situations when they may seem justified and could be perceived by agents as legitimate - such as, when control prevents theft or when control is a general firm's policy and applies to all employees indiscriminately. We use experiments to study the conditions under which controlling is considered legitimate.

Separating Reputation, Social Influence, and Identification Effects in a Dictator Game (MS)

This study explores the ways in which information about others' actions affects one's own behavior in fairness games. The experimental design discriminates behaviorally between three possible effects of recipient's within-game reputation on the dictator's decision: reputation causing indirect reciprocity, social influence, and identification. The separation of motives helps to identify the mechanisms of social transmission of impulses towards selfish or generous behavior. The statistical analysis of experimental data reveals that the reputation effects have a stronger impact on dictators' actions than the social influence and identification. We conjecture that an active participation in social norm creation and their enforcement governs people's behavior to a higher degree than conformism. [download]

Trial Period (MS, RV)

Why do employers hire workers for a trial period? What do they learn? Is such a screening mechanism both efficient and effective? We try to provide an answer based on an experiment.

Internet Auctions (RV)

The two studies focus on electronic marketplaces and especially online auctions, e.g., eBay. I study how people behave in online auctions and I try to develop theories about bidders' bidding behavior and sellers' selling strategies. What determines the size of the bid? Why some bidders bid only once while others bid multiple times? And, of course, there is always the million-dollar question: "Is there a magic formula for winning an auction at the lowest price?"

Trust Signaling (MS, RV)

The central question we examine is whether or not there exists a phenomenon of trust signaling. First, we want to learn whether it is worthwhile for an agent to take a potentially costly action in order to signal the trust in another agent; and second, whether such signal of trust is then rewarded by a trust premium. We conduct an investment game experiment to answer these questions.