We conduct experiments on earned wealth effects in dictator games. In addition to a standard treatment in which wealth was determined by the experimenter, we conduct treatments in which the dictator or the receiver earned the wealth used in the dictator game. In our baseline treatment, on average, dictators allocate receivers 20 percent. In treatments where dictators earned wealth, we observe the (theoretically predicted) zero offers to receivers. In treatments where receivers earned wealth, we observe distributions of offers in which receivers' shares exceeds 50 percent. These results emphasize the importance of property rights in determining individuals' social preferences.

Exogenous Targeting Instruments as a Solution to Group Moral Hazards

Abstract:This paper presents the results from a series of framed field experiments conducted in fishing communities off the Caribbean coast of Colombia. The goal is to investigate the relative effectiveness of exogenous regulatory pressure and pro-social emotions in promoting cooperative behavior in a public goods context. The random public revelation of an individual's contribution and its consequences for the rest of the group leads to significantly higher public good contributions and social welfare than regulatory pressure, even under regulations that are designed to motivate fully efficient contributions.Keywords: public goods, field experiments, pro-social emotions, social dilemma, regulation, enforcement.

This paper investigates the ability of ambient pollution instruments to induce a group of heterogeneous agents to choose a target outcome. Six controlled laboratory sessions were conducted with heterogeneous agents facing ambient pollution instruments with lumpsum or proportional fines and bonuses. Sessions are compared with a study of these exogenous targeting instruments and homogeneous agents using complete information and certainty (J. Public Econ. 84 (2) (2002) 427). The data show that contracts can indeed be developed that induce heterogeneous groups to choose the target outcome; however, substantial inefficiency and inequality were observed. r

We find an "inverse found money effect" in two-person public good experiments in which individuals earning their endowments contribute more and engage in "altruistic conditional cooperation" when they are matched with those whose endowment is provided by the experimenters.Published by Elsevier B.V.