We run a public good experiment in the field and in the lab with (partly) the same subjects. The field experiment is a true natural field experiment as subjects do not know that they are exposed to an experimental variation. We can show that subjects’ behavior in the classic lab public good experiment correlates with their behavior in the structurally comparable public good treatment in the fie...

It has been suggested that players often produce simplified and/or misspecified mental models of strategic decisions (Kreps, 1990). We submit that the relational structure of players’ preferences in a game is a source of cognitive complexity, and may be an important driver of such simplifications. We provide a classification of order structures in two-person games based on the properties of mon...

Variation in economic preferences is systematically related to both individual and aggregate economic outcomes, yet the origins of the worldwide preference variation have proved elusive. This paper uses globally representative data on risk aversion, time preference, altruism, positive reciprocity, negative reciprocity, and trust to uncover that contemporary preference heterogeneity has its long...

Given a set of possible vector outcomes and the set of lotteries over it, we define sets of (a) von Neumann-Morgenstern representations of preferences over the lotteries, (b) mappings that yield the certainty equivalent outcomes corresponding to a lottery, (c) mappings that yield the risk premia corresponding to a lottery, (d) mappings that yield the acceptance set of lotteries corresponding to...

We introduce a new unified framework for modelling both decision problems and finite games based on quantifiers and selection functions. We show that the canonical utility maximisation is one special case of a quantifier and that our more abstract framework provides several additional degrees of freedom in modelling. In particular, incomplete preferences, non-maximising heuristics, and context-...

Interacting agents in finance represent a behavioral, agent-based approach in which financial markets are viewed as complex adaptive systems consisting of many boundedly rational agents interacting through simple heterogeneous investment strategies, constantly adapting their behavior in response to new information, strategy performance and through social interactions. An interacting agent syste...

Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles The well-known Easterlin paradox points out that average happiness has remained constant over time despite sharp rises in GNP per head. At the same time, a micro literature has typically found positive correlations between individual income and individual measures of subjective well-being. This pa...

With increasing attention being paid to inequality and poverty this paper attempts to shed light on mechanisms by which the poor arrive at decisions that are suboptimal and lead to “poverty traps.” Thus, we design a laboratory experiment in which we induce wealth and income differences between subjects to compare their behavior in a simple, two-period life-cycle savings and consumption task tha...

Stability of Time Preferences Individuals frequently face intertemporal decisions. For the purposes of economic analysis, the preference parameters assumed to govern these decisions are generally considered to be stable economic primitives. However, evidence on the stability of time preferences is notably lacking. In a large field study conducted over two years with about 1,400 individuals, tim...

Priming Cooperation in Social Dilemma Games Research on public goods mainly focuses its attention on the ability of incentives, beliefs and group structure to affect behaviour in social dilemma interactions. This paper investigates the pure effects of a rather subtle mechanism on social preferences in a one-shot linear public good game. Using priming techniques from social psychology, we activa...