Abuse, Competition, Cooperation: Essays in Behavioral Economics

Summary This work is composed of four separate essays. Chapter 2 introduces an extortive scenario into the experimental corruption literature. Chapter 3 looks at displaced aggression, using economic experimental methods. Chapter 4 introduces psychological underpinnings into the experimental economic literature on gender and competitiveness. And Chapter 5 offers a solution to a well-known problem in the cooperation literature. Chapter 2, titled “Mitigating Extortive Corruption? Experimental Evidence”, implements a novel experimental design that mimics petty extortive corruption and explores bottom-up approaches for its mitigation. Recommendations seem to perform better in environments with personal and repeated interactions, where reports might cause discontent and further disadvantaged treatment by public officials. In contrast, reports and the sanctions that they potentially cause are more likely to deter public officials from extortive behavior in settings where repeated interaction is not foreseen. Regarding citizens’ monitoring involvement, we find a strong preference for recommendations over reports. Chapter 3, titled “Letting off Steam! Experimental Evidence on Irrational Punishment”, is an economic experiment dedicated to the study of displaced aggression. Aggression is displaced, when provocations cannot be directly retaliated against, and aggression is redirected towards a target innocent of any wrongdoing. While this phenomenon is widespread, as yet it had not been explored in experimental economics. We fill this gap and find that a sizeable proportion of subjects (37%), when treated unfairly, punish co-players who are not at all responsible for the unfairness. Chapter 4, titled “Does “Negative Nancy” Compete Like “Positive Pete”? An Experiment”, reports how differences in self-attribution tendencies and gender affect competitiveness on a neutral task. Compared to men, women tend to ascribe losses to deficient skills rather than bad luck or a poorly chosen strategy. Nevertheless, women do not shy away from competition on a neutral task. Even highly self-critical women embrace competition. Chapter 5, titled “Institution Formation and Cooperation with Heterogeneous Agents”, shows that people can cooperate successfully only when their expectations of fairness are aligned with the rules of the institution that they can establish. Many previous experimental studies have shown that heterogeneity among agents distorts cooperation in the group. This experiment offers an endogenous institution that matches people’s perception of fairness and therefore, despite asymmetries in benefits, can restore high levels of cooperation in the group.