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One lingering puzzle is why voluntary contribu tions to public goods decline over time in experimental and real-w orld settings. We show that the decl ine of cooperation is driven by individual preferences for im perfect conditional cooperation. Many people's desire to contribute less than oth ers, rather than changing beliefs of what others will contr(More)
A demand for behavioral norms arises when members of a group have individual incentives to take actions that reduce the group's overall welfare (James S. Coleman, 1990). Norms require enforcement with a system of sanctions that penalize deviations from acceptable behavior (George C. Homans, 1961). Formal sanctions include fines or restrictions implemented(More)
It is well-known that social influences affect consumption decisions. We used functional magnetic resonance imaging (fMRI) to elucidate the neural mechanisms associated with social influence with regard to a common consumer good: music. Our study population was adolescents, age 12-17. Music is a common purchase in this age group, and it is widely believed(More)
History contains many colorful examples where speculative trade in some commodity or financial asset generated a phase of rapidly increasing prices, followed by a sudden collapse (see, e.g., Edward Chancellor, 1999, or Charles Kindleberger, 2001). One famous case cited by many economists (see Peter Garber, 2000, pp. 127–31, for references) is the Dutch "(More)
Recent auction theory suggests that multi-unit uniform-price auctions, as used by the U.S. Treasury for debt sales, produce incentives that may cause bidders to bid less than their true valuations, resulting in inefficient allocations and reduced revenue. In this paper, we present the results of a field experiment in which we auction nearly $10,000 worth of(More)
A decision maker may experience regret when a choice he makes results in a more adverse outcome than a different choice would have yielded. Analogously, he may experience rejoice when his choice resulted in better outcomes. We used fMRI to investigate the neural correlates of regret and rejoice where payoffs are in terms of a non-monetary medium. Incentives(More)
In the lowest unique positive integer (LUPI) game, players pick positive integers and the player who chose the lowest unique number (not chosen by anyone else) wins a …xed prize. We derive theoretical equilibrium predictions, assuming fully rational players with Poisson-distributed uncertainty about the number of players. We also derive predictions for(More)
While mainstream economic models assume that individuals treat probabilities objectively, many people tend to overestimate the likelihood of improbable events and underestimate the likelihood of probable events. However, a biological account for why probabilities would be treated this way does not yet exist. While undergoing fMRI, we presented individuals(More)
BACKGROUND Financial advice from experts is commonly sought during times of uncertainty. While the field of neuroeconomics has made considerable progress in understanding the neurobiological basis of risky decision-making, the neural mechanisms through which external information, such as advice, is integrated during decision-making are poorly understood. In(More)
This paper analyzes the behavior of single-unit all-pay auctions within the independent private values environment in the laboratory. We study revenue, individual bidding behavior, and efficiency, in relation to theoretical benchmarks and to a similar study of winner-pay first-price sealed-bid auctions. We conclude that the all-pay auction yields(More)