Ernesto Reuben

We study the interaction between competitive markets that produce large but unequally distributed welfare gains and elections through which the poor majority can redistribute income away from the rich minority. In our simple laboratory democracy, subjects first earn their income by trading in a double auction market and thereafter vote on redistributive policies in two-candidate elections. In addition, in one of the treatments subjects can attempt to influence the candidates' policy choices by transferring money to them. We observe very high levels of redistribution—even when transfers to candidates are possible—with little effect on market efficiency. Overall, the experimental results are explained by our equilibrium predictions.

We conduct a field experiment to test whether (and how) emotional intelligence can be taught effectively in a short course. We randomly assign MBA students to an emotional intelligence course, a resiliency course, and a "placebo" course. We compare their emotional intelligences, as measured by the MSCEIT, before and after the sixteen-hour course. We find that students in the emotional intelligence course increase their MSCEIT score by 5 standard score points, students in the resiliency course by 4 standard score points, while students in the placebo course show no change. Furthermore, in the emotional intelligence course this improvement is positively related to class attendance. Students who never missed class increase their MSCEIT score by 10 standard score points.

Economic and social interaction takes place between individuals with heterogeneous characteristics. We experimentally investigate the emergence and informal enforcement of contribution norms to a public good in groups that are heterogeneous with regard to endowments and marginal benefits from the public good. Without punishment, all groups converge towards free-riding. With punishment, contributions strongly differ across groups and individuals with different induced characteristics. We show that these differences are the result of different contribution norms enforced through punishment. Moreover, individuals with different characteristics tacitly agree on the norm to be enforced. The resulting contribution norms are related to the fairness notion of equity regarding contributions but not regarding earnings.

We use a combination of lab and field evidence to study whether preferences for immediacy and the tendency to procrastinate are connected as in O'Donoghue and Rabin (1999a). To measure immediacy, we have participants choose between smaller-sooner and larger-later rewards. Both rewards are paid by check to control for transaction costs. To measure procrastination, we record how fast participants cash their checks and complete other tasks. We find that individuals with a preference for immediacy are more likely to procrastinate. We also find evidence that individuals differ in the degree to which they anticipate their own procrastination.

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We use a novel experimental design to disentangle strategically- and non-strategically-motivated cooperation. By using contingent responses in a repeated sequential prisoners' dilemma with a known probabilistic end, we differentiate end-game behavior from continuation behavior within individuals while controlling for expectations. This design allows us to determine the extent to which strategically-cooperating individuals are responsible for the so-called end-game effect. Experiments with two different subject pools indicate that the most common motive for cooperation in repeated games is strategic and that the extent to which end-game effects are driven by strategically-cooperating individuals depends on the profitability of cooperation.

This experimental study investigates how behavior changes after punishment for a selfish action. The focus is on how proposers in a power-to-take game adjust their behavior depending on their fairness perceptions, their experienced emotions, and their interaction with responders. We find that fairness plays an important role. Fair-minded proposers tend to feel less regret when they learn they could have taken more. Furthermore, proposers who take more than their perceived fairness norm feel more shame. This induces proposers to lower their claims. We also find that the perceived fairness norm varies considerably between individuals. Therefore, it is not the case that proposers who considered themselves fair are particularly nice to responders.

In this paper we study whether expectation biases can be responsible for discrimination against women in hiring decisions and what mechanisms exacerbate or mitigate this phenomenon. We study an experimental market in which, in spite of equal performance across genders, individuals discriminate against women. We show that it is discrimination that is neither taste based, nor statistical in nature, but is rooted in biased beliefs about women's abilities. Furthermore, we show, by applying the implicit association test, that biased beliefs are in part the result of an unconscious stereotype. The gender gap narrows if individuals receive accurate information of the performance of the applicants, but it is not eliminated because individuals do not completely update their initially biased belief.

Experimental evidence indicates that people often cooperate in one-shot anonymous interactions. This behavior is in line with individuals displaying `strong reciprocity', that is, being intrinsically motivated to reward others for cooperative acts and punish others for non-cooperative acts at potentially high costs and in the absence of future interaction. However, it is also consistent with the mistaken use of repeated-interaction strategies in one-shot encounters (`maladaptive reciprocal altruism'). We report the results from an experiment designed to unambiguously identify maladaptive reciprocal altruism as a behavioral force separate from strong reciprocity. The experiment shows that maladaptive reciprocal altruism exists and can explain a substantial part of the observed cooperation.

We test experimentally whether an interest group representing a minority can use non-binding monetary contributions to politicians to move policy away from the outcome preferred by the majority. We find evidence that in settings of repeated interaction, a rich minority can buy itself low income tax rates even in societies where politicians are accountable to the poor majority through competitive elections (and high taxes do not produce inefficiencies). Monetary transfers are effective even though we allow neither formal contracts nor communication between politicians and lobbyists. In one-shot settings, monetary transfers do not have a significant impact on tax policy.

Most models of conflict concentrate on how players allocate resources between productive and fighting efforts. After a conflict, the winner is assumed to take control of all the resources of the loser. In this paper we show experimentally that this simplification misses an important component of a conflict, namely the reaction of the defeated player. We find that, if given the choice to destroy some of their resources, many defeated players prefer to do so rather than let the winner take any of it. Given this, incentives to invest in weapons as opposed to production change and in some cases lower levels of conflict are achieved. Furthermore in settings with repeated interaction, the behavior of players in post-conflict stages can serve as a form of costly communication which enables players to reach a peaceful outcome in the future.

We test if cooperation is promoted by rank-order competition between groups in which all groups can be ranked first, i.e. when everyone can be a winner. This type of rank-order competition has the advantage that it can eliminate the negative externality a group’s performance imposes on other groups. However, it has the disadvantage that incentives to outperform others are absent, and therefore it does not eliminate equilibria where all groups cooperate at an equal but low level. We find that all-can-win competition produces a universal increase in cooperation and benefits a majority of individuals if the incentive to compete is sharp.

This paper reports a positive and statistically significant relation between short-term discount rates elicited with a monetary and a primary reward (chocolate). This finding suggests that high short-term discount rates are related to an underling individual trait.

This paper experimentally explores how the enforcement of cooperative behavior in a social dilemma is facilitated through institutional as well as emotional mechanisms. Recent studies emphasize the importance of anger and its role in motivating individuals to punish free riders. However, we find that anger also triggers retaliatory behavior by the punished individuals. This makes the enforcement of a cooperative norm more costly. We show that in addition to anger, "social" emotions like guilt need to be present for punishment to be an effective deterrent of uncooperative actions. They play a key role by subduing the desire of punished individuals to retaliate and by motivating them to behave more cooperatively in the future.

We study experimentally the effect of expectations on whether trust is repaid. Subjects respond with untrustworthy behavior if they see that little is expected of them. This suggests that guilt aversion plays an important role in the repayment of trust.

In public-good provision, privileged groups enjoy the advantage that some of their members find it optimal to supply a positive amount of the public good. However, the inherent asymmetric nature of these groups may make the enforcement of cooperative behavior through informal sanctioning harder to accomplish. In this article, the authors experimentally investigate public-good provision in normal and privileged groups with and without decentralized punishment. The authors find that compared to normal groups, privileged groups are relatively ineffective in using costly sanctions to increase everyone's contributions. Punishment is less targeted toward strong free riders, and they exhibit a weaker increase in contributions after being punished. Thus, the authors show that privileged groups are not as privileged as they initially seem.

This is an experimental study of negative reciprocity in the case of multiple reciprocators. We use a three-player power-to-take game where a proposer is matched with two responders. We compare a treatment in which responders are anonymous to each other (strangers) with one in which responders know each other from outside the lab (friends). We focus on the responders' decisions, beliefs, and emotions. Our main findings are: (1) friends punish the proposer more than strangers, (2) friends are more likely to coordinate their punishment (without communication), and (3) both punishment and coordination are explained by the responders' emotional reactions.

This document describes the data analyzed in the Chicago-Templeton longitudinal study. The study is based on the entire 2008 generation of MBA students from the University of Chicago Booth School of Business. The data described in this document are obtained from three different sources: surveys, laboratory experiments, and the school's admission department. We give a brief overview of each data source, in addition to a detailed description of the data-collection procedures.

Fairness norms are an elusive and yet important characteristic of our societies. In many situations of interest to economists, the active enforcement of fairness norms affect behavior in significant ways. This thesis studies the motivations of individuals to comply with and to enforce fairness norms. Furthermore, the circumstances under which the enforcement of fairness norms leads to desirable outcomes are investigated. Particular attention is given to the effects of punishment, fairness perceptions, and emotions on an individual's willingness to behave in a fair manner. Latter chapters study norm enforcement in public good settings. First, in groups with heterogeneous endowments, and second, in groups that have less free riding incentives but suffer from the fact that high cooperation levels are no longer supported by fairness norms.

This paper describes how our understanding of collective action has evolved over the years. I use Olson's model of collective action to relate six essentially different approaches. For each approach, I highlight its contribution as well as its main drawbacks. We still do not have a satisfactory explanation for collective action. However, recent work on cognitively and emotionally bounded agents promises to deliver significant insights.