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Bilateral bargaining situations are of great importance in reality. Traditional microeconomics, however, make cognitive and motivational assumptions of subjects` full rationality that are revealed as being unrealistic by a growing number of experimental investigations. The present book adds an important contribution to the understanding of principles of boundedly rational behavior by directly observing groups of subjects in a decision situation and videotaping their discussions. A very important result of the book is that the behavior of subjects is guided by aspirations regarding the final outcome. The levels of aspirations are influenced by prominence and different forms of the equity principle resulting in several fairness norms as to the allocation of the amount of money to be divided. Another important feature of the book stems from the analysis of break off discussions and enables a motivational explanation of the emergence of breakdowns in bargaining

AbstractThe study's primary focus is on examining fairness deliberations of bargainers in Germany and in China under symmetric and asymmetric bargaining power to understand whether they incorporate fairness into their decision process and, if so, how this affects bargaining outcomes. To this end, we conducted an incentivized ultimatum bargaining experiment with symmetric and asymmetric outside options. Groups (N = 142) of three persons interact as proposers and responders in dyads and decide simultaneously on their offer or which offers to accept or reject. Communication between parties is inhibited. We videotaped in-group discussions; the resulting transcripts were text analyzed by eliciting whether groups make fairness an issue, which fairness norms they discuss, and whether they use fairness-related perspective-taking to overcome the communication constraint. We find that asymmetry of bargaining power in favor of the proposer leads to lower offers relative to the symmetric situation. Not all groups make fairness an issue, and fairness deliberations alone have no significant impact on offers. However, when associated with the equal-payoff norm, and in Chinese groups in particular, discussing fairness increases offers in symmetric but also in asymmetric situations, in which other fairness norms could have been applied, too. Fairness-related perspective-taking is used by German and Chinese groups and is associated with higher offers in the former. Our study makes an epistemological and related methodological contribution: a possibly biased interpretation of bargaining outcomes can be mitigated if information on decision processes and underlying mechanisms were available.

The reconcilability of actions and beliefs in inter-country relationships, either in business or politics, is of vital importance as incorrect beliefs on foreigners' behavior can have serious implications. We study a typical inter-country interaction by means of a controlled laboratory investment game experiment in Germany, Israel and Palestine involving 400 student participants in total. An investor has to take a risky decision in a foreign country that involves transferring money to an investee/allocator. We found a notable constellation of calibrated and un-calibrated beliefs. Within each country, transfer standards exist, which investees correctly anticipate within their country. However, across countries these standards differ. By attributing the standard of their own environment to the other countries investees are remarkably bad in predicting foreign investors' behavior. The tendency to ignore this potential difference can be a source of misinterpreting motives in cross-country interaction. Foreigners might perceive behavior as unfavorable or favorable differentiation, even thoughunknown to them-investors actually treat fellow-country people and foreigners alike.

We present causal evidence from a controlled experiment on the effect of pay for performance on physicians' behavior and patients' health benefits. At a within-subject level, we introduce performance pay to complement either fee-for-service or capitation. Performance pay is granted if a health care quality threshold is reached, and varies with the patients' severity of illness. We find that performance pay significantly reduces overprovision of medical services due to fee-for-service incentives, and underprovision due to capitation; on average, it increases the patients' health benefit. The magnitude of these effects depends, however, on the patients' characteristics. We also find evidence for a crowding-out of patient-regarding behavior due to performance pay. Health policy implications are discussed. ; Mit Hilfe eines kontrollierten Experiments präsentieren wir kausale Evidenz zur Wirkung einer leistungsbasierten Vergütung (Pay-for-Performance) auf das Arztverhalten und den Patientennutzen. Auf individueller Ebene führen wir Pay-for-Performance entweder basierend auf einer Einzelleistungsvergütung oder einer Kopfpauschale ein. Die leistungsbasierte Vergütung, die an den Schweregrad der Erkrankung angepasst ist, wird ausgezahlt, sobald die Behandlungsqualität einen bestimmten Schwellenwert erreicht. Wir beobachten, dass Pay-for-Performance die mit der Einzelleistungsvergütung verbundene Überversorgung und die mit der Kopfpauschale verbundene Unterversorgung signifikant reduziert sowie die Patientennutzen im Durchschnitt erhöht. Die Stärke dieser Effekte variiert jedoch mit den Patientencharakteristika. Darüber hinaus finden wir Hinweise darauf, dass Pay-for-Performance Patienten-orientiertes Verhalten verdrängen kann. Implikationen für die Gesundheitspolitik werden diskutiert.

Broken Windows: the metaphor has changed New York and Los Angeles. Yet it is far from undisputed whether the broken windows policy was causal for reducing crime. In a series of lab experiments we show that first impressions are indeed causal for cooperativeness in three different institutional environments: absent targeted sanctions; with decentralised punishment; with decentralised punishment qualified by the risk of counterpunishment. In all environments, the effect of first impressions cannot be explained with, but adds to, participants' initial level of benevolence. Mere impression management is not strong enough to stabilise cooperation though. It must be combined with some risk of sanctions.

This paper systematically studies how performance pay, complementing either baseline feefor-service or capitation, affects physicians' medical service provision and the quality of care. Using a series of controlled experiments with physicians and students, we test the incentive effect of performance pay at a within-subject level. A discrete bonus is granted if a quality threshold is reached, which varies with the patients' severity of illness. We find that performance pay significantly reduces non-optimal service provision and enhances the quality of care. Effect sizes depend on the patients' severity of illness and whether the baseline is fee-for-service or capitation. Health policy implications, including a cost benefit analysis of introducing performance pay, are discussed. ; In diesem Beitrag wird systematisch untersucht, wie sich eine leistungsbasierte Vergütung (Pay-for-Performance), die entweder ergänzend zur Einzelleistungsvergütung oder zur Kopfpauschale eingeführt wird, auf die medizinische Leistungserbringung von Ärzten und die Qualität der Versorgung auswirkt. Insbesondere testen wir auf Basis kontrollierter Experimente mit Ärzten und Studenten den Anreizeffekt der leistungsbasierten Vergütung unter Verwendung eines Within-Subject Designs. Die Bonuszahlung wird gewährt, sobald die Versorgungsqualität einen bestimmten Schwellenwert erreicht hat, der mit dem Schweregrad der Erkrankung der Patienten variiert. Wir beobachten, dass durch die leistungsbasierte Vergütung die nicht-patientenoptimale Leistungserbringung reduziert wird und die Qualität der Versorgung steigt. Die Stärke der Effekte hängt dabei von dem Schweregrad der Erkrankung der Patienten und der zugrundeliegende Vergütungsform (Einzelleistungsvergütung oder Kopfpauschale) ab. Gesundheitspolitische Implikationen einschließlich einer Kosten-Nutzen-Analyse der Einführung von Leistungsvergütungen werden diskutiert.