Prof. Dr. Ernst Fehr

Third-Party Punishment and Social Norms

We examine the characteristics and the relative strength of third party sanctions in a series of experiments. We hypothesize that egalitarian...

Neuroeconomic Foundations of Trust and Social Preferences

Neuroeconomics merges methods from neuroscience and economics to better understand how the human brain generates decisions in economic and social...

Is Strong Reciprocity a Maladaptation?

On the Evolutionary Foundations of Human Altruism

In recent years a large number of experimental studies have documented the existence of strong reciprocity among humans. Strong reciprocity means...

Psychological Foundations of Incentives

During the last two decades economists have made much progress in understanding incentives, contracts and organisations. Yet, they constrained their...

Theories of Fairness and Reciprocity – Evidence and Economic Applications

Most economic models are based on the self-interest hypothesis that assumes that all people are exclusively motivated by their material...

Why Social Preferences Matter – The Impact of Non-Selfish Motives on Competition, Cooperation and Incentives

A substantial number of people exhibit social preferences, which means they are not solely motivated by material self-interest but also care...

Fairness in the Labour Market - A Survey of Experimental Results

In this chapter we provide a selective survey of experiments to investigate the potential of social motivations in explaining labour market...

Do High Stakes and Competition Undermine Fairness?

Evidence from Russia

This paper reports the results of a series of competitive labour market experiments in which subjects have the possibility to reciprocate favours. In...

Do Workers Work More if Wages Are High?

Evidence from a Randomized Field Experiment

The canonical model of life-cycle labor supply predicts a positive response of labor supplied to transitory wage changes. We tested this prediction...

Limited Rationality and Strategic Interaction, The Impact of the Strategic Environment on Nominal Inertia

The evidence from many experiments suggests that people are heterogeneous with regard to their abilities to make rational, forward looking,...

Fairness, Errors and the Power of Competition

One of the most basic questions in economics concerns the effects of competition on market prices. We show that the neglect of both fairness concerns...

The Hidden Costs and Returns of Incentives – Trust and Trustworthiness among CEOs

We examine experimentally how Chief Executive Officers (CEOs) respond to incentives and how they provide incentives in situations requiring trust and...

A Nation-Wide Laboratory Examining trust and trustworthiness by integrating behavioral experiments into representative surveys

Typically, laboratory experiments suffer from homogeneous subject pools and self-selection biases. The usefulness of survey data is limited by...

Money Illusion and Coordination Failure

Economists long considered money illusion to be largely irrelevant. Here we show, however, that money illusion has powerful effects on equilibrium...

Loss Aversion and Labor Supply

In many occupations workers’ labor supply choices are constrained by institutional rules regulating labor time and effort provision. This renders...

The Role of Equality, Efficiency, and Rawlsian Motives in Social Preferences

A Reply to Engelmann and Strobel

In a recent paper Engelmann and Strobl claim that a combination of a preference for efficiency and a Rawlsian motive for helping the least well-off...

Fairness and Incentives in a Multi-Task Principal-Agent Model

This paper reports on a two-task principal-agent experiment in which only one task is contractible. The principal can either offer a piece-rate...

The Neuroeconomics of Mind Reading and Empathy

Economics and game theory are based on the assumption that people are capable of predicting others' actions. The most fundamental solution concepts...

Does Money Illusion Matter?

Money illusion means that people behave differently when the same objective situation is represented in nominal or in real terms. To examine the...

Cooperation and Punishment in Public Goods Experiments

This paper provides evidence that free riders are heavily punished even if punishment is costly and does not provide any material benefits for the...

A Theory of Fairness, Competition and Cooperation

There is strong evidence that people exploit their bargaining power in competitive markets but not in bilateral bargaining situations. There is also...

A Simple Mechanism for the Efficient Provision of Public Goods - Experimental Evidence

This paper presents an experimental examination of the Falkinger (1996) mechanism for overcoming the free-rider problem. The basic idea of the...