Job Market Paper

Abstract. We introduce non-enforceable property rights over bargaining surplus in a two-stage dictator game in which the effort of the agents is differentially rewarded and determines the size of the pie. Using experimental data we elicit individual preferences over natural justice principles and provide evidence to support the inability of these principles to account for the observed behavior. We show that dictators do not follow a unique natural principle but instead employ self-interested criteria, maximizing their own payoffs constrained by these payoffs being considered just by one or more of the principles. The idea of the justice norm providing a constraint on otherwise self-maximizing agents is robust when we isolate the effect of selfish agents and focus on unselfish dictators to perform the analysis.

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Working Papers

Universidad de Navarra, Working Paper No.13/09

Abstract. We develop a principal-agent model in which the principal has access to hard and soft information about the agent’s level of effort. We model the soft signal as being informative about the agent’s level of effort but manipulable by the agent at a cost. We show that the presence of influence activities increases the cost of implementing the efficient level of effort for the principal. We also show that the manipulability of the soft signal leads to wage compression. However, when influence costs affect negatively the agent’s productivity we establish that the design of influence-free contracts by the principal may lead to high-powered incentives. This result implies that high-productivity workers may face incentives schemes that are more responsive and give more weight to hard evidence compared to low-productivity workers.

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Instituto de Investigaciones Económicas, IVIE WP-AD 2009-25

Abstract. We develop, both theoretically and experimentally, a stereotypical environment that allows for coordination breakdown, leading to a bank run. Three depositors are located at the nodes of a network and have to decide whether to keep their funds deposited or to withdraw. One of the depositors has immediate liquidity needs, whereas the other two depositors do not. Depositors act sequentially and observe others' actions only if connected by the network. Theoretically, a link connecting the first two depositors to decide is sufficient to avoid a bank run. However, our experimental evidence shows that subjects' choice is not affected by the existence of the link per se. Instead, being observed and the particular action that is observed determine subjects' choice. Our results highlight the importance of initial decisions in the emergence of a bank run. In particular, Bayesian analysis reveals that subjects clearly depart from predicted behavior when observing a withdrawal.

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Ongoing Research

I am usually re-writting my papers, so feel free to contact me if you want to take a look to the lattest version.

Abstract. I introduce social preferences into a quasi-hyperbolic discounting framework to show how decision maker's choice can be urged to act on time. My approach consider that decision maker can be constrained by the environment when his or her choice affects to other agents' payoffs and the results can be used to explain many observed behavior. For instance, it allows naive agents to complete task efficiently, even when they would have postponed it if they had acted selfish. Using a questionnare, I provide experimental evidence to test the theory.

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Abstract. I consider a model with a principal and two agents in which the agent’s utility increases in wages and decreases when production deviates from what the agent considers fair (guilt) and from what the other agent produces (shame). I show that when wages include bonus payments that do not affect guilt, the optimal wage scheme involves asymmetric payments.
 
 

Abstract. Two subjects solve a questionnaire to determine the size of the surplus. Then, one of the agents (the proposer) is  randomly selected to propose a division of the pie, whereas the other one (the responder) is  asked to decide the minimum amount that she is willing to receive. We observe that the responder relies on earnings to determine the threshold in the ultimatum game (UG). However, the responder increases this threshold in a modified ultimatum game (MUG) in which the responder is ensured the proposer’s offer, whereas the proposer receives nothing if she offers below the threshold.