Nikos Nikiforakis

• PhD in Economics
• Professor at New York University Abu Dhabi

Evidence shows that the willingness of individuals to avenge punishment inflicted upon them for transgressions they committed constitutes a significant obstacle toward upholding social norms and cooperation. The drivers of this behavior, however, are not well understood. We hypothesize that ulterior motive attribution—the tendency to assign ulterio...

When agents derive heterogeneous benefits from cooperation, a tension between efficiency and equality often arises. This tension can impede agents’ ability to cooperate efficiently. We design a laboratory experiment, in which we investigate the capacity of communication and punishment, separately and jointly, to promote cooperation in such an envir...

Does higher socioeconomic status predict decreased prosocial behavior? Methodological issues such as the reliance of survey studies on self-reported measures of prosociality, the insufficient control of relative incentives in experiments, and the use of non-random samples, have prevented researchers from ruling out that there is a negative associat...

Significance Social tipping—instances of sudden change that upend social order—is rarely anticipated and usually understood only in hindsight. The ability to predict when societies will reach a tipping point has significant implications for welfare, especially when social norms are detrimental. In a large-scale laboratory experiment, we identify a...

Can a history of evasion affect tax compliance after a major institutional reform? We address this question in a novel laboratory experiment varying the quality of past and present institutions. We find that past institutions continue to exert considerable influence on individuals’ expectations about others’ compliance even after a major, common-kn...

Can performance bonuses increase the likelihood that managers coerce their subordinates into exerting high levels of effort when doing so promotes neither efficiency nor equity? We consider a laboratory setting in which managers compete to obtain a large bonus at the end of the experiment and the probability of obtaining it depends partly on the ef...

Over the past 30 years, James Andreoni has produced a body of work like few others in public economics. Motivated by a personal need to understand the determinants of prosocial behavior, and by offering a rare blend of insights from formal theory, controlled experiments, and field data, Andreoni has succeeded in elucidating the broader relevance of...

The degree of altruistic behavior among strangers is an evolutionary puzzle. A prominent explanation is the evolutionary legacy hypothesis according to which an evolved reciprocity-based psychology affects behavior even when reciprocity is impossible, i.e., altruistic behavior in such instances is maladaptive. Empirical support for this explanation...

Details about experimental procedures, power calculations, robustness checks and surveys. (DOCX)

We explore gender attitudes towards competition in the United Arab Emirates—a traditionally patriarchal society which in recent times has adopted numerous policies to empower women and promote their role in the labor force. The experimental treatments vary whether individuals compete in single-sex or mixed-sex groups. In contrast to previous studie...

Mechanisms to overcome social dilemmas provide incentives to maximize efficiency. However, often – such as when agents are heterogeneous – there is a trade-off between efficiency and equality – a normative conflict – which is overlooked. Agents’ concerns for equality in such instances can limit the ability of mechanisms to promote efficiency. We pr...

The degree of human cooperation among strangers is a major evolutionary puzzle. A prominent explanation is that cooperation is maintained because many individuals have a predisposition to punish those violating group-beneficial norms. A critical condition for cooperation to evolve in evolutionary models is that punishment increases with the severit...

Supplementary Note 1, Supplementary Methods and Supplementary References

When agents face coordination problems their choices often impose externalities on third parties. If an agent cares about them or believes others do, they can affect equilibrium selection. We present evidence from lab experiments showing that changes in the size and the sign of third-party externalities have a significant impact on tacit coordinati...

We investigate whether peer punishment is an efficient mechanism for enforcing cooperation in an experiment with a long time horizon. Previous evidence suggests that the costs of peer punishment can be outweighed by the benefits of higher cooperation if (i) there is a sufficiently long time horizon and (ii) punishment cannot be avenged. However, in...

This study provides evidence from a laboratory experiment showing that managerial bonuses can affect adversely a manager’s subordinates. In our set up, managers compete to obtain a large bonus which depends partly on the effort exerted by their subordinates. Managers can suggest an effort level and coerce subordinates who disobey by punishing them....

Mechanisms to overcome social dilemmas provide incentives to maximize efficiency. However, often – such as when agents are heterogeneous – there is a trade-off between efficiency and equality. Agents' concerns for equality in such instances can limit the ability of mechanisms to promote efficiency. We provide evidence for this from a public good ex...

Significance Why do humans cooperate in one-time interactions with strangers? The most prominent explanations for this long-standing puzzle rely on punishment of noncooperators, but differ in the form punishment takes. In models of direct punishment, noncooperators are punished directly at personal cost, whereas indirect reciprocity assumes that pu...

While the opportunity to punish selfish and reward generous behavior coexist in many instances in daily life, in most laboratory studies, the demand for punishment and reward are studied separately from one another. This paper presents the results from an experiment measuring the demand for reward and punishment by ‘unaffected’ third parties, separ...

This paper presents experimental evidence from a simple three-person game showing that many individuals are willing to avenge third-party punishment in one-shot interactions. The threat of counter-punishment has a large negative effect on the willingness of third parties to punish selfish behavior. In spite of this, the extent of selfish behavior i...

The power to coerce workers is important for the efficient operation of hierarchically structured organizations. However, this power can also be used by managers to exploit their subordinates for their own benefit. We examine the relationship between the power to coerce and exploitation in a laboratory experiment where a senior and a junior player...

This paper reports the results from a laboratory experiment which investigates the structure of contracts that emerge in overlapping-generation firms where future ownership is a perquisite of employment. Workers in the young generation are offered employment contracts designed by the firms' owners who belong to the old generation. When old, employe...

When agents face coordination problems their choices often impose externalities on third parties. We investigate whether such externalities can affect equilibrium selection in a series of one-shot coordination games varying the size and the sign of the externality. We find that third-party externalities have a limited effect on decisions. A large m...

The willingness of individuals to enforce social norms can have important welfare implications. All the experimental evidence on norm enforcement so far comes from laboratory experiments and indicates that many participants are indeed willing to enforce norms, even in one-shot interactions. We examine individuals’ willingness to punish norm violati...

A normative conflict arises when there exist multiple plausible norms of behavior. In such cases, norm enforcement can lead to a sequence of mutual retaliatory sanctions, which we refer to as a feud. We investigate the hypothesis that normative conflict enhances the likelihood of a feud in a public-good experiment. We find that punishment is much m...

The rarity of altruistic punishment in small-scale societies should not be interpreted as evidence that altruistic punishment is not an important determinant of cooperation in general. While it is essential to collect field data on altruistic punishment, this kind of data has limitations. Laboratory experiments can help shed light on the role of al...

Laboratory experiments are frequently used to examine the nature of individual preferences and inform economic theory. However, it is unknown whether the preferences of volunteer participants are representative of the population from which the participants are drawn or whether they differ due to selection bias. We examine whether the social and ris...

This paper presents evidence that the demand for costly norm enforcement can be affected by the availability of the means for enforcing the norm. Participants in a laboratory experiment can reward or punish to enforce a distribution norm. Controlling for the extent of norm violation, we find that demand for costly punishment is lower when participa...

Altruistic punishment may promote cooperation, but can also lead to costly feuds. We examine how the threat of feuds affects individuals' willingness to engage in altruistic punishment in a public good experiment in which the number of stages is determined by participants' actions. The design imposes minimal restrictions on who can punish whom and...

Do the social and risk preferences of participants in laboratory experiments represent the preferences of the population from which they are recruited? To answer this question, we conducted a classroom experiment with a population of 1,173 students using a trust game and a lottery choice task to measure individual preferences. Separately, all 1,173...

This paper investigates the relationship between firm longevity and rat races in an environment where long-lived firms are operated by overlapping generations of short-lived players. We first present a complete information model in which workers in the young generation are offered an employment contract designed by the firms' owners who belong to t...

A number of studies have shown that peer punishment can sustain cooperation in public good games. This paper shows that the format used to give subjects feedback is critical for the efficacy of punishment. Providing subjects with information about the earnings of their peers leads to significantly less cooperation and lower efficiency compared to a...

Evidence shows that real-effort investments can affect bilateral bargaining outcomes. This paper investigates whether similar investments can inhibit equilibrium convergence of experimental markets. In one treatment, sellers' relative effort affects the allocation of production costs, but a random productivity shock ensures that the allocation is n...

We use a public-good experiment to analyze behavior in a decentralized asymmetric punishment institution. The institution is asymmetric in the sense that players differ in the effectiveness of their punishment. At the aggregate level, we observe remarkable similarities between outcomes in asymmetric and symmetric punishment institutions. Controllin...

We use the voluntary contribution mechanism to investigate whether smaller action sets lead to higher cooperation rates. We find that this is the case for groups of four players.

This paper presents the results from a minimum-effort game in which individuals can observe the choices of others in real time. We find that under perfect monitoring almost all groups coordinate at the payoff-dominant equilibrium. However, when individuals can only observe the actions of their immediate neighbors in a circle network, monitoring imp...

Evidence shows that real-effort investments can affect bilateral bargaining outcomes. This paper investigates whether similar investments can inhibit equilibrium convergence of experimental markets. In one treatment, sellers’ relative effort affects the allocation of production costs, but a random productivity shock ensures that the allocation is n...

This study explores the ways in which information about other individual's action affects one's own behavior in a dictator game. The experimental design discriminates behaviorally between three possible effects of recipient's within-game reputation on the dictator's decision: Reputation causing indirect reciprocity, social influence, and identifica...

Evidence shows that real-effort investments can affect bilateral bargaining outcomes. This paper investigates whether similar investments can inhibit equilibrium convergence of experimental markets. In one treatment, sellers’ relative effort affects the allocation of production costs, but a random productivity shock ensures that the allocation is n...

This paper provides a comparative-statics analysis of punishment in public-good experiments. We vary the effectiveness of punishment, that is, the factor by which punishment reduces the punished player's income. The data show that contributions increase monotonically in punishment effectiveness. High effectiveness leads to near complete cooperation...

Punishing free riders might promote cooperation, but it can also lead to feuds. We use a public good game with punishment opportunities to investigate whether the threat of feuds is e¢ ciency enhancing. Treatments di¤er with respect to whether a punish- ment can trigger a feud. In the main treatment (Feud) the number of punishment stages is endogen...

Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...

We use a public-good experiment to analyze behavior in a decentralized asymmetric punishment institution. The institution is asymmetric in the sense that players differ in the effectiveness of their punishment. At the aggregate level, we observe remarkable similarities between outcomes in asymmetric and symmetric punishment institutions. Controllin...

This paper analyzes vertical cross-shareholding, that is, the mutual holding of a minority of shares between vertically related firms. First, we explore the issue in a game-theoretic model and show that cross-shareholding is sufficient to obtain efficient outcomes. We then test the model's predictions in an experiment. Theory predicts the seller de...

Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...

Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...

We study contract design within an overlapping generations partner- ship fi rm. The old generation owns thefirm, and designs the contract under which the young generation is hired. Young employees become partners with ownership rights, and the right to write to the contract with the next generation, when the old generation dies. This leads to a rec...

This paper investigates the relationship between relative earnings and giving in a two- stage, real-effort experiment. In the first stage, four players compete in a tournament that determines their earnings. In the second stage, they decide whether they wish to transfer part of their earnings to one or more of their group members. Our main finding...

We use a laboratory experiment to investigate the impact of social comparisons on ultimatum bargaining. Three individuals compete in a real-eort task for the role of the proposer in an ultimatum game. The proposer makes a single take- it-or-leave-it oer to the responder which, if rejected, leads to zero earnings for both parties. The role of the re...

Labor market discrimination is frequently observed, but it is un-clear what determines the basis of discrimination and in particular which role policy plays. We study discrimination based on the hukou system, segregating Chinese citizens in groups of migrants and lo-cals in urban China. We hired household aids as participants in our artefactual fie...