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The beauty contest game has been used to analyze how many steps of reasoning subjects are able to perform. A common finding is that a majority seem to have low levels of reasoning. We use eye-tracking to investigate not only the number chosen in the game, but also the strategies in use and the numbers contemplated. We can show that not all cases that are seemingly level-1 or level-2 thinking indeed are {they might be highly sophisticated adaptations to beliefs about other people's limited reasoning abilities.

This study examines mechanisms underlying nationality-based discrimination from two different perspectives: social psychology and microeconomics. The authors studied 91 teams in a binational setting that were offered a new team member. National composition of the team and nationality of the new member were manipulated. Overall, the study showed that discrimination based on nationality does exist in such a setting. A new member is more likely to be accepted when belonging to the majority nation represented in the team. The chances of acceptance do not increase if the newcomer belongs to the national group that is expected to perform better. Furthermore, the authors found a general tendency to close ranks when team members strongly identify with the team, when competition is high, and when success is attributed to team effort. The results underline the importance of understanding social-psychological mechanisms for explaining nationality-based discrimination in teams.

Imitating the best strategy from the previous period has been shown to be an important heuristic, in particular in relatively complex environments. In this experiment we test whether subjects are more likely to use imitation if they are under stress. Subjects play a repeated Cournot oligopoly. Treatments are time pressure within the task and distractions through a second task (a Stroop-task) that has to be performed as well and influences payment. We measure stress levels through salivary cortisol measurements and through measuring the heart rate. Our main findings are that time pressure and distraction can indeed raise physiological stress levels of subjects within our task. More importantly from an economic perspective, we can also observe a corresponding behavioral change that is indicative of imitation.

This is a study about the possibility of self-governance. We designed two versions of a step-level public good game, with or without a centralized sanctioning mechanism (CSM). In a baseline treatment participants play 14 rounds of the non-CSM game. In an automatic removal (AR) treatment participants play 7 rounds with CSM plus 7 rounds without CSM. In voted removal (VR) participants play 7 rounds with CSM followed by a voting stage to decide whether to keep CSM. All VR groups removed CSM. Contributions in AR and VR after CSM removal are dramatically higher than in the baseline. Most groups with a CSM history managed to cooperate until the last round. We do not find more cooperation in VR than in AR. Adapted from the source document.