We find for both types of markets and regardless of the information available to firms that inequality in earnings is a major factor for explaining volatility. The more equal profits are distributed, the less volatility is observed. In this note we report on an experiment designed to find out whether observed cascades are indeed due to rational Bayesian updating. However, we find little support for rational updating. In a bribery experiment, we test the hypothesis that distributive fairness considerations make relatively well-paid public officials less corruptible.
Corrupt decisions impose damages to workers whose wage is varied in two treatments.
However, there is no apparent difference in behaviour. We introduce the moonlighting game. Thus our game allows to study both positively and negatively reciprocal behaviour. We find that retribution is much more compelling than reciprocity. Although contracts are not binding they increase trust but we do not find evidence that they also encourage reciprocity.