Organizational Design

Iris Bohnet,, & Zeckhauser, R. (2004). Social Comparisons in Ultimatum Bargaining. Scandinavian Journal of Economics , 106, 495–510. Publisher's VersionAbstract

Experiments are used to examine the effects of social comparisons in ultimatum bargaining. We inform responders about the average offer before they decide whether to accept or reject their specific offer. This significantly increases offers and offer-specific rejection probabilities. For comparison, we consider another change in informational conditions: telling responders the total pie is \$30—ex ante it was either \$15 or \$30—affects offers and rejection probabilities roughly as much. Our results are consistent with people’s dislike for deviations from the norm of equity but inconsistent with fairness theories, where people dislike income disparity between themselves and their referents.

Iris Bohnet,, & Baytelman, Y. (2007). Institutions and Trust: Implications for Preferences, Beliefs and Behavior. Rationality and Society , 19 (1), 99-135. Publisher's VersionAbstract

Institutions matter - but how? This article employs experiments to examine whether institutions only affect trust and trustworthiness behavior by changing constraints and thereby the beliefs people hold about others' behavior, as commonly assumed in a rational choice framework, or also by influencing preferences. In a within-subject design, we confront people with an anonymous one-shot trust game, a one-shot game with pre-play communication, post-play communication and a post-play punishment option and a finitely repeated game. Institutions increasing the cost of betrayal as compared to an anonymous one-shot game affect people's beliefs and enhance their willingness to trust and be trustworthy. However, all settings that offer tighter institutional constraints compared to the anonymous one-shot game decrease intrinsically motivated trust. They do not influence trustworthiness. Thus, institutions may also affect preferences. The ‘crowding-out’ of intrinsic trust is of concern as it has been found to be associated with economic performance and democracy.

Iris Bohnet,, van Geen, A., & Bazerman, M. H. (2016). When Performance Trumps Gender Bias. Joint Versus Separate Evaluation. Management Science , 62 (5), 1225-1234. Publisher's VersionAbstract

We examine a new intervention to overcome gender biases in hiring, promotion, and job assignments: an “evaluation nudge,” in which people are evaluated jointly rather than separately regarding their future performance. Evaluators are more likely to focus on individual performance in joint than in separate evaluation and on group stereotypes in separate than in joint evaluation, making joint evaluation the money-maximizing evaluation procedure. Our findings are compatible with a behavioral model of information processing and with the System 1/System 2 distinction in behavioral decision research where people have two distinct modes of thinking that are activated under certain conditions.