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A main goal of affirmative action (AA) policies is to enable disadvantaged groups to compete with their privileged counterparts. Existing theoretical and empirical research documents that incorporating AA can result in both more egalitarian outcomes and higher exerted efforts. However, the direct behavioral effects of the introduction and removal of such policies are still under-researched. It is also unclear how specific AA policy instruments, for instance, head-start for a disadvantaged group or handicap for the privileged group, affect behavior. We examine these questions in a laboratory experiment in which individuals participate in a real-effort tournament and can sabotage each other. We find that AA does not necessarily result in higher effort. High performers that already experienced an existing AA-free tournament reduce their effort levels after the introduction of the AA policy. Additionally, we observe less sabotage under AA when the tournament started directly with the AA regime. The removal of AA policies, however, significantly intensifies sabotage. Finally, there are no overall systematic differences between handicap and head-start in terms of effort provision or sabotaging behavior.

It has been argued that guilt aversion (the aversion to violate others’ expectations) and the compliance to descriptive social norms (the aversion to act differently than others in the same situation) are important drivers of human behavior. We show in a formal model that both motives are empirically indistinguishable when only one benchmark (another person’s expectation or a norm) is revealed as each of these benchmarks signals information on the other one. To address this problem, we experimentally study how individuals react when both benchmarks are revealed simultaneously. We find that both types of information affect transfers in the dictator game. At the same time, the effect of the recipient’s expectation is non-monotonic as dictators use the disclosed expectation in a self-serving way to decrease transfers.

We study, how help can be fostered under relative rewards by means of team bonus and corporate value statements. A simple model analysis suggests that team members help less as relative rewards increase. As one potential measure to encourage help, we augment relative rewards with team rewards determined by the output of the whole team. This theoretical benchmark is tested in an experiment. Furthermore, we provide the first clean one-shot experimental test of the Lazear and Rosen (1981) tournament model. In a second experiment, we investigate the effectiveness of corporate value statements to encourage help.

We investigate whether incentive schemes signal social norms and thus affect behavior beyond their direct economic consequences. A principal-agent experiment is studied in which prior to contract choice principals are informed about past actions of other agents and thus have more information about norms of behavior. Compared to a setting with uninformed principals agents exert nearly 50% higher efforts under a fixed wage contract when an informed principal had chosen this contract. Apparently the informed principal's choice signals a norm not to exploit the trust which leads to more trustworthy behavior. This mechanism's robustness is explored in further experiments.