This dissertation consists of three studies in behavioral and experimental economics. In the first chapter, I study how vote buying may occur in environments where promises cannot be enforced and investigate how different kinds of behavioral biases lead to the use of different types of payments (pre-voting transfers vs. promises of post-voting transfer). I provide a simple model of the vote buying exchange as a one-shot interaction of a buyer and a voter, where voting is costly and done in private, and the buyer may make offers with different payments types. I investigate the effects of three behavioral biases on buyer and voter behavior: inequity aversion, guilt aversion and voter reciprocity. Using a laboratory experiment, I present evidence that support the presence of all three behavioral biases.

The second chapter is a joint work with Erkut Ozbay. We study the optimality of pre- and post-voting payments to buy votes in an environment where both the buyer and the voter are able to commit to their promises. Using a modified version of the model used in Chapter 1, we investigate the implications of different risk attitudes and inequity aversion on agent behavior. We test the predictions of different preferences using a lab experiment. Our results support the presence of inequity aversion in this environment.

In the third chapter, I study whether and under what conditions a decision maker may decline a transfer made to her by another person. I identify the behavioral biases of inequity aversion, guilt aversion and reciprocity as possible explanations: an inequity averse decision maker may reject if the resulting allocation is very inequitable, while a guilt averse one may reject if she believes that she cannot fulfill the other person’s payoff expectations, and a reciprocal decision maker may reject if she believes the other person made the transfer with good intentions, but she cannot respond in kind. By modifying a widely used experimental two-player game introduced to study trust and reciprocity, I show that a decision maker takes the cost of reciprocating a transfer into consideration when deciding whether to accept, regardless of whether she is reciprocal, inequity averse, or guilt averse. However, the three biases have different implications for how the decision maker's belief about the other player’s material payoff expectations affect her behavior. Using a laboratory experiment, I confirm that both guilt aversion and reciprocity motives are present, and they are able to explain different aspects of the behavior.