Institutions may rely on fundamental principles, e.g., of legal philosophy, but may also have evolved according to institutional fitness, as gauged by a society's well-being. In our stylized framework where two fundamental principles, equality and efficiency, conflict with each other, one of the...

We modify the Acquiring-a-Company game to study lying in ultimatum bargaining. Privately informed sellers send messages about the alleged value of their company to potential buyers. Via random information leaks, buyers can learn the true value before proposing a price which the seller finally...