We introduce a generalized theoretical approach to study imitation andsubject it to rigorous experimental testing. In our theoretical analysiswe …nd that the different predictions of previous imitation models aredue to different informational assumptions, not to different behavioralrules. It is...

We discuss the literatures on behavioral economics, bounded rationality and experimental economics as they apply to firm behavior in markets. Topics discussed include the impact of imitative and satisficing behavior by firms, outcomes when managers care about their position relative to peers,...

This is a survey of studies that examine competition in the presence of behaviourally biased or boundedly rational consumers. It will tackle questions such as: How does competition and pricing change when consumers are biased? Can inefficiencies that arise from consumer behavioural biases be...

We analyze the dynamics of neighbourhood watch programs in a local interaction framework. Agents can watch their neighbours' houses and thus deter burglars from breaking in....

While people on all sides of the political spectrum were amazed that Donald Trump won the Republican nomination this paper demonstrates that Trump's victory was not a crazy event but rather the equilibrium outcome of a multi-candidate race where one candidate, the buffoon, is viewed as likely to...

We study a version of a canonical model of attacks against political regimes where agents have an expressive utility for taking political stances that is scaled by the salience of political decision-making. Increases in political salience can have divergent effects on regime stability depending...

In a large-scale natural field experiment, we partnered with a micro-lending company in Kyrgyzstan that asked over 180,000 of its clients for donations to social projects as a form of corporate philanthropy. In a 2x2 design, we explored two main (pre-registered) hypotheses about giving by the...

This paper studies the interplay between economic incentives and social norms in firms. Weintroduce a general framework to model social norms arguing that norms stem from agents’desire for, or peer pressure towards, social efficiency. In a simple model of team productionwe examine the...

The findings on the ultimatum game are considered as belonging to the most robust experimental results. In this paper we present a slightly altered version of the mini ultimatum game of Bolton and Zwick (1995). Whereas in the latter exactly equal splits were feasible in our games these were...

Studying evolutionarily successful behavior we show in a general framework that when individuals maximizing payoff differentials invest resources in punishing others. Interestingly, these investments are increasing in individuals, own wealth and decreasing in the wealth of others.