We study experimentally how the ability to communicate affects the frequency and effectiveness of flexible and inflexible contracts in a bilateral trade context where sellers can adjust trade quality after observing a post-contractual cost shock and a discretionary buyer transfer. In the absence...

While the theoretical industrial organization literature has long argued that excess capacity can be used to deter entry into markets, there is little empirical evidence that incumbent firms effectively behave in this way. Bagwell and Ramey (1996) propose a game with a specific sequence of moves...

In the past decade, it has become increasingly common to use simple laboratory games and decision tasks as a device for measuring both the preferences and understanding of rural populations in the developing world. This is vitally important for policy implementation in a variety of areas. In...

JEL#: A12, A13, B49, C70, C91, D63<BR> Keywords: difference aversion, fairness, inequality aversion, maximin criterion, non-ultimatum games, reciprocal fairness, social preferences<BR> Departures from pure self interest in economic experiments have recently inspired models of "social preferences". We...