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...

We study competition in experimental markets in which two incumbents face entry by three other firms. Our treatments vary with respect to three factors: sequential vs. block or simultaneous entry, the cost functions of entrants and the amount of time during which incumbents are protected from...

The existence of punishment opportunities has been shown to cause efficiency in public goods experiments to increase considerably. In this paper we ask whether punishment also has a downside in terms of process dissatisfaction. We conduct an experiment to study the conjecture that an environment...

We study the effectiveness of leaders for inducing coordinated organizational change to a more efficient equilibrium, i.e., a turnaround. We compare communication from leaders to incentive increases and also compare the effectiveness of randomly selected and elected leaders. While all...

We study how conflict in a contest game is influenced by rival parties being groups and by group members being able to punish each other. Our main motivation stems from the analysis of socio-political conflict. The relevant theoretical prediction in our setting is that conflict expenditures are...

Bertrand competition under decreasing returns involves a wide interval of pure strategy equilibrium prices. We first present results of experiments in which two, three and four identical firms repeatedly interact in this environment. Less collusion with more firms leads to lower average prices....

We conduct a laboratory experiment to study how, after a history of decay, cooperation in a repeated voluntary contribution game can be revived in an enduring way. Simply starting the repeated game over - a simple fresh start - leads to an initial increase of cooperation, but to a subsequent new...

Decision-makers are sometimes influenced by the way in which choice situations are presented to them or "framed." This can be seen as an important challenge to the social sciences, since strong and pervasive framing effects would make it difficult to study human behavior in a synthetic or...

We use experiments to study the efficiency effects for a market as a whole of adding the possibility of forward contracting to a pre-existing spot market. We deal separately with the cases where spot market competition is in quantities and where it is in supply functions. In both cases we...