An auction is externality-robust if unilateral deviations from equilibrium leave the other bidders’ payoffs unaffected. The equilibrium and its outcome will then persist if certain types of externalities arise between bidders. One example are externalities due to spiteful preferences, which...

This paper explores the sale of an object to an ambiguity averse buyer. We show that the seller can increase his profit by using an ambiguous mechanism. That is, the seller can benefit from hiding certain features of the mechanism that he has committed to from the agent. We then characterize the...

We experimentally test overconfidence in investment decisions by offering participants the possibility to substitute their own for alternative investment choices. Overall, 149 subjects participated in two experiments, one with just one risky asset, the other with two risky assets. Overconfidence...

We provide experimental evidence on the emergence of redistributive societies. Individuals first vote on redistribution by feet and then learn their productivity and invest. We vary the individuals’ information about their productivities at the time when they choose a distribution rule and...

We compare performance in a word based creativity task under three incentive schemes: a flat fee, a linear payment and a tournament. Furthermore, we also compare performance under two control tasks (Raven’s advanced progressive matrices or a number-adding task) with the same treatments. In all...

According to the Framework Convention on Climate Change, global collective action is needed to stabilize “greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous [our emphasis] anthropogenic interference with the climate system.” The Framework Convention thus...

Previous research shows that collective action to avoid a catastrophic threshold, such as a climate “tipping point,” is unaffected by uncertainty about the impact of crossing the threshold but that collective action collapses if the location of the threshold is uncertain. Theory suggests...

There has been a dramatic increase in the use of experimental methods in the past two decades. An oft-cited reason for this rise in popularity is that experimental methods provide the necessary control to estimate treatment effects in isolation of other confounding factors. We examine the...

Auction theory represents one of the richest areas of research in economics over the past three decades. Yet, whether, and to what extent, the introduction of secondary resale markets influences bidding behavior in sealed bid first-price auctions remains under researched. This study begins by...

This article investigates the impact of the distribution of preferences on equilibrium behavior in conflicts that are modeled as all-pay auctions with identity-dependent externalities. In this context, we define centrists and radicals using a willingness-to-pay criterion that admits preferences...