We use laboratory experiments to analyze decentralized decision-making in one-sided matching markets. We find that subjects tend to make decisions in line with theoretical models, as their offering and accepting decisions are only guided by the objective of improving upon the status quo....

I examine the behavior of subjects in common value auctions with both experienced and inexperienced bidders in the same market. Subjects know that they are competing against both experienced and inexperienced subjects and can observe bidding behavior of their opponents after an auction round....

This paper reports an experimental study on three well-known solutions for problems of adjudicating con icting claims: the constrained equal-awards, the proportional, and the constrained equal-losses rules. We first let subjects play three games designed such that the unique equilibrium...

Pairwise stability (Jackson and Wolinsky, 1996) is the standard stability concept in network formation. It assumes myopic behavior of the agents in the sense that they do not forecast how others might react to their actions. Assuming that agents are farsighted, related stability concepts have...

Pairwise stability Jackson and Wolinsky [1996] is the standard stability concept in network formation. It assumes myopic behavior of the agents in the sense that they do not forecast how others might react to their actions. Assuming that agents are perfectly farsighted, related stability...

This paper examines how to satisfy a separability condition related to “independence of the utilities of the dead” (Blackorby et al., 1995; Bommier and Zuber, 2008) in the class of “expected equally distributed equivalent” social orderings (Fleurbaey, 2010). It also inquires into the...

Considering a consumer with standard preferences, I trace out the consequences for risk aversion and prudence of quantity constraints on markets. I first show how the effect can be decomposed into a price risk effect and an endogenously changing risk aversion/prudence effect. Next, I calibrate...

This paper considers the problem of the optimal timing of the exchange of the sum of n geometric Brownian motions for the sum of m others. We propose a closed form determinable stopping time based on the heuristic principle of smooth fit. We cannot prove that this stopping time is optimal....

This paper considers the general problem of optimal timing of the exchange of the sum of n Ito-diffusions for the sum of m others (e.g., the optimal time to exchange a geometric Brownian motion for a geometric mean reverting process). We first contribute to the literature by providing analytical...

Profit maximization is not a well defined objective when markets are incomplete. Several criteria of investment choice have therefore been put forward in the literature, some of which crucially hinge upon aggregation of shareholders' preferences, as is the case with the criteria proposed by...