The effectiveness of pre-play communication in achieving efficient outcomes has long been a subject of controversy. In some environments, cheap talk may help to achieve coordination. However, Aumann conjectures that, in a variant of the Stag Hunt game, a signal for efficient play is not...

We analyze the role of commitment in pre-play communication for ensuring efficient evolutionarily stable outcomes in coordination games. All players are a priori identical as they are drawn from the same population. In games where efficient outcomes can be reached by players coordinating on the...

We use subjects’ actions in modified dictator games to perform a within-subject classification of individuals into four different types of interdependent preferences: Selfish, Social Welfare maximizers, Inequity Averse and Competitive. We elicit beliefs about other subjects’ actions in the...

We study an interactive framework that explicitly allows for non-rational behavior. We do not place any restrictions on how players can deviate from rational behavior. Instead we assume that there exists a lower bound p E [0,1] such that all players play and are believed to play rationally with...

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been...

We perform an experimental test of Maskin's canonical mechanism for Nash implementation, using 3 subjects in non-repeated groups, as well as 3 outcomes, states of nature, and integer choices. We find that this mechanism succesfully implements the desired outcome a large majority of the time and...