Level-k and team reasoning theories, among others, have been used to explain experimental evidence on coordination games. Both theories succeed in explaining some results and both fail in explaining other results. Sometimes it is impossible to discriminate between them. For this reason we...

A freeze-out bond exchange offer can occur when a firm wants to replace an exist- ing bond, issued with a covenant, with a new bond that does not have this type of restriction. If the bondholders are not fully coordinated, the shareholders can make the exchange offer unfair to capture wealth...

We analyze subjects’ eye movements while they make decisions in a series of one-shot games. The majority of them perform a partial and selective analysis of the payoff matrix, often ignoring the payoffs of the opponent and/or paying attention only to specific cells. Our results suggest that...

In minority games, players in a group must decide at each round which of two available options to choose, knowing that only subjects who picked the minority option obtain a positive reward. Previous experiments on the minority and similar congestion games have shown that players interacting...

Theoretical and empirical body of research have exposed the powerful role of experiencing regret in guiding choice behavior. In this paper, we examined the impact of experienced regret and rejoicing induced by feedback provided on a risk decision prior to a two-period intertemporal choice. To...

Group membership increases cooperation in social dilemma games, altruistic donation in dictator games, and fair offers in ultimatum games. While the empirical study of group action has grown rapidly over the years, there is little agreement at the theoretical level on exactly why and how group...

We present results of an experiment on expectation formation in an asset market. Participants to our experiment must provide forecasts of the stock future return to computerized utility-maximizing investors, and are rewarded according to how well their forecasts perform in the market. In the...

The focus of this paper is on altruism and coordination among children. A special form of altruism (ethical altruism) is investigated by means of experiments. The definition of altruism used here follows from A. Sen’s concept of obligation, i.e. behaviour that produces advantage for someone...

It has been suggested that players often produce simplified and/or misspecified mental representations of interactive decision problems (Kreps, 1990). We submit that the relational structure of players’ preferences in a game induces cognitive complexity, and may be an important driver of such...

We demonstrate that one should not expect convergence of the proposals to the subgame perfect Nash equilibrium offer in standard ultimatum games. First, imposing strict experimental control of the behavior of the receiving players and focusing on the behavior of the proposers, we show...