We report experiments designed to test between Nash equilibria that are stable and unstable under learning. The “TASP†(Time Average of the Shapley Polygon) gives a precise prediction about what happens when there is divergence from equilibrium under fictitious play like learning...

This pap er develops a theory of revealed preferences over oneís own and othersímonetary payoffs. We intro duce ímore altruistic thanî(MAT), a partial ordering over preferences, and interpret it with known parametric mo dels. We also intro duce and illustrate ímore generous thanî (MGT), a...

Each of n ≥ 1 identical buyers (and m ≥ 1 identical sellers) wants to buy (sell) a single unit of an indivisible good. The core predicts a unique and extreme outcome: the entire surplus is split evenly among the buyers when m n and among the sellers when m n; the long side gets...

An irreversible investment opportunity has value V governed by Brownian motion with upward drift and random expiration. Human subjects choose in continuous time when to invest. If she invests before expiration, the subject receives V−C : the final value V less a given avoidable cost C ....

Fund managers respond to the payoff gradient by continuously adjusting leverage in our analytic and simulation models. The base model has a stable equilibrium with classic properties. However, bubbles and crashes occur in extended models incorporating an endogenous market risk premium based on...

Human players in our laboratory experiment converge closely to the symmetric mixed Nash equilibrium when matched in a single population version of the standard Hawk-Dove game. When matched across two populations, the same players show clear movement towards an asymmetric (and very inequitable)...

We study prisoner’s dilemmas played in continuous time with flow payoffs over 60 seconds. In most cases, the median rate of mutual cooperation rises to 90% or more. Control sessions with 8-time repeated matchings achieve less than half as much cooperation, and cooperation rates...

This paper analyzes seller characteristics and choices in approximately 1000 eBay auctions for a particular model of PDA. Seller characteristics include frequency of selling, reputation, and the qualities of the product sold. Seller choices include the length of the auction, information provided...