We examine the robustness of information cascades in laboratory experiments. Apart from the situation in which each player can obtain a signal for free (as in the experiment by Anderson and Holt, 1997, American Economic Review), the case of costly signals is studied where players decide whether...

We extend the analysis of the intertemporal utility maximization problem for Hindy-Huang-Kreps utilities reported in Bank and Riedel (1998) to the stochastic case. Existence and uniqueness of optimal consumption plans are established under arbitrary convex portfolio constraints, including both...

In this paper I consider a complex decision problem where subjects have to cope with a time horizon of uncertain duration and must update their termination probabilities which depend on stochastic events during "life". First I describe how economic theory suggests to solve the decision problem....

Consider estimating the mean of a normal distribution with known variance, when that mean is known to lie in a bounded interval. In a decision-theoretic framework we study finite sample properties of a class of nonlinear' estimators. These estimators are based on thresholding techniques which...

The experimental situation presents a complex stochastic intertemporal allocation problem. First, two initial chance moves select one of three possible termination probabilities which then determines whether "life" lasts 3,4,5, or 6 periods. Compared to Anderhub et al. (1997) participants are...

We prove existence of an Arrow-Debreu equilibrium when agents' preferences exhibit local substitution in the sense of Hindy, Huang, and Kreps (1992). Efficient allocations and supporting price functionals are identified and characterized. Under Hindy Huang Kreps preferences, equilibrium price...

Many consumption prices are highly volatile. It would certainly overburden our cognitive system to fully adjust to all these changes. Households therefore often rely on simple heuristics when deciding what to consume, e.g. in the form of a constant budget share for a specific consumption...

Updating behavior in cascade experiments is usually investigated on the basis of urn prediction. But urn predictions alone can only provide a very rough information on individual updating behavior. Therefore, we implement a BDM mechanism. Subjects have to submit maximum prices that they are...

Studying evolutionarily successful behavior we show in a general framework that when individuals maximizing payoff differentials invest resources in punishing others. Interestingly, these investments are increasing in individuals, own wealth and decreasing in the wealth of others.

The findings on the ultimatum game are considered as belonging to the most robust experimental results. In this paper we present a slightly altered version of the mini ultimatum game of Bolton and Zwick (1995). Whereas in the latter exactly equal splits were feasible in our games these were...