We use a two-person linear voluntary contribution mechanism with stochastic marginal benefits from the public good to examine the effect of imperfect information on contributions levels. To assess prior risk attitudes, individual valuations of several risky prospects are elicited via a...

We examine the strategic behavior of leaders and followers in sequential duopoly experiments in which followers either perfectly observe the leaders’ actions or else observe nothing. Our experiments show that consistent with the theory, leaders enjoy a greater …rst-mover advantage when...

Theory absorption, a notion introduced by Morgenstern and Schwödiauer (1972) and further elaborated by Güth and Kliemt (2004), discusses the problem whether a theory can survive its own acceptance. Whereas this holds for strategic equilibria according to the assumptions on which they are...

Seminal models of herd behaviour and informational cascades point out the existence of information negative externalities, and propose to destroy information in order to achieve social improvements. Although in the last years many features of herd behaviour and informational cascades have been...

Different from previous studies that use a best estimate, interval, or sets of probabilities, we represent the degree of ambiguity through levels of information provided to subjects. The willingness to pay is higher when more amount of information is provided.

In the 40's and early 50' two decision theories were proposed and have since dominated the scene of the fascinating field of decision-making. In 1944 - when von Neumann and Morgenstern showed that if preferences are consistent with a set of axioms then it is possible to represent these...