We study an industry in which an upstream monopolist supplies an essential input at a regulated price to several downstream firms. Legal unbundling means that a downstream firm owns the upstream firm but this upstream firm is legally independent and maximizes its own upstream profits. We allow...

We study an industry in which an upstream monopolist supplies an essential input at a regulated price to several downstream firms. Legal unbundling means that a downstream firm owns the upstream firm but this upstream firm is legally independent and maximizes its own upstream profits. We allow...

We study an industry with a monopolistic bottleneck (e.g. a transmission network) supplying an essential input to several downstream firms. Under legal unbundling the bottleneck must be operated by a legally independent upstream firm, which may be partly or fully owned by an incumbent active in...

We report results of an internet experiment designed to test the theory of informational cascades in financial markets (Avery and Zemsky, AER, 1998). More than 6000 subjects, including a subsample of 267 consultants from an international consulting firm, participated in the experiment. As...

This paper analyses competition of moral norms and institutions in a society where a fixed share of people unconditionally complies with norms and the remaining people act selfishly. Whether a person is a norm-complier or selfish is private knowledge. A model of voting-by-feet shows that those...

Most real world situations which are susceptible to herding are also characterized by direct payoff externalities. Yet, the bulk of the theoretical and experimental literature focuses on pure informational externalities. In this paper we study several different forms of payoff externalities that...

This paper extends the standard principal-agent model with moral hazard to allow for agents having reference- dependent preferences according to Köszegi and Rabin (2006, 2007). The main finding is that loss aversion leads to fairly simple contracts. In particular, when shifting the focus from...

This paper extends the standard principal-agent model with moral hazard to allow for agents having reference- dependent preferences according to Köszegi and Rabin (2006, 2007). The main finding is that loss aversion leads to fairly simple contracts. In particular, when shifting the focus from...

This paper analyses competition of moral norms and institutions in a society where a fixed share of people unconditionally complies with norms and the remaining people act selfishly. Whether a person is a norm-complier or selfish is private knowledge. A model of voting-by-feet shows that those...

Most real world situations which are susceptible to herding are also characterized by direct payoff externalities. Yet, the bulk of the theoretical and experimental literature focuses on pure informational externalities. In this paper we study several different forms of payoff externalities that...