Can algorithms help people detect deception in high-stakes strategic interactions? Participants watching the pre-play communication of contestants in the TV show Golden Balls display a limited ability to predict contestants' behavior, while algorithms do significantly better. We provide...

Can algorithms help people predict behavior in high-stakes prisoner’s dilemmas? Participants watching the pre-play communication of contestants in the TV show Golden Balls display a limited ability to predict contestants’ behavior, while algorithms do significantly better. We provide...

The present note analyzes the Simultaneous Ascending Bid Auction with arbitrarily many bidders with decreasing marginal valuations under complete information. We show that the game is solvable by iterated elimination of weakly dominated strategies if the efficient allocation assigns at least one...

Implicit contracts can mitigate moral hazard in labor, credit and product markets. The enforcement mechanism underlying an implicit contract is the threat of exclusion: the agent fears that he will lose future income if the principal breaks off the relationship. This threat may be very weak in...

This paper investigates how heterogeneity in contestants' investment costs affects the competition intensity in a dynamic elimination contest. Theory predicts that the absolute level of investment costs has no effect on the competition intensity in homogeneous interactions. Relative cost...

Credence goods markets – like for health care or repair services – with their informational asymmetries between sellers and customers are prone to fraudulent behavior of sellers and resulting market inefficiencies. We present the first model that considers both diagnostic uncertainty of...

Credence goods markets – like for health care or repair services – with their informational asymmetries between sellers and customers are prone to fraudulent behavior of sellers and resulting market inefficiencies. We present the first model that considers both diagnostic uncertainty of...

We investigate the elasticity of moral ignorance with respect to monetary incentives and social norm information. We propose that individuals suffer from higher moral costs when rejecting a certain donation, and thus pay for moral ignorance. Consistent with our model, we find significant...

Expert advice is often biased in ways that benefit the advisor. We demonstrate how self-deception helps advisors be biased while preserving their self-image as ethical and identify limits to advisors' ability to self-deceive. In experiments where advisors recommend one of two investments to a...

Do people anticipate the conditions that enable them to manipulate their beliefs when confronted with unpleasant information? We investigate whether individuals seek out the "cognitive flexibility" needed to distort beliefs in self-serving ways, or instead attempt to constrain it, committing to...