We study the implications of biased consumer beliefs for search market outcomes in the seminal framework due to Diamond (1971). Biased consumers base their search strategy on a belief function which specifies for any (true) distribution of utility offers in the market a possibly incorrect...

Matching markets can be unstable when individuals prefer to be matched to a partner who also wants to be matched with them. Through a pre-registered and theory-guided laboratory experiment, we provide evidence that such reciprocal preferences exist, significantly decrease stability in matching...

This paper studies if workers infer from correlation about causal effects in the context of the part-time wage penalty. Differences in hourly pay between full-time and part-time workers are strongly driven by worker selection and systematic sorting. Ignoring these selection effects can lead to...

Game-theoretic analyses of communication rely on beliefs – especially, the receiver’s belief about the truth status of an utterance and the sender’s belief about the reaction to the utterance – but research that provides measurements of such beliefs is still in its infancy. Our...

People with higher-incomes tend to support less redistribution than lower-income people. This has been attributed not only to self-interest, but also to psychological mechanisms including differing beliefs about the hard work or luck underlying inequality, differing fairness views, and differing...

Do agents believe to be agreeing more with others in the long-run? This paper designs an experiment to study how cognitive abilities affect actual and perceived disagreement in a standard sequential belief updating task with public signals. We document a persistent gap in the perception of...

A lack of transparency about policy performance can pose a major obstacle to welfare-enhancing policy competition across jurisdictions. In parallel surveys with German citizens and state parliamentarians, we document that both groups misperceive the performance of their state's education system....

Agents with reciprocal preferences prefer to be matched to a partner who also likes to collaborate with them. In this paper, we introduce and formalize reciprocal preferences, apply them to matching markets, and analyze the implications for mechanism design. Formally, the preferences of an agent...

We examine the impact of reputational concerns on seeking advice. While seeking can improve performance, it may affect how others perceive the seeker's competence. In an online experiment with white-collar professionals (N=2,521), we test how individuals navigate this tradeoff and if others'...

We conduct an experiment in which groups are tasked with evaluating the truth of a set of politically relevant facts and statements, and we investigate whether communication improves information aggregation and the accuracy of group decisions. Our findings suggest that the effect of...