We construct a dynamic model of two-sided sorting in labor markets with multi-dimensional agent and firm heterogeneity. We apply it to study optimal party structure and the decision of how (de)centralized candidate recruitment should be. Parties are non-unitary actors and compete at the local...

This article studies long-horizon dynamic asset allocation strategies with recursive parameter updating. The parameter estimates for the regime-switching dynamics vary as more and more datapoints are observed and the sample size increases. In such a setting, the globally optimal portfolio...

We explore the stability of imitation in a 1,200-period experimental Cournot game where subjects do not know the payoff function but see the output quantities and payoffs of each oligopolist after every period. In line with theoretical predictions and previous experimental findings, our...

We study long-run learning in an experimental Cournot game with no explicit information about the payoff function. Subjects see only the quantities and payoffs of each oligopolist after every period. In line with theoretical predictions and previous experimental findings, duopolies and...

Social interactions predominantly take place under the shadow of the future. Previous literature explains cooperation in indefinitely repeated prisoner's dilemma as predominantly driven by self-interested strategic considerations. This paper provides a causal test of the importance of social...

In this note we shall discuss a concept that - despite its prominence in both Hume (1739) and Smith (1759), its obvious relevance for social behavior, and its not so infrequent use in colloquial language - has never gained a foothold in economic theory: the concept of empathy. Specifically, we...

The game-theoretical analysis of this paper shows that stress tests that cover the entire banking sector (macro stress tests) can be performed by institutional supervisors to improve welfare. In a multi-receiver framework of Bayesian persuasion we show that a banking authority can create value...

This paper analyzes fairness and bargaining in a dynamic bilateral matching market. Traders from both sides of the market are pairwise matched to share the gains from trade. The bargaining outcome depends on the traders’ fairness attitudes. In equilibrium fairness matters because of market...