In markets with asymmetric information between sellers and buyers, feedback mechanisms are important to increase market efficiency and reduce the informational disadvantage of buyers. Feedback mechanisms might work because of self-selection of more trustworthy sellers into markets with such...

We expand upon the previous models of inequity aversion of Fehr and Schmidt [1], and Frohlich et al. [2], which assume that dictators get disutility if the final allocation of surplus deviates from the equal split (egalitarian principle) or from the subjects' production (libertarian principle)....

Two deviations of alternating-offer bargaining behavior from economic theory are observed together, yet have been studied separately. Players who could secure themselves a large surplus share if bargainers were purely self-interested incompletely exploit their advantage. Delay in agreement...

Is the willingness to make trades influenced by how the total gains from trade are split between the trading partners? We present results from a bilateral trade game (n = 128) where all participants were price-takers and trading pairs faced one of three exogenously imposed trading prices. The...

A number of studies discuss whether and how economists differ from other disciplines in the amount that they contribute to public goods. We view this debate as incomplete because it neglects the willingness to sanction non-cooperative behavior, which is crucial for maintaining social order and...

Markets sometimes unravel, with offers becoming inefficiently early. Often this is attributed to competition arising from an imbalance of demand and supply, typically excess demand for workers. However this presents a puzzle, since unraveling can only occur when firms are willing to make early...