Individual welfare is most naturally measured in terms of individual utility but this has the well-known disadvantage that utility levels of different consumers cannot be meaningfully compared. This difficulty is traditionally avoided by using various willingness-to-pay measures, such as...

We construct a simple trading process that is based on the maximization, at each stage, of the total distributable surplus. We show that this process converges to a Pareto optimal allocation.

We report an experiment designed to investigate markets with consumer search costs. In markets where buyers are matched with one seller at a time, sellers are predicted to sell at prices equal to buyers' valuations. However, we find sellers post prices that offer a more equal division of the...

We report a policy experiment that illustrates a potential problem of using historical pass-through rates as a means of predicting the competitive consequences of projected firm-specific cost savings in antitrust contexts, particularly in merger analysis. The effects of cost savings on welfare...

Standard laboratory posted-offer markets respond slowly and incompletely to demand shocks. In these one-sided markets, where sellers control the setting of prices, very little information is transmitted via the process of exchange. For this reason, traders have trouble distinguishing randomness...

The pure exchange model is the foundation of the neoclassical theory of value, yet equilibrium predictions and price adjustment dynamics for this model remained untested prior to the experiment reported in this paper. With the exchange economy replicated several times, prices and allocations in...

The warm-glow model (Andreoni in J Political Econ 97:1447–1458, <CitationRef CitationID="CR2">1989</CitationRef>; Econ J 100:464–477, <CitationRef CitationID="CR3">1990</CitationRef>) of public goods provision has received widespread interest, yet surprisingly most attention has focused on the voluntary contribution equilibrium of the model, and only very little attention has...</citationref></citationref>