It is shown that rent-seeking contests with continuous and independent type distributions possess a unique pure-strategy Nash equilibrium.

Trendsetters wish to be perceived as the type that defines normative behavior. Incorporating norm formation in Bernheim (1994)’s model yields equilibria with social considerations concentrating behavior, allowing multiple conformist pools. Refinements link each pooling equilibrium to a unique...

We experimentally study clock auctions to dissolve partnerships jointly owned by two players. Subjects are found to deviate systematically from the Nash equilibrium. We explain the bidding behaviour in terms of risk aversion and/or non-standard utility theory.

We introduce a competitive framing in the mini-ultimatum game utilizing chess puzzles. Therein, our chess playing participants accept low offers significantly more often compared to a neutral framing. We conclude that in familiar competitive surroundings egoistic behavior is more acceptable.

This paper investigates whether a contest organizer should disclose private information about bidders’ abilities in a multi-prize all-pay auction. Bidders’ abilities are randomly distributed and observed by the contest organizer; the organizer decides whether to disclose this information...

“Overbidding” with respect to risk-neutral Nash predictions in first-price auction experiments has been consistently reported in the literature. One possible explanation for overbidding is that participants in these experiments do not have a clear perception of probabilities, which causes...

Some problems are more easily solved if context is provided. A stylized result from beauty contest experiments is that most choices are consistent with level-1 or level-2 thinking rather than the Nash equilibrium. The beauty contest experiment reported in this paper includes treatments in which...

We consider a differential game with a corrupt government and civil society as its players. We characterize open-loop and feedback Nash equilibria and find that, whereas it is in the best interest of the government not to commit to a repression policy, civil society is better off precommitting...

We propose an evolutionary game to analyse the dynamics of tolerance among heterogeneous economic agents. We show that: (i) intolerance is much more persistent than tolerance; (ii) a fully tolerant society assures prosperity; (iii) cultural integration should precede economic integration.

This paper provides a link between the structural approach of econometrics of auctions with the stochastic frontier literature in an effort to model excess bidding behaviour. The new technique is applied to timber auction data. The results suggest that both systematic overbidding and...