The presence of background risk increases self-protection effort or caution as long as an agent is prudent. In addition, the result extends to monetary self-protection investment if wealth and consumption are complements.

We re-examine the link between absolute prudence and self-protection activities. We show that the level of effort chosen by an agent with decreasing absolute prudence is larger than the optimal effort chosen by a risk-neutral agent if the degree of absolute prudence is less than a threshold that...

We show that there is a class of risk lovers who optimally choose a positive level of self-protection investment. In most cases, a risk lover increases his self-protection investment as he becomes less downside risk averse.

We conduct a laboratory experiment and provide evidence of learning spillovers within and across equivalence classes of “structurally similar” games. These spillovers are inconsistent with existing theories of learning in games.

Do corrupt people self select themselves in professions where the scope of corruption is high? We conduct a corruption experiment with private sector job aspirants and aspirants of Indian bureaucracy. The game models embezzlement of resources in which “supervisors” evaluate the performance...

We test in a laboratory experiment the theoretical prediction that risk attitudes have a surprisingly small role in distorting reports from true belief distributions. We find evidence consistent with theory in our experiment.

I examine two dimensions of framing in public goods games: Contributing vs. Taking and Gains vs. Losses. I find decreased cooperation under the Taking frame, but not under the Loss frame. This framing effect is stronger for men than women.

Shotgun clauses are commonly included in the business agreements of partnerships and limited liability companies (LLCs), but the role of offeror typically remains unassigned. In a common-value, one-sided asymmetric information setting, unequal and inefficient outcomes occur with an unassigned...

In a Bertrand-oligopoly experiment, firms choose whether or not to engage in cartel-like communication and, if so, they may get fined by a cartel authority. We find that the four-firm industries form cartels more often than the duopolies because they gain less from a hysteresis effect after...