Models of herd behaviour and informational cascades were theoretically developed in 1992 respectively by Banerjee (A simple model of herd behavior) and Bikhchandani, Hirshleifer and Welch (A Theory of Fads, Fashion, Custom and Cultural Change as Informational Cascades). Both articles pointed out...

In a laboratory experiment, subjects played ten two-person 3x3 constant sum games and stated beliefs about the frequencies of play by their opponents. Contrary to previous experimental evidence, game-theoretical predictions work well: 80% of actions coincided with Nash equilibrium, subjects were...

We design a novel sequential public goods experiment to study reciprocity, or conditional cooperation. In contrast to the standard simultaneous contribution game, our sequential design provides direct evidence on how subjects condition their own contributions on the contributions of other...

We introduce a generalized theoretical approach to study imitation models and subject the models to rigorous experimental testing. In our theoretical analysis we find that the different predictions of previous imitation models are due to different informational assumptions, not to different...

Economic theory predicts that in a first-price auction with equal and observable valuations, bidders earn zero profits. Theory also predicts that if valuations are not common knowledge, then since it is weakly dominated to bid your valuation, bidders will bid less and earn positive profits....

This paper reports experimental evidence on behaviour in an Ultimatum Game where responders have low structural information and feedback so that they have to learn the nature of the game during repeated play. The results lend support to the view that certain learning conditions are less...

In a two-stage two-public good experiment, we study the effect that subjects’ possibility of contributing to a public good in the first stage of the game has on the voluntary contributions to the second public good. Our results show that subjects do not follow either the Nash strategy or the...

We study the effect of the possibility of investing in cultural education on the voluntary contributions to the cultural good. Moreover, we provide treatments with different context in order to control for a possible framing effect. Our results show the absence of effect of cultural education on...

We run a public goods experiment with four different treatments. The payoff function is chosen such that the Nash equilibrium (NE) and the collective optimum (CO) are both in the interior of the strategy space. We test the effect of varying the level of the collective optimum on contributions....

In many research contexts it is necessary to group experimental subjects into behavioral “types.” Usually, this is done by pre-specifying a set of candidate decision-making heuristics and then assigning each subject to the heuristic that best describes his/her behavior. Such approaches might...