This paper introduces a new method of estimating indifference curves in the Marschak-Machina triangle. The method involves posing questions about indifference. Contrary to previous attempts, where subjects were required to identify those lotteries to which they were indifferent vis-à-vis a...

Using trust games, we study how promises and messages are used to build new trust where it did not previously exist and to rebuild damaged trust. In these games, trustees made non-binding promises of investment-contingent returns, then investors decided whether to invest, and finally trustees...

We study experimentally the effects of cost structure and prize allocation rules on the performance of rent-seeking contests. Most previous studies use a lottery prize rule and linear cost, and find both overbidding relative to the Nash equilibrium prediction and significant variation of...

Standard theoretical prediction is that rational economic agents participating in rent-seeking contests should engage in socially inefficient behavior by exerting costly efforts. Experimental studies find that the actual efforts of participants are significantly higher than predicted and that...

We investigate a private value auction in which a single "entrant" on winning imposes a negative externality on two "regular" bidders. In an English auction, when all bidders are active "regulars" free ride, exiting before price reaches their value. In a first-price sealed-bid auction incentives...

Motivated by problems of coordination failure observed in weak-link games, we experimentally investigate behavioral spillovers for minimum- and median-effort coordination games. Subjects play these coordination games simultaneously and sequentially. The results show that successful coordination...