This article develops the theoretical properties of a new incentive mechanism for regulating a monopoly seller and reports the results of laboratory experimental tests of its behavioral properties. The design of the new mechanism draws upon the results of our earlier experimental research on the...

This article extends previous laboratory experimental research to examine the competitive discipline of contested markets with a "natural monopoly"-type cost structure where sunk costs are neither zero nor infinite. Several alternative conjectures as to how or whether sunk costs can weaken the...

In this article we report the results from a series of laboratory markets in which sellers have better information about the quality of an item than any of the potential buyers. Sellers may voluntarily choose to reveal this information or they may instead decide to "blind bid" the item. We find...