The trust game has been widely studied in the laboratory and is often presented as a model of exchange with incomplete contracting. The standard presentation of the game differs in three potentially important ways from the naturally occurring transactions it represents: buyer-seller framing,...

Frequently, parties make sequential decisions regarding investments for which the probability of success or failure is dependent on the amount of total investment. This paper reports a series of experiments involving a costly investment game that is derived from the catalytic finance model of...

This article reports laboratory experiments investigating behavior in which players may make inferences about the intentions behind others' prior actions based on higher- or lower-accuracy information about those actions. We investigate a trust game with first mover trembling, a game in which...

When the value of a product or service is uncertain, outcomes can be inefficient. A market for evaluations can theoretically increase efficiency by voluntarily eliciting an evaluation that would otherwise not be provided. This paper uses a controlled laboratory experiment to test the performance...

The decision to undertake risk is often made by pairs (dyads), while much of the economics literature on risk taking focuses on the individual. We report the results of controlled laboratory experiments that compare behavior between individuals and pairs. Using the Holt and Laury (2002)...

This paper reports laboratory experiments comparing arbitration behavior between and across two countries with extensive trade relations, the United States and Japan. Besides comparing disputes in both locations, we evaluate disputes between them. While we find nominal differences between the...

Theoretical models of group lending assume that all group members are identical in terms of their effect on repayment performance. In practice, however, this may not be true. We use a unique data set obtained from a survey of 160 borrowing groups in Jordan to investigate the impact of joint...

Several current issues in economics are centered on scheduling and matching problems, notably including the 2012 Nobel Prize winning work. Such problems usually lie outside the scope of most undergraduate courses. We present a relatively simple problem that can be used to introduce the graph...

This classroom experiment illustrates the efficiency-enhancing property of a Tiebout system in which local public goods decisions are determined by a political process. Students are given playing cards that induce diverse preferences for expenditures on alternative public goods and are initially...

A noncooperative model of a normal form game is developed using tools from fuzzy set theory. The paper extends the decision theory framework of Bellman and Zadeh (1970) to a game-theoretic setting. We identify conditions for the existence of equilibrium in this setting and provide a duopoly...