We report an experiment on the Probabilistic Serial (PS) mechanism for allocating indivisible goods. The PS mechanism, a recently discovered alternative to the widely used Random Serial Dictatorship mechanism, has attractive fairness and efficiency properties if people report their preferences...

Individuals and two-person teams play a hidden - action trust game with pre - play communication. We replicate previous results for individuals that non-binding promises increase cooperation rates. But this does not extend to teams. Wh ile teams make non-binding promises to cooperate at the same...

Prior laboratory experiments have studied general equilibrium economies constructed from "induced preferences" for artificial goods. We introduce new methods that allow us to study economies constructed instead from subjects' actual, "homegrown" preferences. Our subjects reveal their preferences...

While people on all sides of the political spectrum were amazed that Donald Trump won the Republican nomination this paper demonstrates that Trump's victory was not a crazy event but rather the equilibrium outcome of a multi-candidate race where one candidate, the buffoon, is viewed as likely to...

We investigate fairness preferences in matching mechanisms using a spectator design. Participants choose between the Boston mechanism or the serial dictatorship mechanism (SD) played by others. In our setup, the Boston mechanism generates justified envy, while the strategy-proof SD ensures...

Teamwork has become increasingly important in modern organizations and the labor market. Yet little is known about the role of self-confidence in teamwork. In this paper, we present evidence from a laboratory experiment using a team effort task. Effort and ability are complements and there are...

We characterize a parametric family of application-rejection school choice mechanisms, including the Boston and Deferred Acceptance mechanisms as special cases, and spanning the parallel mechanisms for Chinese college admissions, the largest centralized matching in the world. Moving from one...

We analyze the incidence and welfare effects of unit sales taxes in experimental monopoly and Bertrand markets. We find, in line with economic theory, that firms with no market power are able to shift a high share of a tax burden on to consumers, independent of whether buyers are automated or...

We present a legislative bargaining model of the provision of a durable public good over an infinite horizion. In each period, there is a societal endowment which can either be invested in the public good or consumed. We characterize the optimal public policy, defined by the time path of...

Quotas for special groups of students often apply in school or university admission procedures. This paper studies the performance of two mechanisms to implement such quotas in a lab experiment. The first mechanism is a simplified version of the mechanism currently employed by the German central...