The rational-voter model is often criticized on the grounds that two of its central predictions (the paradox of voting and Duverger's law) are at odds with reality. Recent theoretical advances suggest that these empirically unsound predictions might be an artifact of an assumption in those...

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been...

Competition has been modelled in economic literature in a number of ways. What do these different parameterizations of competition have in common? For instance, it turns out that it is not always the case that a rise in competition reduces price cost margins, industry wide profits or...

This Paper presents the results of an experimental study on unemployment benefit sanctions. The experimental set-up allows us to distinguish between the effects of benefit sanctions once they are imposed (the ex post effect) and the effects that discourage the unemployed from risking benefit...

In this Paper we provide experimental evidence indicating that incentive contracts may cause a strong crowding out of voluntary cooperation. This crowding-out effect constitutes costs of incentive provision that have been largely neglected by economists. In our experiments the crowding-out...

We report experimental results on exclusive dealing inspired by the literature on "naked exclusion.'' Our key findings are: First, exclusion of a more efficient entrant is a widespread phenomenon in lab markets. Second, allowing incumbents to discriminate between buyers increases exclusion rates...