This paper studies oligopolistic competition in off-patent pharmaceutical markets using a vertical product differentiation model. This model can explain the observation that countries with stronger regulations have smaller generic market shares. It can also explain the differences in observed...

We analyze a mutual fire insurance mechanism used in Andorra, which is called La Crema in the local language. This mechanism relies on households' announced property values to determine how much a household is reimbursed in the case of a fire and how payments are apportioned among other...

This paper is concerned with the realism of mechanisms that implement social choice functions in the traditional sense. Will agents actually play the equilibrium assumed by the analysis? As an example, we study the convergence and stability properties of Sj\"ostr\"om's (1994) mechanism, on the...

Cofoundresses of the desert fungus garden ant Acromyrmex versicolor exhibit a forager specialist who subsumes all foraging risk prior to first worker eclosion (Rissing et al. 1989). In an experiment designed to mimic a "cheater" who refuses foraging assignment when her lot, cofoundresses...

We generalize the Mortensen-Pissarides (1994) model of the labor market with a more realistic structure for the stochastic process of the shocks to the worker-firm match. In this way we can acommodate the empirical observation that hazard rates of job termination decrease and average wages...

We perform an experimental test of Maskin's canonical mechanism for Nash implementation, using 3 subjects in non-repeated groups, as well as 3 outcomes, states of nature, and integer choices. We find that this mechanism succesfully implements the desired outcome a large majority of the time and...

It has long been standard in agency theory to search for incentive-compatible mechanisms on the assumption that people care only about their own material wealth. However, this assumption is clearly refuted by numerous experiments, and we feel that it may be useful to consider nonpecuniary...

We perform an experiment on a pure coordination game with uncertainty about the payoffs. Our game is closely related to models that have been used in many macroeconomic and financial applications to solve problems of equilibrium indeterminacy. In our experiment each subject receives a noisy...

We propose a stylized model of a problem-solving organization whose internal communication structure is given by a fixed network. Problems arrive randomly anywhere in this network and must find their way to their respective “specialized solvers” by relying on local information alone. The...