While the theoretical industrial organization literature has long argued that excess capacity can be used to deter entry into markets, there is little empirical evidence that incumbent firms effectively behave in this way. Bagwell and Ramey (1996) propose a game with a specific sequence of moves...

We explore the effects of social distance on reciprocal behavior in an experiment conducted over the Internet on three continents and in classroom laboratory sessions conducted in Israel and Spain. Our design elicitsindividual behavior profiles over a range of contingencies, enabling us to...

Social facilitation describes the effect on performance due to the mere presence of others. Here we study the effect of the mere presence of an audience on the behavior of people involved in a strategic interaction and on the performance of institutions. In our laboratory experiment, two active...

We explore the effects of social distance on reciprocal behavior in an experiment conducted over the Internet on three continents and in classroom laboratory sessions conducted in Israel and Spain. Our design elicits individual behavior profiles over a range of contingencies, enabling us to...

We study the following basic intuition: when faced with a decision how to split their investment between a risky lottery and an asset with a fixed return, people increase the proportion invested in the risky option the more they like the lottery. We find counter-examples to this, and in fact we...

It is standard in agency theory to search for incentive-compatible mechanisms on the assumption that people care only about their own material wealth. Yet it may be useful to consider social preferences in mechanism design and contract theory. We devise an experiment to explore optimal contracts...

We investigate the nature of continuous-time strategic interactions in public-goodsgames. In one set of treatments, four subjects make contribution decisions in continuous timewhile in another they make them only at discrete points of time. The effect of continuous timeis muted in public-goods...