Using detailed firm-level data, we analyze Spain’s Pharmaceutical Research Program, and find differences between the ex ante announced evaluation criteria and their ex post implementation. By studying the program’s implementation, we also uncover that the apparent discrimination against...

Several situations in our daily interactions are characterized by uncertainty and asymmetric information regarding the final outcomes. For example, an investor may overstate a project’s value, or a superior may choose to under, or over, state the gains from a project to a subordinate. We...

We test the strategic motive to sell forward in experimental Cournot duopoly and quadropoly environments with either a finite (exogenous close) or an infinite (endogenous close) number of forward markets. In the exogenous close case experienced subjects do not avail themselves of the forward...

Financial markets are overwhelmed by daily announcements. We use experimental asset markets to assess the impact of releasing public messages with different levels of reliability on asset prices. Subjects receive qualitative announcements in predetermined trading periods that are either preset...

This paper analyzes the incentives for governments to impose export subsidies when firms invest in a cost saving technology before market competition. Governments first impose an export subsidy or a tax. After observing export policy, firms invest in cost reducing R&D and subsequently compete in...

In this paper we analyze market access blocking properties of a Minimum Quality Standard (MQS). For an importing country that imports a high and low quality good, the welfare maximizing optimal MQS limits market access only to the high quality firm. This result is further confirmed for a uniform...

Non-existence of a pure strategy equilibrium in a Bertrand-Edgeworth duopoly model is analyzed. The standard model is modified to include a list pricing stage and a subsequent price discounting stage. Both firms first simultaneously choose a maximum list price and then decide to lower the price,...

We test how a monopoly, a duopoly and a public monopoly manage and allocate water resources. Stock depletion for the public monopoly is fastest. However, it reaches the optimal stock level towards the end of the experimental sessions. The private monopoly and duopoly maintain inefficiently high...

In a vertically differentiated duopoly the use of import tariffs by an importing country decreases domestic welfare if import tariffs are chosen once the firms have made their quality decisions. In this paper we propose import tariffs that are contingent on some minimum quality level (MQL) being...

Financial markets are overwhelmed by daily announcements. We use experimental asset markets to assess the impact of uninformative communications on asset prices and trading volumes. We deliver uninformative messages in standard experimental asset markets and find that trading volumes and prices...