We provide a framework to evaluate whether or not a seller can increase his revenue in interacting with a privately informed buyer by using money-back guarantees (MBGs). The buyer's value for the good exhibits fi risk and his type is multidimensional giving the probability of Öt as well as the...

We study the effciency and fairness properties of the equal cost sharing mechanism in the provision of a binary and excludable public good. According to the maximal welfare loss criterion, equal cost sharing is optimal within the class of strategyproof, individually rational and no-budgetde…cit...

The Axiom of Monotonicity (AM) is a necessary condition for a number of expected utility representations, including those obtained by de Finetti (1930), von Neumann and Morgenstern (1944) and Savage (1954). The paper reports on experiments that directly test AM by eliminating strategic...

It is generally understood that in situations of asymmetric information, the principal is better off committing to long term contracts than committing to short term contracts. The result holds true even when long term contracts are constrained to be renegotiation proof. The paper argues that the...