The common prior assumption justifies private beliefs as posterior probabilities when updatinga common prior based on individual information. Common priors are pervasive in most economicmodels of incomplete information and oligopoly models with asymmetrically informed firms. Wedispose of the...

There is robust field data showing that a frequent and successful way of looking fora job is via the intermediation of friends and relatives. Here we want to explore thisexperimentally. Participants first play a simple public good game with two interactionpartners ("friends"), and share whatever...

Assuming inequality averse subjects as modeled by Fehr and Schmidt (1999) or in the ERC model by Bolton and Ockenfels (2000) in ultimatum games with asymmetric conflict payoffs allows to make predictions especially concerning responder acceptance thresholds. These predictions are tested in a...

This paper investigates market failures due to strategic delays. We test experimentally a discrete model of dynamic investment, where two privately informed agents have an option to invest at the time of their choice in the presence of waiting costs. The equilibrium outcome of ourexperimental...

The employment relationship is characterized by incomplete contracts. Labor contracts often take the form of a fixed wage without explicit performance incentives meaning that workers have a large degree of discretion over effort levels. As a consequence, an employee’s general jobattitude...

Direct transfers allow heirs to freely use what has been passed on to them. Bequeathers who do not trust their descendants to make proper use of the fortune may prefer investing it in a safe foundation, thereby limiting their descendants’ autonomy. In our study we compare experimentally these...

We consider a modi¯ed pure public good game characterized by a pre-play negotiation stage, onwhich pairs of players can form binding cooperation commitments. As the introduced mecha-nism only supports pairwise rather than more inclusive commitments, it does not implement thee±cient outcome. We...

Arguably the most important campaign finance regulations in U.S. federal elections are limitsimposed on the amount that an individual or organization may donate to a federal campaign. Suchcontribution limits are advocated on two separate grounds. The first is that they prevent corruption,the...

A procurement contract is granted by a bureaucrat (the auctioneer)who is interested in a low price and a bribe from the provider.The optimal bids and bribes are derived based on an iid private costassumption. In the experiment, bribes are negatively framed (betweensubjectstreatment) to capture...