We investigate experimentally whether social learners appreciate the redundancy of information conveyed by their observed predecessors' actions. Each participant observes a private signal and enters an estimate of the sum of all earlier-moving participants' signals plus her own. In a first...

We investigate experimentally whether social learners appreciate the redundancy of information conveyed by the behavior of those they observe. Each experimental participant observes a private signal and enters an estimate of the sum of all earlier-moving participants' signals plus her own. In a...

We consider bargaining in a bipartite network of buyers and sellers, who can only trade with the limited number of people with whom they are connected. Such networks could arise due to proximity issues or restricted communication flows, as with information transmission of job openings, business...

Do people know their own risk preferences, or do risk choices change with experience and observation? We provide a clean and straightforward test in the laboratory. People make an initial decision concerning a lottery choice and then experience 24 practice periods in which they roll the dice,...

Israel M. Kirzner is the 2006 winner of The International Award for Entrepreneurship and Small Business Research (the FSF-Nutek Award). In this Prize Lecture he argues that a number of those who have commented on his work have misunderstood certain aspects of his theoretical system, and as a...

Preference for control affects investment behavior. Participants of laboratory experiments invest different amount of money in a risky asset when face with two different methods of control which have identical payoff structure and probability distribution, but provide different sense of control....

Good decision-making often requires people to perceive and handle a myriad of statistical correlations. Notably, optimal portfolio theory depends upon a sophisticated understanding of the correlation among financial assets. In this paper, we examine people's understanding of correlation using a...

Das Management von Enron bediente sich moralisch fragwürdiger Praktiken ("Bad Practices"), die zu dem spektakulären Aufstieg und Fall des Unternehmens beitrugen. Wie konnten sich diese Bad Practices etablieren? Um diese Frage zu beantworten, betrachten wir vier Verhaltensmechanismen und...

Economists typically predict that people are inherently selfish; however, experimental evidence suggests that this is often not the case. In particular, delegating a choice (such as a wage) to the performing party may imbue this party with a sense of responsibility, leading to improved outcomes...