Smith et al. (1988) reported large bubbles and crashes in experimental asset markets, a result that has been replicated by a large literature. Here we test whether the occurrence of bubbles depends on the experimental subjects' cognitive sophistication. In a two-part experiment, we first run a...

Traditional finance is built on the rationality paradigm. This chapter discusses simple models from an alternative approach in which financial markets are viewed as complex evolutionary systems. Agents are boundedly rational and base their investment decisions upon market forecasting heuristics....

Drawing on examples of recently published and widely-cited studies in experimental economics, we show that behavioral games are frequently analyzed in a manner that is prone to biased causal inference. First, deficiencies in design and implementation jeopardize the crucial assumption that...

Traditional finance is built on the rationality paradigm. This chapter discusses simple models from an alternative approach in which financial markets are viewed as complex evolutionary systems. Agents are boundedly rational and base their investment decisions upon market forecasting heuristics....

We analyze data from experimental auctions of orange maize in rural Zambia using the Becker-deGroot-Marschak (BDM) mechanism to estimate the willingness-to-pay (WTP) for the maize. Further, BDM data is combined with first-price auction data to estimate individual risk attitudes. The orange maize...

Using real effort to implement costly activities increases the likelihood that the motivations that drive effort provision in real life carry over to the laboratory. However, unobserved differences between subjects in the cost of real effort make quantitative prediction problematic. In this...

Although different approaches and methods have been used to measure inequality aversion, there remains no consensus about its drivers at the individual level. We conducted an experiment on a sample of more than 1,576 first-year undergraduate economics and business students in Uruguay to...