Weber (2001) uses the Dirty Faces Game to examine the depth of iterated rationality. Weber does not consider equilibria that contain weakly dominated actions. So he implicitly assumes that it is common knowledge that no one ever uses weakly dominated actions. We show that allowing for equilibria...

By providing incentives for sellers to act in a trustworthy manner, reputation mechanisms in many online environments can mitigate moral-hazard problems when particular buyers and sellers interact infrequently. However, these mechanisms rely on buyers sharing their private information about...

Can a social norm of trust and reciprocity emerge among strangers? We investigate this question by examining behavior in an experiment where subjects repeatedly play a two-player binary ―trust‖ game. Players are randomly and anonymously paired with one another in each period. The...

The paper presents the concept of an "imitation equilibrium" and explores it in the context of some simple oligopoly models. The concept applies to normal form games enriched by a "reference structure" specifying a "reference group" for every player. The reference group is a set of other...

Is culture an important variable to explain whether groups can successfully provide public goods? A wealth of empirical evidence on both industrialized and developing countries shows that cooperation levels decrease in the presence of ethnic divisions. Although several laboratory works deal with...

This article explores the effect of a subset of symmetric bidders joining to bid together. Possible applications include mergers, collusion and joint-bidding arrangements. The change produces a “strong” party with a more advantageous value distribution than the remaining “weak”...

Industrial organization is mainly concerned with the behavior of large firms, especially when it comes to oligopoly theory. Experimental industrial organization, therefore, faces a problem: How can firms be brought into the laboratory? The main approach relies on framing: Call individuals...

Industrial organization is mainly concerned with the behavior of large firms, especially when it comes to oligopoly theory. Experimental industrial organization therefore faces a problem: How can firms be brought into the laboratory? The main approach relies on framing: Call individuals firms!...

We experimentally study behavior in a simple voting game where players have private information about their preferences. With random matching, subjects overwhelmingly follow the dominant strategy to exaggerate their preferences. Applying the linking mechanism suggested by Jackson and...

We experimentally study behavior in a simple voting game where players have private information about their preferences. With random matching, subjects overwhelmingly follow the dominant strategy to exaggerate their preferences, which leads to inefficiency. We analyze an exogenous linking...