In this paper we experimentally test a theory of boundedly rational behavior in a "lemons market." We analyzed two different market designs, for which perfect rationality implies complete and partial market collapse, respectively. Our empirical observations deviate substantially from these...

Does market exposure shape civic values and rules that constrain opportunistic behavior and foster generalized cooperation? I investigate this question using a natural experiment on market location from Ethiopia, where exchange is prone to cooperation problems from asymmetric information and...