We study two person-betting games with inconsistent commonly know beliefs, using an experimentalapproach. In our experimental games, participants bet against one another, each bettorchoosing one of two possible outcomes, and payoff odds are know at the time bets are placed.Bettors’ beliefs are...

When two or more agents compete for a bonus and the agents' productivity in each of several possible occurrences depends stochastically on (constant) effort, the number of times that are checked to assign the bonus affects the level of un-certainty in the selection process. Uncertainty, in turn,...

In a market with stochastic demand at most one seller can acquire costly informationabout demand. Other sellers entertain idiosyncratic beliefs about the marketdemand and the probability that an informed seller is trading in the market. Theseidiosyncratic beliefs co-evolve with the potential...

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...

We investigate experimentally whether entry costs have an impact on the evolutionof cooperation in a social dilemma game. In particular, subjects repeatedly playthe so-called takeover game with anonymous partners randomly drawn from a fixedpopulation of participants. The game represents a social...

In the Yes/No game, like in the ultimatum game, proposer and respondercan share a monetary reward. In both games the proposer suggests a rewarddistribution which the responder can accept or reject (yielding 0-payoffs). Thegames only differ in that the responder does (not) learn the suggested...

A robust nding of repeated public goods experiments is that high initialcontribution rates sharply decline towards the end. This paper reports onan exploratory experiment designed to discover whether such a decline is simply triggered by the usual experimental practice of publicly informing...

The common prior assumption asserts that the beliefs of agents in different states of theworld are their posteriors based on a common prior and possibly some private signal. Commonpriors are pervasive in most economic models of incomplete information, oligopoly models withasymmetrically informed...

Are commonly known beliefs essential for bidding behavior in asymmetric auctions? Our experimental results suggest that not informing participants how values are randomly generated does not change behavior much and may even make it appear more rational.