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...

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...