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In games with strategic complementarities, public information about the state of the world has a larger impact on equilibrium actions than private information of the same precision, because the former is more informative about the likely behavior of others. This may lead to welfare-reducing...
Persistent link: https://www.econbiz.de/10009787097
We implement a repeated version of the Barro-Gordon monetary policy game in the laboratory and ask whether reputation serves as a substitute for commitment, enabling the central bank to achieve the efficient Ramsey equilibrium and avoid the inefficient, time-inconsistent one-shot Nash...
Persistent link: https://www.econbiz.de/10011572114
Truthtelling is often viewed as focal in direct mechanisms. We introduce two new notions of robust implementation based on the premise that society may be composed of "primitive'' agents who, whenever confronted with a strategy profile, anchor to truthtelling and make a limited number of...
Persistent link: https://www.econbiz.de/10012951989
The goal of this paper is to study how informational frictions affect asset liquidity in OTC markets in a laboratory setting. The experiments replicate an OTC market similar to the one used in monetary and financial economics (Shi, 1995; Trejos and Wright, 1995; Duffie, Garleanu, and Pedersen, 2005):...
Persistent link: https://www.econbiz.de/10009763984
We develop a general procedure to construct pairwise meeting processes characterized by two features. First, in each period the process maximizes the number of matches in the population. Second, over time agents meet everybody else exactly once. We call this type of meetings “absolute...
Persistent link: https://www.econbiz.de/10013039819
What would you do if you were invited to play a game where you were given $25 and allowed to place bets for 30 minutes on a coin that you were told was biased to come up heads 60% of the time? This is exactly what we did, gathering 61 young, quantitatively trained men and women to play this...
Persistent link: https://www.econbiz.de/10012980760
Experimental studies of search behavior suggest that individuals stop searching earlier than predicted by the optimal … standard search task as well as a lottery task designed to elicit utility functions. We find that search heuristics are not …
Persistent link: https://www.econbiz.de/10003470506
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Persistent link: https://www.econbiz.de/10013168461
A data buyer faces a decision problem under uncertainty. He can augment his initial private information with supplemental data from a data seller. His willingness to pay for supplemental data is determined by the quality of his initial private information. The data seller optimally offers a menu...
Persistent link: https://www.econbiz.de/10012954846