This paper experimentally studies the role of a compromise option in a repeated battle-of-the-sexes game. We find that in a random-matching environment, compromise serves as an effective focal point and facilitates coordination, but fails to improve efficiency. However, in a fixed-partnership...

We conduct one of the first laboratory experiments and noncooperative analyses of the de-centralized matching market with transfers (Koopmans and Beckmann,1957; Shapley andShubik,1972; Becker,1973). Some theoretical predictions align with but some differ from experimental evidence. Stable matching,...

This paper investigates the importance and the determinants of trust in a lending situation using an online controlled experiment. We find that communication can facilitate collaboration between lenders and borrowers through three channels of trust: 1) an information channel, 2) a preference...

This paper experimentally investigates the importance of sacrifice in affecting people’s reciprocal behavior. Our design allows us to exactly pin down how sacrifice of the sender’s own payoff matters for her perceived kindness from the eyes of the receiver in a sender-receiver game, without...