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...

Many negotiations involve risks that are only resolved ex-post, and often these risks are not incurred equally by the parties involved. We experimentally investigate bargaining situations where a residual claimant faces ex-post risk, whereas a fixed-payoff player does not. In line with the...

We study procrastination in the context of a field experiment involving students who must exert costly effort to complete certain tasks by a fixed deadline. Descriptively, we document a strong demand for commitment, in the form of self-imposed deadlines, which appear to be associated with...

We experimentally investigate a bargaining environment in which players negotiate over a fixed payment to one player, while the other player receives the residual from a random pie realization after subtracting the fixed payment. Contrary to the intuition that risk exposure is detrimental, we...

Motivated by payment terms observed in regulatory reporting data, we construct a signalling model to analyse how late payments affect market entry and price competition in business-to-business transactions. Buyers first signal a payment term to potential suppliers, either standard or extended....

This paper presents the results of a laboratory experiment designed to investigate whether the option of a Prize Linked Savings (PLS) product alters the likelihood that subjects choose to delay payment. By comparing PLS and standard savings products in a controlled way, we find strong evidence...

We conduct an experiment in which subjects play an ultimatum game but, rather than bargaining over money, they bargain over lottery tickets for a prize. Compared to the standard ultimatum game, proposers offer a significantly lower percentage of lottery tickets, which is inconsistent with either...

We experimentally study a situation in which two players negotiate the dissolution of a partnership. In our experiments, the valuation from owning the partnership is risky and subjects must simultaneously negotiate both a selling price and the identity of the buyer. That is, upon reaching an...

We study the coordination problem of a two-firm supply chain in which firms simultaneously choose a capacity before demand is realized. We focus on the role that (a lack of) common knowledge of demand forecasts has on firms' ability to align their capacity decisions. When forecasts are not...