In simple textbook treatment of bilateral exchange traders end up on the contract curve such that the trading surplus is maximized regardless of any asymmetric bargaining power they might have. However, that need not be true when the terms of exchange are determined by uncooperative bargaining,...

The most fundamental solution concepts in Game Theory Nash equilibrium, backward induction, and iterated elimination of dominated strategies are based on the assumption that people are capable of predicting others' actions. These concepts require people to be able to view the game from the other...

In ultimatum game experiments, most subjects will reject very unfair distribution suggestions, such as 80:20 splits of given money. That is, economics experiments have disproved the hypothesis of economic man which insists that rational humans will always maximize their utility. However,...

Selfishness, harming others and benefiting oneself, serves by mistake as human basic motivation in social science research. Even today, such a mistake is still unknown to academic circles; instead, it has become a common knowledge. In fact, selfishness is not a human motivation; it is one type...

Research rankings based on publications and citations today dominate governance of academia. Yet they have unintended side effects on individual scholars and academic institutions and can be counter productive. They induce a substitution of the “taste for science” by a “taste for...

Patent application numbers grow exponentially in many industries, a phenomenon that has been linked to high fragmentation of patent ownership. Contradicting these findings and theoretical arguments, we show that such fragmentation is not a precondition for sudden and strong increases in...

In economic experiments decisions often differ from game-theoretic predictions. Why are people generous in one-shot ultimatum games with strangers? Is there a benefit to generosity toward strangers? Research on the neural substrates of decisions suggests that some choices are hormone-dependent....

This paper tests the theory of mixed strategy equilibrium using Maradona's penalty kicks during his lifetime professional career. The results are remarkably consistent with equilibrium play in every respect: (i) Maradona's scoring probabilities are statistically identical across strategies; (ii)...

Since its early days, the Internet has been used by the music industry as a powerful marketing tool to promote artists and their products. Nevertheless, technology developments of the past ten years, and especially the ever-growing phenomenon of file sharing, have created the general impression...

Experimentalists frequently claim that human subjects playing games in the laboratory violate such solution concepts as Nash equilibrium and subgame perfection. This claim is premature. What has been rejected are certain joint hypotheses about preferences, knowledge, and behavior. This note...