Markets are often viewed as a tool for aggregating disparate private knowledge, a stance supported by past laboratory experiments. However, traders' acquisition cost of information has typically been ignored. Results from a laboratory experiment involving six treatments varying the cost of...

This paper introduces two simple betting mechanisms, Top-Flop and Threshold betting, to elicit unverifiable information from crowds. Agents are offered bets on the rating of an item about which they received a private signal versus that of a random item. We characterize conditions for the chosen...

We contrast a standard deterministic signaling game with one where the signal-generating mechanism is stochastic. With stochastic signals a unique equilibrium emerges that involves separation and has intuitive comparative-static properties as the degree of signaling depends on the prior type...

We consider an oligopolistic market game, in which the players are competing firm in the same market of a homogeneous consumption good. The consumer side is represented by a fixed demand function. The firms decide how much to produce of a perishable consumption good, and they decide upon a...

We contrast a standard deterministic signaling game with a variant where the signal-generating mechanism is subject to stochastic perturbations. In the theoretical part, we obtain a unique equilibrium with stochastic signals. This equilibrium is separating and has intuitive comparative-static...

This paper presents a first experimental investigation of the underpricing-signaling hypothesis in a financing-investment environment under asymmetric information. Importantly, the paper tests and compares this hypothesis under the two institutions for financing offers that are commonly observed...

Sequential bifurcation (or SB) is an efficient and effective factor-screening method; i.e., SB quickly identifies the important factors (inputs) in experiments with simulation models that have very many factors — provided the SB assumptions are valid. The specific SB assumptions are: (i) a...

Consumer demand for products often result in the purchase of multiple goods at the same time. Corner solutions, or the non-purchase of items, occur when consumers have strong preference for some goods that do not satiate and weak preference for other goods. However, if non-purchase arises...

Similar to Kübler et al. (2008, GEB 64, p. 219-236), we compare sorting in games with asymmetric incomplete information theoretically and experimentally. Rather than distinguishing two very different sequential games, we use the same game format and capture the structural difference of...