In this short note, we show investors one way to calculate ideal investment sizing by using two rules of thumb based on a simple outline of individual risk aversion. We illustrate these two heuristics, which are not widely appreciated, with thought experiments involving coin flips and ketchup &...

We present a simple, finite-state search model to understand how the cross-sectional distribution of money affects its value. We first document a network effect: the value of a given unit of money is higher when its distribution is even, rather than skewed. We also find some distributions to be...

This experimental study investigates two bargaining games with twosided incomplete information between a seller and a buyer. In the first game with no outside options many subjects do not use the incomplete information to their advantage as predicted. We find that a model with adjusting priors...

We consider one-to-one matching problems under two modalities of uncertainty that differ in the way types are assigned to agents. Individuals have preferences over the possible types of the agents from the opposite market side and initially know the "name" but not the "type" of the other...

We consider one-to-one matching problems under two modalities of uncertainty that differ in the way types are assigned to agents. Individuals have preferences over the possible types of the agents from the opposite market side and initially know the “name” but not the ”type” of the other...

This paper aims to build an algorithm of network dynamics with decision-making under incomplete information. Accordingly, it tries to identify if a social planner reduces the influence of individual biases, such as confirmation bias or assimilation bias on agents actions, and solve a...

Online platforms that match customers with service providers utilize a wide variety of designs: some implement a searchable directory of one side of the market (i.e., Airbnb, Google Local Services); some allow both sides of the market to search and initiate contact (i.e., Upwork, Care.com);...

I study a dynamic one-sided-offer bargaining model between a seller and a buyer under incomplete information. The seller knows the quality of his product, while the buyer does not. During bargaining, the seller may receive an outside option, the value of which depends on the quality of the...

We experimentally study how redistribution choices are affected by positive and negative information regarding the behaviour of a previous participant in a dictator game with a taking option. We use the strategy method to identify behavioural ‘types', and thus distinguish ‘conformists' from...

We study the effect of the transparency of outside options in bilateral bargaining. A seller posts prices to screen a buyer over time, and the buyer may receive an outside option at a random time. We consider two information regimes: one in which the arrival of the outside option is public and...