Stochastic uncertainty can cause difficult coordination problems that may hinder mutually beneficial cooperation. We propose a mechanism of ex-post voluntary transfers designed to circumvent these coordination problems and ask whether it can do so. To test this, we implement a controlled...

Despite its empirical relevance, increasing returns to scale are understudied in experimental markets. We fill this gap by comparing two sharing rules in Bertrand duopolies with increasing returns: the symmetric sharing rule (where each of the two firms that set the same price serves half of the...

The strategic commitment moves that game theory predicts players make may sometimes seem counter-intuitive. We therefore conducted an experiment to see if people make the predicted strategic move. The experiment uses a simple bargaining situation. A player can make a strategic move of committing...