We experimentally examine how the level of internal conflict, and whether such conflict is transparent to other teams, affects teams' ability to compete vis-à-vis each other, and, consequently, market outcomes. We find that internal conflict leads to (tacit) coordination on high prices in...

This paper analyzes the inner workings of cartels. To understand how sanctioning institutions prevent cartel formation we study their effect on firms' communication in a laboratory experiment. Using machine learning to organize the chat communication into topics, we find that firms are less...

A constant price level facilitates cooperation among firms whereas steady inflation and deflation rates lower firms' ability to cooperate. In an experimental market with price competition we show that both inflation and deflation signi cantly reduce cooperation compared to treatments with a...

The paper provides an experimental analysis of above-cost predatory pricing in a multi-period interaction between a monopolistic incumbent and a potential entrant. It shows that, without policy interventions, the threat of post-entry price cuts discourages entry without forcing incumbents to...

The provision of public goods often relies on voluntary contributions and cooperation. While most of the experimental literature focuses on individual contributions, many real-world problems involve the formation of institutions among subgroups (coalitions) of players. International agreements...

The strive for social esteem is an important motive for pro-social behavior. Many people want to be seen as nice. Recent theories have suggested that the valuation of such esteem depends on the audience. In this study we look at trust and trustworthiness towards people who do or do not identify...

The `Four-Eyes-Principle' (4EP) (business has to be conducted by at least two individuals, hence four eyes) is seen as one of the most potent measures against corruption although it lacks any theoretical or empirical justification. We show in a laboratory experiment that the net effect of the...

In a coordination game with Pareto-ranked equilibria, we study whether a sunspot can lead to either coordination on an inferior equilibrium (mis-coordination) or to out-of equilibrium behavior (dis-coordination). While much of the literature searches for mechanisms to attain coordination on the...

The Winner s Curse (WC) is a non-equilibrium behavior in common-value auctions involving systematic and persistent overbidding that often results in signi ficant losses. It is one of the most robust fi ndings in laboratory experiments. We developed an auction mechanism with a payment rule that...