The authors present a simple classroom game in which students are randomly designated as employers, purple workers, or green workers. This environment may generate "statistical" discrimination if workers of one color tend not to invest because they anticipate lower opportunities in the labor...

We experimentally study auctions versus grandfathering in the initial assignment of pollution permits that can be traded in a secondary spot market. Low and high emitters compete for permits in the auction, while permits are assigned for free under grandfathering. In theory, trading in the spot...

We specify a dynamic model in which agents adjust their decisions toward higher payoffs, subject to normal error. This process generates a probability distribution of players' decisions that evolves over time according to the Fokker-Planck equation. The dynamic process is stable for all...