We report results from fifteen computerized double auctions with concurrent trading of two commodities. In contrast to prior experimental markets, buyers' demands are induced via CES earnings functions defined over the two traded goods, with a fiat money expenditure constraint. Sellers receive...

Adam Smith identified two key components in the wealth creation process of human societies: exchange and specialization. More than two centuries later relatively little is understood about the underlying process by which people build exchange systems and discover comparative advantage. In this...

People can become less cooperative when threatened with sanctions, and previous research has pointed to both intentions and incentives as sources of this effect. This paper reports data from a novel experiment aimed at determining the relative importance of intentions and incentives in producing...

We use laboratory experiments to test three different water market institutions designed to incorporate instream flow values into the allocation. The institutions are (1) a baseline with fixed minimum flow constraints, (2) an environmental agent contributing to the cost of providing instream...

Behavioral economists accept many of the premises of traditional economic thought: that situational outcomes are the result of individual decisions, taking place in a particular economic environment. But behavioral economists go a step further, arguing that the human action is shaped not only by...

As legal scholarship has come to rely more on economic analysis, the foundational questions of economics have become important questions for legal analysis as well. One of the key foundational elements of modern economics is the assumption of the rational utility maximizing individual. While...

This paper uses laboratory experiments to test alternative water market institutions designed to protect third party interests. The institutions tested include taxing mechanisms that raise revenue to compensate affected third parties and a market in which third parties actively participate. The...

Fifteen scholars on auctions and telecommunications regulation urge the FCC to cancel bids made in, or permit winning bidders to opt out of, the reauction of the NextWave licenses in Auction 35. For auctions to function efficiently, buyers and sellers must follow basic rules, including the rule...

This is a systematic experimental comparison of the efficiency and competitive properties of a computerized multiunit tatonnement with or without a dynamic improvement rule, with or without publicity of order flow information. All versions of the tatonnement are comparatively less efficient than...

We develop and test a model that provides a unified account of the neural processes underlying behavior in a classical economic choice task. The model describes in a stylized way brain processes engaged in evaluating information provided by the experimental stimuli, and produces a consistent...