Recent experimental evidence appears to reject simple Nash equilibrium models of bidding behavior in first-price auctions. The author presents a methodological critique of this evidence. Existing tests have concentrated on deviations of subjects from predictions in the message space of the...

We evaluate two competing hypotheses that try to account for robust violations of the predictions of game theory in Ultimatum bargaining experiments. One popular hypothesis is that the subjects are motivated by considerations of fairness that are not modeled by traditional theory. The...

Does individual behavior in a laboratory setting provide a reliable indicator of behavior in a naturally occurring setting? We consider this general methodological question in the context of eliciting risk attitudes. The controls that are typically employed in laboratory settings, such as the...

We examine the net economic benefits and government revenue implications for Chile of: (1) forming a free trade area with MERCOSUR; (2) forming a free trade area with NAFTA; and (3) reducing its external tariff multilaterally and unilaterally. We show tha

The authors propose a methodological extension of quantitative "cost of protection" analyses to consider elementary game-theoretic aspects of the policy process. They illustrate these ideas by evaluating size propositions: nations can "win" trade wars; multilateral negotiations that "merely...