The evolution of many economic variables is affected by expectations that economic agents have with respect to the future development of these variables. Here we show, by means of laboratory experiments, that market behavior depends to a large extent on how the realized market price responds to...

Interest groups are introduced in a spatial model of electoral competition between two political parties. We show that the presence of these interest groups increases the winning set, which is the set of policy platforms for the challenger that will defeat the incumbent. Therefore interest...

The liberalization of many former state governed natural monopolies in sectors such as electricity, railroad and telecommunications is done by partial deregulation. Typically, entry is invited into elements of the production chain, yet under strict price and quality controls. This note considers...

We study participation games with negative feedback, i.e. games where players choose either to participate in a certain project or not and where the payoff for participating decreases in the number of participating players. We use the replicator dynamics to model the competition between...

We run a laboratory experiment that contributes to the finance literature on "return chasing behavior" studying how investors switch between mutual funds driven by past performance of the funds. The subjects in this experiment make discrete choices between several (2, 3 or 4) experimental funds...

Recent turmoil on global financial markets has led to a discussion on which policy measures should or could be taken to stabilize financial markets. One such a measure that resurfaced is the imposition of short-selling constraints. It is conjectured that these short-selling constraints reduce...

This paper stresses the importance of heterogeneity in learning rules. We introduce an evolutionary competition between different learning rules and demonstrate that, though these rules can coexist, their convergence properties are strongly affected by heterogeneity. We consider a Bertrand...

We show that incomplete cartels in quantity-setting oligopolies may increase welfare, without any efficiencies or synergies being internalized by cartel formation. The main intuition is that the cartel has an incentive to contract output and that the firms outside the cartel react to this by...

Minority games are a stylized description of strategic situations with both coordination and competition. These games are widely studied using either simulations or laboratory experiments. Simulations can show the dynamics of aggregate behavior, but the results of such simulations depend on the...

We construct an evolutionary version of Theocharis (1960)'s seminal work on the stability of equilibrium in multi-player quantity-setting oligopolies. Two sets of behavioral heuristics are investigated under fixed and endogenously evolving fractions: (myopic) Cournot firms vs. Nash firms and...