Bickerton (2009, 2014) hypothesizes that language emerged as the solution to a scavenging problem faced by proto-humans. We design a virtual world to explore how people use words to persuade others to work together for a common end. By gradually reducing the vocabularies that the participants...

Using a laboratory experiment we explore competing claims on the welfare effects of civil forfeiture. Experiment participants are tasked with making trade-offs in allocating resources “to fight crime” with and without the ability to seize and forfeit assets. It is an open question whether...

We report a policy experiment that illustrates a potential problem of using historical pass-through rates as a means of predicting the competitive consequences of projected firm-specific cost savings in antitrust contexts, particularly in merger analysis. The effects of cost savings on welfare...

If there is a favorite sentence that encapsulates Vernon Smith’s contribution to how I think about economics, it is the first one in the second footnote of his Nobel lecture: “Doing experimental economics has changed the way I think about economics” (reprinted in Smith, 2003; p. 465). He...

This paper attempts to clarify our understanding of the everyday use of fair as we apply it to economic behavior. I first examine the decomposition of fair into its semantic primitives and discuss implications of recent research which indicates that the word is untranslatable into any other...

Economic experiments allow the K-12 teacher to promote active learning that is also rigorously grounded in economic theory. In an experiment students test for themselves the economics they hear in lectures and read in their textbooks. The authors have found that working through the existing...

Policymakers are often tempted to implement various new laws and regulations intended to prevent gasoline price gouging. We recently carried out economic experiments to test such anti-gouging measures as mandated divorcement and uniform pricing, and we found that those regulations actually harm...

Zone pricing in wholesale gasoline markets is a contentious topic in the public policy debate. Refiners contend that they use zone pricing to be competitive with local rivals. Critics claim that zone pricing benefits the oil industry and harms consumers. With a controlled experiment, we...

Modern economics, whether in the orthodox tradition of Paul Samuelson or the heterodox tradition of Ludwig von Mises, ultimately looks to explain economic outcomes, that is, the effects of human action. In their own way, neither distinguish the consequences of human action from the origins of...

We compare first-price auctions to an exchange process that we term 'multilateral negotiations.' In multilateral negotiations, a buyer solicits price offers for a homogeneous product from sellers with privately known costs, and then plays the sellers off one another to obtain additional price...