We study the optimal regulation of a monopolist when intrinsic efficiency (intrinsic cost) and empire building tendency (marginal utility of output) are private information, but actual cost (the difference between intrinsic cost and effort level) is observable. This is a problem of...

Sponsored search advertising has grown rapidly since the last decade and is now a significant revenue source for search engines. To ameliorate revenues, search engines often set fixed or variable reserve price to in influence advertisers’ bidding. This paper studies and compares two pricing...

Classical economists from Adam Smith to Thomas Malthus and to Karl Marx have considered the importance of <i>direct interdependence</i> and direct interactions for the economy. This was even more the case for original institutionalist thinkers such as Thorstein Veblen, John Commons, and Clarence Ayres....

This paper examines a general model of contract in multi-period settings with both external and self-enforcement. In the model, players alternately engage in contract negotiation and take individual actions. A notion of contractual equilibrium, which combines a bargaining solution and individual...

This paper presents an experiment that evaluates the effect of financial incentives and complexity in political science voting experiments. To evaluate the effect of complexity we adopt a level-<i>k</i> reasoning model concept. This model by Nagel [1] postulates that players might be of different...

We expand upon the previous models of inequity aversion of Fehr and Schmidt [1], and Frohlich <em>et al.</em> [2], which assume that dictators get disutility if the final allocation of surplus deviates from the equal split (egalitarian principle) or from the subjects' production (libertarian principle)....

We numerically solve the classical "Game of Pure Strategy" using linear programming. We notice an intricate even-odd behaviour in the results of our computations that seems to encourage odd or maximal bids.

In repeated public good experiments, reciprocity helps to sustain high levels of cooperation. Can this be achieved by location choices in addition to making contributions? It is more realistic to rely on an intuitive neighborhood model for community members who interact repeatedly. In our...

Adaptive dynamics is a mathematical framework for studying evolution. It extends evolutionary game theory to account for more realistic ecological dynamics and it can incorporate both frequency- and density-dependent selection. This is a practical guide to adaptive dynamics that aims to...

<span>We examine the effectiveness of the individual-punishment mechanism in larger groups, comparing groups of four to groups of 40 participants. We find that the individual punishment mechanism is remarkably robust when the marginal per capita return (MPCR), <i>i.e.</i> the return to each participant from...</span>