In this paper, we experimentally test the Modigliani-Miller theorem. Applying a general equilibrium approach and not allowing for arbitrage among firms with different capital structure, we are able to address a question fundamental to the valuation of firms: does capital structure affect the...

A model of coalition government formation is presented in which inefficient, non-minimal winning coalitions may form in Nash equilibrium. Predictions for five games are presented and tested experimentally. The experimental data support potential maximization as a refinement of Nash equilibrium....

In this paper, we directly test the Modigliani-Miller theorem in the lab. Applying a general equilibrium approach and not allowing for arbitrage among firms with different capital structures, we are able to address this issue without making any assumptions about individuals' risk attitudes and...

In the framework of expected utility theory, risk attitudes are entirely captured by the curvature of the utility function. In cumulative prospect theory (CPT) risk attitudes have an additional dimension: the weighting of probabilities. With this modification, one question arises naturally:...

This experiment evaluates various systems of taxation on the number of real tasks performed by participants and in terms of fiscal income generated to help government in its redistributive goal. The first treatment concerns a proportional system of taxation. The second treatment considers an...

A model of coalition government formation is presented in which inefficient, non-minimal winning coalitions may form in Nash equilibrium. Predictions for five games are presented and tested experimentally. The experimental data support potential maximization as a refinement of Nash equilibrium....

In geographical zones with a continental Mediterranean climate, the convenience of passive systems becomes doubtful, when one takes into account real thermal performance throughout the different seasons of the year. It is assumed that these systems stay shut down during summer thus avoiding...

This paper reports results of an experimental study of uniform and discriminatory auctions of multiple objects in an environment of publicly known common values. We find that the bidding behavior in the uniform case exhibits two clear regularities: agents consistently play weakly dominated...

This paper reports results of an experimental study of uniform multi-unit auctions in an environment of publicly known common values. We find that the bidding behavior exhibits two clear regularities: agents consistently play weakly dominated strategies by overbidding on the first unit and have...

Network formation is frequently modeled using link-formation games and typically present a multiplicity of Nash equilibria. Cooperative refinements —such as strong or coalitional proof Nash equilibria— have been the standard tool used for equilibrium selection in these games. Non-cooperative...