In illiquid markets, option traders may have an incentive to increase their portfolio value by using their impact on the dynamics of the underlying. We provide a mathematical framework within which to value derivatives under market impact in a multi-player framework by introducing strategic...

There are legal grounds to hear competitors in merger control proceedings, and competitor involvement has gained significance. To what extent this is economically sensible is our question. The competition authority applies some welfare standard while the competitor cares about its own profit. In...

We examine optimal managerial compensation and turnover policy in a principal-agent model in which the firm output is serially correlated over time. The model captures a learning-by-doing feature: higher effort by the manager increases the quality of the match between the firm and the manager in...

We examine collaboration in a one-arm bandit problem in which the players' actions affect the distribution over future payoffs. The players need to exert costly effort both to enhance the value of a risky technology and to learn about its current state. Both product value and learning are public...

This paper examines how societies can conserve common-pool resources (CPRs) through the cultural transmission of norms. To this end, we introduce an evolutionary model that endogenizes the formation of personal, social, and descriptive norms, thereby unifying existing economic theories on norm...

Does gender play a role in the context of team work? Our results based on a real-effort experiment suggest that performance depends on the composition of the team. We find that female and male performance differ most in mixed teams with revenue sharing between the team members, as men put in...

Peer punishment is widely considered a key mechanism supporting cooperation in human groups. Although much research shows that human behavior is shaped by the prevailing social norms, little is known about how punishment decisions are impacted by the social context. We present a set of...

This paper provides the first steps towards a theoretical and structural modelling framework through which optimal decision making in financial market infrastructures such as payments clearing and settlement systems can be assessed from a market microstructure perspective. In particular, the...