Abstract: We consider the relationship between the emotional state of traders and market prices. We create asset markets with the structure first studied by Smith, Suchanek and Williams (1988), which is known to generate price bubbles and crashes. We analyze participants' facial expressions with...

Using the strategy method (Selten 1967) we elicit subjects' strategies for playing any 2-person 3x3-game with integer payoffs between 0 and 99.In each of 5 tournaments, every strategy pair plays 500000 games.The frequency of pure strategy equilibrium play increases from 51% in the first to 74%...

The common prior assumption is pervasive in game-theoretic models with incomplete information. This paper investigates experimentally the importance of inducing a common prior in a two-person signaling game. For a specific probability distribution of the sender’s type, the long-run behavior...

Abstract: This paper compares the behavior of subjects' uncertainty in different monetary policy environments when forecasting inflation in the laboratory. We find that inflation targeting produces lower uncertainty and higher accuracy of interval forecasts than inflation forecast targeting. We...

Numerous laboratory experiments show that workers reciprocate to high wages with high effort, when there is perfect information on the surplus created. Recent field experiments, however, suggest that trust and reciprocity may be lower or absent when the information is incomplete.We report a...

With regard to global or regional environmental problems, do countries that take unilateral actions inspire other countries to curtail emissions?In this paper this possibility is investigated by the use of a novel design of a laboratory public bad experiment with a leader.Twelve groups of five...

New Keynesian dynamic stochastic general equilibrium models are the principal paradigm currently employed for central bank policymaking. In this paper, we construct experimental economies, populated with human subjects, with the structure of a New Keynesian DSGE model. We give individuals...

We report an experiment on two treatments of an ultimatum minigame.In one treatment, responders' reactions are hidden to proposers.We observe high rejection rates reflecting responders' intrinsic resistance to unfairness.In the second treatment, proposers are informed, allowing for dynamic...

We examine contributions to a public good when some donors do not know the true value of the good.If donors in such an environment determine the sequence of moves, two contribution orders may arise as equilibria.Either the uninformed and informed donors contribute simultaneously or the informed...