We analyze the effects of introducing asymmetric information andexpectations in the investment game (Berg et al., 1995). In our experiment,only the trustee knows the size of the surplus. Subjects’expectations about each other’s behavior are also elicited. Our resultsshow that average payback...

Are commonly known beliefs essential for bidding behavior in asymmetric auctions? Our experimental results suggest that not informing participants how values are randomly generated does not change behavior much and may even make it appear more rational.

This paper presents an empirical study based on a survey of 399 owners of small and mediumsize companies in Lithuania. Applying bivariate and ordered probit estimators, we investigatewhy some business owners expect their firms to expand, while others do not. Our mainfindings provide evidence...

We investigate a consumption-based present value relation that is a function of future dividend growth. Using data on aggregate consumption and measures of the dividend payments from aggregate wealth, we show that changing forecasts of dividend growth are an important feature of the post-war...

This paper proposes a habit formation model that explains the failure of the expectations hypothesis documented by Campbell and Shiller (1991) and Fama and Bliss (1987).(...)