In cricket, the right to make an important strategic decision is assigned via a coin toss. We utilize these "randomized trials" to examine (a) the consistency of choices made by teams with strictly opposed preferences, and (b) the treatment effects of chosen actions. We find significant evidence...

We present a simple menu cost model which explains the finding that firms are more likely to adjust prices upward than downward. Asymmetric adjustment to shocks arises naturally, even without trend inflation, from the desire of firms to keep industry prices as high as is sustainable and the...

We analyze the role of relative performance evaluation when a principal has several agents, who face correlated shocks. If limited liability constraints are binding, relative performance evaluation may be of no value if the principal is restricted to symmetric contracts. However, with asymmetric...

We investigate whether experimental subjects can predict behavior in a prisoner's dilemma played on a TV show. Subjects report probabilistic beliefs that a player cooperates, before and after the players communicate. Subjects correctly predict that women and players who make a voluntary promise...

This paper analyzes the effects of a ban on smoking in public places upon firms and consumers. Analysis of survey data from public houses finds that the Scottish smoking ban (introduced in March 2006) reduced pub sales and harmed medium run profitability. An event study analysis of the stock...

We analyze discrimination against less attractive people on a TV game show with high stakes. The game has a rich structure that allows us to disentangle the relationship between attractiveness and the determinants of a player’s earnings. Unattractive players perform no worse than attractive...

1This paper incorporates earlier work by Bhaskar [4] and unpublished notes by van Damme. We are grateful to Tilman Börgers, Dilip Mookherjee, Debraj Ray, an anonymous referee, an associate editor, and numerous seminar audiences for useful comments. The first author thanks the CentER for...