There is extensive evidence documenting the economic consequences of discrimination patterns between individuals belonging to the same or different group identities. However, many group identities rely on convictions and beliefs that are non-observable, and therefore, might be uncertain. This...

We design a laboratory experiment to test the importance of wealth as a channel for financial contagion across markets with unrelated fundamentals. Specifically, in a sequential global game, we analyze the decisions of a group of investors that hold assets in two markets. We consider two...

In the context of supply function competition with private information, we test in the laboratory whether—as predicted in Bayesian equilibrium—costs that are positively correlated lead to steeper supply functions and less competitive outcomes than do uncorrelated costs. We find that the...

We examine price competition with homogeneous products in the presenceof general common ownership arrangements allowing for different corporate control structures. We show that equilibria with positive profits exist (including themonopoly outcome) when the manager places the same weight on the...

We study how inflated credit ratings affect investment decisions in bond markets using experimental coordination games. Theoretical models that feature a feedback effect between capital markets and the real economy suggest that inflated ratings can have both positive and negative real effects....

In the context of supply function competition with private information, we test in the laboratory whether - as predicted in Bayesian equilibrium - costs that are positively correlated lead to steeper supply functions and less competitive outcomes than do uncorrelated costs. We find that the...