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We report results from a novel experiment where participants invest an endowment across multiple options, with investment in one option disrupting (reducing) the value of another option. While expected payoff maximization predicts the comparative statics of aggregate investment well, it does not...
Persistent link: https://www.econbiz.de/10012848262
We report laboratory experiments investigating the cyclicality of profit-enhancing investment in a competitive environment. In our setting, optimal investment is counter-cyclical when investment costs fall following market downturns. However, we do not observe counter-cyclical investment....
Persistent link: https://www.econbiz.de/10012852845
We experimentally explore indefinitely repeated contests. Theory predicts more cooperation, in the form of lower expenditures, in indefinitely repeated contests with a longer expected time horizon, and our data support this prediction, although this result attenuates with contest experience....
Persistent link: https://www.econbiz.de/10012852873
We test whether the length of an indefinite horizon, or that the horizon is indefinite as opposed to finite, affects cooperation in repeated 3x3 Red Queen Games. With our participant population, and our experimental program and procedures, the length of the indefinite horizon significantly...
Persistent link: https://www.econbiz.de/10012832131
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This paper uses a laboratory experiment to probe the proposition that property emerges anarchically out of social custom. We test the hypothesis that whalers in the 18th and 19th century developed rules of conduct that minimized the sum of the transaction and production costs of capturing their...
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We consider a non-stochastic online learning approach to price financial options by modeling the market dynamic as a repeated game between the nature (adversary) and the investor. We demonstrate that such framework yields analogous structure as the Black-Scholes model, the widely popular option...
Persistent link: https://www.econbiz.de/10010787813