Punishing the free-riders of a team can promote group efficiency but is costly for the punisher. For this reason, economists see punishment as a second-order public good. We show in an experiment that subjects do not value punishment for its deterrence but instead for the satisfaction of...

This paper examines acquisition performance from the perspective of acquirer capabilities. It argues that the strategic capabilities underpinning a firm’s competitive strategy can be utilized to create economic value in acquisitions. Acquirers with strong cost leadership capabilities are...

We study equilibrium in a multistage race in which players compete in a sequence of simultaneous move component contests. Players may win a prize for winning each component contest, as well as a prize for winning the overall race. Each component contest is an all-pay auction with complete...

This paper presents a laboratory collective resistance (CR) game to study how different forms of non-binding communication among responders can help coordinate their collective resistance against a leader who transgresses against them. Contrary to the predictions of analysis based on purely...

I study a model of entrepreneurial investment in which investment projects are heterogeneous with respect to their exposure to an aggregate liquidity shock. A firm that is affected by the shock will mitigate its exposure by purchasing claims issued by a firm that is not. Liabilities of the...

This study reports a laboratory experiment wherein subjects play a hawk-dove game. We try to implement a correlated equilibrium with payoffs outside the convex hull of Nash equilibrium payoffs by privately recommending play. We find that subjects are reluctant to follow certain recommendations....

We consider the properties of perfectly discriminating contests in which players’ abilities are stochastic, but become common knowledge before efforts are expended. Players whose expected ability is lower than that of their rivals may still earn a positive expected payoff from participating in...

We develop a general procedure to construct pairwise meeting processes characterized by two features. First, in each period the process maximizes the number of matches in the population. Second, over time agents meet everybody else exactly once. We call this type of meetings "absolute...

We introduced a parametric model of other-regarding preferences in which my emotional state determines the marginal rate of substitution between my own and other' payoffs, and thus my subsequent choices. In turn, my emotional state responds to relative status and to the kindness or unkindness of...

We empirically examine earnout contracts, which provide for contingent payments in acquisition agreements. Our analysis reveals considerable heterogeneity in the terms of earnout contracts, i.e. the potential size of the earnout, the performance measure on which the contingent payment is based,...