Does the ability to ‘read the market’ affect equilibrium formation in asset markets? To answer this question, we conducted pre-registered learning to forecast experiments with market groups composed of either subjects with high or low Theory of Mind (ToM) capabilities, elicited via the eye...

The enforcement of social norms is considered as a main motivation for third-party intervention. We provide direct evidence for this theory in a cross-country experimental trust game with a sender, a receiver, and a third party who can punish or reward the receiver at own cost. As a novelty we...

We study whether negotiators adopt commitment tactics in bargaining, which was first proposed by Schelling (1956), and their choice of the credibility of commitment. In a modified ultimatum game experiment, the responder can pre-commit to a minimum acceptable offer (MAO) before an offer is...

Previous literature in experimental finance finds little support for the effectiveness of interest rate policy in stabilizing asset price bubbles. We run a learning to forecast experiment with an interest rate policy that is strongly responsive to deviation of asset prices from the fundamental....