The classical trinity of tests is used to check for the presence of a tremble in economic experiments in which the response variable is binary. A tremble is said to occur when an agent makes a decision completely at random, without regard to the values taken by the explanatory variables. The...

The use of experimental settings to observe human behaviour in a controlled environment of incentives, rules and institutions, has been widely used by the behavioural sciences for some time now, particularly by psychology and economics. In most cases the subjects are college students recruited...

Reinforcement learning has proved quite successful in predicting subjects' adjustment behaviour in repeatedly played simple games. However, reinforcement learning does not predict convergence to the efficient cell in the minimal information game of mutual fate control, while earlier...

We conducted a laboratory study with a public goods game in which contributions are not submitted all at once but incrementally as coordinated in real time by a clock. Individuals press a button as soon as the clock equals their willingness to contribute. This public goods institution exploits...

This Paper studies budget processes, both theoretically and experimentally. We compare the outcomes of bottom-up and top-down budget processes. It is often presumed that a top-down budget process leads to a smaller overall budget than a bottom-up budget process. We show, using structurally...

Updated - please see paper 551.02 in this series. The Bank of Spain uses a unique auction format to sell government bonds, which can be seen as a hybrid of a uniform and a discriminatory auction. For winning bids above the average winning bid, buyers are charged the average winning bid,...

Experimental behavioral scientists have found consistent deviations from the predictions of the canonical model of self-interest in over a hundred experiments from around the world. Prior research cannot determine whether this uniformity results from universal patterns of behavior, or from the...

We present the results of an experiment on voluntary contributions to a public good with a unique dominant strategy equilibrium in the interior of the strategy space. The treatment variable is the equilibrium contribution level. By increasing the equilibrium contribution level, we reduce the...

We develop and experimentally test a model of endogenous entry, exit, and bidding in common value auctions. The model and experimental design include an alternative profitable activity (a “safe havenâ€) that provides agent-specific opportunity costs of bidding in the auction. Each agent...

Can hypothetical questions reveal true values? An examination of thelaboratory experimental literature examining contingent valuation (CV)lends some support for using open-ended hypothetical willingness to payquestions. However, experimental studies examining dichotomous choicehave found that...