We experimentally study how people form expectations about correlated variables. Subjects forecast a time-series variable A. In the baseline treatment, subjects only observe past values of A. In the correlated treatment, they additionally observe an informative correlated variable B. Our novel...

This study investigates how people provide public goods in a network formation game. In this game, players first form a network through bilateral linking, with or without a link cost, and then contribute to a public good, which can benefit both themselves and their direct neighbors....

We experimentally study the effects of advice on decision-making in a dictator game. In the experiment, participants receive no advice, selfish advice, or fair advice before making decisions. Advisors in our experiment do not receive any financial incentives for their advice. We find that...

Polluted rivers are harmful to human, animals and plants living along it. To reduce the harm, cleaning costs are generated. However, when the river passes through several different countries or regions, a relevant question is how should the costs be shared among the agents. Ni and Wang (2007)...

Face-to-face communication drastically increases cooperation rates in social dilemmas. We test which factors are the most important drivers of this communication gap. We distinguish three main categories. First, communication may decrease social distance. Second, communication may enable...

This paper experimentally studies the role of a compromise option in a repeated battle-of-the-sexes game. We find that in a random-matching environment, compromise serves as an effective focal point and facilitates coordination, but fails to improve efficiency. However, in a fixed-partnership...

Polluted rivers are harmful to human, animals and plants living along it. To reduce the harm, cleaning costs are generated. However, when the river passes through several different countries or regions, a relevant question is how should the costs be shared among the agents. Ni and Wang (2007)...

We investigate a novel continuous-time mechanism in a public-goods game. Within a fixed period, a clock ensures that contributions increase simultaneously for every player, and players can choose when to stop, while their actions are observed by others in real time. We show both theoretically...

I revisit the Diamond-Dybvig model of liquidity insurance in the presence of hidden trades. The key result is that in this environment deposit-taking banks are not necessary for the efficient provision of liquidity. Mutual funds are constrained efficient when supplemented with the same...