Purpose: This paper analyzes how different dynamics of changes in piece-rate incentives affect individuals' exerted effort. Design/methodology/approach: The authors constructed an across-subjects three-period laboratory setting where, for each period, they exogenously manipulate the amount of...

Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors have been...