We model centralized school matching as a second stage of a simple Tiebout-model and show that the two most discussed mechanisms, the deferred acceptance and the Boston algorithm, both produce inefficient outcomes and that the Boston mechanism is more efficient than deferred acceptance. This...

Algorithms play an increasingly important role in economic situations. These situations are often strategic, where the artificial intelligence may or may not be cooperative. We study the deter-minants and forms of algorithmic cooperation in the infinitely repeated prisoner's dilemma. We run a...

We study the propensity of independent algorithms to collude in repeated Cournot duopoly games. Specifically, we investigate the predictive power of different oligopoly and bargaining solutions regarding the effect of asymmetry between firms. We find that both consumers and firms can benefit...

We modify the Acquiring-a-Company game to study lying in ultimatum bargaining. Privately informed sellers send messages about the alleged value of their company to potential buyers. Via random information leaks, buyers can learn the true value before proposing a price which the seller finally...

Endogenous timing can help to derive the time structure of decision making instead of assuming it as exogenously given. In our study we consider a homogeneous market where, like in the model of Kreps and Scheinkman (1983), sellers determine sales capacities before prices. Sellers must serve...

A general framework is described specifying how boundedly rational decision makers generate their choices. Starting from a Master Module which keeps an inventory of previously successful and unsuccessful routines several submodules can be called forth which either allow one to adjust behavior...

Applying an indirect evolutionary approach with endogenous preference formation, we show that a legal system can induce players to reward trust even if material incentives dictate to exploit trust. By analyzing the crowding out or crowding in of trustworthiness implied by various verdict rules,...

By vetoing one questions mutually efficient agreements. On the other hand the threat of vetoing may prevent exploitation. Based on a generalization of ultimatum bargaining (Suleiman, 1996) we first elicit the responders' certainty equivalents for three different degrees of veto power. Afterwards...

Overall, 72 subjects invest their endowment in four risky assets. Each com-bination of assets yields the same expected return and variance of returns. Illusion of expertise prevails when one prefers nevertheless the self-selected portfolio. After being randomly assigned to groups of four...

We experimentally test overconfidence in investment decisions by offering participants the possibility to substitute their own for alternative investment choices. Overall, 149 subjects participated in two experiments, one with just one risky asset, the other with two risky assets. Overconfidence...