This article examines the nature of human behavior in a nested socialdilemma referred to as the Spillover Game. Players are divided into twogroups with positive production interdependencies. Based on theoreticallyderived opportunistic, local, and global optima, our experimental...

The paper shows how commodity taxes can provide insurance to consumers when the producer price is volatile. Specific and ad valorem taxes have differing roles. The optimal specific tax is positive when demand has some elasticity. The optimal ad valorem rate is zero when demand is unit-elastic,...

We revisit the economic models of social learning by assuming that individuals update theirbeliefs in a non-Bayesian way. Individuals either overweigh or underweigh (in Bayesian terms)their private information relative to the public information revealed by the decisions of othersand each...

This paper considers the impact of reviewers on sales of products of quality unknown to consumers. Sales occur simultaneously after consideration by a reviewer with a known level of bias. Consumers observe the reviewer`s decision and a private signal. We find that: (a) with flexible prices and...

Probably the most enduring result in the theory of optimum income taxation is that,for a sufficiently thin upper tail to the skill distribution, the marginal tax rate shouldfall rather than rise with income. This paper shows that this result is highly sensitiveto a very strong informational...

Preference for control affects investment behavior. Participants of laboratory experiments invest different amount of money in a risky asset when face with two different methods of control which have identical payoff structure and probability distribution, but provide different sense of control....

Using a unique bank-level dataset on the Ugandan banking system over theperiod 1999 to 2005, we explore the factors behind consistently high interest rate spreadsand margins. While foreign banks charge lower interest rate spreads, we do not find arobust and economically significant relationship...

We investigate determinants of launch spreads in European securitizationtransactions over the last decade. First, we develop a simple, reduced-form pricingmodel for all issues across different transaction types and test it. We document thecritical importance of credit ratings without refinements...

Securitisations usually involve creating multiple tranches of a single issue with different characteristics, placed on the market as separate securities. Various theoretical explanations have been advanced to explain such tranching. This paper provides the first systematic testing of such...