We conducted an experiment in which subjects played a sender-receiver game with and without rewarding opportunities. We find that rewards enhance the receiver's propensity to trust the sender's message but do not influence the sender's probability to tell the truth. Moreover, subjects who reward...

In this paper we show that in a differentiated product market, the presence of exogenous demand shocks leads to countercyclical price behavior when firms are committed to prices in the short run.

We show that synergies enhance bidding competition to such an extent that they are a curse rather than a blessing for the bidders.