In his classic article "An Essay on Bargaining" Schelling (1956) argues that ignorance might actually be strength rather than weakness. We test and confirm Schelling's conjecture in a simple take-it-or-leave bargaining experiment where the proposer can choose between two possible offers. Option...

We experimentally investigate multiple notions of equity in ultimatum bargaining with asymmetric outside options. Building on the generalized equity principle formulated by Selten (1978), we derive three different equity rules that can explain 43% of all offers. Our within-subject design further...

The "joint costs" model states that the incentive to strike is inversely related to the total costs associated with workers' and firms' strike activities. Not only has this model been tested with mixed results, but also the joint costs model is problematic in explaining several stylized facts in...

We conduct multi-person one-shot ultimatum games that reflect important aspects of collective bargaining. In all treatments a proposer has to divide a pie among herself and two groups of three recipients each. She cannot discriminate within, but across groups. A committee with representatives...

In many markets, sellers advertise their good with an asking price. This is a price at which the seller is willing to take his good off the market and trade immediately, though it is understood that a buyer can submit an offer below the asking price and that this offer may be accepted if the...

The undersupply of spots in German daycare facilities for toddlers challenges parents' possibilities to work. To ease the situation, the government implemented a new law entitling every child between ages one and three to daycare supervision for about four hours per day. Nevertheless, the...

In an experiment on the repeated prisoner s dilemma where intended actions are implemented with noise, Fudenberg et al. (2012) observe that non-equilibrium strategies of the "tit-for-tat" family are largely adopted. Furthermore, they do not find support for risk dominance of TFT as a determinant...

We examine the influence of guilt and trust on the performance of credence goods markets. An expert can make a promise to a consumer first, whereupon the consumer can express her trust by paying an interaction price before the expert's provision and charging decisions. We argue that the expert's...