Standard theoretical models of household saving behavior do not typically assume that household perceptions of the world change in response to observed events. In light of the potential importance of such perception changes (e.g., after a financial crisis), this paper considers the hypothesis...

Confessions after failures are socially desirable. However, confessions also bear the risk of punishment. In a laboratory experiment I examine how confessions work. I analyze whether the willingness to punish harmful failures depends on how the harmed party has learned about the outcome. The...

A biased, perfectly informed expert advises a partially and privately informed decision maker using cheap-talk message. The decision maker can tell whether the state is “high” or “low” relative to a private threshold that divides the unit-interval state space into two subintervals. The...

This study tests whether individuals are reluctant to tell lies, or perhaps only “harmful lies”, in a previously untested environment: an expert sending a message to a decision maker whose interpretation of that message is subject to error, i.e. a noisy sender–receiver game. In the Aligned...

We consider the problem of an employer who has to choose whether to reemploy agents with a positive track record or agents who were unsuccessful. While previously successful managers are likely to be of high ability, they have also accumulated wealth and will be harder to motivate in the future....

Strategic settings are often complex and agents who lack deep reasoning ability may initially fail to make optimal decisions. This paper experimentally investigates how the decision making quality of an agent's opponent impacts learning-by-doing (LBD) and learning-by-observing (LBO) in a...

This paper presents a new agent-based financial market. It is designed to be both simple enough to gain insights into the nature and structure of what is going on at both the agent and macro levels, but remain rich enough to allow for many interesting evolutionary experiments. The model is...

Several studies show that evolution favors non-selfish preferences only if preference types are observable. We present a new evolutionary scenario applied to the Centipede Game, where we adopt self-confirming equilibrium to capture behavior. We show that altruism may be evolutionarily successful...

I analyze a problem of project selection where two agents, privately informed of both the true value and their bias in favor of their alternatives, make non-verifiable proposals to an uninformed decision-maker. The analysis makes two contributions. First, I examine the consequences of preference...

The core idea of evolution is that order in living systems emerges from a simple process of variation and selection. In biological systems we usually understand the source of variation as best described by the mechanisms of genetics. If human social systems are evolutionary systems, however, it...