Margin requirements are being used to regulate the risks of leveraged positions in financial markets. Violated margin requirements trigger margin calls that lead to automated liquidation of open margin positions. Under controlled laboratory conditions we consider the effect of margin trading...

The paper reports experimental data on the behavior in the first-price sealed-bid auction for a varying number of bidders when values and bids are private information. This feedback-free design is proposed for the experimental test of the one-shot game situation. We consider both within-subject...

We model the safety net problem as a social dilemma game involving moral hazard, risk taking and limited liability. The safety net game is compared to both an individual decision task involving full liability and the deterministic public goods game. We report experimental data to show that...

The paper reports an experimental study on a promotion-demotion mechanism to mitigate the free-rider problem in team production. The "mechanism hierarchically splits a group in two; we refer to one subgroup as" the major league and to the other as the minor league. The most cooperative subject...

We revisit the sequential search problem by Hey (1987). In a 2x2 factorial design, varying fixed and random cost treatments with and without recall, we address open research questions that were originally stated by Hey (1987). Our results provide clear evidence for Hey’s (1987) conjecture that...

We offer a translation into English of the original French version published in 1777 of Buffon’s Essai d’Arithmetique Morale along with some introductory remarks. In this classic work, Buffon discusses degrees of certainty, probability, the moral value of money, the different evaluations of...

The tension between cooperation and competition that characterizes many business " relationships is experimentally studied in a “pie”-creation game; value is created and" increased through cooperation in a repeated prisoner’s dilemma game. At the end, the player with the greater stake in...

Safety nets may reduce incentives to mitigate risks, and adversely affect people’s behavior. We model the safety net problem as a social dilemma game involving moral hazard, risk taking and limited liability. Individuals take costly measures to avoid a likely loss which, if incurred, is...

The paper reports experimental data on the behavior in the first-price sealed-bid auction for a varying number of market participants when values and bids are private information. In line with the theory, the data show that the price and the bid-value ratio increase with the number of...

In a laboratory experiment subjects were endowed with money and waiting time. Preferences for waiting time reduction were elicited with salient rewards both as a private good and as a public good. The allocations of the public good that were theoretically predicted by the Nash equilibrium and...