This paper purports to provide experimental evidence explaining a number of stylized facts associated with the behaviour of financial returns, in particular, the fat tailed nature of their distribution and the persistence in their volatility. By means of a laboratory experiment, we will...

The study investigates protective responses in low probability and high loss risk situations. Particularly, it (1) detects individual protection valuations to variations in probability versus to variations in loss for payment decisions and choice decisions, (2) elicits the threshold probability...

Seminal models of herd behaviour and informational cascades point out the existence of information negative externalities, and propose to destroy information in order to achieve social improvements. Although in the last years many features of herd behaviour and informational cascades have been...

Different from previous studies that use a best estimate, interval, or sets of probabilities, we represent the degree of ambiguity through levels of information provided to subjects. The willingness to pay is higher when more amount of information is provided.

We use a two-person linear voluntary contribution mechanism with stochastic marginal benefits from the public good to examine the effect of imperfect information on contributions levels. To assess prior risk attitudes, individual valuations of several risky prospects are elicited via a...

Theory absorption, a notion introduced by Morgenstern and Schwödiauer (1972) and further elaborated by Güth and Kliemt (2004), discusses the problem whether a theory can survive its own acceptance. Whereas this holds for strategic equilibria according to the assumptions on which they are...

Experimental research on decision making under risk has until now always employed choice data in order to evaluate the empirical performance of expected utility and the alternative non-expected utility theories. The present paper performs a similar analysis which relies on pricing data instead...

Amidst a sharp increase in household debt levels, many countries have substantially reformed their consumer bankruptcy regulations. I first classify the mechanisms triggered by current U.S. and European bankruptcy regulations and then evaluate these mechanisms within a hidden action model. I...

We investigate the intertemporal allocation behavior of spouses with different deterministic life expectations in an experiment. In each period of their life both partners propose a consumption level of which one is then randomly implemented. In spite of the complex dynamics optimal behavior is...

The workforce in all industrialized countries is aging. To forecast future challenges, it is important to understand the impact of a worker's age on the labor market. In this paper, we analyze whether older workers in Germany and Norway are treated differently in the hiring process. Students and...