We study the development of a social norm of trust and reciprocity among strangers in the infinitely repeated binary trust games. Players are anonymous and interact at randomly determined times. Following Kandori (1992), we show that the social norm of trust and reciprocity can be sustained in a...

The extant experimental design to investigate warm glow and altruism elicits a single measure of crowd-out. Not recognizing that impure altruism predicts crowd-out is a function of giving-by-others, this design's power to reject pure altruism varies with the level of giving-by-others, and it...

We study how group size affects cooperation in an infinitely repeated n-player Prisoner's Dilemma (PD) game. In each repetition of the game, groups of size n less than or equal to M are randomly and anonymously matched from a fixed population of size M to play the n-player PD stage game. We...

We develop a new nonparametric test of common values in first-price auctions and apply it to British Columbia (BC) Timber Sales. The test is based on the behavior of the CDF of bids near the reserve price. We show that the curvature of the CDF is drastically different under private values (PV)...

The finite state Markov-Chain approximation method developed by Tauchen (1986) and Tauchen and Hussey (1991) is widely used in economics, finance and econometrics in solving for functional equations where state variables follow an autoregressive process. For highly persistent processes, the...

Tax-based deficit reduction experiments for the U.S.\@ and EMU-12 are conducted using an open economy model. In welfare terms, raising the consumption tax is the least costly, followed by the labor income tax, then the capital income tax. Use of an open economy model means that the incidence of...

Capturing the boom phase of Pigou cycles and resolving the comovement problem requires positive sectoral comovement. This paper addresses these observations using a two sector New Keynesian model. Price rigidities dampen movements in the relative price of durables following a monetary policy...

In a neoclassical growth model with life-cycle households in which money is held to satisfy a cash-in-advance constraint, the optimal steady state inflation rate is not the Friedman rule -- it is in excess of $20\%$. Lump-sum, age-independent money injections twist and flatten the lifetime...

A large group of authors with inspiring credentials recently expressed their belief, in the journal Tobacco Control, that the introduction of graphic label warnings (GLWs)on cigarette packages could reduce smoking prevalence in the US by several percentage points, in view of the evidence...