We study sequential parimutuel betting markets with asymmetrically informed bettors, using an experimental approach. In one treatment, groups of eight participants play twenty repetitions of a sequential betting game. The second treatment is identical, except that bettors are observed by other...

We test whether large but purely nominal shocks affect real asset market prices. We subject a laboratory asset market to an exogenous shock, which either inflates or deflates the nominal fundamental value of the asset, while holding the real fundamental value constant. After an inflationary...

Punishment can lose its legitimacy if the enforcer can profit from delivering punishment. We use a controlled laboratory experiment to examine how justification can combat profit-seeking punishment and promote the legitimacy of punishment. In a one-shot sender-receiver game, an independent third...

Punishment can lose its legitimacy if the enforcer can profit from delivering punishment. We examine how justification can promote the legitimacy of punishment in a one-shot sender-receiver game where an independent third party can punish the sender upon seeing whether the sender lied. Most...

We conduct an experiment to examine the role of retribution and deterrence in motivating third party punishment. In particular, we consider how the role of these two motives may differ according to whether a third party is a group or an individual. In a one-shot prisoner’s dilemma game with...

This paper investigates how punishment promotes cooperation when the punishment enforcer is independent of its proposer. In a prisoner's dilemma experiment, compared with the case when the implicated parties are allowed to punish each other, cooperation is lower when the enforcement of...

In a prisoner’s dilemma experiment, compared with the case when the implicated parties are allowed to punish each other, both the cooperation rate and the earnings are lower when the enforcement of punishment requires approval from an independent third party.

This paper investigates how punishment promotes cooperation when the punishment enforcer is a third party independent of the implicated parties who propose the punishment. In a prisoner's dilemma experiment, we find an independent third party vetoes not only punishment to the cooperators but...