This paper studies socially responsible behavior in markets. We develop a laboratory product market in which low-cost production creates a negative externality for third parties, but where alternative production with higher costs mitigates the externality. Our first study, conducted in...

This article studies socially responsible behavior in markets. We develop a laboratory product market in which low-cost production creates a negative externality for third parties, but where alternative production with higher costs mitigates the externality. Our first study, conducted in...

When a company goes public, it is standard practice that the underwriting syndicate allocates more shares than issued. The underwriter thus holds a short position that it commonly fills by aftermarket trading when market prices fall or, when prices rise, by executing the so-called overallotment...

We explore both theoretically and experimentally how final prices and security holdings in an asset market influence and forecast behavior and outcomes in an affiliated coordination game. We vary the incentives from the market relative to payoffs from the game, the number of players in a group,...

We explore both theoretically and experimentally how final prices and security holdings in an asset market influence and forecast behavior and outcomes in an affiliated coordination game. We vary the incentives from the market relative to payoffs from the game, the number of players in a group,...

We study the relationship between economic activity, modeled by a minimum-effort coordination game, and asset markets in which securities' values correspond to outcomes of the activity. We explore both theoretically and experimentally how final prices and asset holdings in the market influence...

We test the claim that game form misconception among subjects making choices through the Becker-DeGroot-Marschak (BDM) value elicitation procedure provides an explanation for the endowment effect, as suggested by Cason and Plott (forthcoming). We employ a design that allows us to clearly...

This paper studies the stability of socially responsible behavior in markets. We develop a laboratory product market in which low-cost production creates a negative externality for third parties, but where alternative production with higher costs entirely mitigates the externality. Our data...

This paper studies whether people can avoid punishment by remaining willfully ignorant about possible negative consequences of their actions for others. We employ a laboratory experiment, using modified dictator games in which a dictator can remain willfully ignorant about the payoff...

This paper studies whether people can avoid punishment by remaining willfully ignorant about possible negative consequences of their actions for others. We employ a laboratory experiment, using modified dictator games, in which a dictator can remain willfully ignorant about the payoff...