We investigate whether subjects’ behavior in the Arad and Rubinstein (2012) "11-20" game could be well explained by the k-level process described by the authors. We replicated their game in our baseline experiment and provided two other variations that retained the same mixed-strategy...

We investigate whether behaviours in Arad and Rubinstein (2012) 11-20 game are well explained by the level-k model. We replicate their game in our Baseline experiment and provided two other variations that retain the same mixed-strategy equilibrium but result in different predicted level-k...

This paper investigates the conventional wisdom that markets would naturally allocate the rights for performing decisional task to those players who might be best suited to perform the task. We embedded the decisional tasks in a stylised setting of a game, motivated by Littlewood(1953) Red Hat...

This paper investigates the conventional wisdom that markets should allocate the rights for performing decisional tasks to those players who might be best suited to perform the task. We embed the decisional tasks in a stylised setting of a game, motivated by Littlewood (1953) Red Hat Puzzle,...

Often an organization or government must allocate goods without collecting payment in return. This may pose a difficult problem either when agents receiving those goods have private information in regards to their values or needs or when discriminating among agents using known differences is not...

Once relegated to cinema or history lectures, bank runs have become a modern phenomenon that captures the interest of students. We use a simple classroom experiment based upon the Diamond-Dybvig Model (1983) to demonstrate how a bank run, a seemingly irrational event, can occur rationally. We...

In the 1990s, companies collected billions in premiums from peculiarly structured put options written on their own stock while almost all of these puts expired worthless. Buyers of these options, primarily �nancial intermediaries, lost money as a result. Although these losses might seem...

In the 1990s, companies collected billions in premiums from peculiarly structured put options written on their own stock while almost all of these puts expired worthless. Buyers of these options, primarily �nancial intermediaries, lost money as a result. Although these losses might seem...

In this paper, we seek to determine if auctions can be used to select players according to their level-k types. To do so, we embed auctions into the p-beauty contest game. We find that by using different designs, we can get the auction winners to be either the lower level-k types or the higher...

We study, using laboratory experiments, the extent to which disclosure policies about the financial health of a bank affect the likelihood of a bank run. We consider two disclosure regimes, full disclosure and no disclosure, under two scenarios: one in which the bank is on average financially...