Most theories of risky choice postulate that a decision maker maximizes the expectationof a Bernoulli (or utility or similar) function. We tour 60 years of empirical search and concludethat no such functions have yet been found that are useful for out-of-sample prediction. Nor dowe find...

We investigate the nature of continuous-time strategic interactions in public-goodsgames. In one set of treatments, four subjects make contribution decisions in continuous timewhile in another they make them only at discrete points of time. The effect of continuous timeis muted in public-goods...

We examine speculative attacks in a controlled laboratory environment featuring continuous time, size asymmetries, and varying amounts of public information. Attacks succeeded in 233 of 344 possible cases. When speculators have symmetric size and access to information: (a) weaker fundamentals...

Financial engineering often involves redefining existing financial assets to create new financial products. This paper investigates whether financial engineering can alter the environment so that irrational agents can quickly learn to be rational. The specific environment we investigate is based...

We introduce a parametric model of other-regarding preferences in which my emotional state determines the marginal rate of substitution between my own and others' payoffs, and thus my subsequent choices. In turn, my emotional state responds to relative status and to the kindness or unkindness of...

The effects of trading institutions on market efficiency and trading volume are examined. The trading institutions are computerized versions of continuous double auction and clearinghouse markets. Traders are experienced, profit-motivated undergraduates. The traded good is a financial asset...

We study learning in an individual choice price forecasting task in which subjects must learn coefficients of two independent variables in stationary linear stochastic processes. The 99 subjects each forecast in 480 trials with feedback. Learning is tracked by fitting individual forecasts to the...