In a repeated-interaction public goods economy, dynamic behavior may affect the efficiency of various mechanisms thought to be efficient in one-shot games. Inspired by results obtained in previous experiments, the current paper proposes a simple best response model in which players' beliefs are...

An alternative is a Condorcet winner if it beats all other alternatives in a pairwise majority vote. A social choice correspondence is a Condorcet extension if it selects the Condorcet winners–and nothing else–whenever a Condorcet winner exists. It is well known that Condorcet extensions are...

We examine whether the ‘Level-k’ model of strategic behavior generates reliable cross-game predictions within an individual. We find no correlation in subjects’ estimated levels of reasoning across two families of games. Furthermore, estimating a higher level for Ann than Bob in one family...

We investigate whether the perception of economy-wide inflation is affected by the frequency with which various goods׳ prices are observed. We provide novel experimental evidence that consumers׳ perceptions of aggregate inflation are systematically biased toward the perceived inflation rates...

Fehr, Kirchsteiger and Riedl [12] experimentally test a labor market in which worker effort levels are chosen after wages are set. They observe high wages and effort levels in the repeated game, contrary to the equilibrium prediction. In a similar experimental test of lemons markets, Lynch...

Reputation effects and other-regarding preferences have both been used to predict cooperative outcomes in markets with inefficient equilibria. Existing reputation-building models require either infinite time horizons or publicly observed identities, but cooperative outcomes have been observed in...

Double auction prediction markets have proven successful in large-scale applications such as elections and sporting events. Consequently, several large corporations have adopted these markets for smaller-scale internal applications where information may be complex and the number of traders is...

Paul Milgrom [Milgrom, P.R., 1981. Goods news and bad news: representation theorems and applications. The Bell Journal of Economics 12, 380-391] showed that if the strict monotone likelihood ratio property (MLRP) does not hold for a conditional distribution then there exists some non-degenerate...

We study the design of mechanisms that implement Lindahl or Walrasian allocations and whose Nash equilibria are dynamically stable for a wide class of adaptive dynamics. We argue that supermodularity is not a desirable stability criterion in this mechanism design context, focusing instead on...