We develop a theoretical analysis of two widely used regulations of genetic tests, disclosure duty and consent law, and we run several experiments in order to shed light on both the take-up rate of genetic testing and on the comparison of policyholders' welfare under the two regulations....

In markets with asymmetric information, where equilibria are often inefficient, bargaining can help promote welfare. We design an experiment to examine the impact of competition and price transparency in such settings. Consistent with the theoretical predictions, we find that competition...

There is substantial evidence that generalized trust improves economic outcomes at both the individual and aggregate levels. Furthermore, certain institutions such as educational and religious institutions foster trust, trade, and economic growth. A specific mechanism through which trust might...

We report on an experiment on decentralized markets in the presence of adverse selection. When allowing for costless and non-binding communication (cheap-talk), there exists a partially separating equilibrium that results in a substantially higher efficiency level than the adverse selection...

The goal of this paper is to study how informational frictions affect asset liquidity in OTC markets in a laboratory setting. The experiments replicate an OTC market similar to the one used in monetary and financial economics (Shi, 1995; Trejos and Wright, 1995; Duffie, Garleanu, and Pedersen, 2005):...

The psychology literature provides ample evidence that people have difficulties taking the perspective of less-informed others. This paper presents a controlled experiment showing that this "curse of knowledge" can cause comparative overconfidence and overentry into competition. In a broader...

We consider a group of receivers who share a common prior on a finite state space and who observe private correlated signals that are contingent on the true state of the world. We show that, while necessary, Bayes plausibility is not sufficient for a distribution over posterior belief vectors to...

In economic environments, decision-makers may strategically delay irreversible investments to learn from the actions of others creating socially suboptimal outcomes. We investigate if and how communication mitigates the strategic delay in investment timings. Players choose when to invest in a...