Competition authorities impose substantial penalties on firms engaging in illegal pricefixing. We examine how basing cartel fines on either revenue, profit, or price overcharge influences cartel and market prices, as well as cartel incidence and stability. In an infinitely repeated Bertrand...

Cartels are often fought by granting leniency, in the form of forgiveness of penalties, to whistle-blowers. This study employs a laboratory experiment to compare leniency programs that differ with respect to fine size and whether a second whistle-blower may apply for leniency. The results show...

In tort litigation, delayed settlement or impasse imposes high costs on the parties and society. Litigation institutions might influence social welfare by affecting the likelihood of out-of-court settlement and the potential injurers' investment in product safety. An appropriate design of...

When an upstream monopolist supplies several competing downstreamfirms, it may fail to monopolize the market because it is unable to commit not to behave opportunistically. We build on previous experimental studies of this well-known commitment problem by introducing communication. Allowing the...

To study the effect of congestion on the fundamental trade-off between diagnostic accuracy and speed, we empirically test the predictions of a formal sequential testing model in a setting where the gathering of additional information can improve diagnostic accuracy, but may also take time and...

This paper experimentally studies stipulated damages as a rent-extraction mechanism. We demonstrate that contract renegotiation induces the sellers to propose the lowest stipulated damages and the entrants to offer the highest price more frequently. We show that complete information about the...