Results from four experiments suggest that currencies such as loyalty-program points are overvalued. Different allocations of the same quantity of points across the same number of purchases (e.g., 100 points for each first, 200 for each second, 300 for each third purchase vs. 200 for each first,...

We design an online experiment that mimics a Twitter/X "feed" to test whether (perceived) poster gender influences users' propensity to doubt the veracity of a given post. On average, posts by women are less likely to be flagged as concerning than identical posts by men. Heterogeneity analysis...

This study experimentally analyses traders' choices, with and without asymmetric information, based on the riding-bubble model. While asymmetric information has been necessary to explain a bubble in past theoretical models, our experiments show that traders have an incentive to hold a bubble...

We use an economic experiment to examine the impact of an uncertain level of asymmetric information on the behavior of security dealers. Specifically, we distinguish three types of uncertainty with respect to informed trading - risk, compound risk, and ambiguity - for both a monopoly and a...

The work of Friedrich Von Hayek contains several testable predictions about the nature of market processes. Vernon Smith termed the most important one the 'Hayek Hypothesis': equilibrium prices and the gains from trade can be achieved in the presence of diffuse, decentralized information, and in...

This paper studies the influence of information on entry choices in a competition with a controlled laboratory experiment. We investigate whether information provision attracts mainly high productivity individuals and reduces competition failure, where competition failure occurs when a subject...

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...

In an information cascade experiment participants are confronted with artificial predecessors predicting in line with the BHW model (Bikchandani et al. 1992). Using the BDM (Becker et al., 1964) mechanism we study participants' probability perceptions based on maximum prices for participating in...

Markets for expert services are characterized by information asymmetries between experts and consumers. We analyze the effects of consumer information, where consumers suffer from either a minor or serious problem and only experts can infer the appropriate treatment. Consumer information is a...