We present a model of adaptive economic agents who are k periods forward looking. Agents in our model are randomly matched to interact in finitely repeated games. They form beliefs by learning from past behavior of others and then best respond to these beliefs looking k periods ahead. We...

Experimentalists frequently claim that human subjects playing games in the laboratory violate such solution concepts as Nash equilibrium and subgame perfection. This claim is premature. What has been rejected are certain joint hypotheses about preferences, knowledge, and behavior. This note...

Bertrand competition under decreasing returns involves a wide interval of pure strategy equilibrium prices. We first present results of experiments in which two, three and four identical firms repeatedly interact in this environment. Less collusion with more firms leads to lower average prices....

The most fundamental solution concepts in Game Theory Nash equilibrium, backward induction, and iterated elimination of dominated strategies are based on the assumption that people are capable of predicting others' actions. These concepts require people to be able to view the game from the other...

Online labor markets such as Amazon Mechanical Turk (MTurk) off er an unprecedented opportunity to run economic game experiments quickly and inexpensively. Using Mturk, we recruited 756 subjects and examined their behavior in four canonical economic games, with two payoff conditions each: a...

This paper reviews experiments that include two types of subjects: professionals and students. The typical subject pool for economic experiments is composed of students. Professionals are loosely defined as people working in an industry where the game under study is thought to be relevant. The...

We experimentally examine the effects of flexible and fixed prices in markets for experience goods in which demand is driven by trust. With flexible prices, we observe low prices and high quality in competitive (oligopolistic) markets, and high prices coupled with low quality in non-competitive...

Simulation is a way to deal with complex situations. A simplified model of a complex situation is built, from this model is leaned, and what has been learned is translated back to the real life setting. Simulation gaming is based on this idea. However, making inferences about real settings based...

We analyze tournaments of heterogeneous players from an organizer's perspective. Using a simple model of a noisy tournament, we demonstrate how the likelihood of selecting the best player, here termed the "predictive power" of a tournament, depends on the tournament format, the distribution of...