The power to influence the allocation of resources in coalitional bargaining stems from an agent's ability to form multiple majority coalitions (pivotality) or from the relative vote share the agent contributes to a coalition (proportionality). We distinguish between coalitional commitment,...

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...

Evidence for the long-term effects of foreign aid on local communities is mixed. In a laboratory experiment, we investigate whether external subsidies, e.g. foreign assistance, promote or undermine giving. Subjects play two rounds of a dictator game followed by an elicitation of norms. In both...

The opportunity to bargain often causes costs for at least one party in many economic situations, e.g. wage negotiations, joint ventures or interfirm cooperation. This paper studies such situations. A "strong" and a "weak" player have to agree how to divide the produced surplus. The "weak"...