We study risky behavior of adolescents. Concentrating on smoking and alcohol use, we structurally estimate a dynamic social interaction model in the context of students' school networks included in the National Longitudinal Study of Adolescent Health (Add Health). The model allows for...

We experimentally investigate a bargaining environment in which players negotiate over a fixed payment to one player, while the other player receives the residual from a random pie realization after subtracting the fixed payment. Contrary to the intuition that risk exposure is detrimental, we...

We conduct an experiment in which subjects play an ultimatum game but, rather than bargaining over money, they bargain over lottery tickets for a prize. Compared to the standard ultimatum game, proposers offer a significantly lower percentage of lottery tickets, which is inconsistent with either...

We experimentally study a situation in which two players negotiate the dissolution of a partnership. In our experiments, the valuation from owning the partnership is risky and subjects must simultaneously negotiate both a selling price and the identity of the buyer. That is, upon reaching an...

The opacity of over-the-counter (OTC) markets – in which a large number of financial products including credit derivatives trade – appears to have played a central role in the ongoing financial crisis. We model such OTC markets for risk-sharing in a general equilibrium setup where agents...