People are sometimes risk-averse in gains but risk-loving in losses. Such behavior and other anomalies underlying prospect theory arise from a model of local status maximization in which consumers compare their wealth with other consumers of similar wealth. This social explanation shares key...

We use a human-subjects experiment to investigate how bargaining outcomes are affected by changes in bargainers’ disagreement payoffs. Subjects bargain against changing opponents, with randomly drawn asymmetric disagreement outcomes that vary over plays of the game, and with complete...

Game theorists typically assume that changing a game's payoff levels - by adding the same constant to, or subtracting it from, all payoffs - should not affect behavior. While this invariance is an implication of the theory when payoffs mirror expected utilities, it is an empirical question when...