This study uses the methods of experimental economics to investigate possible causes for the failure of the Hotelling rule for nonrenewable resources. We argue that as long as resource stocks are high enough, producers may choose to (partially) ignore the dynamic component of their production...

This study uses the methods of experimental economics to investigate possible causes for the failure of the Hotelling rule for nonrenewable resources. We argue that as long as resource stocks are high enough, producers may choose to (partially) ignore the dynamic component of their production...

When workers' investments in firm-specific skills are non-contractible underinvestment may occur because of holdup. Up-or-out contracts can potentially solve this problem by limiting the firm's scope for opportunistic behavior. The downside of such contracts is that a worker who does not make...

We study experimentally whether employers or workers should invest in firm specific training. Only workers are assumed to have an alternative trading opportunity. Both the turnover costs case where this alternative takes the form of an outside option and the no-friction case where it serves as a...