We experimentally study the effect of the mode of digital communication on the emergence of trust in a principal-agent relationship. We consider three modes of communication that differ in the capacity to transmit nonverbal content: plain text, audio, and video. Communication is pre-play,...

We experimentally investigate how much value people put in observable information about others in strategic interactions. The incentivized experimental task is to predict an unknown target player's trustworthiness in an earlier hidden action game. In Experiment 1, we vary the source of...

Experimental evidence shows that the rational expectations hypothesis fails to characterize the path to equilibrium after an exogenous shock when actions are strategic complements. Under identical shocks, however, repetition allows adaptive learning, so that inertia in adjustment should fade...

Experimental evidence shows that the rational expectations hypothesis fails to characterize the path to equilibrium after an exogenous shock when actions are strategic complements. Under identical shocks, however, repetition allows adaptive learning, so that inertia in adjustment should fade...

Eliciting all the components of prospect theory –curvature of the utility function, weighting function and loss aversion– remains an open empirical challenge. We develop a semi-parametric method that keeps the tractability of parametric methods while providing more precise estimates. Using...

Recent experiments show that feedback transmission can mitigate opportunistic behavior in repeated social dilemmas. Two nonexcludable explanations have been investigated: strategic signaling and nonmonetary sanctioning. This literature builds on the intuition that under both partner matching...