Many loan commitment contracts contain a material adverse change clause which allows banks to renege or step back from their commitment based on rather subjective claims regarding the borrowers' prospective financial situation. While this sounds like an attractive option for banks, empirical...

Game Theory essentially deals with two types of representations of strategic interaction: normal form and extensive form games. In the present paper, we propose a third more abstract approach based only on the information structure and choices. Linking standard game representations to their...

How do people perceive a social dilemma such as the Prisoner’s Dilemma if the problem is framed focusing entirely on monetary incentives – as commonly done in laboratory experiments? Focusing on the involved conflict between strategic and moral incentives, we designed a two-stage experiment...

In this paper, we reconsider the valuation equilibrium concept (Jehiel and Samet, 2007) and partly endogenise the grouping of actions entailed in the concept. In particular, we allow players to differentiate between a priori similar actions based on differences in the preceding history. Yet,...

This paper connects insights from the literature on cosmopolitan worldviews and the effects of perspective-taking in political science, (intergroup) anxiety in social psychology, and identity economics in a vignette-style experiment. In particular, we asked German respondents about their...