We experimentally analyze efficiency-enhancing power of focal points in 2x2 Pareto-ranked coordination games. We find that the power of focal labels, when attached to the Pareto-efficient strategy, to promote efficiency critically depends upon the alternative strategy’s label salience. When...

Buy price auctions merge a posted price option with a standard bidding mechanisms, and have been used by various online auction sites including eBay and General Motors Assistance Corporation. A buyer in a buy price auction can accept the buy price to win with certainty and end the auction early....

eBay's Buy It Now format allows a seller to list an auction with a "buy price" at which a bidder may purchase the item immediately and end the auction. When bidders are risk averse, then theoretically a buy price can raise seller revenue when values are private (but not when values are common)....

Identity is a person’s sense of self, derived from her membership in a group. Previous experimental studies have shown that people take more favorable actions towards the members of their own group (in-group favoritism). This paper proposes a simple model of identity to capture this in-group...