Price bubbles remain a puzzle for economic theory, particularly given their appearance in experimental markets with high efficiency and minimized uncertainty and noise. We propose that bubbles are caused by the institutionalization of social norms, when individuals observe and adopt the behavior...

The institutionalized status of markets is undoubtedly due to their presumed ability to aggregate individual bids into a single unbiased estimate of value. While not denying this emergent property of market processes, we propose and test an alternative perspective that explains how market...

In many life situations, people choose sequentially between repeating a past action in expectation of a familiar outcome (exploitation), or choosing a novel action whose outcome is largely uncertain (exploration). For instance, in each quarter, a manager can budget advertising for an existing...

Individual and organizational actors enter into a large number of relationships that include benefiting others without ensuring the equality of reciprocal benefits. We suggest that actors have evolved mechanisms that guide them in the choice of exchange partners, even without conscious...

While the economic impact of, and the interest in, open source innovation and production has increased dramatically in recent years, there is still no widely accepted theory explaining its performance. We combine original fieldwork with agent-based simulation to propose that the performance of...

The principles of open collaboration for innovation and production — once distinctive to open source software — are now found in many other ventures. Some of these ventures are internet-based: Wikipedia, online forums and communities; others are off-line, in medicine, science, and everyday...