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This paper examines what connection, if any, there is between cognitive ability and bidding strategy in second price auctions. Despite truthful revelations being a weakly dominant strategy, previous experiments have consistently observed overbidding, which makes the use of such auctions for inferring homegrown values problematic. Examining the effect of cognitive ability is important, as it may help identify when one can reliably recover values from observed bids. The results indicate that more cognitively able subjects behave in closer accordance with theory, and that cognitive ability partially explains heterogeneity in bidding behavior. Our results suggest that considering subjects' cognitive ability in homegrown valuation studies can help identify the true underlying demand conditions.

Trade developed through barter, an institution requiring the double coincidence of wants. Fiat money subsequently arose to provide traders with a mechanism for exchange in decentralized markets while avoiding the problems associated with commodity monies. Currently, every major modern economy uses fiat money and numerous Internet economies are developing private fiat monies, yet traditional economic theories, such as general equilibrium or Walrasian models, provide little insight. This work develops the concept of a coordination equilibrium model, which maintains fiat money's role as a medium of exchange. The potential instability of fiat money is apparent from observed hyperinflationary episodes. Civil unrest and real purchases financed by printing money are also associated with hyperinflations. These factors lead to an experimental design addressing the stability of intrinsically valueless money. Via controlled laboratory experiments, subjects trade fictitious commodities for fiat money in a circular flow economy. The experimental results indicate that under a long trading horizon with no money creation, fiat money provides a stable medium of exchange and the economy realizes almost maximum efficiency, a result consistent with the coordination equilibrium model but not with standard economic models. Shortening the trade horizon causes a decrease in efficiency. However, the ability to create money leads to hyperinflationary trade patterns independent of the horizon. Further, the experimental results demonstrate that the collapse is not caused by an increasing money supply but rather the result of interference in the real price discovery process. As the party issuing money is often an active participant, this economic instability creates a problem in the design of decentralized economic systems. Forcing the monetary authority to balance fiscal spending with the level of tax collection is a potential solution. Experimental evidence demonstrates that a balanced budget

Efforts in the spirit of this special issue aim at improving the reproducibility of experimental economics, in response to the recent discussions regarding the “research reproducibility crisis.” We put this endeavour in perspective by summarizing the main ways (to our knowledge) that have been proposed – by researchers from several disciplines – to alleviate the problem. We discuss the scope for economic theory to contribute to evaluating the proposals. We argue that a potential key impediment to replication is the expectation of negative reactions by the authors of the individual study, and suggest that incentives for having one’s work replicated should increase.

Efforts in the spirit of this special issue aim at improving the reproducibility of experimental economics, in response to the recent discussions regarding the “research reproducibility crisis.” We put this endeavour in perspective by summarizing the main ways (to our knowledge) that have been proposed – by researchers from several disciplines – to alleviate the problem. We discuss the scope for economic theory to contribute to evaluating the proposals. We argue that a potential key impediment to replication is the expectation of negative reactions by the authors of the individual study, and suggest that incentives for having one’s work replicated should increase.

Efforts in the spirit of this special issue aim at improving the reproducibility of experimental economics, in response to the recent discussions regarding the “research reproducibility crisis.” We put this endeavour in perspective by summarizing the main ways (to our knowledge) that have been proposed – by researchers from several disciplines – to alleviate the problem. We discuss the scope for economic theory to contribute to evaluating the proposals. We argue that a potential key impediment to replication is the expectation of negative reactions by the authors of the individual study, and suggest that incentives for having one’s work replicated should increase.

Efforts in the spirit of this special issue aim at improving the reproducibility of experimental economics, in response to the recent discussions regarding the “research reproducibility crisis.” We put this endeavour in perspective by summarizing the main ways (to our knowledge) that have been proposed – by researchers from several disciplines – to alleviate the problem. We discuss the scope for economic theory to contribute to evaluating the proposals. We argue that a potential key impediment to replication is the expectation of negative reactions by the authors of the individual study, and suggest that incentives for having one’s work replicated should increase.