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First price and Dutch auctions are theoretically isomorphic, but previous experiments report that the institutions are not behaviorally isomorphic. This article uses facial analysis of video recordings of laboratory experiments to investigate whether these auctions invoke different emotional responses from bidders. The results indicate that bidders are angrier during the Dutch auction and that winners exhibit more contempt after the first price auction. Overall, subjects in both auctions appear to be mostly bored and depressed, but there is evidence that bidders exhibit more positive emotions as prices fall in the Dutch auction. [ABSTRACT FROM AUTHOR]

• Marijuana use and economic behavior is examined using a series of experimental tasks. • Increased marijuana use is correlated with marginally poorer performance on a memory task. • Marijuana use is not correlated with prosocial behavior, risk preferences, or cognitive ability. • Marijuana use is also not correlated with an individual's responsiveness to monetary incentives. • Correlations between caffeine, tobacco, or alcohol consumption and behavior are also identified. With the increased acceptance of marijuana, it is important to understand the impacts of its use. While much attention has been paid to concerns such as health, relatively little attention has been paid to the relationship between marijuana use and basic economic behavior. This experimental study uses incentivized tasks to measure prosocial behavior, risk-taking, memory, cognitive ability, and responsiveness to incentives for 374 subjects, and examines how these behaviors vary with frequency of marijuana use. The general results provide little evidence that increased marijuana is associated with any change in these basic behaviors. Despite the fact that we observe males to be more frequent users of marijuana, more willing to take risks, and more selfish, the general lack off a relationship between economic behavior and frequency of marijuana use holds for both males and females. Relationships between caffeine, tobacco, and alcohol use and basic economic behavior are also analyzed. [ABSTRACT FROM AUTHOR]

This paper investigates decision quality in large choice sets across several choice architectures in three studies. In the first controlled experiment, we manipulate two features of a choice architecture--the response mode (for ranking alternatives) and presentation mode (for presenting alternatives). Our design objectively ranks all 16 choice options in each choice set and makes it possible to observe decision quality directly, independent of attitudes toward risk. We find joint presentation outperforms separate presentation and that choice response modes outperform "happiness ratings," which outperform hypothetical monetary valuations. We also apply classic welfare criteria to assess the performance of the architectures. Our key finding is that low cognitive reflection subjects (as measured by the cognitive reflection test) perform better given a large choice set than given smaller sets collectively containing the same alternatives. This illustrates a basic tradeoff confronting choice architectures: for a fixed choice set, fewer options improve decision quality within that set but require architectures to elicit multiple responses, increasing opportunities for errors. One follow-up study demonstrates the robustness of the response mode result in a comparison using the tournament presentation mode. A second follow-up study reveals that the impact of incentivizing monetary valuations depends on cognitive reflection. [ABSTRACT FROM AUTHOR]

Tournaments consisting of iterative matches are a common mechanism for determining how to allocate a prize. For this reason it is important to understand the behavioral as well as the theoretical properties of different tournament structures. Given that laboratory experiments have consistently found high levels of overbidding in contests, one might suspect that double-elimination tournaments would generate substantially more total investment than single-elimination tournaments despite the two types of tournaments generating theoretically equivalent expected aggregate investment. This paper reports a set of laboratory experiments designed to test this comparison. The results indicate that aggregate investment is similar between the two tournaments, despite behavioral differences in bidding strategies. [ABSTRACT FROM AUTHOR]

We construct an asset market in a finite horizon overlapping-generations environment. Subjects are tested for comprehension of their fundamental value exchange environment and then reminded during each of 25 periods of the environment's declining new value. We observe price bubbles forming when new generations enter the market with additional liquidity and bursting as old generations exit the market and withdrawing cash. The entry and exit of traders in the market creates an M shaped double bubble price path over the life of the traded asset. This finding is significant in documenting that bubbles can reoccur within one extended trading horizon and, consistent with previous cross-subject comparisons, shows how fluctuations in market liquidity influence price paths. We also find that trading experience leads to price expectations that incorporate fundamental value. [ABSTRACT FROM AUTHOR]

Abstract: Economic intuition suggests competition lowers prices. However, recent theoretical work reveals a monopolist may prefer to charge a lower price than a seller facing a competitor with a differentiated product depending upon the joint distribution of buyer values for the products. We explore this relationship using controlled laboratory experiments. Our results indicate price increasing competition is rare due in part to overly intense competition, but after controlling for such behavioral reactions, we find some support for the model. We also explore pricing dynamics and find that sellers are more sensitive to their rivals when buyer values are positively correlated. [Copyright &y& Elsevier]

This article examines theory and behavior in a two-player game of siege, sequential attack and defense. The attacker’s objective is to successfully win at least one battle, while the defender’s objective is to win every battle. Theoretically, the defender either folds immediately or, if his valuation is sufficiently high and the number of battles is sufficiently small, then he has a constant incentive to fight in each battle. Attackers respond to defense with diminishing assaults over time. Consistent with theoretical predictions, the authors’ experimental results indicate that the probability of successful defense increases in the defenders valuation and it decreases in the overall number of battles in the contest. However, the defender engages in the contest significantly more often than predicted and the aggregate expenditures by both parties exceed predicted levels. Moreover, both defenders and attackers actually increase the intensity of the fight as they approach the end of the contest. [ABSTRACT FROM PUBLISHER]

Abstract: Using paper and pencil experiments administered in senior centers, we examine decision-making performance in multi-attribute decision problems. We differentiate the effects of declining cognitive performance and changing cognitive process on decision-making performance of seniors as they age. We find a significant decline in performance with age due to reduced reliance on common heuristics and increased decision-making randomness among our oldest subjects. However, we find that increasing the number of options in a decision problem increases the number of heuristics brought to the task. This challenges the choice overload view that people give up when confronted with too much choice. [Copyright &y& Elsevier]

Abstract: Given the sizeable savings, many disputes are resolved via arbitration. Numerous studies have considered the strategic incentives of various forms of arbitration, most notably final offer arbitration (FOA). While previous work focused exclusively on optimal offers, in reality disputants make a series of perhaps interrelated choices. This paper considers FOA disputants making an additional investment decision regarding their case. We consider four cases distinguished by the sequence and observability of choices. The theoretical results indicate that it is socially optimal for disputants to make publicly observable offers prior to investment decisions. Behavior in controlled laboratory experiments weakly confirms this conclusion. [Copyright &y& Elsevier]

Abstract: Our paper provides a procedure to induce imperfect recall in the laboratory, even though in the past it has been claimed that this is difficult to achieve in a controlled environment. To accomplish this task we rely on a technique called divided attention to impair subject recollection of previous choices in a version of the absent-minded driver game of Piccione and Rubinstein [Piccione, M., Rubinstein, A., 1997a. On the interpretation of decision problems with imperfect recall. Games and Economic Behavior 20, 3–24]. The results suggest that a substantial number of subjects experience imperfect recall yet still behave in a rational manner. The observed behavior is consistent with a large portion of the subjects falling prey to the temporal paradox as suggested by Piccione and Rubinstein [Piccione, M., Rubinstein, A., 1997a. On the interpretation of decision problems with imperfect recall. Games and Economic Behavior 20, 3–24]. [Copyright &y& Elsevier]