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This paper examines the occurrence and fragility of information cascades in two laboratory experiments. One group of low informed participants guess sequentially which of two states has been randomly chosen. In a matched pairs design, another group of high informed participants make similar guesses after having observed the guesses of the low informed(More)
We experimentally test a precommitment mechanism for the trust game. Before the investor's decision , the allocator places an amount into escrow, to be forfeited if he keeps the proceeds of investment for himself. We vary the available escrow amounts—in particular, whether there is a high amount that gives rise to an efficient equilibrium—and whether escrow(More)
We use a human–subjects experiment to test the effects of non–coercive " information " mechanisms designed to increase cooperation and efficiency in the trust game. In the equilibrium of the standard trust game, the investor does not invest, foreseeing that the allocator would have kept all of the returns from investment. Our mechanisms add a pre–play stage(More)
This paper shows theoretically and experimentally that hearing expert opinions can be a double-edged sword for decision making committees. We study a majoritarian voting game of common interest where committee members receive not only private information, but also expert information that is more accurate than private information and observed by all members.(More)
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