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| Basic Concepts: Decisions, Game Theory, and Market Equilibrium | |
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| Introduction | |
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| Origins | |
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| Overview | |
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| Methodology | |
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| A Brief History of Experimental Economics | |
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| Questions | |
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| A Pit Market | |
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| A Simple Example | |
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| A Classroom Experiment | |
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| Chamberlin's Results and Vernon Smith's Reaction | |
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| Extensions | |
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| Questions | |
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| Some Simple Games: Competition, Coordination, and Guessing | |
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| Game Theory and the Prisoner's Dilemma | |
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| A Prisoner's Dilemma Experiment | |
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| A Coordination Game | |
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| A Guessing Game | |
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| Extensions | |
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| Questions | |
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| Risk and Decision Making | |
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| Who Wants to Be a Millionaire? | |
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| A Simple Lottery-Choice Experiment | |
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| Payoff Scale, Order, and Demographics Effects | |
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| Extensions | |
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| Questions | |
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| Randomized Strategies | |
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| Symmetric Matching Pennies Games | |
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| Battle of the Sexes | |
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| Extensions | |
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| Questions | |
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| Market Experiments | |
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| Monopoly and Cournot Markets | |
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| Monopoly | |
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| Cournot Duopoly | |
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| Cournot Oligopoly | |
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| Extensions | |
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| Optional Quick Calculus Review | |
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| Questions | |
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| Vertical Market Relationships | |
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| Double Marginalization | |
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| The Newsvendor Problem | |
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| The Bullwhip Effect | |
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| Extensions | |
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| Questions | |
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| Market Institutions and Power | |
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| Introduction | |
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| The Exercise of Seller Market Power without Explicit Collusion | |
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| Edgeworth Cycles and Random Prices | |
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| The Effects of Market Power | |
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| Extensions | |
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| Calculation of a Mixed-Strategy Equilibrium in Prices | |
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| Questions | |
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| Collusion and Price Competition | |
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| Collusion in Posted-Offer Markets: "This Is Economics" | |
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| Collusion with Secret Discounts | |
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| Extensions: Cheap Talk, Mutual Forbearance, and the "V Word" | |
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| Questions | |
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| Market Failure Due to Unraveling: Lemons and Matching Markets | |
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| Endogenous Product Quality | |
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| Clearinghouse Mechanisms and Unraveling in Labor Markets | |
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| Extensions: Baseball, Dorm Rooms, School Choice, Deep Space, Sorority Rush,...but Marriage? | |
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| Questions | |
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| Asset Markets and Price Bubbles | |
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| Bubbles and Crashes | |
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| A Digression on Present Value | |
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| The Limit Order Market Experiment | |
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| Other Research on the Call Market Institution | |
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| Questions | |
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| Bargaining and Behavioral Labor Economics | |
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| Ultimatum Bargaining | |
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| Strategic Advantage and Ultimatums | |
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| Bargaining in the Bush | |
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| Bargaining in the Lab | |
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| Multi-Stage Bargaining | |
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| Extensions: "I Will Be Spending Years Trying to Figure Out What This All Meant" | |
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| Questions | |
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| Trust, Reciprocity, and Principal-Agent Games | |
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| The Trust Game | |
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| A Labor Market Reciprocity Game | |
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| Extensions: Field Experiments | |
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| Questions | |
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| Public Choice | |
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| Voluntary Contributions | |
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| Social Norms and Public Goods | |
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| "Economists Free-Ride, Does Anyone Else?" | |
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| Single-Round Experiments | |
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| Multi-Round Experiments | |
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| Extensions | |
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| Questions | |
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| The Volunteer's Dilemma | |
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| Sometimes It Only Takes One Hero | |
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| Initial Experimental Evidence | |
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| The Mixed-Strategy Equilibrium | |
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| An Experiment on Group Size Effects | |
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| Extensions | |
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| Questions | |
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| Externalities, Congestion, and Common Pool Resources | |
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| Water | |
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| Ducks and Traffic | |
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| Fish | |
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| Extensions | |
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| Questions | |
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| Rent Seeking | |
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| Government with "a Smokestack on Its Back" | |
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| Rent Seeking in the Classroom Laboratory | |
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| The Nash Equilibrium | |
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| Comparative Statics for Changes in Cost and the Number of Competitors | |
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| Extensions | |
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| Questions | |
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| Voting and Politics Experiments | |
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| The Median Voter Theorem | |
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| Experimental Tests of Spatial Voting Models | |
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| Fairness and Deviations from Core Outcomes | |
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| Legislative Bargaining | |
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| Agendas and Strategic Voting | |
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| Polls, Runoffs, and Other Coordinating Devices | |
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| Participation Games | |
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| Field Experiments | |
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| Extensions | |
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| Questions | |
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| Auctions | |
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| Private Value Auctions | |
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| Introduction | |
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| Auctions: Up, Down, and the "Little Magical Elf" | |
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| Bidding against a Uniform Distribution | |
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| Bidding Behavior in a Two-Person, First-Price Auction | |
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| Extensions | |
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| Risk Aversion | |
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| Questions | |
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| The Takeover Game | |
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| Wall Street (the Film) | |
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| A Takeover Game Experiment | |
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| Quality Unraveling | |
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| Extensions: The Loser's Curse | |
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| Questions | |
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| Common-Value Auctions and the Winner's Curse | |
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| "I Won the Auction but I Wish I Hadn't" | |
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| The Nash Equilibrium | |
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| The Winner's Curse | |
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| Extensions | |
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| Questions | |
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| Multi-Unit and Combinatorial Auctions | |
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| Dry 2K | |
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| FCC Bandwidth Auctions and Package Bidding Alternatives | |
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| Experimental Tests of Package Bidding Alternatives | |
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| Extensions | |
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| Questions | |
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| Behavioral Game Theory: Treasures and Intuitive Contradictions | |
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| Multi-Stage Games | |
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| Extensive Forms and Strategies | |
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| Two-Stage Trust Games | |
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| The Centipede Game | |
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| Extensions | |
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| Questions | |
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| Generalized Matching Pennies | |
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| The Case of Balanced Payoffs | |
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| Noisy Best Responses | |
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| The Effects of Payoff Imbalances | |
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| Probabilistic Choice | |
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| Extensions | |
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| Questions | |
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| The Traveler's Dilemma | |
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| A Vacation with an Unhappy Ending? | |
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| Data | |
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| Learning and Experience | |
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| Iterated Rationality and Quantal Response Equilibrium | |
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| Extensions | |
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| Bounded Rationality in the Traveler's Dilemma-A Spreadsheet-Based Analysis | |
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| Questions | |
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| Coordination Games | |
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| "The Minimum Effort Game? That's One I Can Play!" | |
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| Nash Equilibria, Numbers Effects, and Experimental Evidence | |
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| Effort-Cost Effects | |
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| Equilibrium with Noisy Behavior | |
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| Extensions | |
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| An Analysis of Noisy Behavior in the Coordination Game | |
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| Questions | |
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| Individual Decision Experiments | |
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| Probability Matching | |
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| Being Treated Like a Rat | |
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| Are Rats Really More Rational Than Humans? | |
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| Siegel and Goldstein's Experiments | |
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| A Simple Model of Belief Learning | |
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| Reinforcement Learning | |
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| Extensions | |
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| Questions | |
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| Lottery Choice Anomalies | |
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| Introduction | |
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| The Allais Paradox | |
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| Prospect Theory: Probability Misperception | |
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| Prospect Theory: Gains, Losses, and "Reflection Effects" | |
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| Extensions | |
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| Questions | |
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| ISO (in Search of...) | |
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| Introduction | |
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| Search from a Uniform Distribution | |
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| Experimental Data | |
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| Optimal Search | |
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| Extensions | |
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| Questions | |
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| Information, Learning, and Signaling | |
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| Bayes' Rule | |
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| Introduction | |
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| A Simple Example and a Counting Heuristic | |
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| Relating the Counting Heuristic to Bayes' Rule | |
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| Experimental Results | |
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| Bayes' Rule with Elicited Probabilities | |
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| A Follow-Up Experiment with a Rare Event | |
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| Extensions | |
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| Truthful Elicitation | |
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| Questions | |
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| Information Cascades | |
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| "To Do Exactly as Your Neighbors Do Is the Only Sensible Rule" | |
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| A Model of Rational Learning from Others' Decisions | |
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| Experimental Evidence | |
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| Extensions | |
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| Questions | |
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| Statistical Discrimination | |
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| "Brown-Eyed People Are More Civilized" | |
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| Being Purple or Green | |
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| Data on Statistical Discrimination | |
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| "Are Emily and Greg More Employable than Lakisha and Jamal?" | |
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| Extensions | |
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| Derivation of the Discriminatory Equilibrium | |
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| Questions | |
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| Signaling Games | |
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| Real Men Don't Eat Quiche | |
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| Separating Equilibria | |
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| Pooling | |
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| Unintuitive Beliefs and Reverse Type Dependence | |
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| "Stripped Down Poker" | |
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| Extensions: "Too Cool for School" | |
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| Questions | |
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| Prediction Markets | |
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| The Rationale for Prediction Markets | |
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| The Success of Political Event Markets | |
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| Information Aggregation and "Common Value Trading" | |
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| Extensions | |
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| Questions | |
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| References | |
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| Index | |