We investigate experimentally the impact of continuous time on a four-player Hotelling location game. The static pure strategy Nash equilibrium (NE) consists of firms paired-up at the first and third quartiles of the linear city. In a repeated simultaneous move (discrete time) treatment, we largely replicate previous findings in which subjects fail to converge to the NE. However, in asynchronous move (continuous time) treatments we see clear convergence towards the NE.

There is growing evidence that not all experimental subjects understand their strategic environment. We introduce a “choice process” (CP) protocol that aids in identifying these subjects. This protocol elicits in an incentive compatible manner provisional choices as players internalize their decision making environment. We implement the CP protocol in the modified 2/3 guessing game and use it to pinpoint players that are naive by identifying those who make weakly dominated choices some time into the play. At all time horizons these players average close to 50. This is consistent with the assumption in Level-K theory that the least sophisticated subjects (the naive ones) play uniformly over the [1–100] action space. In contrast, sophisticated players show evidence of increased understanding as time passes. We find that the CP protocol mirrors play in multiple setups with distinct time constraints. Hence it may be worth deploying more broadly to understand the interaction between decision time and choice.

We measure time preferences in a sample of 561 children aged 7–11 years. Using a within-subject design, we compare the behavior of our subjects using two distinct experimental measures of time preferences: a standard choice list with multiple decisions and a single choice time-investment-exercise requiring one decision only. We find that both measures yield very similar aggregate results, correlate significantly within subjects and can be explained by basically the same explanatory variables. Advantages and disadvantages of both measures are discussed. Our findings are relevant for the design of experiments to measure time preferences.

We report a laboratory experiment that investigates the impact of passive participation on bubble formation in asset markets with inexperienced and experienced traders. Some treatments employ pre-market training in which each participant is ‘matched’ with a trader from a different prior market and observes all trading details but does not directly participate in trading. We find that passive participation, similar to direct experience, significantly reduces mispricing in subsequent markets. This finding suggests that observation of prices is a key mechanism through which experience mitigates bubbles. We also vary whether transaction prices are displayed in a column of text or in a graphical display, and find that among inexperienced and once-experienced traders, markets with the tabular display result in bubbles that are greater in amplitude relative to markets with the graphical display.

Economic experiments often entail subjects making decisions with payoffs in experimental currency units (ECUs). Earnings in ECUs are converted to cash at the end of the experiment. Such a procedural choice seems to be driven more by habit or tradition than by empirical evidence that this is more appropriate to use. We report results of a private, induced value second price auction (SPA) experiment in which we manipulate the exchange rate between ECUs and cash. We find virtually no relationship between a stronger/weaker experimental currency and the ability of theory to predict observed outcomes. The only significant effect relates to the comparison of the cash-only condition to the one-to-one exchange condition. The latter produced greater behavioral deviations from theoretical predictions. However, we find that this effect is largely driven by a handful of subjects. The results suggest that the use of ECUs is not a hindrance for experimental practice, at least not in the context of an induced value SPA.

This paper investigates the effectiveness of peer punishment in non-linear social dilemmas and replicates Cason and Gangadharan (Exp Econ 18:66–88, 2015). The contribution of this replication is that cooperation is quantified across payoff equivalent, strategically symmetric public good and common pool resource experiments. Results suggest that the cooperation-inducing effect of peer punishment is statistically equivalent across conditions. Despite this increase in cooperation, earnings are significantly lower than in the absence of punishment. Institutional features which improve the effectiveness of peer punishment in linear public good experiments may, similarly, make self-governance possible in more complex social dilemmas.