» ESI Research Agenda

Below is a list of the current research projects in which ESI faculty members are involved:



Accounting Statements and Trust Does the presence of traditional accounting statements help or hinder the generation of wealth in firm?
Accounting Uniformity Does non-uniformity of accounting rules hinder or help firms generate wealth due to strategic uncertainty?
Accounting Information Granularity How does the granularity of accounting information effect coordination?
Ageism and Cooperation Do people make age-based stereotypes and discriminate based on age? How does ageism affect cooperation?

Ambiguity in Asset Markets 

Ambiguity commonly occurs, but it is not clear how important it is in decision-making across different economic settings. How does ambiguity affect bubble formation in asset markets and how do market participants react to its presence?

Antitrust Waiver for Healthcare Group Purchasing Why does the federal government allow any large seller of healthcare products, attempting to contract with a hospital group purchasing organization, to offer an exclusivity bribe intended to eliminate competition?
Apology How and when does apology work to rebuild damaged trust?

Auction Discovery

What characteristics underlie the spontaneous emergence of auctions in the laboratory exchange environment?

Beliefs and Honesty Are people electing to deceive others in one role trusting when listening to others in another role?

Bubble Formation

What cause market bubbles and speculation?  When asset life, gains from trade, and levels of dividend uncertainty are manipulated?  

Capacity Investments In a competitive dynamic environment where the demand for a particular good or service is increasing, what is the optimal strategy for a firm concerned with when to invest in additional capacity to supply?

Combo Auctions

When a seller conducts an online auction for multiple items of related value (e.g. computers and printers) at each step of the auction which item’s price does he raise and by how much?

Contest Theory

How do information, prize structure, self-selection, and externalities among players affect the optimal and observed behavior in rank-order contests.

Cooperation and Punishment Does high-powered punishment lead to more cooperation? Do men and women differ in their use of punishment? What is the relationship between cognitive ability and punishment?


How do institutions, such as punishment and commitment, affect a group’s ability to coordinate on cooperation?

Costly Coordination and Commitment

Can a costly coordination problem help solve the commitment problems inherent in conflict resolution?

Cultural Accumulation

When does the accumulation of knowledge and skill in language and observation result in real progress? Are there conditions under which it predictably fails?

Disclosure in One-Shot Settings

What is the role of disclosing conflicts of interests and transactional history in settings where information providers and users meet only once?

Disclosure and Contracts

How can disclosure of information in an investment setting be substituted for contracting?

Drug Testing

How can we devise ways in which responsible drug testing can be done more quickly and without a federal (FDA) monopoly?

Efficiency and Drift in Markets

Can claims about the existence of observed market efficiency and drift be understood from laboratory experiments?

Electric Power

Does the government need to construct special incentives to induce the private sector to build new generators?

Emotions and Trust Can we predict the experience of emotions following trust-based interaction?
Endogenous Rules Do endogenously selected rules that decrease investor risk increase the amount of investment in trust-based interaction?
Exogenous Rules Do exogenously imposed rules that decrease investor risk increase the amount of investment in trust-based interaction?
Financial Market Regulation How will changing the rules of the game in financial markets affect risk decisions?
Firm Reputation Which strategies should firms adopt to create and maintain reputation?

Futures Markets 

Does the existence of futures markets enhance market competition? How is the degree of competition affected by the fact that the number of futures periods is fixed or endogenously determined?

Game of Siege

How do people behave in a series of contests where the defender must repeatedly fend off an attacker?

Group Reputation

Will individuals punish their group members in order to uphold their group's reputation in a trust game setting?

Health Insurance

Should every small business be forced to buy health insurance for all of its employees and to what extent?

How Much is Too Much Talk?

Is communication (cheap talk) helpful for firms in achieving collusive outcomes? What forms of communication result in collusive outcomes?

Humans, Chimpanzees, Capuchin
Monkeys & Rhesus Macaques

Do humans and nonhuman primates share basic economic decision making strategies that account for partner identity and potential rewards for cooperation and defection?

Individual Health How well can individuals with different income streams dynamically manage their investments in maintaining health in order to maximize their life enjoyment?

Intrinsic Value versus Money Illusion

Under what conditions do economic agents see through distortions of fundamental values?

List Pricing and Discounts 

A common market practice is to list a price that can later be discounted. Do such practices enhance competition or lead to collusive outcomes?

Luck or Effort

How does the introduction of random events affect gift-exchange contracts in a principal-agent setting?

Manipulation in Information Markets

Can information markets be manipulated when there are participants who have sufficient cash and only want to influence forecasts and do not care about capital gains.

Mark to Market 

Can aspects of the current financial collapse be explained through the use of mark to market accounting?

Market Volatility  

How will market price respond to positive shocks (good news) and negative shocks (bad news)?

Model of Choice

Can the classic model of economic choice be improved by incorporating how the brain processes sensory signals?

Monitoring Coordination 

How does the ability to monitor group members affect a group’s ability to coordinate their actions?

Moral Coercion

Does the existence of moral coercion affect outcomes in economic interactions? Are we more likely to take others preferences into consideration under such circumstances?

Navy Personnel

What is the most efficient way to match sailors to jobs as they develop skills and march through their career development in the Navy?

Organ Markets

Can allowing a market for organs increase the number of organs available for transplant?

Participative Management What is the impact of involving employees in organizational decision made on firm performance?

Passive versus Active Investing  

What proportion of investment managers need to be actively investing time and effort in identifying under and overvalued assets in order that market prices become reliable indicators for passive investors?

Performance Compensation Is the market skeptical of sorting and/or incentive effects contained in executive compensation?

Personal versus Anonymous Exchange

What precautions underlie a society’s (business’s) movement from local personal exchange to anonymous exchange?

Pollution Permits

When the government sells pollution permits to limit the amount of pollution emitted should firms be allowed to bank or borrow those permits?

Power of Words

How do releasing public messages with different levels of reliability affect trading prices and volumes in the stock market?

Predictable Emotions

Can we predict emotional response in cooperative tasks? Does demonstrable facial emotions predict future cooperation? 

Predictably Random

The random element in economic behavior has important consequences. Can we give a good account of the shape of that randomness too?   

Predicting Attacks

Can prediction markets help decrease the likelihood of successful attack?

Price Increasing Competition 

In what market situations could more competition lead to higher prices?

Property Rights

Did the long, dead philosophers of 18th century Scotland get it right when they argued that property is an invention of man and the foundation of a system that creates wealth?

Recordkeeping and Reciprocity

Is recordkeeping a natural evolutionary outcome of an increased need to ensure trust in exchange?

Revenue-Neutral Assignment Auctions Can efficient assignments be achieved through the use of auction mechanisms with artificial currencies and/or cash transfers?
Risk and Exchange Are people pre-disposed to evaluate gains from exchange and respond to unsynchronized variance in resource availability through exchange?

Rule of Law

How did the rule of law evolve to establish peaceful coexistence and prosperity?

Sexist Stereotypes and Behavior Do sexist stereotypes and behavior exist in market settings?  Can the market discipline erroneous beliefs and costly behavior?
Self-control, Workplace Distraction and Production Efficiency Does the availability of a tempting distraction, like the internet, change the production efficiency of workers?

Signaling Trust with Investment

Does forcing investor to make all-or-nothing investments rather than incremental investments generate more wealth and trustworthiness?

Strategic Attack and Defense of Networks

How do network structure, player objectives, and the technology of conflict affect the optimal allocation of resources in the attack and defense of (transportation, terrorist, computer, electric, or gas) networks?


Does the management of a firm need to constantly supervise its employees or can it induce high levels of performance with other means?

Too Many Firms

Does the most inefficient firm always exit a market when the demand for a product can only support fewer suppliers?

Transactional Transparency In settings requiring multiple levers of trust, does transparency promote trust and welfare?

Trust, Apology, and Confession

What is the strategic rationale behind voluntarily informing others that you have caused personal offense?

Trust and the Economic Crisis

Can misplaced trust cascade into a financial crisis?

Tug of War 

Do people exert more or less effort in contests where one has to win by two?  

Used Cars

What market conditions are more or less conducive for sellers to pawn off lemons on trusting buyers?

Venture Capital 

Given that the matching process of Venture Capitalists (VC) with Entrepreneurs seems to be influenced by past success, is there a persistent cascade resulting in a mismatch of VC and projects?

Virtual Organizations What is the optimal supervision strategy of firms? What is the role of organizational hierarchies? Are monetary incentives effective? Do non-monetary goals help motivate employees? Should firms restrict Internet usage? How do personality traits and cognitive abilities affect a worker’s organizational performance?  Is firing effective? Do employees shirk after being granted tenure?  If employees were given the chance to design their own firm, how would it look like?