Data on individual labor earnings are reported from two experimental economies where the primary factors responsible for income differences were differences in tastes for market income versus leisure and differences in abilities working manual job tasks. Measured income dispersion under these conditions was strikingly similar to that in the United states and other market economies, indicating that these two factors alone are sufficient to generate such income differences. Further, in tests of the functional form of the distributions of income, the hypothesis of lognormality fit better than the hypothesis of normality, just as it does in national data.

This paper reports an experiment comparing three stag hunt games that have the same best-response correspondence and the same expected payoff from the mixed equilibrium, but differ in the incentive to play a best response rather than an inferior response.In each game, risk dominance conflicts with payoff dominance and selects an inefficient pure strategy equilibrium.We find statistically and economically significant evidence that the differences in the incentive to optimize help explain observed behavior.

Selection dynamics are often used to distinguish stable and unstable equilibria. This is particularly useful when multiple equilibria prevent a priori comparative static analysis. This paper reports an experiment designed to compare the accuracy of the myopic best-response dynamic and an inertial selection dynamic. The inertial selection dynamic makes more accurate predictions about the observed mutual best-response outcomes.

Selection dynamics are often used to distinguish stable and unstable equilibria. This is particularly useful when multiple equilibria prevent a priori comparative static analysis. This paper reports an experiment designed to compare the accuracy of the myopic best-response dynamic and an inertial selection dynamic. The inertial selection dynamic makes more accurate predictions about the observed mutual best-response outcomes.