What We Study

An explanation of what the Smeal College of Business Laboratory for Economics Management and Auctions (LEMA) focuses on in its experiments.

Those involved with LEMA are doing research in three main areas.

Bargaining and dispute resolution

There are two main goals to this research.

  • First, to provide insight into why some negotiations end in dispute while others are successful.
  • Second, to investigate methods for resolving disputes, such as arbitration, with the ultimate goal of producing better dispute resolution methods.

A related stream of research looks at basic issues concerning human motivation in situations such as bargaining and learning in repeated bargaining encounters. Previous work has been published in leading economic and game theory journals including the American Economic Review and Games and Economic Behavior . The contribution of this work was recently recognized with a National Science Foundation grant.


The goals of this research are to provide insights into bidder behavior in auctions and to act as a test-bed for new auction designs. Bidder behavior often varies significantly from predicted theory. One area of research that we are actively pursuing is the ability of bidders to collude in various auctions. An experimental lab also allows us to test designs of new auctions and market institutions before they are implemented. This research includes such questions as the inclusion of combinatorial bidding. Our research can provide significant insights into the desirable features of auctions to be used in growing the internet auction marketplace. In one study, we are investigating the use of bidding in order to solve a scheduling problem within an organization.

Decision Support and institutional implementation

Decision Support Systems (DSSs) consist of three components:

  • model
  • data
  • user interface

The laboratory methods are powerful tools for improving these three components. In one study, we use laboratory experiments to investigate inventory management and to better understand how user interface components of a DSS impact the quality of inventory management decisions and affect user learning. Another stream of research uses the laboratory to compare different mechanism designs. Some of this work has been published in the Journal of Economic Theory .

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