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This article uses experimental data to test for a complementary relationship between formal regulations imposed on a community to conserve a local natural resource and nonbinding verbal agreements to do the same. Our experiments were conducted in the field in three regions of Colombia. Our results suggest that the hypothesis of a complementary relationship between communication and external regulation is supported for some combinations of regions and regulations but cannot be supported in general. We conclude that the determination of whether formal regulations and informal communication are complementary must be made on a community-by-community basis. ( JEL C93, H41, Q20, Q28) [ABSTRACT FROM AUTHOR]

We study the conflict that can occur in a merger due to firms' use of specialized language, or “code,” and whether participants accurately forecast this difficulty. After creating a shared code to describe different pictures accurately, subjects bid for extra payments to join a merged group. The two lowest bidders are placed in the merged group. Values inferred from two different bidding procedures indicate fairly accurate general appraisals of the cost of the merger, but the values of those subjects who bid the least, and choose to join the merged group, are too optimistic, reflecting an “organizational winner's curse.” ( JEL D23, D83, G34, L21, M14) [ABSTRACT FROM AUTHOR]