Essays in microeconomics

This dissertation consists of three essays in microeconomic theory. The first two concern methods of modeling bounded rationality and unawareness, while the third applies a model of jointly determined reputation to incentive problems in the market for expert advice. Increases in awareness information can be associated with dramatic increases in certainty or uncertainty. The first chapter of this dissertation seeks to unify both phenomena under a single framework of epistemic negligence, or errors in an agent's epistemic relation to tautological beliefs. It is shown that impossible possible worlds (excess uncertainty) result from a failure to believe all tautologies, while possible impossible worlds (excess certainty) result from belief in 'tautologies' which may in fact be false. A propositional model is employed throughout the paper, and several of its properties are compared to the standard state-space model, which implicitly assumes that epistemic negligence does not exist. Chapter 2 continues to work with a propositional model of knowledge, focusing more closely on agents who fail to take into account all relevant dimensions of uncertainty.