A body of empirical work documents that most people believe they are above average in a variety of skills and abilities. This paper argues that such evidence does not necessarily imply that people process information in an irrational way. I build a model in which people can learn about their...

Subgame perfect equilibrium predictions of ultimatum bargaining games correspond poorly to the data gathered from human subjects in laboratory environments. Attempts to reconcile this discrepancy have taken one or more of three routes: (1) expanding the agent foresight and scope of decisions,...