We examine an Outside Option Game in which player I submits a claim for a share of a cake while player II simultaneously either makes a claim or chooses to opt out. If player II opts out, then she receives an opt-out payment while player I receives nothing. If player II opts in and if the claims...

This paper develops an approach to equilibrium selection in game theory based on studying the equilibriating process through which equilibrium is achieved. The differential equations derived from models of interactive learning typically have stationary states that are not isolated. Instead, Nash...

Prize Lecture to the memory of Alfred Nobel, December 9, 1994.

I was born in Budapest, Hungary, on May 29, 1920. The high school my parents chose for me was the Lutheran Gymnasium in Budapest, one of the best schools in Hungary, with such distinguished alumni as John von Neumann and Eugene Wigner. I was very happy in this school and received a superb...