This paper examines a Markovian model for the optimal irreversible investment problem of a firm aiming at minimizing total expected costs of production. We model market uncertainty and the cost of investment per unit of production capacity as two independent one-dimensional regular diffusions,...

In this note I give a full characterization of all deterministic direct mechanisms in the public good provision problem with independent private values that are dominant strategy incentive compatible, ex-post individually rational, and ex-post budget balanced.

The paper generalizes Kuhn's Theorem to extensive form games in which players condition their play on the realization of ambiguous randomization devices and use a maxmin decision rule to evaluate the consequences of their decisions. It proves that ambiguous behavioral and ambiguous mixed...

We provide an axiomatic approach to a belief formation process in an informational environment characterized by limited, heterogenous and differently precise information. For a list of previously observed cases an agent needs to express her belief by assigning probabilities to possible outcomes....

One of the best known ideas in the study of bounded rationality is Simon's satisficing; yet we still lack a standard formalization of the heuristic and its implications. We propose a mathematical model of satisficing which explicitly represents agents' aspirations and which explores both...