This paper reconsiders the valuation equilibrium concept (Jehiel and Samet, 2007) and proposes an additional regularity condition concerning the playersʼ equilibrium strategies. The condition, which requires equilibrium strategies to induce the same local behaviour at all nodes with...

We study communication in a two-player coordination game with Pareto-ranked equilibria. Prior research demonstrates that efficient coordination is difficult without communication but obtains regularly with (mandatory) costless pre-play messages. In a laboratory experiment, we modify...

Stackelberg-like games show a situation where there is a clear advantage in moving first. In a thought provoking article, Bagwell [1995] shows that this advantage may not be robust against imperfect observations of the first move. We explore these ideas in the context of forward induction in...

Forward induction is the notion that players in a game assume, even when confronted with an unexpected event, that their opponents chose rationally. It is often motivated by invariance, namely, that the normal form game captures all strategically relevant information. To be consistent with this...

Restricting attention to economic environments, we study implementation under perturbed better-response dynamics (BRD). A social choice function (SCF) is implementable in stochastically stable strategies of perturbed BRD whenever the only outcome supported by the stochastically stable strategies...

We find that differences in the ability to devote cognitive resources to a strategic interaction imply differences in strategic behavior. In our experiment, we manipulated the availability of cognitive resources by applying a differential cognitive load. In cognitive load experiments, subjects...

We study the simultaneous direct revelation mechanism associated with each equal-income competitive social choice function in the allocation of objects and money among sincere and strategic agents. Strategic agents take advantage of sincere agents. They non-cooperatively coordinate on the...

We study a market model in which competing firms use costly marketing devices to influence the set of alternatives which consumers perceive as relevant. Consumers in our model are boundedly rational in the sense that they have an imperfect perception of what is relevant to their decision...

This paper studies a model of memory. The model takes into account that memory capacity is limited and imperfect. We study how agents with such memory limitations, who have very little information about their choice environment, play games. We introduce the notion of a Limited Memory Equilibrium...