We build a dynamic global game in which players repeatedly face a similar coordination problem. By choosing a risky action (invest) instead of an outside option (not invest), players risk instantaneous losses as well as payoffs from future stages, in which they cannot participate if they go...

We provide evolutionary game-theoretic microfoundations to a dynamic complete nominal adjustment in response to a monetary shock. To this end, we develop an approach based on a new analytical notion to which we refer as boundedly rational inattentiveness. We investigate the behavior of the price...

We extend Aumann's theorem [Aumann 1987], deriving correlated equilibria as a consequence of common priors and common knowledge of rationality, by explicitly allowing for non-rational behavior. We replace the assumption of common knowledge of rationality with a substantially weaker one, joint...

By identifying types whose low-order beliefs up to level ℓ_i about the state of nature coincide, we obtain quotient type spaces that are typically smaller than the original ones, preserve basic topological properties, and allow standard equilibrium analysis even under bounded reasoning. Our...

We study experimentally the nature of dominance violations in three minimalist dominancesolvable guessing games. We examine how subjects’ reported reasoning processes translate into their stated choices and beliefs about others’ choices, and how both reasoning processes and choices relate to...

We study coordination failures in many simultaneously occurring coordination problems called projects. Players encounter one of these projects, but have an outside option to search for another of the projects. Drawing on the global games approach, we show that such a mobile game has a unique...

We consider a class of two-player quadratic games under incomplete information to study the relation between exogenous coordination motives and strategic interactions in information acquisition. The players make decisions in two stages. They decide about information acquisition in the first...

This paper investigates empirically the relationship between inflation, inflation volatility and output growth in the case of México using monthly data over the period 1993-2011. Specifically a bivariate GARCH-M model is estimated to test the hypotheses that inflation rates are directly related...

This paper develops a model of costly information acquisition by agents who are connected through a network. For a exogenously given network, each agent decides first on information acquisition from his neighbors and then, after processing the information acquired, takes an action. Each agent is...

This paper investigates empirically the relationship between inflation, inflation volatility and output growth in the case of México using monthly data over the period 1993-2011. Specifically a bivariate GARCH-M model is estimated to test the hypotheses that inflation rates are directly related...