Within the context of strategic interaction, we provide a unified framework for analyzing information, knowledge, and the "stable" pattern of behavior. We first study the related interactive epistemology and, in particular, show an equivalence theorem between a strictly dominated strategy and a...

This paper considers the "negotiation game" (Busch and Wen, 1995) which combines the features of two-person alternating offers bargaining and repeated games. Despite the forces of bargaining, the negotiation game in general admits a large number of equilibria some of which involve delay in...

This paper evaluates performance of human subjects and instances of a bidding model that interact in continuous-time double auction experiments. Asks submitted by instances of the seller model ("automated sellers") maximize the seller's expected surplus relative to a heuristic belief function,...

This paper presents a participation game experiment to study the impact of uncertainty and costly political participation on the incidence of reform. Fernandez and Rodrik (1991) show that uncertainty about who will ultimately gain or lose as a result of a reform can prevent its adoption. We...

In many markets consumer biases do not affect prices, since competition forces firms to price their products close to marginal cost; competition protects the consumer. We show that noisy consumer product evaluations undermine the force of competition, enabling firms to charge high mark-ups in...

We report experimental results using a multi-task for simple two-player, two- stage extensive-form games. It is suggested that by creating the perception of a "level playing field" the participants are relieved of responsibility for others since competition on a level playing field is presumed...

In this paper we consider a model where some consumers act in a boundedly rational way by treating money as non-fungible (Kahneman and Tversky (1979) and (1984), Thaler (1987) and (1990). The budget is broken up into different expenditure groups (cookie-jars). Given the amount of resources...

This paper considers the "negotiation game" (Busch and Wen, 1995) which combines the features of two-person alternating offers bargaining and repeated games. Despite the forces of bargaining, the negotiation game in general admits a large number of equilibria some of which involve delay in...

We solve in closed form the optimal consumption / portfolio choice problem for the class of isoelastic utility functions under incomplete information about the mean return of the stock price. Our approach consists in converting the original investor's problem into an equivalent program where the...