The paper examines the theoretical foundations of the hold-up problem. At a first stage, one agent decides on the level of a relationship-specific investment. There is no contract, so at a second stage the agent must bargain with a trading partner over the surplus that the investment has...

This is a dictionary entry forthcoming in Peter Newman, ed. The New Palgrave Dictionary of Economics and the Law, London: Macmillan, 1998.

In the models of Young (1993a, b), boundedly rational individuals are recurrently matched to play a game, and they play myopic best replies to the recent history of play. It could therefore be an advantage to instead play a myiopic best reply to the myopic best reply, something boundedly...

We discuss attempts to justify conditional cooperation in the Prisoners’ Dilemma based on the idea of identifying an opponent’s strategy. We note that the concept of such complete transparency of decision procedures is logically inconsistent. Furthermore, we observe that attempts to justify...

Recognizing that individualism, or weak family ties, may be favorable to economic development, we ask how family ties interact with climate to determine individual behavior and whether there is reason to believe that the strength of family ties evolves differently in different climates. For this...

We study the long-run behavior of an economy where agents who are heterogeneous with respect to risk attitudes can either earn a certain income or enter a risky rent seeking contest. In contrast with standard evolutionary game theory, we distinguish between utility and material payoffs, and...