It is not unusual in real-life that one has to choose among finitely many alternatives when the merit of each alternative is not perfectly known. This may be the case when an individual chooses school, doctor or pension plan, or when a firm chooses between alternative R&D projects. Instead of...

In a strategic game, a curb set [Basu and Weibull, Econ. Letters 36 (1991) 141] is a product set of pure strategies containing all best responses ro every possible belief restricted to this set. Prep sets [Voorneveld, Games Econ. Behav. 48 (2004) 403] relax this condition by only requiring the...

Behavioral economics provides several motivations for the common observation that agents appear somewhat unwilling to deviate from recent choices: salience, inertia, the formation of habits, the use of rules of thumb, or the locking in on certain modes of behavior due to learning by doing. This...

Most of the literature on monetary policy delegation assumes that the government can credibly commit to the delegation contract, an assumption criticized by McCallum. This paper provides foundations for the assumption that renegotiating a delegation contract can be costly by illustrating how...