A decision maker observes the evolving state of the world while constantly trying to predict the next state given the history of past states. The ability to benefit from such predictions depends not only on the ability to recognize patters in history, but also on the range of actions available...

When fairly homogeneous taxpayers are affected by common income shocks, a tax agency’s optimal auditing strategy consists of auditing a low-income declarer with a probability that (weakly) increases with the other taxpayers’ declarations. Such policy generates a coordination game among...

I present a model of social learning over an exogenous, directed network that may be readily nested within broader macroeconomic models with dispersed information and combines the attributes that agents (a) act repeatedly and simultaneously; (b) are Bayes-rational; and (c) have strategic...

The paper presents a new meta data set covering 13 experiments on the social learning games by Bikhchandani, Hirshleifer, and Welch (1992). The large amount of data makes it possible to estimate the empirically optimal action for a large variety of decision situations and ask about the economic...

In this paper, we build and structurally estimate a complete information bargaining model of collective negotiation for Spain. For large firms, the assumption of complete information seems a sensible one, and it matches the collective bargaining environment better than the one provided by...

We study the evolution of prices in a symmetric duopoly where firms are uncertain about the degree of product differentiation. Customers sometimes perceive the products as close substitutes, sometimes as highly differentiated. Firms learn about their competitive environment from the quantities...

We consider the impact of history on the survival of a monopolist selling single units in discrete time periods, whose quality is learned slowly. If the seller learns her own quality at the same rate as customers, a sufficiently bad run of luck could induce her to stop selling. When she knows...

This paper studies a dynamic model of a financial market with N strategic agents. Agents receive random stock endowments at each period and trade to share dividend risk. Endowments are the only private information in the model. We find that agents trade slowly even when the time between trades...

This paper compares the leader and follower payoff in a duopoly game, as they arise in sequential play, with the Nash payoff in simultaneous play. If the game is symmetric, has a unique symmetric Nash equilibrium, and players' payoffs are monotonic in the opponent's choice along their own best...

Speculative Attacks can be modeled as a coordination game with multiple equilibria if the state of the economy is common knowledge. With private information there is a unique equilibrium. This raises the question whether public information may be destabilizing by allowing for self-fulfilling...