We consider a matching model of the labour market where workers that differ in quality send signals to firms that are also vertically differentiated. Signals allow assortative matching in which the highest quality workers send the highest signals and are hired by the best firms. Matching is...

We study the incentive to invest to improve marriage prospects, in a frictionless marriage market with non-transferable utility. Stochastic returns to investment eliminate the multiplicity of equilibria in models with deterministic returns, and a unique equilibrium exists under reasonable...

We investigate games whose Nash equilibria are mixed and are unstable under fictitious play-like learning processes. We show that when players learn using weighted stochastic fictitious play and so place greater weight on more recent experience that the time average of play often converges in...

Recent stochastic evolutionary models have shown that the most likely convention when the probability of a mutation is sufficiently small is coordination on the risk-dominant strategy rather than the payoff-dominant one. This paper looks at the consequences of player movement between locations...

We analyze experimentally two sender-receiver games with conflictive preferences. In the first game, the sender can choose to tell the truth, to lie, or to remain silent. The latter strategy is costly and similar to an outside option. If sent, the receiver can either trust or distrust the...

A recent experimental study of Cai and Wang (2003) on strategic information transmission games reveals that subjects tend to transmit more information than predicted by the standard equilibrium analysis. To evidence that this overcommunication phenomenon can be explained in some situations in...

We report experiments designed to test the theoretical possibility, first discovered by Shapley (1964), that in some games learning fails to converge to any equilibrium, either in terms of marginal frequencies or of average play. Subjects played repeatedly in fixed pairings one of two 3 × 3...

This paper adds to the growing literature on stochastic evolutionary models. These models can be characterised by small probability shocks or mutations which perturb the system away from its deterministic evolution, allowing it to move between equilibria over a long period of time. Much of the...

Players repeatedly face a coordination problem in a dynamic global game. By choosing a risky action (invest) instead of waiting, players risk instantaneous losses as well as a loss of payoffs from future stages, in which they cannot participate if they go bankrupt. Thus, the total strategic risk...