We study the optimal dynamic torture scheme offered to an informed victim by a principal who cannot commit. We interpret the principal as the representative member of society (political leader, median voter etc.). We show that an arbitrarily long torture scheme is extremely costly to the...

This paper provides an explanation for why the sunk cost bias persists among firms in a competitive environment in which rich learning possibilities are allowed. We envision firms that experiment with cost methodologies that are consistent with real-world accounting practices, including ones...