We consider an auction environment with interdependent values. Each bidder can learn her payoff type through costly information acquisition. We contrast the socially optimal decision to acquire information with the equilibrium solution in which each agent has to privately bear the cost of...

We study how the predictive power of level-k models changes as we perturb the classical beauty contest setting along two dimensions: the strength of the coordination motive and the information symmetry. We use the Morris and Shin (2002) model as the unified framework for our study, and find that...

A committee decides by unanimity whether to accept the current alternative, or to continue costly search. Alternatives are described by several distinct attributes. Each committee member privately assesses the quality of one attribute (her \

We derive the empirical content of Nash equilibrium in 2×2 games of perfect information, including duopoly entry and coordination games. The derived bounds are nonparametric intersection bounds and are simple enough to lend themselves to existing inference methods. Implications of pure strategy...

This paper deals with the identification and estimation of dynamic games when players' beliefs about other players' actions are biased, i.e., beliefs do not represent the probability distribution of the actual behavior of other players conditional on the information available. First, we show...

Empirical models of strategic games are central to much analysis in marketing and economics. However, two challenges in applying these models to real world data are that such models often admit multiple equilibria and that they require strong informational assumptions. The first implies that the...

This paper defines an equilibrium concept for general preferences in two person normal form games. It collapses to Nash Equilibrium when preferences are represented by the expected utility model. An important characteristic of the equilibrium concept is that player i does not necessarily know...

We present a Bayesian framework based on the finite hierarchies of beliefs to study the decision problems in strategic form games. The model allows us to analyze the behavior of bounded rational players as well as that of fully rational players. We define the degree of ``boundedness'' by the...

When human capital skills differ in their ability to attract offers from alternative employers, a potential inefficiency in human capital investment arises. If a worker's output is observed by the labour market only when the worker invests in self-promoting activities, then high-ability workers...

Existing equilibrium concepts for games make use of the subjective expected utility model axiomatized by Savage (1954) to represent players' preferences. Accordingly, each player's beliefs about the strategies played by opponents are represented by a probability measure. Motivated by the...