Substantial evidence has accumulated in recent empirical works on the limited ability of the Nash equilibrium to rationalize observed behavior in many classes of games played by experimental subjects. This realization has led to several attempts aimed at finding tractable equilibrium concepts...

This paper studies frequent monitoring in a simple infinitely repeated game with imperfect public information and discounting, where players observe the state of a continuous time Brownian process at moments in time of length Δ. It shows that efficient strongly symmetric perfect public...

We offer a shipper and a carrier the choice among three contracts in which to frame their relationship. Both can also take recourse in the transport spot market. Demand and price on the spot market are dependent exogenous stochastic processes. We model the outcome of this endogenous choice of...

Based on recent proposals on non cooperative dynamic games for analysing climate negotiation outcomes, such as Dutta and Radner (2004, 2006a), we generalize a specific framework for modelling differential games of this type and describe the set of conditions for the existence of closed loop...

This paper explores the role of memory in decision making in dynamic environments. We examine the inference problem faced by an agent with bounded memory who receives a sequence of signals from a hidden Markov model. We show that the optimal symmetric memory rule may be deterministic. This...

In this paper we propose an oligopolistic market model of pollution, where demand is not linear and firms are revenue maximizers. Additionally we assume that the rate of purification is very small tending to zero and that each firm accumulates a pollution share depending for example on firm’s...

Neuroeconomics focuses on brain imaging studies mapping neural responses to choice behavior. Economic theory is concerned with choice behavior but it is silent on neural activities. We present a game theoretic model in which players are endowed with an additional structure - a simple "nervous...

This paper studies the question of how well we understand segregation. The point of departure is Schelling’s spatial proximity model in one dimension. By introducing noise I show that segregation emerges as the long run prediction of neighborhood evolution, both when residents have...

This paper proposes an axiomatic approach to study two-player infinitely repeated games. A solution is a correspondence that maps the set of stage games into the set of infinite sequences of action profiles. We suggest that a solution should satisfy two simple axioms: individual rationality and...

This paper presents a strategic model of risk-taking behavior in contests. Formally, we analyze an n-player winner-take-all contest in which each player decides when to stop a privately observed Brownian Motion with drift. A player whose process reaches zero has to stop. The player with the...