Empirical studies show that agents often violate Bayes' rule in updating probability expectations. This paper deals with errors in combining observations with prior knowledge. Such errors neccessarily occur when agents have limited information-processing capacities. It is shown that rational...

Absentmindedness is a special case of imperfect recall which according to Piccione and Rubinstein (1997a) leads to time inconsistencies. Aumann, Hart and Perry (1997a) question their argument and show how dynamic inconsistencies can be resolved. The present paper explores this issue from a...

Hoheitliche Länderrisiken im hier beschriebenen Sinne sind bankbetriebliche Risiken, die im internationalen Kreditgeschaet durch die Zahlungsunfähigkeit oder -unwilligkeit der ausländischen Regierung entstehen. Länderrisiko-Analysen untersuchen folglich die Frage nach der Bonität eines...

In this paper we attempt to compare theoretically and experimentally three models of strategic information transmission. In particular we focus on the models by Crawford & Sobel (1982), Lai (2010) and Ehses-Friedrich (2011). These three models differ in the information that the receiver...

In the market where inattentive buyers can fail to notice some feasible choices, the key role of marketing is to make buyers aware of products. However, the eective marketing strategy is often subtle since marketing tactics can make buyers cautious. This paper provides a framework to analyze an...

Candidates compete to persuade a decision maker. The decision maker wishes to select a candidate who possesses a certain ability. Then, as a signaling, each candidate decides whether to perform a task whose performance statistically reflects the ability. However, since the cost of the...

In a public goods experiment, subjects can vary over a period of stochastic length two contribution levels: one is publicly observable (their cheap talk stated intention), while the other is not seen by the others (their secret intention). When the period suddenly stops, participants are...

Software is a good with very special economic characteristics. Taking a general definition of software as its starting-point, this article   systematically elaborates the central qualities of the commodity which have implications for its production and cost structure, the demand, the...

We investigate whether experimental participants follow their private information and contradict herds in situations where it is empirically optimal to do so. We consider two sequences of players, an observed and an unobserved sequence. Observed players sequentially predict which of two options...