We consider a model in which educational investments entail productivity gains, signaling power, and social returns. The latter depend on the relative position the agent occupies in one of three di¤erent dimensions: (i) his innate characteristics, (ii) his level of schooling, and (iii) his...

We show how the common occurrence of seeing exceedingly high claims in disputes and litigations about how to share a limited resource can be rationalized by a model in which claimants display reference dependent preferences, expect the judge to use a generalized social welfare function, and...

We present an endogenous timing game of action commitment in which play- ers can steal from each other parts of a homogeneous and perfectly divisible pie and the expected effectiveness of a player?s theft is proportional to the amount he currently owns. We show how the incentives to preempt or...

A price reveal auction is a Dutch auction in which the current price of the item on sale remains hidden. Bidders can privately observe the price only by paying a fee, and every time a bidder does so, the price falls by a predetermined amount. We show that in equilibrium, no rational bidder...

A lowest unique bid auction allocates a good to the agent who submits the lowest bid that is not matched by any other bid. This peculiar auction format is becoming increasingly popular over the Internet. We show that when all the bidders are rational such a selling mechanism can lead to positive...

This note introduces and discusses the concept of pu-dominance in the context of finite games in normal form. It then presents the pu-dominance criterion for equi- librium selection. The pu-dominance criterion is inspired by and closely related to the p-dominance criterion (Morris et al., 1995)...

We introduce and examine a game in which players can steal parts of a homo- geneous and perfectly divisible pie from each other. The expected effectiveness of a player's theft is proportional to the share of the pie he currently owns. We show how the incentives to preempt or to follow the rivals...

This paper formalizes the pervasive phenomenon of the self-serving bias within the framework of reference dependent preferences. This formulation allows the stating of a simple rule to assess the existence of the bias at the aggregate level as well as a procedure that identifies the minimum...

We study a rent-seeking contest in which players have heterogeneous and private valuations. In addition to their own type, agents only know that all valuations are drawn from an unspeciÂ…ed distribution, of which they only know the mean. We obtain a closed-form solution for agentsÂ’...