The OLG model of Allais and Samuelson retains the methodological assumptions of agent optimization and market clearing from the Arrow-Debreu model, yet its equilibrium set has different properties: Pareto inefficiency, indeterminacy, positive valuation of money, and a golden rule equilibrium in...

Ambiguous assets are characterized as assets where objective and subjective probabilities of tomorrow's asset-returns are ill-defined or may not exist, e.g., bitcoin, volatility indices or any IPO. Investors may choose to diversify their portfolios of fiat money, stocks and bonds by investing...

Psychologists report that people make choices on the basis of "decision utilities" that routinely overestimate the "experienced utility" consequences of these choices. This paper argues that this dichotomy between decision and experienced utilities may be the solution to an evolutionary design...

Forming beliefs or expectations about others’ behavior is fundamental to strategy, as it co-determines the outcomes of interactions in and across organizations. In the game theoretic conception of rationality, agents reason iteratively about each other to form expectations about behavior....

A broad nontechnical coverage of many of the developments in game theory since the 1950s is given together with some comments on important open problems and where some of the developments may take place. The nearly 90 references given serve only as a minimal guide to the many thousands of books...

These notes are provided to describe many of the problems encountered concerning both structure and behavior in specifying what is meant by the solution to a game of strategy in matrix or strategic form. In the short term in particular, it is often reasonable for the individual to accept as...

These notes are provided to describe many of the problems encountered concerning both structure and behavior in specifying what is meant by the solution to a game of strategy in matrix or strategic form. In the short term in particular, it is often reasonable for the individual to accept as...

The use of equilibrium models in economics springs from the desire for parsimonious models of economic phenomena that take human reasoning into account. This approach has been the cornerstone of modern economic theory. We explain why this is so, extolling the virtues of equilibrium theory; then...

The quantal response equilibrium (QRE) notion of McKelvey and Palfrey (1995) has recently attracted considerable attention, due in part to its widely documented ability to rationalize observed behavior in games played by experimental subjects. However, even with strong a priori restrictions on...

What is the most statistically efficient way to do off-policy optimization with batch data from bandit feedback? For log data generated by contextual bandit algorithms, we consider offline estimators for the expected reward from a counterfactual policy. Our estimators are shown to have the...