In this paper, we show that moderate overconfidence in a contest can improve the agent's performance relative to an unbiased opponent and even lead to an advantage in absolute terms.

In this paper, we demonstrate that the existence of sequential equilibria may depend on the players holding beliefs which are tailored to the respective equilibrium but otherwise difficult to justify. We also discuss potential remedies.

This paper proposes an extension of the valuation equilibrium concept (Jehiel and Samet, 2007), which partly endogenises the underlying grouping of actions. The effect on equilibrium predictions is illustrated in a burning money game.

The data reported in this paper show that in an ultimatum mini-game rejection rates of low offers are significantly reduced if participation for responders is voluntary but costly. A possible explanation based on cognitive dissonance and loss aversion is offered.