In this paper we address the question as to why fund managers may trade on short-term information in a financial market that offers more profitable trading on long-term information. We consider a setting in which a fund manager`s ability is unknown and an investor uses performance observations...

In an economy with a fixed exchange rate regime that suffers a random adverse shock, we study the strategies of imperfectly and sequentially informed speculators that may trigger an endogenous devaluation before it occurs exogenously. The game played by the speculators has a unique symmetric...

Herding arises when an agents private information is swamped by public information in what Jackson and Kalai (1997) call a recurring game. The agent will fail to reveal his own information and will follow the actions of his predecessor and, as a result, useful information is lost, which might...

This paper examines experimental evidence relating to herd behaviour in situations when subjects can learn from each other, and can delay their decision. Subjects acted rationally, gaining from observational learning, despite penalties for delay. Cascades were ubiquitous and reverse-cascades...

The increasing number of antitrust cases that affect more than one country calls for more active cooperation between competition authorities.  I analyse the impact of exchange of confidential information between two authorities deciding on a multinational merger.  The authorities want to clear...

The epistemic program in game theory uses formal models of interactive reasoning to provide foundations for various game-theoretic solution concepts. Much of this work is based around the (static) Aumann structure model of interactive epistemology, but more recently dynamic models of interactive...

This paper offers a simple but rich framework to study communication subject to various constraints such as anonymity requirements, equal treatment of multiple agents, overconfidence of an expert, and garbling, by extending the cheap talk model of Crawford and Sobel (1982). Common to these...

We present a model in which a principal delegates the choice of project to an agent with different preferences. A project`s characteristics are verifiable once presented to the principal, but the principal does not know how many projects are available to the agent. The principal chooses the set...

Negotiations often take long a time even if a delay in the agreement is inefficient. One typical explanation is the existence of private information of at least one party; the time is then a discriminating instrument. The paper starts by pointing out that this result does not hold once the...

This paper considers the impact of reviewers on sales of products of quality unknown to consumers. Sales occur simultaneously after consideration by a reviewer with a known level of bias. Consumers observe the reviewer`s decision and a private signal. We find that: (a) with flexible prices and...