This paper reexamines the paradoxical aspect of the electronic mail game (Rubinstein, 1989). The electronic mail game is a coordination game with payoff uncertainty. At a Bayesian Nash equilibrium of the game, players cannot achieve the desired coordination of actions even when a high order of...

We examine multistage information transmission with voluntary monetary transfer in the framework of Crawford and Sobel (1982). In our model, an informed expert can send messages to an uninformed decision maker more than once, and the uninformed decision maker can pay money to the informed expert...

We experimentally study the effect of the mode of digital communication on the emergence of trust in a principal-agent relationship. We consider three modes of communication that differ in the capacity to transmit nonverbal content: plain text, audio, and video. Communication is pre-play,...

Multiple Cournot oligopoly experiments found more collusive behavior in markets with fewer firms (Huck et al., 2004; Horstmann et al., 2018). This result could be explained by a higher difficulty to coordinate or by lower incentives to collude in markets with more firms. We show that the Quantal...

We analyze a cheap talk model in which an informed sender and an uninformed receiver engage in finite-period communication before the receiver chooses a project. During the communication phase, in each period, the sender sends a cheap talk message and the receiver voluntarily pays money for the...

Common sense is a dynamic concept and it is natural that our (statistical) common sense lags behind the development of statistical science. What is not so easy to understand is why common sense lags behind as much as it does. We conduct a survey among Japanese students and try to understand why...

Extending the power-to-take game, we explore the impact of two forces that may shape retaliation. In our 2x2 design, i) in addition to taking, the proposers can give part of their endowment to the responders, and ii) in addition to destroying their own endowment in retaliation, the responders...

This paper studies the optimal disclosure of information about an agent's talent when it consists of two components. The agent observes the first component of his talent as his private type, and reports it to a principal to perform a task which reveals the second component of his talent. Based...

This study constructs a simplest model to examine anticompetitive exclusive contracts that prevent a downstream buyer from buying input from a new up-stream supplier. Incorporating Nash bargaining into the standard one-buyer-one-supplier framework in the Chicago School critique, we show a...

Although outsourcing input production has long been considered as an important approach to help downstream manufacturers enhance structural efficiency, we provide a theoretical explanation for why outsourcing may negatively affect downstream firms' profitability. We consider a duopoly model...