Towards developing a theory of systematic biases about strategies, I analyse strategic implications of a particular bias: wishful thinking about the strategies. I identify a player as a wishful thinker if she hopes to enjoy the highest pay-off that is consistent with her information about the...

We show that in any game that is continuous at infinity, if a plan of action a_i is played by a type t_i in a Bayesian Nash equilibrium, then there are perturbations of t_i for which a_i is the only rationalizable plan and whose unique rationalizable belief regarding the play of the game is...

Towards developing a theory of systematic biases about strategies, I analyse strategic implications of a particular bias: wishful thinking about the strategies. I identify a player as a wishful thinker if she hopes to enjoy the highest pay-off that is consistent with her information about the...

We study the (perfect Bayesian) equilibrium of a sequential learning model over a general social network. Each individual receives a signal about the underlying state of the world, observes the past actions of a stochastically generated neighbourhood of individuals, and chooses one of two...

We study the (perfect Bayesian) equilibrium of a sequential learning model over a general social network. Each individual receives a signal about the underlying state of the world, observes the past actions of a stochastically generated neighbourhood of individuals, and chooses one of two...

This paper develops a model to analyse how skill premia differ over time and across countries, and uses this model to study the impact of international trade on wage inequality. Skill premia are determined by technology, the relative supply of skills, and trade. Technology is itself endogenous,...

We study the formation of a ruling coalition in non-democratic societies where institutions do not enable political commitments. Each individual is endowed with a level of political power. The ruling coalition consists of a subset of the individuals in the society and decides the distribution of...

We study the structure of non-linear taxes in a dynamic economy subject to political economy problems. In contrast to existing literature, taxes are set by a self-interested politician, without any commitment power, who is partly controlled by the citizens. We prove that: (1) a version of the...

For many problems in macroeconomics, development economics, labour economics, and international trade, whether technical change is biased towards particular factors is of central importance. This paper develops a simple framework to analyse the forces that shape these biases. There are two major...

Voters often dismantle constitutional checks and balances on the executive. If such checks and balances limit presidential abuses of power and rents, why do voters support their removal? We argue that by reducing politician rents, checks and balances also make it cheaper to bribe or influence...