In games with incomplete information, conventional hierarchies of belief are incomplete as descriptions of the players' information for the purposes of determining a player's behavior. We show by example that this is true for a variety of solution concepts. We then investigate what is essential...

Human utility embodies a number of seemingly irrational aspects. The leading example in this paper is that utilities often depend on the presence of salient unchosen alternatives. Our focus is to understand <i>why</i> an evolutionary process might optimally lead to such seemingly dysfunctional features...

A refinement of the set of Nash equilibria that satisfies two assumptions is shown to select a subset that is stable in the sense defined by Kohlberg and Mertens. One assumption requires that a selected set is invariant to adjoining redundant strategies and the other is a strong version of...

We define and analyze a "strategic topology'' on types in the Harsanyi-Mertens-Zamir universal type space, where two types are close if their strategic behavior is similar in all strategic situations. For a fixed game and action define the distance between a pair of types as the difference...

Some private-monitoring games, that is, games with no public histories, can have histories that are almost public. These games are the natural result of perturbing public monitoring games towards private monitoring. We explore the extent to which it is possible to coordinate continuation play in...

A learning rule is uncoupled if a player does not condition his strategy on the opponent's payoffs. It is radically uncoupled if a player does not condition his strategy on the opponent's actions or payoffs. We demonstrate a family of simple, radically uncoupled learning rules whose...

This paper proposes the solution concept of interim correlated rationalizability, and shows that all types that have the same hierarchies of beliefs have the same set of interim-correlated-rationalizable outcomes. This solution concept characterizes common certainty of rationality in the...

This paper shows how political parties differentiate to reduce electoral competition. Two parties choose platforms in a unidimensional policy space, and then candidates from these parties compete for votes in a continuum of constituencies with different median voters. Departing from their...

We introduce a new solution concept for games in extensive form with perfect information, valuation equilibrium, which is based on a partition of each player's moves into similarity classes. A valuation of a player is a real-valued function on the set of her similarity classes. In this...

We analyze the extent to which efficient trade is possible in an ongoing relationship between impatient agents with hidden valuations (i.i.d. over time), restricting attention to equilibria that satisfy ex post incentive constraints in each period. With ex ante budget balance, efficient trade...