We report experiments designed to test between Nash equilibria that are stable and unstable under learning. The 'TASP' (Time Average of the Shapley Polygon) gives a precise prediction about what happens when there is divergence from equilibrium under fictitious play like learning processes. We...

The equilibrium outcome of a strategic interaction between two or more people may depend on the weight they place on each other's payoff. A positive, negative or zero weight represents altruism, spite or complete selfishness, respectively. Paradoxically, the real, material payoff in equilibrium...

We show that for many classes of symmetric two-player games, the simple decision rule imitate-the-best can hardly be beaten by any other decision rule. We provide necessary and sufficient conditions for imitation to be unbeatable and show that it can only be beaten by much in games that are of...

We show that local potential maximizer ([15]) with constant weights is stochastically stable in the log-linear dynamics provided that the payoff function or the associated local potential function is supermodular. We illustrate and discuss, through a series of examples, the use of our main...

Do mandatory spending programs such as Medicare improve efficiency? We analyze a model with two parties allocating a fixed budget to a public good and private transfers each period over an infinite horizon. We compare two institutions that differ in whether public good spending is discretionary...

Do mandatory spending programs such as Medicare improve efficiency? We analyze a model with two parties allocating a fixed budget to a public good and private transfers each period over an infinite horizon. We compare two institutions that differ in whether public good spending is discretionary...

Regret minimizing strategies for repeated games have been receiving increasing attention in the literature. These are simple adaptive behavior rules that exhibit nice convergence properties. If all players follow regret minimizing strategies, their average joint play converges to the set of...

Players in a congestion game may differ from one another in their intrinsic preferences (e.g., the benefit they get from using a specific resource), their contribution to congestion, or both. In many cases of interest, intrinsic preferences and the negative effect of congestion are (additively...

Models of choice where agents see others as less sophisticated than themselves have significantly different, sometimes more accurate, predictions in games than does Nash equilibrium. When it comes to mechanism design, however, they turn out to have surprisingly similar implications. This paper...

This paper studies the incentives for interim voluntary disclosure of verifiable information in probabilistic all-pay contests. Provided that the contest is uniformly asymmetric, full revelation is the unique perfect Bayesian equilibrium outcome. This is so because the weakest type of the...