The paper presents a theoretical and empirical analysis of a donor’s choice of the composition of unrestricted and in-kind/restricted transfers to a recipient and how this composition is adjusted in response to changes in the moral hazard behavior of the recipient. In-kind or restricted...

We consider a differential game of a conflict between two factions who both have a desire to exact revenge. We show that, in contrast to conventional wisdom, the desire for revenge need not lead to escalation of conflicts. Surprisingly, in the open-loop equilibrium, the weaker faction exerts a...

Consider a world with two people, 1 and 2, where person 1 (the proposer) may offer to help person 2 (the responder). The proposer may be altruistic towards the responder either out of a genuine desire to make her happy or out of guilt. The responder derives disutility from apparent acts of...

There are two factions in a conflict. A third-party may choose to intervene by supporting one of the factions. We consider a third-party who maximizes a weighted sum of the welfare of the warring factions and the non-combatant population. In the case of a nonmilitary intervention, we obtain the...

Using the popular FOX TV reality show, American Idol, this paper makes a contribution to the literatures on the design of contests, the allocation of voting rights in committees, and the desirability of low-powered incentive schemes. In American Idol, the judges, who are presumably experts in...

People feel a sense of gratitude when they receive gifts, transfers, or assistance. Based on psychological literature, I argue that gratitude is different from standard notions of reciprocity. Indeed, people derive utility from in-kind transfers (i.e., feel grateful), even if they do not like or...

We examine equilibrium selection in a two-stage sequential elimination contest in which contestants compete for a single prize. This game has a continuum of equilibria, only one of which satisfies the Coalition-Proof Nash Equilibrium (CPNE) refinement. That equilibrium involves “burning out”...

In psychological games, higher-order beliefs, emotions, and motives - in addition to actions - affect players’ payoffs. Suppose you are tolerated as opposed to being genuinely accepted by your peers and “friends”. In particular, suppose you are invited to a party, movie, dinner, etc not...

I consider a two-stage (dynamic) elimination contest with uninformed and informed players. Informed players can signal their type to future uninformed opponents through their efforts in the first stage. Uninformed players might make wrong inferences. It is in this sense that they are boundedly...

I present a two-player nested contest which is a convex combination of two widely studied contests: the Tullock (lottery) contest and the all-pay auction. A Nash equilibrium exists for all parameters of the nested contest. If and only if the contest is sufficiently asymmetric, then there is an...