Brenner and Vriend (2006) argued (experimentally and theoretically) that one should not expect proposers in ultimatum games to learn to converge to the subgame perfect Nash equilibrium offer, as finding the optimal offer is a hard learning problem for (boundedly-rational) proposers. In this...

The use of coarse categories is prevalent in various situations and has been linked to biased economic outcomes, ranging from discrimination against minorities to empirical anomalies in financial markets. In this paper we study economic rationales for categorizing coarsely. We think of the way...

This paper develops an economic argument relating auctions to high market prices. At the core of the argument is the claim that market competition and bidding in an auction should be analyzed as part of one game, where the pricing strategies in the market subgame depend on the bidding strategies...