The evolution of boundedly rational rules for playing normal form games is studied within stationary environments of stochastically changing games. Rules are viewed as algorithms prescribing strategies for the different normal form games that arise. It is shown that many of the folk results of...

We extend Kohlberg and Mertens' (1986) structure theorem on the Nash correspondence to show that its graph is not only homeomorphic to the underlying space of games, but that the homeomorphism extends to the ambient space of games times strategies, thus implying the graph is unknotted. This has...

Does gender play a role in the context of team work? Our results based on a real-effort experiment suggest that performance depends on the composition of the team. We find that female and male performance differ most in mixed teams with revenue sharing between the team members, as men put in...

We analyze the Spence education game in experimental markets. We compare a signaling and a screening variant, and we analyze the effect of increasing the number of employers from two to three. In all treatments, there is a strong tendency to separate. More efficient workers invest more often and...

By identifying types whose low-order beliefs - up to level li - about the state of nature coincide, we obtain quotient type spaces that are typically smaller than the original ones, preserve basic topological properties, and allow standard equilibrium analysis even under bounded reasoning. Our...

We study an interactive framework that explicitly allows for non-rational behavior. We do not place any restrictions on how players' behavior deviates from rationality. Instead we assume that there exists a probability p such that all players play rationally with at least probability p, and all...

To address the impact of regulation on ethical concerns of consumers, we study the example of minimum wages. In our experimental market, consumers have monopsony power, firms set prices and wages, and workers are passive recipients of a wage payment. We find that the majority of consumers...

Predictions under common knowledge of payoffs may differ from those under arbitrarily, but finitely, many orders of mutual knowledge; Rubinstein's (1989)Email game is a seminal example. Weinstein and Yildiz (2007) showed that the discontinuity in the example generalizes: for all types with...

We study the optimal design of information nudges for present-biased consumers who have to make sequential consumption decisions without exact prior knowledge of their long-term consequences. For arbitrary distributions of risk, there exists a consumer-optimal information nudge that is of cutoff...

We study the optimal design of information nudges for present-biased consumers who have to make sequential consumption decisions without exact prior knowledge of their long-term consequences. For arbitrary distributions of risk, there exists a consumer-optimal information nudge that is of cutoff...